Emerick v. Blue Cross Blue Shield Anthem

Filing 12

OPINION AND ORDER DENYING 8 MOTION to Dismiss Plaintiff's Complaint filed by Blue Cross Blue Shield Anthem. Signed by Judge Jon E DeGuilio on 4/11/18. (Copy mailed to pro se party)(ksp)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
WILLIAM EMERICK, pro se,
Plaintiff,
v.
BLUE CROSS BLUE SHIELD
ANTHEM,

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Case No. 3:17-CV-895 JD

Defendant.
OPINION AND ORDER
Plaintiff William Emerick, proceeding pro se, filed a state court breach of contract suit
against Defendant Blue Cross Blue Shield Anthem (“Anthem”)1, alleging that Anthem failed to
reimburse him and his now-deceased wife for her medical expenses in accordance with their
joint health insurance policy. [DE 6] Anthem removed the matter to this Court based on federal
question jurisdiction, alleging that Emerick’s policy is an employee welfare benefit policy
created pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”), 29
U.S.C. § 1001, et seq. [DE 1 ¶ 5] On December 22, 2017, Anthem moved to dismiss Emerick’s
case under Fed. R. Civ. P. 12(b)(6). [DE 8] Emerick never responded.2 For the reasons stated
herein, the Court will deny Anthem’s motion to dismiss.

1
Anthem maintains that it has been improperly identified as “Blue Cross Blue Shield Anthem” in this
action. Rather, its proper identity is Anthem Insurance Companies, Inc.
 Under Local Rule 7-1(d)(2)(A), Emerick had fourteen days to respond to Anthem’s motion to dismiss.
Those fourteen days came and went without any filings. While not required to do so, the Court then
ordered Anthem to provide Emerick with notice of the pending motion to dismiss, given Emerick’s pro se
status and the dispositive nature of the motion. [DE 10] Anthem complied on January 17, 2018, giving
Emerick a new fourteen-day period to respond. [DE 10; 11] Now roughly three months later, Emerick still
has not responded to the instant motion. In fact, not counting his state court complaint, he has made no
filings in this action whatsoever.

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BACKGROUND
Emerick and his now-deceased wife were joint beneficiaries of an employee welfare
benefit policy created under ERISA. The policy bars beneficiaries from taking legal action to
recover benefits any later than three years after the date the relevant claims are required to be
furnished to Anthem [DE 9-1 at 89], and beneficiaries must provide Anthem with notice of
claims within 90 days of receiving covered services. Id. at 80. However, the policy also states
that beneficiaries “must exhaust the Plan’s Member Grievance and Appeal procedures before
filing a lawsuit or other legal action of any kind against [Anthem].” Id. at 89
Emerick alleges that, between November 2011 and January 2012, he incurred significant
expenses related to the hospitalization and treatment of his wife, who suffered from an
unspecified form of cancer and a broken spine. In total, these expenses equaled $232,000. They
included fees for her stay at a hospital in Tijuana, Mexico, transportation via air ambulance to
and from said hospital, doctors’ fees, and medication costs. Emerick alleges that he submitted a
demand for reimbursement of these expenses on March 13, 2012, and that he and his wife made
continuous demands for this reimbursement up until September 2016. He states that Anthem
tendered a fractional reimbursement of $20,000, but he does not allege when that happened, nor
whether or when he exhausted any internal appeal processes.
STANDARD
In reviewing a motion to dismiss for failure to state a claim upon which relief can be
granted under Federal Rule of Civil Procedure 12(b)(6), the Court construes the complaint in the
light most favorable to the plaintiff, accepts the factual allegations as true, and draws all
reasonable inferences in the plaintiff’s favor. Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143,
1146 (7th Cir. 2010). A complaint must contain only a “short and plain statement of the claim

