Courtney v. ART Applied Reimbursement Techniques, Inc. et al
Filing
53
OPINION and ORDER GRANTING Motion for Summary Judgment filed by Defendants Kelly O'Brien, Vickie Kennedy, and Josh Patrick (doc. 39). Signed by Senior Judge Charles R. Butler, Jr on 5/5/2014. (adk)
IN
THE
UNITED
STATES
DISTRICT
COURT
FOR
THE
SOUTHERN
DISTRICT
OF
ALABAMA
SOUTHERN
DIVISION
MELISA
COURTNEY,
Plaintiff,
v.
ART
APPLIED
REEIMBURSEMENT
TECHNIQUES,
INC.,
RALPH
PATRICK,
KELLY
O’BRIEN,
VICKIE
KENNEDY
and
JOSH
PATRICK,
Defendants.
)
)
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)
CIVIL
ACTION
NO.
12-‐00311-‐CB-‐B
OPINION
and
ORDER
This
matter
is
before
the
Court
on
a
motion
for
summary
judgment
filed
by
defendants
Kelly
O’Brien,
Vickie
Kennedy
and
Josh
Patrick
(Doc.
39),
Plaintiff’s
response
thereto
(Doc.
48),
and
Defendants’
reply
(Doc.
50).
Plaintiff
concedes
that
her
state
law
claims
are
preempted
by
ERISA
and,
therefore,
due
to
be
dismissed.
She
also
concedes
her
ERISA
claims
against
defendant
Vickie
O’Brien.
She
argues,
however,
that
there
is
evidence
to
support
her
ERISA
claims
for
breach
of
fiduciary
duty
against
O’Brien
and
Patrick.
For
reasons
discussed
below,
the
Court
finds
that
Plaintiff’s
evidence
is
insufficient
to
sustain
an
ERISA
claim
against
these
defendants.1
1
The
summary
judgment
motion
does
not
pertain
to
Plaintiff’s
claims
against
defendants
ART
Applied
Reimbursement
Techniques,
Inc.
and
Ralph
Patrick,
both
of
whom
have
filed
bankruptcy
petitions.
Facts
While
Plaintiff
Melisa
Courtney
was
employed
by
defendant
ART
Applied
Reimbursement
Techniques,
Inc.
(ART),
the
company
had
in
place
an
ERISA
Plan
for
employee
health
insurance
(the
Plan)
provided
through
Blue
Cross
Blue
Shield
(Blue
Cross).
An
amount
was
deducted
from
Courtney’s
wages
to
cover
a
portion
of
the
premium,
and
ART
was
to
pay
the
remainder
of
the
premium.
In
January
2012,
Courtney
underwent
nonemergency
medical
procedures
only
to
discover
that
she
had
no
coverage.
ART
had
failed
to
pay
Courtney’s
Blue
Cross
premiums,
even
though
her
portion
of
the
premium
had
been
deducted
from
her
paychecks.
Courtney
was
denied
coverage
by
Blue
Cross
and,
as
a
result,
owed
$27,860.28
in
medical
bills.
Defendant
Vickie
Kennedy
was
employed
as
a
“team
manager”
for
ART.
(Kennedy
Aff.
¶
2,
Doc.
41.)
As
such,
she
“was
responsible
for
supervising
a
coding
and
billing
team
for
an
emergency
room
account.”
(Id.
¶
3.)
Kennedy
had
no
responsibility
for,
nor
was
she
involved
in,
the
administration
of
employee
benefits.
Kennedy
was
not
an
owner
or
principle
of
ART
and
received
no
funds
diverted
from
the
payment
of
insurance
premiums.
Defendant
Kelly
O’Brien
was
employed
by
ART
as
Director
of
Administration
responsible
for
supervising
team
managers
and
for
making
sure
departments
were
running
smoothly.
(O’Brien
Aff.
3,
Doc.
41.)
O’Brien’s
responsibilities
included
keeping
up
with
employees’
hours
worked
and
requests
for
time
off.
(Id.
¶
3.)
O’Brien
had
no
discretionary
authority
with
respect
to
the
employee
benefits
plan
or
medical
insurance.
(Id.
¶
4.)
O’Brien
is
not
a
principle
or
owner
of
ART
and
did
not
receive
funds
diverted
from
paying
medical
insurance
premiums.
(Id.
¶
6.)
2
Josh
Patrick
was
ART’s
Director
of
Information
Systems,
responsible
for
“internal
IT
maintenance
as
well
as
client
equipment
installation
and
implementation.”
(Patrick
Aff.
¶
2,
Doc.
41.)
