Milton v. Life Insurance Company of North America et al
MEMORANDUM OPINION. Signed by Judge Karon O Bowdre on 6/20/12. (ASL)
2012 Jun-20 AM 10:01
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
LIFE INSURANCE COMPANY OF,
NORTH AMERICA; HONDA
MANUFACTURING OF ALABAMA, LLC
and HONDA OF AMERICA
MANUFACTURING, INC. HEALTH &
WELFARE BENEFITS PLAN NO. 510
This matter comes before the court on “Honda Manufacturing of Alabama, LLC and Honda
of America Manufacturing, Inc. Health & Welfare Benefits Plan’s Motion to Dismiss and
Incorporated Memorandum of Law in Support Thereof” (doc. 10) and this court’s “Order to Show
Cause” (doc.12) to which the Plaintiff responded (doc. 14), the Honda Defendants replied (doc. 17),
and the Plaintiff filed a subsequent sur-reply (doc. 21). For the reasons stated in this Memorandum
Opinion, the court finds that the motion to dismiss is due to be GRANTED.
The Plaintiff disagrees, arguing that dismissal of the Honda Defendants is inappropriate or
premature. The court notes at the outset that all parties agree to the proposition that the Plan
Administrator is generally a proper party to ERISA litigation challenging the Administrator’s
actions and that an employee benefit plan is an ERISA entity that may be sued in certain
circumstances. However, authorities stating those general propositions do not necessarily mandate
the inclusion of the Honda Defendants in this specific instance. Accordingly, the court must
determine whether, based on the allegations in Counts One and Two of the Complaint in this case,
those Defendants are subject to dismissal in this case.
Count One: A Claim for Benefits under 29 U.S.C. § 1132(a)(1)(B)
In Count One, the Plaintiff brings a claim under 29 U.S.C. § 1132(a)(1)(B), asserting that
“LINA wrongfully, and in violation of its obligations under ERISA, terminated and denied the
Plaintiff’s claim for long term disability benefits.” In paragraphs 9 and 10 of the Complaint, the
Plaintiff acknowledges that “[a]ll claims decisions regarding the Plaintiff’s long term disability
benefits were made solely by employees of LINA. . .[; that] Honda had no involvement in the claim
decision making process for the Plaintiff’s long term disability claim[; and] upon information and
belief from plan documents that Honda has contracted with third party LINA ‘to decide claims and
provide other related services’ as well as delegated all administrative obligations to LINA.” (Compl.
Doc. 1, at 5). Consistently with these allegations, in its Answer, LINA “admits that it administers
LTD claims under the policy and that it alone made the benefits decision at issue in the instant
action.” (LINA’s Answer, Doc. 13 ¶ 9).
As the party with decisional control over the Plaintiff’s benefits claim, LINA is the only
proper defendant in an action concerning ERISA benefits. See Garren v. John Hancock Mut. Life
Ins. Co., 114 F.3d 186, 187 (11th Cir. 1997) (“The proper party defendant in an action concerning
ERISA benefits is the party that controls administration of the plan.”); see also Peters v. Hartford
Life & Accident Ins. Co., 367 Fed. Appx 69, 71 (11th Cir. 2010) (per curiam) (affirming the
dismissal of the former employer and holding that the proper party to be held answerable in an action
regarding ERISA claims benefits is the insurance company that was the named fiduciary for the
payment of benefits); Hunt v. Hawthorne Assocs., Inc., 119 F.3d 888, 908 (11th Cir. 1997)
(concluding that, under § 502(a)(1)(B), an “order enjoining the payment of benefits from an ERISA
plan must issue against a party capable of providing the relief requested,” not the ERISA plan itself);
Henderson v. Transamerica Occidental Life Ins. Co., 120 F. Supp. 2d 1278, 1282 (M.D. Ala. 2000)
(granting summary judgment in favor of the employer, finding that, absent evidence of employer’s
decisional control over benefits decision, the employer was not a proper defendant to the plaintiff’s
wrongful denial of benefits claim).
