Tupper v. Rossman Realty Group, Inc.

Filing 47

OPINION AND ORDER denying 41 Motion for summary judgment. Signed by Judge John E. Steele on 3/12/2018. (RKR)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
DEANNA TUPPER,
Plaintiff,
v.

Case No:

2:16-cv-361-FtM-29MRM

ROSSMAN REALTY GROUP, INC.,
Defendant.

OPINION AND ORDER
This matter comes before the Court on the defendant’s Motion
for

Summary

Judgment

(Doc.

#41)

filed

on

December

13,

2017.

Plaintiff filed a Response in Opposition (Doc. #45) and Notice of
Filing the Declaration of D. Tupper (Doc. #46) on December 28,
2017.

The motion will be denied as to a daily penalty, the only

relief which is currently being sought by plaintiff.
I.
Summary

judgment

is

appropriate

only

when

the

Court

is

satisfied 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).

“An issue of fact is ‘genuine’ if the

record taken as a whole could lead a rational trier of fact to
find for the nonmoving party.”

Baby Buddies, Inc. v. Toys “R” Us,

Inc., 611 F.3d 1308, 1314 (11th Cir. 2010).

A fact is “material”

if it may affect the outcome of the suit under governing law.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

“A

court must decide ‘whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter of law.’”
Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th
Cir. 2004) (citation omitted).
II.
The undisputed facts are as follows: Defendant Rossman Realty
Group, Inc. (Rossman) is a realty and property management company
with

approximately

50

employees.

Plaintiff

Deanna

Tupper

(plaintiff or Tupper) was hired as an employee by Rossman on or
around October 19, 2015, as a title processor/closer.

Rossman

offers its employees a group health insurance plan covered by the
Employee Retirement Income Security Act (ERISA).

Rossman is the

employer and the Plan Administrator, and plaintiff become a plan
participant effective January 1, 2016.
On February 25, 2016, plaintiff was terminated, which was a
“qualifying

event”

Reconciliation

Act

triggering
(COBRA)

the

notice

Consolidated

Omnibus

requirements.

The

Budget
normal

procedure upon such an occurrence is that Rossman notifies its
agency (Brown & Brown) which logs into the United Healthcare system
to trigger delivery of the COBRA notice to the employee.

The

notice is auto-generated through the United Healthcare’s Employer

2

Eservices and sent via First Class Mail to the plan participant’s
last known address.
In plaintiff’s case, Rossman employee Lynn O’Connell, at the
direction of the Office Manager Julie Gorman, emailed Brown & Brown
on March 2, 2016, notifying them of plaintiff’s qualifying event.
Rossman requested that all coverage be terminated, and that the
COBRA notice be sent to Tupper.

Brown & Brown’s Employee Benefits

Account Manager stated that the requests would be completed by the
following

Monday.

Brown

&

Brown

did

terminate

plaintiff’s

coverage, but due to either a human error or a computer error, the
COBRA notice was not auto-generated and not sent at that time.
Rossman first learned that the notice was not sent or received
when it was served with plaintiff’s Complaint, around May 16, 2017.
On May 27, 2016, to cure the error, Rossman’s Office Manager
generated a notice and mailed it to plaintiff’s last known address.
Defendant concedes this was 48 days after the April 9, 2016
deadline.

The

notice

retroactive

coverage

gave

and

plaintiff

continuing

the

option

coverage

to

under

elect
COBRA.

Plaintiff did not make the election.
III.
A group health plan must provide “written notice to each
covered employee and spouse of the employee (if any) of the rights
to continuing coverage.”

29 U.S.C. § 1166(a)(1).

An employer

“must notify the administrator of a qualifying event” within 30

3

days of a qualifying event.
added).

“The

COBRA

29 U.S.C. § 1166(a)(2) (emphasis

notification

requirement

exists

because

employees are not expected to know instinctively of their right to
continue their healthcare coverage.”

Cummings v. Washington Mut.,

650 F.3d 1386, 1391 (11th Cir. 2011).

“Simply hiring an agent and

then instructing the agent to send notice is not sufficient to
satisfy the statute, where there is no evidence that the agent
sent out a notice to the plaintiff, nor any evidence that the
principal took the necessary steps to ensure that the agent would,
in all cases, make such notification.”

Scott v. Suncoast Beverage

Sales, Ltd., 295 F.3d 1223, 1231 (11th Cir. 2002).
Rossman admits that it failed to send a timely notice of COBRA
coverage, and therefore has essentially admitted liability for the
only remaining claim.

Rossman’s argument that it has no liability

because it acted in good faith through means that were reasonably
calculated (but completely unsuccessful) to ensure actual receipt
of notice (Doc. #41, pp. 9-10) is without merit.

As the Eleventh

Circuit has stated:
Here, Suncoast tries to extend the good faith
language from these cases to cover a situation
in which it has contracted with a third party
to send the notice, but there is no evidence
that any notice was ever sent by that third
party. But Suncoast has cited no case where an
employer or administrator was relieved of
liability because it had contracted its
notification obligations out to a third party.
To stretch the good faith language that far
would essentially permit an employer to

4

contract away an obligation specifically
assigned to it under the statute. Simply
hiring an agent and then instructing the agent
to send notice is not sufficient to satisfy
the statute, where there is no evidence that
the agent sent out a notice to the plaintiff,
nor any evidence that the principal took the
necessary steps to ensure that the agent
would, in all cases, make such notification.
Scott, 295 F.3d at 1231.
Rossman is correct that the only damages plaintiff now seeks
is the discretionary civil penalties provided in 29 U.S.C. §
1132(c)(1).

Rossman seeks summary judgment as to these penalties,

asserting that civil penalties cannot be imposed as a matter of
law because plaintiff has not suffered any damages or prejudice
and defendant acted in good faith (Doc. #41, pp. 13-15.)

Rossman

is incorrect.
A plan administrator who fails to provide timely COBRA notice
“may

in

the

court’s

discretion

be

personally

liable

to

such

participant or beneficiary in the amount of up to $[110] 1 a day
from the date of such failure or refusal, and the court may in its
discretion order such other relief as it deems proper.”
§ 1132(c)(1).
district

29 U.S.C.

“The precise relief and amount are left to the

court's

discretion.

So,

a

plaintiff

will

not

automatically and always be entitled to statutory penalties for

1

The statutory remedy was for up to $100 days, but was
increased for violations occurring after July 29, 1997, to $110 a
day. 29 C.F.R. § 2575.502c-1.

5

the entire period before suit was filed: the district court has
discretion to limit appropriately the defendant’s liability, given
all the circumstances, including the diligence of both parties.”
Cummings,

650

F.3d

at

1391.

Prejudice

is

a

factor

to

be

considered, however it is not required and is not a prerequisite
to penalizing a violation of the notice requirement.

Scott, 295

F.3d at 1232.
The Court finds that the undisputed material facts support
liability, and that no legal basis precludes consideration and
imposition of a daily penalty. Defendant’s summary judgment motion
is denied.
Accordingly, it is now
ORDERED:
Defendant’s

Motion

for

Summary

Judgment

(Doc.

#41)

is

DENIED.
DONE AND ORDERED at Fort Myers, Florida, this
March, 2018.

Copies:
Counsel of record

6

12th

day of