Patrick
was
not
responsible
for
administration
of
employee
benefits,
was
not
a
principle
or
owner
of
ART,
and
did
not
receive
any
funds
from
diverted
from
the
payment
of
medical
insurance
premiums.
(Id.
¶¶
4,
7.)
Kelly
O’Brien
and
Josh
Patrick
are
the
children
of
ART
owner
Ralph
Patrick.
According
to
Plaintiff,
the
two
“were
intimately
involved
in
the
details
of
running
ART”
while
Plaintiff
was
employed
there.
(Pl.’s
Aff.
¶
4,
Doc.
49.)
During
her
time
with
ART,
Plaintiff
“heard
[O’Brien]
on
occasions
speaking
.
.
.
about
payroll
deduction
and
the
insurance
fiasco.”
(Id.)
Plaintiff
also
alleges
that
O’Brien
“was
responsible
for
printing
the
paychecks
at
issue”
and
that
“[i]t
was
common
knowledge
throughout
the
office
of
ART’s
financial
problems
and
the
fact
that
employee
premiums
were
being
wrongfully
diverted
and
used
to
prop
up
other
areas
of
the
business,
including
the
executive’s
[sic]
paychecks.”
(Id.)
Procedural
Background
Courtney
filed
the
instant
civil
action
against
ART
and
the
individual
defendants
in
the
Circuit
Court
of
Mobile
County
on
April
23,
2012
asserting
several
state
law
causes
of
action.
The
Defendants
removed
the
action
to
this
Court
on
May
12,
2012.
As
grounds
for
removal
jurisdiction,
Defendants
relied
on
federal
question
jurisdiction
and
the
superpreemption
doctrine
applicable
to
certain
ERISA
claims.
After
removal,
ART
filed
a
Chapter
11
bankruptcy
petition.
Courtney
moved
to
remand,
and
the
Court
found
that
the
bankruptcy’s
automatic
stay
provision,
18
U.S.C.
§
362(a)
did
not
preclude
consideration
of
jurisdictional
issues.
This
Court
3
agreed
that
the
superpreemption
doctrine
applied
and
denied
Courtney’s
motion
to
remand.
(Doc.
14.)
After
a
period
of
delay,
discovery
got
underway
in
late
October
2013,
and
shortly
thereafter
Ralph
Patrick
filed
a
notice
of
bankruptcy.
Therefore,
on
December
12,
2013,
the
Court
entered
an
order
acknowledging
that
this
action
was
stayed
pursuant
to
11
U.S.C.
§
362(a)
as
to
both
Ralph
Patrick
and
ART.2
In
the
Second
Amended
Complaint,
Plaintiff
asserts
seven
claims
against
the
Defendants.
In
Counts
One
and
Two,
Plaintiff
asserts
claims
under
ERISA.
Count
One
alleges
that
the
Defendants
breached
their
fiduciary
duty
under
ERISA
by
deducting
monies
from
Plaintiff’s
paycheck
for
health
insurance
premiums
and
failing
to
pay
those
monies
to
Blue
Cross.
Count
Two
asserts
a
claim
for
improper
denial
of
benefits
under
a
qualified
ERISA
plan.
Counts
Three
through
Seven
assert
state
law
claims
for
fraud
and
suppression,
wantonness,
negligence,
negligent
supervision,
and
criminal
theft
of
property
and/or
theft
by
deception.
Issues
Raised
Defendants
Kelly
O’Brien,
Vickie
Kennedy,
and
Josh
Patrick
seek
summary
judgment
with
respect
to
all
claims
asserted
against
them.
In
response,
Plaintiff
agrees
that
her
state
law
claims
(Counts
Three
through
Seven)
are
preempted
by
ERISA
and
consents
to
dismissal
of
those
claims.
She
also
agrees
that
Vickie
Kennedy
is
entitled
to
summary
judgment
with
respect
to
the
ERISA
claims
(Counts
One
and
Two).
Therefore,
the
only
issue
remaining
is
whether
the
evidence,
viewed
in
the
light
most
favorable
to
Plaintiff,
supports
a
claim
against
Kelly
O’Brien
or
Josh
2
ART’s
Chapter
11
bankruptcy
petition
was
dismissed
on
January
16,
2014,
and
Plaintiff
filed
a
motion
to
lift
the
stay
as
to
ART.
However,
ART
subsequently
filed
a
Chapter
7
bankruptcy
petition.
4
Kennedy
for
breach
of
fiduciary
duty
under
ERISA
or
for
failure
to
pay
benefits
under
ERISA.
Legal
Analysis
Summary
Judgment
Standard
Summary
judgment
should
be
granted
only
if
"there
is
no
issue
as
to
any
material
fact
and
the
moving
party
is
entitled
to
a
judgment
as
a
matter
of
law."
