Orellana v. Connecticut General Life Insurance Company et al
Filing
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MEMORANDUM OPINION AND ORDER granting 19 Motion for Summary Judgment; granting 30 Motion to Dismiss without prejudice Superior Industries, Inc. for Failure to State a Claim and denying 32 Motion to Amend/Correct. Signed by Honorable Timothy L. Brooks on July 22, 2016. (tg)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FAYETTEVILLE DIVISION
ERIKA ORELLANA
V.
PLAINTIFF
CASE NO. 5:16-CV-05007
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
and SUPERIOR INDUSTRIES, INC.
DEFENDANTS
MEMORANDUM OPINION AND ORDER
Now pending before the Court are three ripe motions. First is a Motion for Summary
Judgment (Doc. 19), which is accompanied by a Brief in Support (Doc. 20) and was filed
by Defendant Connecticut General Life Insurance Company (“CIGNA”). CIGNA also filed
a Supplementary Brief in Support (Doc. 28) and the Administrative Record (Doc. 27) relied
upon by CIGNA in evaluating Plaintiff Erika Orellana’s claim for health care benefits. Ms.
Orellana filed two Briefs in Opposition to the Motion, along with supporting exhibits (Docs.
21, 34), and CIGNA filed a Reply (Doc. 36). The Motion for Summary Judgment had
previously been filed as a motion to dismiss; however, the parties had submitted a number
of documents in support of their briefing on the motion that were not part of the public
record, not part of the pleadings, and not embraced by the pleadings. Federal Rule of Civil
Procedure 12(d) provides that if matters outside the pleadings are presented to the Court
in conjunction with a motion brought under Rule 12(b), the motion must be treated as one
for summary judgment under Rule 56. See Ashanti v. City of Golden Valley, 666 F.3d
1148, 1150-51 (8th Cir. 2012). Accordingly the Court converted the motion into one for
summary judgment by Order entered on February 24, 2016. See Doc. 26. The Court then
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invited the parties to supplement the summary judgment record with further briefing and
documents, and they did so.
The second ripe motion is a Motion to Dismiss (Doc. 30) filed by Defendant Superior
Industries, Inc. (“Superior”). Superior’s Motion and Brief in Support (Doc. 31) argue that
since the case concerns only claims made pursuant to the Employee Retirement Income
Security Act (“ERISA”), 29 U.S.C. § 1001, et seq., and since Superior granted discretionary
authority to CIGNA to administer the entire claims process, Superior is not a proper party
to be sued. Id. at p. 4. Ms. Orellana responds that it is far from clear that Superior is not
the de facto administrator of the Plan because “the two entities [CIGNA and Superior]
certainly seem to be working together.” (Doc. 35, p. 2).
The third motion pending for resolution is Ms. Orellana’s Motion to Complete the
Administrative Record (Doc. 32), which is accompanied by a Brief in Support (Doc. 33).
In this Motion, Ms. Orellana maintains that the Summary Plan Description (“SPD”) from
2011 (Doc. 3-1)—which she concedes is not the correct SPD applicable to her ERISA
claims in this matter—should nonetheless be included in the Administrative Record. She
argues that when she requested Plan documents from Superior, she was given this wrong
version of the SPD, and that she relied on this version when submitting her claim for health
care benefits to CIGNA. CIGNA responds (Doc. 37) that the Administrative Record
contains only those documents that CIGNA actually relied upon in evaluating Ms.
Orellana’s claim. CIGNA maintains that since it did not rely on the 2011 version of the
SPD, this document should not be added to the Adm inistrative Record.
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For the reasons explained herein, the Motion for Summary Judgment (Doc. 19) is
GRANTED, the Motion to Dismiss (Doc. 30) is GRANTED; and the Motion to Complete the
Administrative Record (Doc. 32) is DENIED.
I. BACKGROUND
Ms. Orellana filed her Complaint in state court on November 24, 2015, and the case
was removed to this Court by CIGNA and Superior on January 7, 2016.
Ms. Orellana
makes a claim for damages pursuant to ERISA for the recovery of health care benefits.1
Her total claim of $8,513.63 is broken down into three sets of bills owed to the following
entities or individuals: (1) Benton Emergency Group/Francis M. Henderson, M.D. (“BEG”),
for a bill totaling $991.00, (2) Northwest Medical Center (“NMC”), for a bill totaling
$2,146.63, and (3) Unruh Chiropractic and Wellness Center (“UCWC”), for a bill totaling
$5,376.00.