The Plaintiff disagrees that LINA should proceed as the sole Defendant. As support for the
Plan’s continued presence in the case, he cites 29 U.S.C. § 1132(d)(1), providing “[a]n employee
benefit plan may sue or be sued,” and cases quoting that statutory language or acknowledging that
an employee benefit plan is an ERISA entity.
While the court would agree that an employee
benefits plan is an ERISA entity and is subject to suit in some instances, that proposition does not
mean that a plan is a proper party in every ERISA case. In this particular case, the Complaint
contains no allegations or request for relief that would warrant the Plan’s inclusion as a party.
Further, the court can find no support for the Plaintiff’s position in the cases that he cites.
For example, Wilson v. Coman, a district court case upon which the Plaintiff relies, identifies an
employee benefit plan as an ERISA entity, but that case does not stand for the proposition that the
plan was a necessary or proper party to the lawsuit seeking benefits under an ERISA plan. Indeed,
the Wilson case did not involve a claim for benefits under an ERISA plan and the plaintiff employee
in that case did not attempt to name the plan as a defendant. 284 F. Supp. 2d 1319, 1347 (M.D. Ala.
Another case that the Plaintiff cites as support, Mackey v. Lanier Collection Agency & Serv.,
Inc., also did not involve an employee’s claim for benefits under an ERISA plan, but rather, was a
garnishment suit brought by a collection agency to collect a judgment by garnishing a welfare
benefits plan, and thus, is inapposite. 486 U.S. 825 (1988). In a third case that the Plaintiff cites,
Black & Decker Disability Plan v. Nord, a plan was indeed a named party to a claim for benefits
under an ERISA plan, but the decision did not squarely address whether the plan was a proper party
and the decision does not indicate that the parties even raised this issue. 538 U.S. 822 (2003). The
court notes that the various Circuit Courts of Appeal have taken different approaches about whether
the plan is appropriately included in ERISA suits for benefits under 29 U.S.C. § 1132(a)(1)(B), and
the Black & Decker case was not a case originating in Eleventh Circuit. See, e.g., Candace Budy &
Richard Bales, Naming a Defendant in an ERISA Action, 9 Transactions 317 (Spring 2008) (noting
the varying approaches among different Circuits regarding the proper parties in ERISA cases). In
any event, the court reiterates that the Supreme Court did not address this issue in the Black &
Decker decision. Further, in light of the different approaches that various Circuit Courts of Appeal
take, the court need not and does not address case law from other circuits. In sum, the court finds
no support in these decisions for the Plaintiff’s argument that, based on the allegations in the
Complaint at bar, the Honda Plan itself is a proper named party. Rather, the Eleventh Circuit’s
direction is that the proper party in such cases is the entity that controls administration of the plan.
Garren, 114 F.3d at 187.
As support for the employer’s remaining in this case as a named party in addition to LINA,
the Plaintiff cites Hamilton v. Allen-Bradley Co., 244 F.3d 819, 824 (11th Cir. 2001), and two
district court cases, Creighton v. Cont’l Airlines, Inc., 321 F. Supp. 2d 1309, 1310 (M.D. Fla. 2004)
and Sahlie v. Nolen, 984 F. Supp. 1389, 1394 (M.D. Ala. 1997).
In the Eleventh Circuit’s Hamilton decision, the Court of Appeals acknowledged that the plan
administrator was a proper party and found that the “key question” was whether the employer “had
sufficient decisional control over the claims process [to] qualify it as a plan administrator. . . .” 244
F.3d at 824. The facts of that case reflected that the employer required employees to begin the
claims process by contacting the employer’s HR department and that the employer supplied the
application for disability benefits. In light of the employer’s involvement in the claims process, the
Eleventh Circuit found that the employer qualified as a plan administrator. Id.
However, the Hamilton decision is inapposite to the instant situation, where the Complaint
on its face acknowledges that Honda “had no involvement in the claim decision process . . .[and] no
role in deciding the Plaintiff’s claim.” Compl. Doc. 1, ¶¶ 9-10 (emphasis added). Although the
Plaintiff in this case now suggests that he requires discovery to determine the extent of Honda’s
discretion, that argument makes no sense in light of the allegations of the Complaint; surely the
Plaintiff is not suggesting that he needs discovery to disprove his own allegations that Honda had
no involvement in the claims process.