Fed.
R.
Civ.
P.
56(c).
The
party
seeking
summary
judgment
bears
"the
initial
burden
to
show
the
district
court,
by
reference
to
materials
on
file,
that
there
are
no
genuine
issues
of
material
fact
that
should
be
decided
at
trial."
Clark
v.
Coats
&
Clark,
Inc.,
929
F.2d
604,
608
(11th
Cir.
1991).
Once
the
moving
party
has
satisfied
his
responsibility,
the
burden
shifts
to
the
nonmoving
party
to
show
the
existence
of
a
genuine
issue
of
material
fact.
Id.
"If
the
nonmoving
party
fails
to
make
'a
sufficient
showing
on
an
essential
element
of
her
case
with
respect
to
which
she
has
the
burden
of
proof,'
the
moving
party
is
entitled
to
summary
judgment."
United
States
v.
Four
Parcels
of
Real
Property,
941
F.2d
1428,
1437
(11th
Cir.
1991)
(quoting
Celotex
Corp.
v.
Catrett,
477
U.S.
317
(1986))
(footnote
omitted).
"In
reviewing
whether
the
nonmoving
party
has
met
its
burden,
the
court
must
stop
short
of
weighing
the
evidence
and
making
credibility
determinations
of
the
truth
of
the
matter.
Instead,
the
evidence
of
the
non-‐movant
is
to
be
believed,
and
all
justifiable
inferences
are
to
be
drawn
in
his
favor.”
Tipton
v.
Bergrohr
GMBH-‐
Siegen,
965
F.2d
994,
999
(11th
Cir.
1992)
(internal
citations
and
quotations
omitted).
“However,
we
draw
these
inferences
only
“’to
the
extent
supportable
by
the
record.’”
Penley
v.
Eslinger,
605
F.3d
843,
848
(11th
Cir.
2010)
(quoting
Scott
v.
Harris,
550
U.S.
372,
381
n.
8
(2007)
(emphasis
omitted)).
Furthermore,
“[a]
5
dispute
over
a
fact
will
only
preclude
summary
judgment
if
the
dispute
“might
affect
the
outcome
of
the
suit
under
the
governing
law.”
Id.
(quoting
Anderson
v.
Liberty
Lobby,
Inc.,
477
U.S.
242,
248,
(1986)).
Plaintiff
Has
Failed
to
Prove
Individual
Defendants
Liable
Under
ERISA
The
Second
Amended
Complaint
asserts
two
distinct
claims
against
O’Brien
and
Patrick,
although
the
parties
do
not
clearly
address
both
in
their
summary
judgment
submissions.
Count
One
asserts
a
claim
for
breach
of
fiduciary
duty,
which
falls
under
29
U.S.C.
§
1132(a)(3).
Varity
Corp
v.
Howe,
516
U.S.
489,
515
(1996)
(holding
that
ERISA’s
catchall
relief
provision
provides
individuals
remedy
against
ERISA
trustee
for
breach
of
fiduciary
duty).
Count
Two
asserts
a
claim
for
improper
denial
of
benefits
under
29
U.S.C.
§
1132(a)(1)(B)
which
allows
a
plan
beneficiary
to
bring
a
civil
action
“to
recover
benefits
due
to
him
under
the
terms
of
the
plan.”
“The
proper
party
defendant
in
an
action
concerning
[denial
of]
ERISA
benefits
is
the
party
that
controls
administration
of
the
plan.”
Garren
v.
John
Hancock
Mut.
Life
Ins.
Co.,
114
F.3d
186,
187
(11th
Cir.
1997)
(per
curiam).
Presumably,
Blue
Cross
administered
the
health
insurance
plan.3
Kelly
O’Brien
and
Josh
Patrick
deny
any
role
in
the
administration
of
the
plan,
and
Plaintiff
has
presented
no
evidence
to
the
contrary.
Therefore,
Plaintiff
cannot
prevail
against
these
Defendants
on
her
claim
for
improper
denial
of
benefits.
Plaintiff’s
claim
for
breach
of
fiduciary
duty
fares
no
better
because
neither
of
these
defendants
qualifies
as
a
fiduciary.
It
is
true,
as
Plaintiff
argues,
that
a
party
may
be
a
“fiduciary”
within
the
meaning
of
ERISA
even
though
he
is
not
designated
as
such
in
the
plan
documents.
ERISA
“defines
a
fiduciary
not
simply
in
terms
of
3
No
evidence
of
the
terms
of
the
Plan
has
been
presented.
6
certain
designated
offices,
but
also
more
flexibly,
with
reference
to
the
functions
performed
by
a
person.”