The relevant Plan documents describe CIGNA as “[t]he office designated to
consider the appeal of denied claims . . . .” (Doc. 27, p. 56). The Plan lists Superior as “the
sponsor of the Plan” and as “Plan Administrator.” Id. However, according to the Plan,
Superior, as Plan Administrator, “delegates to Cigna the discretionary authority to interpret
and apply plan terms and to make factual determinations in connection with its review of
claims under the plan.” Id. This discretionary authority includes “the determination of the
eligibility of persons desiring to enroll in or claim benefits under the plan, the determination
of whether a person is entitled to benefits under the plan, and the computation of any and
all benefit payments,” as well as the authority to “perform a full and fair review, as required
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Originally, the Complaint also made certain state-law claims, but those were dismissed
as preempted by ERISA. See Doc. 26, p. 2.
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by ERISA, of each claim denial which has been appealed by the claimant or his duly
authorized representative.” Id.
II. LEGAL STANDARDS AND DISCUSSION
A. Motion for Summary Judgment
Beginning with CIGNA’s Motion for Summary Judgment (Doc. 19), the law provides
that “[t]he court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). The Court must view the facts in the light most favorable to the nonmoving party, and give the non-moving party the benefit of any logical inferences that can
be drawn from the facts. Canada v. Union Elec. Co., 135 F.3d 1211, 1212-13 (8th Cir.
1997). The moving party bears the burden of proving the absence of any material factual
disputes. Fed. R. Civ. P. 56(c); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 586-87 (1986); Nat’l Bank of Commerce of El Dorado, Ark. v. Dow Chem. Co., 165
F.3d 602, 607 (8th Cir. 1999). If the moving party meets this burden, then the non-moving
party must “come forward with ‘specific facts showing that there is a genuine issue for
trial.’” Matsushita, 475 U.S. at 587 (quoting Fed. R. Civ. P. 56(c)). These facts must be
“such that a reasonable jury could return a verdict for the nonmoving party.” Allison v.
Flexway Trucking, Inc., 28 F.3d 64, 66 (8th Cir. 1994) (quoting Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986)).
As previously discussed, Ms. Orellana’s Complaint for health care benefits under
ERISA includes claims for bills from three medical providers. As to the first provider, BEG,
Ms. Orellana admits there is no genuine, material dispute of fact that this bill “was correctly
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processed by the Defendant.” (Doc. 21, p. 1). Summary judgment on this claim will be
granted to CIGNA, and the claim is dismissed with prejudice.
As to the bill for NMC, Ms. Orellana agrees that CIGNA also resolved this claim in
her favor, see id. at p. 2, but complains that NMC “obviously disagrees with this conclusion
and continues to bill Ms. Orellana,” id. The Court finds that there is no genuine, material
dispute of fact as to whether CIGNA properly processed this claim. Instead, Ms. Orellana’s
grievance appears to be with NMC’s billing department. The undisputed evidence is that
CIGNA informed Ms. Orellana in writing that she owed nothing on the bill to NMC. See
Doc. 27, pp. 110, 112. It follows that summary judgment should be granted to CIGNA as
to this claim, and it is also dismissed with prejudice.
Turning finally to the UCWC bill, Ms. Orellana confirms that she submitted this claim
to CIGNA in accordance with the procedure described in the 2011 SPD, which was
allegedly provided to her by Superior. Superior apparently made a mistake in giving her
the wrong Plan documents, as the 2013 SPD—and not the 2011 SPD—applied to her
claims. Regardless of this error, Ms. Orellana complains that CIGNA never communicated
with her about how it was processing the UCWC claim—nor did it inform her that it was
ignoring the claim altogether because it did not consider it to have been properly submitted
on the correct form. Ms. Orellana hired an attorney, who followed up with CIGNA in writing
multiple times but never received a response about the status of this claim. See Doc. 1-1,
pp. 93-100.
It comes as no surprise that counsel eventually filed this lawsuit on Ms.
Orellana’s behalf on the theory that CIGNA’s silence amounted to a constructive denial.
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CIGNA is unapologetic about how it handled the UCWC claim. It admits to ignoring
the claim entirely. Then it attempts to shift the blame to Ms. Orellana for allegedly “failing
to exhaust administrative remedies.” See Doc. 28, pp. 4-5. It was impossible, however,
for Ms. Orellana to seek further administrative review of her claim through CIGNA because
the claim was ignored in the first place, and there was no final decision she could appeal.
The exhaustion argument fails.
CIGNA’s behavior in refusing to respond to Ms. Orellana or her attorney on the
UCWC claim has been unreasonable, and its foot-dragging has directly resulted in
unnecessary time wasted and expense incurred—on all sides, and particularly on Ms.
Orellana’s. Both the 2011 and 2013 versions of the SPD direct anyone who desires to
make a claim to contact the Plan Administrator—Superior—in order to obtain copies of
Plan documents and to obtain assistance with questions about the Plan or about filing
claims. See Doc. 1-1 (2011 Plan), pp. 82-83; Doc. 27 (2013 Plan), p. 57. It appears Ms.
Orellana appropriately requested Plan documents from Superior, and Superior gave her
the wrong documents. For some reason, though, when CIGNA actually received her claim,
it felt it appropriate to do nothing, even after receiving letters from Ms. Orellana’s attorney
asking why the claim had not yet been decided.
