Feazel v. Ameren Long Term Disability Plan for Non-union Employees et al
ORDER granting 16 Motion to Dismiss for failure to exhaust administrative remedies and denying as moot 27 Motion to Strike. The Court dismisses this matter for failure to exhaust administrative remedies and DIRECTS the Clerk of the Court to enter judgment. Signed by Judge David R. Herndon on 4/13/2018. (klh)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
JACOB P. FEAZEL,
AMEREN LONG TERM DISABILITY PLAN
FOR NON-UNION EMPLOYEES, AND
AMEREN SERVICES COMPANY AS PLAN
MEMORANDUM and ORDER
HERNDON, District Judge:
Before the Court is defendants Ameren Long Term Disability Plan For NonUnion Employees and Ameren Services Company’s (“defendants”) motion to
dismiss, or in the alternative, to stay, plaintiff Jacob P. Feazel’s complaint
pending exhaustion of administrative remedies (Doc. 16). For the reasons
explained below, the Court GRANTS the defendants’ motion to dismiss for failure
to exhaust administrative remedies.
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On April 1, 1983, plaintiff Jacob P. Feazel (“Feazel”) retired from his
employment at Union Electric Company, a predecessor of Ameren (Doc. 1, ¶¶ 8,
12–13). Upon retirement, Feazel received a letter informing him that he was
entitled to a monthly disability payment under the applicable Union Electric Long
Term Disability Plan (Doc. 1, Ex. A). The letter stated that Feazel would receive a
monthly benefit of $389.72 for the rest of his life, assuming he remained disabled
(Id.). Feazel received this benefit pursuant to the Union Electric Plan, and later
the Ameren Long Term Disability Plan for Non-Union Employees (the “Plan”) (Id.
at ¶ 17). On August 18, 2017, Feazel received a letter from Ameren stating that an
internal audit revealed that Feazel had been improperly receiving benefits for a
period beyond the Plan’s Maximum Benefit Period (Doc. 1, Ex. B).1 The letter
advised Feazel that the Plan would not seek repayment of the benefits he had
improperly received, but that the date of his final payment under the Plan would
be September 1, 2017 (Id.). However, on November 1, 2017, Ameren apparently
deposited $370.43 into Feazel’s bank account (Id. at ¶¶ 25, Ex. E). Consistent
with the termination of Feazel’s Plan benefits, Ameren recouped the deposit a few
hours later, but several hours thereafter, an “unknown entity”2 reversed the
Although the August 18, 2017 letter describes the Plan’s Maximum Benefits Period, it is not clear
from the pleadings when Feazel allegedly became ineligible for the benefits he continued to receive.
See Doc. 1, Ex. B.
Plaintiff’s counsel presumes that Scott Credit Union reversed the withdrawal after he called to
inform them that the withdrawal was unauthorized (Doc. 1, ¶ 27).
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withdrawal and credited Feazel’s account with the original deposit amount of
$370.43 (Id. at ¶¶ 26–27, Ex. E).
One week later, on November 7, 2017, Feazel initiated this action by
filing a complaint (Doc. 1) alleging that he is entitled to benefits under the Plan
and seeking penalties for the defendants’ failure to provide requested Plan
documents (Id. at ¶¶ 1, 1, 23–28, 35–38). Feazel also alleges that Ameren
breached its fiduciary duties in two ways. First, he alleges that Ameren caused
him emotional distress by discontinuing his benefits and reversing the November
1, 2017 deposit (Id. at ¶¶ 29–34). Second, he alleges that Ameren failed to provide
him with requested Plan documents (Id. at ¶¶ 35–38).
The defendants argue that Feazel’s complaint should either be
dismissed pursuant to FEDERAL RULE
CIVIL PROCEDURE 12(b)(6), or stayed,
because Feazel has failed to exhaust his administrative remedies as required by
the Employee Retirement Income Security Act of 1974 (ERISA) (Doc. 17, pp. 4–6;
Doc. 25, pp. 2–3). The defendants also argue that Feazel’s complaint should be
dismissed because his fiduciary breach claims are duplicative and seek damages
that are not available under ERISA (Doc. 17, pp. 6–8; Doc. 25, pp. 3–5).
Motion to Dismiss
CIVIL PROCEDURE 12(b)(6) permits a motion to dismiss a
complaint for failure to state a claim upon which relief can be granted. Hallinan v.
Fraternal Order of Police Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir.
2009). The Supreme Court explained in Bell Atlantic Corp. v. Twombly that Rule
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12(b)(6) dismissal is warranted if the complaint fails to set forth “enough facts to
state a claim to relief that is plausible on its face.” 550 U.S. 544, 570 (2007).
Although federal pleading standards were retooled by Twombly and Ashcroft v.