Useden
v.
Acker,
947
F.2d
1563,
1574
(11th
Cir.
1991).
A
person
is
a
fiduciary
to
the
extent
he
“exercises
any
discretionary
authority
or
discretionary
control”
over
the
plan’s
management
or
over
management
or
disposition
of
the
plan’s
asserts
or
“to
the
extent
he
has
discretionary
authority
or
discretionary
responsibility
in
the
administration
of
the
plan.”
29
U.S.C.
§
1102(21)(A)(i)
&
(iii).
Both
Kelly
O’Brien
and
Josh
Patrick
deny
they
had
any
discretionary
authority
or
responsibility
over
any
employee
benefits
plan
and
also
deny
that
they
had
any
fiduciary
responsibilities
regarding
any
employee
benefits
plan.
Plaintiff’s
evidence
to
the
contrary
is
quite
thin.
In
her
brief,
she
points
out
that
Kelly
O’Brien
and
Josh
Patrick
are
the
children
of
Ralph
Patrick,
the
owner
of
ART
and
that
Kelly
O’Brien
was
aware
that
funds
withheld
from
employee
paychecks
for
health
insurance
premiums
were
being
used
for
other
purposes.4
Plaintiff’s
deposition
contains
a
bit
more
information
about
Kelly
O’Brien’s
involvement
and
duties
at
ART,
though
none
of
it
proves
that
O’Brien
exercised
any
discretionary
authority
regarding
the
Plan
or
its
assets.
Specifically,
she
states
that
O’Brien
spoke
with
Plaintiff
and
others
about
“payroll
deduction
and
the
insurance
fiasco,”
that
O’Brien
was
responsible
for
printing
checks,
and
that
“[i]t
was
common
knowledge
that
.
.
.
employee
premiums
were
being
wrongfully
diverted
and
used
to
prop
up
other
areas
of
the
business,
including
the
executive’s
paychecks.”
(Pl.’s
Aff.
¶
4,
Doc.
49.)
O’Brien’s
knowledge
does
not
equate
to
“discretionary
authority”
over
4
Plaintiff
also
asserts,
without
proof,
that
Josh
Patrick
and
Kelly
O’Brien
were
“executives”
in
ART.
Even
if
that
were
true,
it
is
not
evidence
that
they
had
discretionary
authority
over
the
management
of
the
Plan
or
over
administration
of
the
Plan’s
assets.
7
the
Plan,
its
assets,
or
its
administration,
nor
does
her
check-‐printing
responsibility.
Cf.
LoPresti
v.
Terwilliger,
126
F.3d
34,
40
(2nd
Cir.
1997)
(holding
that
co-‐owner
who
used
company
assets
to
pay
creditors
rather
than
employee
benefit
Plan
was
a
fiduciary
under
ERISA
but
that
co-‐owner-‐-‐who
had
check-‐signing
authority,
some
knowledge
of
payroll
deductions,
and
no
responsibility
for
determining
order
in
which
creditors
would
be
paid—was
not).5
Conclusion
For
reasons
discussed
above,
it
is
hereby
ORDERED,
ADJUDGED,
and
DECREED
that
the
motion
for
summary
judgment
be
and
hereby
is
GRANTED.
DONE
and
ORDERED
this
the
5th
day
of
May,
2014.
s/Charles
R.
Butler,
Jr.
Senior
United
States
District
Judge
5
In
her
deposition,
Plaintiff
makes
a
conclusory
assertion
that
“Josh
Patrick
and
Kelly
O’Brien
“were
involved
in
discretionary
functions
relating
to
policies
and
procedures
concerning
the
operation
of
ART
and
the
Insurance
issues.
.
.”
(Pl.’s
Aff.,
¶
4.)
That
statement
does
not
create
a
genuine
issue
of
fact
for
two
reasons.
First
it
is
a
conclusory
assertion.
See
Fullman
v.
Graddick,
793
F.2d
553,
557
(11th
Cir.
1984)
(party’s
own
conclusory
allegations
not
sufficient
to
oppose
a
motion
for
summary
judgment).
Second,
it
ties
the
Defendants’
“discretionary
functions”
to
things
other
than
the
Plan,
i.e.,
operation
of
the
business
and
undefined
insurance
issues.
Plaintiff
also
mentions
in
both
her
brief
and
her
affidavit
that
Josh
Patrick
and
Kelly
O’Brien
are
owners
of
a
new
company
operating
in
the
location
and
providing
the
same
services
as
ART.
This
information
has
no
relevance
in
proving
that
either
of
these
Defendants
exercised
discretionary
authority
over
the
Plan
at
issue
here,
its
assets,
or
its
administration.
8
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