As there is no dispute of fact as to the events concerning the UCWC bill, it is clear
that this claim must be remanded so that CIGNA may consider it. If, during this review
process, CIGNA determines that more documentation, forms, or other evidence is needed
to supplement the existing claim, CIGNA must contact Ms. Orellana’s attorney in writing
and explain what information is still needed no later than seven days following the entry
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of this Order. CIGNA must complete its review of Ms. Orellana’s UCWC claim in an
expedited manner and provide her attorney with a written decision no later than 21 days
after the entry of this Order. If Ms. Orellana disagrees with CIGNA’s decision, she may
then appeal it as per the procedures outlined in her Plan.
B. Motion to Dismiss by Superior
Under Rule 12(b)(6), a party may move the Court to dismiss a claim if, on the
pleadings, the plaintiff has failed to state a claim upon which relief may be granted. In
reviewing a motion to dismiss, the Court takes all facts alleged in the complaint to be true.
Zutz v. Nelson, 601 F.3d 842, 848 (8th Cir. 2010). Here, Superior has moved the Court
to dismiss it from the case because it is not a proper party to be sued under ERISA.
Superior is listed in Plan documents as employer, Plan Sponsor, and Plan Administrator,
but it has delegated to CIGNA its discretionary authority to interpret and apply Plan terms,
make factual determinations in connection with its review of claims under the Plan, make
determinations about the eligibility of persons desiring to enroll in or claim benefits under
the Plan, decide whether a person is entitled to benefits under the Plan, compute any and
all benefit payments, and perform a full and fair review of appealed claims. See Doc. 27,
p. 56.
The Eighth Circuit has held that an employer is not a proper party defendant in an
ERISA case unless it has been shown to control the administration of the plan. See Layes
v. Mead Corp., 132 F.3d 1246, 1249 (8th Cir. 1998). From the plain language of the 2013
SPD, Superior has ceded its authority over the administration of claims to CIGNA. The
Complaint provides no detail as to the different roles Superior and CIGNA have in
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administering claims, and instead alleges that both Defendants collectively “did not
respond” to letters sent by counsel, “had a duty to pay the bills on behalf of Plaintiff,” and
“failed to provide any explanation of benefits.” (Doc. 3, p. 3).
In response to Superior’s arguments and the Plan language, Ms. Orellana offers
nothing more than speculation. She states that she suspects Superior may be the de facto
administrator of the Plan or may be working more closely with CIGNA in deciding claims
than Plan documents might indicate; but such assertions, without more, are insufficient to
survive dismissal. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (explaining that a valid
complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face’” (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007))). For these reasons, Superior will be dismissed without prejudice from the lawsuit,
and the Motion to Dismiss (Doc. 30) is GRANTED.
C. Motion to Complete the Administrative Record
Ms. Orellana admits that the 2011 SPD never applied to her claims, yet maintains
that it should be included in the Administrative Record. This request is puzzling. The 2011
SPD was not relied upon by CIGNA in reviewing any of her earlier claims, and it will not be
relied upon when evaluating her UCWC claim once it has been remanded. In the Court’s
experience, the administrative record contains all documents that were relied upon by the
claims administrator in reviewing an ERISA claim. Since CIGNA never relied on the 2011
SPD when evaluating Ms. Orellana’s claims, it should not be included in the Administrative
Record. Ms. Orellana’s Motion to Complete the Administrative Record (Doc. 32) is
therefore DENIED.
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III. CONCLUSION
IT IS ORDERED that Defendant CIGNA’s Motion for Summary Judgment (Doc. 19)
is GRANTED as follows:
!
The claim related to a bill for $991.00 by Benton Emergency Group/Francis
M. Henderson, M.D. has been resolved and is DISMISSED WITH
PREJUDICE;
!
The claim related to a bill for $2,146.63 by Northwest Medical Center has
been resolved and is DISMISSED WITH PREJUDICE;
!
The claim related to a bill for $5,376.00 Unruh Chiropractic and Wellness
Center is REMANDED to CIGNA for further consideration.
If CIGNA
determines that other documents or forms are needed to supplement this
claim, CIGNA is ordered to provide written notice to Ms. Orellana’s attorney,
explaining exactly what information is needed, no later than seven days
following the issuance of this Order. It is further ordered that this claim
be processed by CIGNA in an expedited manner, with a written decision
issued no later than 21 days after the entry of this Order.
IT IS FURTHER ORDERED that the Motion to Dismiss (Doc. 30) filed by Defendant
Superior Industries, Inc. is GRANTED, and this Defendant is DISMISSED WITHOUT
PREJUDICE.
IT IS FURTHER ORDERED that Plaintiff Orellana’s Motion to Complete the
Administrative Record (Doc. 32) is DENIED.
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IT IS SO ORDERED on
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this~ day of July, 201 ·
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