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showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). That statement must
contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its
face, Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), and raise a right to relief above the speculative
level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). However, a plaintiff’s claim need
only be plausible, not probable. Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930,
935 (7th Cir. 2012). Evaluating whether a plaintiff’s claim is sufficiently plausible to survive a
motion to dismiss is “‘a context-specific task that requires the reviewing court to draw on its
judicial experience and common sense.’” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th
Cir. 2011) (quoting Iqbal, 556 U.S. at 678).
DISCUSSION
As a preliminary matter, the Court notes that Anthem attached a “true and accurate copy”
of the relevant employee welfare benefit policy to its motion. [DE 9 at 2; 9-1] A court normally
cannot consider documents outside the complaint without converting it into a motion for
summary judgment. See Fed. R. Civ. P. 12(d); Tierney v. Vahle, 304 F.3d 734, 738 (7th Cir.
2002). That being said, a court can consider documents attached to a motion to dismiss if they
are: part of the pleadings referred to in the plaintiff’s complaint; central to his claim; and
properly authenticated (or authenticity is conceded). See Hecker v. Deere & Co., 556 F.3d 575,
582 (7th Cir. 2009); Tierney, 304 F.3d at 738-39; Wright v. Associated Ins. Cos., 29 F.3d 1244,
1248 (7th Cir. 1994); Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th
Cir. 1993). Here, the health insurance policy is referenced in the complaint and is central to
Emerick’s claim that Anthem failed to reimburse his wife’s medical expenses. In addition, the
attached policy is concededly authentic because Emerick has not challenged its authenticity. See
Hecker, 556 F.3d at 582-83 (upholding district court’s consideration of documents attached to a

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motion to dismiss where the parties did not dispute the documents’ authenticity). Therefore, the
Court’s consideration of the policy here does not convert the instant motion into one for
summary judgment. See 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 735 (7th Cir. 2002).
A.

ERISA’s Preemption of Breach of Contract Claims
Moving on to the substance of the motion to dismiss, Anthem argues that, because the

policy is created under and governed by ERISA, Emerick’s state law breach of contract claims
are preempted by federal law. State common law causes of action asserting improper processing
of a claim for benefits under an employee benefit plan regulated by ERISA are preempted by the
statute. 29 U.S.C. § 1144(a); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987). Thus, Emerick’s
claim that Anthem “failed and refused to reimburse [him] for reasonable medical expenses he
incurred” should ordinarily be preempted.
However, while labeled a “breach of contract” claim under state law, Emerick’s
complaint adequately sets forth the elements of an ERISA action under 29 U.S.C. §
1132(a)(1)(B), which allows a beneficiary to bring a civil action in federal district court “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.” First, Emerick
alleges that he is a beneficiary3 under the policy: “Plaintiff … jointly with his deceased wife …
entered into a written health insurance contract with the Defendant” and “Defendant …
contracted with the Plaintiff to provide coverage for the medical needs of Plaintiff’s decedent.”
[DE 6 at 1] Second, he clearly seeks to recover benefits he believes are due to him under this
policy. See generally, id. Because of this, the Court will not dismiss his case simply because he

3
“The term ‘beneficiary’ means a person designated by a participant, or by the terms of an employee
benefit plan, who is or may become entitled to a benefit thereunder.” 29 U.S.C. § 1002(8).

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names “breach of contract” as a claim for relief but articulates a cause of action under ERISA.
See Bartholet v. Reishauer A.G. (Zurich), 953 F.2d 1073, 1078 (7th Cir. 1992) (explaining that
identifying an incorrect legal theory is not fatal where plaintiff brought state breach of contract
claim that was actually based on ERISA); see also Johnson v. City of Shelby, 135 S. Ct. 346
(2014) (“Federal pleading rules call for ‘a short and plain statement of the claim showing that the
pleader is entitled to relief’; they do not countenance dismissal of a complaint for imperfect
statement of the legal theory supporting the claim asserted.”) (citation omitted).
B.

Timeliness
Preemption arguments aside, Anthem also argues that Emerick’s lawsuit, initiated on

November 1, 2017, should be dismissed because he filed his complaint well after the contractual
limitation period lapsed. The policy’s language mandated that any legal action to recover
benefits be taken no later than three years after the date the claim was required to be furnished to
Anthem (ninety days after covered services rendered). [DE 9-1 at 80, 89] Emerick alleges he
incurred medical expenses between November 2011 and January 2012 for his wife’s treatment.
Thus, Anthem contends that the policy’s language limited him to taking legal action no later than
April 2015 (approximately ninety days plus three years). But Anthem neglects to mention
another provision in the policy, which is required by ERISA itself, 29 U.S.C. § 1133(2), and
states that a beneficiary “must exhaust the Plan’s Member Grievance and Appeal procedures
before filing a lawsuit or other legal action of any kind against [Anthem].” Id. at 89 (emphasis
added).
As a general matter, contractual limitations contained in health insurance policies are
enforceable in ERISA suits. Doe v. Blue Cross Blue Shield United of Wis., 112 F.3d 869, 875
(7th Cir. 1997). This holds true so long as the limitations period is not “unreasonably short.”