Iqbal, 556 U.S. 662 (2009), notice pleading remains all that is required in a
complaint. Tamayo v. Blagojevich, 526 F.3d 1074, 1083 (7th Cir. 2008)
(“A plaintiff still must provide only ‘enough detail to give the defendant fair notice
of what the claim is and the grounds upon which it rests, and, through his
allegations, show that it is plausible, rather than merely speculative, that he is
entitled to relief.’”). In determining whether the allegations in the plaintiff’s
complaint are sufficient “to raise a right to relief above a speculative level,”
Twombly, 550 U.S. at 555, the Court assumes the truth of all well-pleaded factual
allegations and draws all reasonable inferences in the plaintiff’s favor. See Virnich
v. Vorwald, 664 F.3d 206, 212 (7th Cir. 2011); Rujawitz v. Martin, 561 F.3d
685, 688 (7th Cir. 2009).
With these principles in mind, the Court now turns to address the merits of
the defendants’ motion to dismiss.
A. Failure to Exhaust Administrative Remedies
Feazel concedes that he has neither exhausted nor attempted to exhaust
administrative remedies under the Plan, but argues that such failure should be
excused, either because exhaustion would be futile, or because he was wrongfully
denied meaningful access to administrative procedures (Doc. 22, pp. 6–7). Feazel
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contends that excusal from the usual exhaustion requirement is warranted in this
case because the defendants have failed to demonstrate the existence of adequate
administrative remedies, and because the defendants’ failure to supply him with
certain Plan documents “leaves ample possibility . . . that there is no such appeal
procedure” (Id.). The defendants respond that they have demonstrated the
existence of available administrative procedures by referring to them in the
August 18, 2017 letter (Doc. 1, Ex. B) and subsequent correspondence with
Feazel (Doc. 22, Ex. A, p.1), and that Feazel has failed to show that exhaustion
would be futile because he has not alleged any facts tending to show that those
claims and appeals procedures would not redress his grievances (Doc. 17, p.5).
ERISA provides that “[a] civil action may be brought . . . by a
participant . . . to recover benefits due to him under the terms of his plan, to
enforce his rights under the terms of the plan, or to clarify his rights to future
benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B); Edwards v.
Briggs & Stratton Ret. Plan, 639 F.3d 355, 360 (7th Cir. 2011). Although ERISA
allows an aggrieved plan participant to file a civil action, the statute does not
explicitly state “whether exhaustion of administrative remedies is a precondition
to filing that action.” Edwards, 639 F.3d at 360. “However, because ERISA directs
employee benefit plans to provide adequate written notice of the reasons for
denials of claims by plan participants and to create procedures for the review of
such denials of claims,” the Seventh Circuit has “interpreted ERISA as requiring
exhaustion of administrative remedies as a prerequisite to bringing suit under the
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statute.” Id.; see Powell v. A.T. & T. Commc'ns, Inc., 938 F.2d 823, 826 (7th
Cir.1991) (citing 29 U.S.C. § 1133).
commencing a civil suit serves several important policy and practical purposes.
First, it “encourages informal, non-judicial resolution of disputes about employee
benefits.” Id. This is consistent with the purpose of the statute because “the
institution of . . . administrative claim-resolution procedures was apparently
intended by Congress to help reduce the number of frivolous lawsuits under
ERISA; to promote the consistent treatment of claims for benefits; to provide a
nonadversarial method of claims settlement; and to minimize the cost of claims
settlement for all concerned.” Id. (quoting Kross v. Western Elec. Co., 701 F.2d
1238, 1244–45 (7th Cir. 1983)). The administrative remedy exhaustion
prerequisite also helps to “prepare the ground for litigation in case administrative
dispute resolution proves unavailing,” because “[c]ompelling parties to exhaust
administrative remedies can help a court by requiring parties, in advance of
bringing suit, ‘to develop a full factual record’ and by enabling the court to ‘take
advantage of agency expertise.’” Id. at 361 (quoting Janowski v. International
Bhd. of Teamsters Local No. 710 Pension Fund, 673 F.2d 931, 935 (7th Cir.
1982), vacated on other grounds, 463 U.S. 1222 (1983)).
“An ERISA plaintiff’s failure to exhaust administrative remedies may be
excused where there is a lack of meaningful access to review procedures, or where
pursuing internal plan remedies would be futile.” Edwards, 639 F.3d at 361
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(citing Stark v. PPM Am., Inc., 354 F.3d 666, 671 (7th Cir. 2004)). To be excused
from the exhaustion requirement on futility grounds, Feazel “must show that it is
certain that [his] claim will be denied on appeal, not merely that [he] doubt[s] an
appeal will result in a different decision.” Smith v. Blue Cross & Blue Shield
United of Wisconsin, 959 F.2d 655, 659 (7th Cir. 1992) (citing Dale v. Chicago
Tribune Co., Tribune Co., 797 F.2d 458, 467 (7th Cir.1986), cert. denied, 479
U.S. 1066 (1987)). Furthermore, where a plaintiff “present[s] no facts to show
that the review procedure would not work, the futility exception does not apply.”