The other decisions that Plaintiff cited to support his position on this issue are district court
decisions that are not binding on this court; however, the court will examine them to determine
whether they provide persuasive analysis that is relevant to this court’s determination. In Creighton
v. Continental Airlines, Inc., the district court agreed with the plaintiff that dismissal of the employer
was not appropriate before discovery could be conducted to determine whether the employer or the
insurance company, or both, qualified as the plan administrator. The Creighton plan documents
appeared to identify the employer as the plan administrator but the parties disputed whether the
employer had delegated all claims administration responsibility to the insurance company. 321 F.
Supp. at 1310. In the instant case, however, the allegations of the Complaint acknowledge that
Honda had delegated all claims administration to LINA, allegations that LINA has confirmed.
Therefore, unlike the district court in Creighton, this court need not postpone dismissing the
employer until that confirmation occurs.
The court also finds no support in the Sahlie v. Nolan case for retaining Honda as a
defendant. In that case, the plaintiff sued the employer and the plan trustees in their capacities as the
trustees of the plan and as individuals. Stating that the plan was administered by an employerappointed committee comprising of trustee defendants, the district court found that neither the
employer nor the trustee defendants as individuals could “be held liable for any benefits owed the
plaintiffs under the Plan,” and it dismissed those parties. 984 F. Supp. at 1393, &1403-04. This
court cannot fathom how the dismissal in Sahlie of the employer who had delegated claim
administration responsibility supports the retention in the instant case of the employer who likewise
had delegated claim administration responsibility.
In sum, the appropriate party defendant in a claim 29 U.S.C. § 1132(a)(1)(B) for wrongful
denial of benefits is the entity or entities making that decision. Where the allegations of the
Complaint state that LINA is the sole party handling claims and making claims decisions, and where
LINA’s Answer confirms those allegations, LINA is the only proper Defendant as to those claims.
Therefore, based upon the relevant case law applied to the allegations in the Complaint and the
information in LINA’s Answer and the Honda Defendants’ motion and brief, all stating that LINA
and not Honda had decisional control over benefits claims, the court finds that Count One does not
state a claim upon which relief can be granted as to the Honda, the employer. Further, as discussed
above, the court finds that Count One does not state a claim upon which relief can be granted as to
the Honda Plan.
Count Two: Wrongful Refusal to Provide Information under 29 U.S.C. § 1132(c)
In Count Two, the Plaintiff seeks penalties under 29 U.S.C. § 1132(c) for wrongful refusal
to provide information requested. In that Count, the Plaintiff repeatedly refers to requests for
information that he made to LINA but which LINA allegedly failed to provide. The only reference
to the Honda Defendants in Count Two is in the last paragraph of that count: “In the event that LINA
cannot be subjected to such a penalty, then Defendant Honda, as the plan administrator, is
responsible for LINA’s breach of fiduciary duty, as LINA was the chosen Claim Administrator, and.
. .[a]s a result, Honda is also subjected to penalties. . . .” (Compl. Doc.1, ¶ 59, at 21). The Plaintiff
has not alleged that the Honda Defendants wrongfully failed to comply with any request for
documents that they had a duty to provide. Further, he has not alleged a basis for holding the Honda
Defendants liable for the acts or omissions of LINA. Therefore, Count Two does not state a claim
upon which relief can be granted as to the Honda Defendants.
In sum, the court finds that the Honda Defendants’ motion to dismiss is due to be GRANTED
in its entirety. The court will enter a separate Order DISMISSING WITHOUT PREJUDICE the
claims against the Honda Defendants in Counts One and Two, and DISMISSING the Honda
Defendants as party Defendants. This case will proceed with the claims against Defendant LINA.
Dated this 20th day of June, 2012.
KARON OWEN BOWDRE
UNITED STATES DISTRICT JUDGE
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