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Heimeshoff v. Hartford Life & Accident Ins. Co., 134 S. Ct. 604, 612 (2013) (“We must give
effect to the Plan’s limitations provision unless we determine … that the period is unreasonably
short ….”). To borrow from Judge Dow in Jamison v. Aetna Life Ins. Co.:
In Heimeshoff, the start of the contractual limitations period was based on the date
that the participant’s proof of loss was due. Because ERISA and its regulations
require plans to complete an internal review after participants submit proof of
loss, and because a participant’s legal cause of action does not accrue until the
plan’s internal review is complete, the three-year limitations period applicable in
Heimeshoff began to run before the participant’s legal cause of action accrued
(i.e., before the plan completed its internal review). The Supreme Court
concluded that this arrangement was reasonable, based on the fact that (a) the
typical internal review lasted only one year, leaving most participants with two
years to file suit, and (b) in Heimeshoff’s case, even though his internal review
took two years, he still had one year to file suit before the expiration of his
limitations period. Id. at 613.
No. 15-CV-0078, 2015 WL 6711081, *4 (N.D. Ill. Nov. 2, 2015).
Here, the policy measures Emerick’s limitations period based on the deadline for filing a
claim for benefits, which itself is measured based on the date on which he incurred medical
expenses for his wife’s treatment. Under this rubric, and according to Anthem’s calculations,
Emerick’s three-year contractual limitations period ended in April 2015. Emerick’s complaint,
however, contains no allegations as to whether or when he exhausted the internal review process
(or, when his claims became final) that served as a prerequisite to him filing suit. For example, if
Emerick challenged Anthem’s response to his claims pursuant to the grievance and appeal
process, and those internal procedures did not conclude until after April 2015, then he would
certainly have far less than an “unreasonably short” period of time to file a civil suit under
Heimeshoff; he would have no time at all to file suit.
The fact that this information is missing from Emerick’s complaint does not merit
dismissal. Timeliness (or lack thereof) is an affirmative defense, and “‘complaints need not
anticipate and attempt to plead around defenses.’” Chicago Bldg. Design, P.C. v. Mongolian
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House, Inc., 770 F.3d 610, 613 (7th Cir. 2014) (quoting United States v. N. Trust Co., 372 F.3d
886, 888 (7th Cir. 2004)). Accordingly, a motion to dismiss based on a failure to comply with a
contractual limitations period should be granted only where “‘the allegations of the complaint
itself set forth everything necessary to satisfy the affirmative defense.’” See id. (quoting United
States v. Lewis, 411 F.3d 838, 842 (7th Cir. 2005)). In other words, dismissal on this ground at
the pleading stage is only appropriate when the plaintiff “affirmatively plead[s] himself out of
court.” Id.; see also Vinson v. Vermilion Cnty., Ill., 776 F.3d 924, 929 (7th Cir. 2015) (“[A]
plaintiff may plead herself out of court when she includes in her complaint facts that establish an
impenetrable defense to her claims.”). Here, the complaint is ambiguous as to when Emerick
exhausted the policy’s internal review procedures, if at all. Because these factual details remain
unresolved, the Court cannot address the reasonableness of the applicable contractual limitations
period here, as required by Heimeshoff. See Jamison, 2015 WL 6711081, *5 (issues of fact
remained as to when plaintiff’s cause of action arose, preventing dismissal for lack of
timeliness). Once the parties determine whether and when Emerick completed an internal review
of his claims for reimbursement, “they should consider the Supreme Court’s reasonableness
requirement as articulated in Heimeshoff.” Id. For the time being, the contents of the complaint
do not establish the airtight timeliness defense that Anthem proposes; Emerick did not “plead
himself out of court.” Therefore, the motion to dismiss will be denied.

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CONCLUSION
For the foregoing reasons, the Court hereby DENIES Defendant Anthem’s Motion to
Dismiss. [DE 8]
SO ORDERED.
ENTERED: April 11, 2018
/s/ JON E. DEGUILIO
Judge
United States District Court

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