Excusal may also be warranted where a claimant is not required to
appeal due to a “lack of meaningful access to the review procedures.” Id. There is
a lack of meaningful access where the claimant attempts to initiate higher levels of
review procedure, but is denied access to those procedures. Id.; see Carter v.
Signode Industries, Inc., 688 F.Supp. 1283, 1287–88 (N.D. Ill. 1988) (Aspen, J.)
(“Generally, claimants are not required to exhaust administrative remedies when
the conduct of the administrator amounts to a repudiation of the procedures,
such as when an administrator neglects to submit claims to the proper reviewing
body.”) (citing Vaca v. Sipes, 386 U.S. 171 (1967)).
Ultimately, the determination of whether to excuse the exhaustion
requirement is “a matter within the sound discretion of the trial court,” Orr v.
Assurant Employee Benefits, 786 F.3d 596, 601–02 (7th Cir. 2015) (citing Kross,
701 F.2d at 1244), and such a determination “will only be disturbed on appeal if
the lower court has clearly abused its discretion.” Id. at 602; see also Zhou v.
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Guardian Life Ins. Co. of Am., 295 F.3d 677, 679 (7th Cir. 2002) (“[W]e review a
district court's decision to dismiss a complaint on exhaustion grounds for an
abuse of discretion.”).
Here, Feazel has not pleaded sufficient facts to show that he is entitled
to excusal from the exhaustion requirement on either of the theories he advances.
First, Feazel has not alleged any facts to suggest that it would be futile for him to
pursue the administrative procedures apparently available to him under the LTD
Plan. The August 18, 2017 letter from Ameren refers Feazel to “the Plan’s
summary plan description for . . . claims and appeals procedures” (Doc. 1, Ex. B),
which plaintiff’s counsel appears to have received (See, e.g., Doc. 1, ¶¶ 36–37;
Doc. 22, Ex. A). The letter also includes a phone number for the Ameren Benefits
Center, to which “questions regarding [Feazel’s] Long Term Disability Plan benefit
payment” may be directed (Doc. 1, Ex. B). Feazel argues that the defendants’
failure to provide him with certain other Plan documents “leaves ample possibility
. . . that there is no such appeal procedure” (Doc. 22, pp. 6–7). Notwithstanding
the plain language of Ameren’s letter, which appears to contradict Feazel’s claim,
Feazel has not alleged facts to indicate that the claims and appeals procedures
referenced in the letter could not redress his grievance. Feazel has thus failed to
demonstrate that he should be excused from the exhaustion requirement based
Feazel also argues that he should be excused from the exhaustion
requirement on the basis that the defendants wrongfully denied him meaningful
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access to review procedures. Again, Feazel has not alleged any facts to suggest
that he was denied meaningful access to review procedures. He does not indicate
that he made any attempt to avail himself of the claims and appeals process
referenced in Ameren’s August 18, 2017 letter. Furthermore, in email
correspondence between the parties appended to Feazel’s response to defendants’
motion to dismiss (Doc. 22), LTD Plan counsel references the available claims
and appeals process, cites the relevant LTD Plan document, and offers to help
Feazel file a claim or appeal (Doc. 22, Ex. A). Feazel has failed to allege any facts
to show that he attempted to initiate such a claim or appeal, and that the
defendants denied him access to such procedures.
Therefore, because Feazel has failed to allege facts showing that he
should be excused from the exhaustion requirement, the defendants’ motion to
dismiss for failure to exhaust administrative remedies is granted.
B. Breach of Fiduciary Duty Claims
Feazel also argues that the defendants breached their fiduciary duty to
him in several ways, which caused him emotional distress and entitles him to
compensatory damages (Doc 1, ¶¶ 29–38). The defendants respond that Feazel’s
fiduciary breach claims should be dismissed because they are duplicative and
seek relief that is not available under ERISA (Doc. 17, pp. 6–8).
The Court need
not address this argument as it finds that plaintiff’s case should be dismissed for
failure to exhaust administrative remedies.
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For the reasons stated above, the Court GRANTS defendants’ motion to
dismiss plaintiff’s complaint (Doc. 16) and DENIES as moot plaintiff’s motion to
strike (Doc. 27). The Court DISMISSES without prejudice plaintiff’s complaint
for failure to exhaust administrative remedies. Further, the Court DIRECTS the
Clerk of the Court to enter judgment.
IT IS SO ORDERED.
United States District Judge
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