Piro v. Nexstar Broadcasting Inc et al

Filing 69

MEMORANDUM RULING re 54 MOTION for Summary Judgment filed by Nexstar Broadcasting Inc, 55 MOTION for Summary Judgment filed by Guardian Life Insurance Co of America. Signed by Judge Robert G James on 6/10/13. (crt,Crawford, A)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
MONROE DIVISION
PAUL PIRO

CIVIL ACTION NO. 11-2049

VERSUS

JUDGE ROBERT G. JAMES

NEXSTAR BROADCASTING, INC., ET AL

MAG. JUDGE KAREN L. HAYES

RULING
This action was brought by Plaintiff Paul Piro (“Piro”) against Defendants Nexstar
Broadcasting, Inc. (“Nexstar”) and Guardian Life Insurance Corporation of America
(“Guardian”) (collectively, “Defendants”). Piro has raised claims based on the denial of longterm disability benefits.
Pending before the Court are Motions for Summary Judgment filed by Nexstar [Doc. No.
54] and Guardian [Doc. No. 55]. For the following reasons, the Motions are GRANTED.
I.

BACKGROUND AND PROCEDURAL HISTORY
Piro was employed by Nexstar from June 1996 to July 2011. On January 1, 2011,

Guardian offered a group insurance policy to Nexstar employees, which provided disability
insurance coverage to eligible participants. Both short-term disability (“STD”) and long-term
disability (“LTD”) coverage was available.
Premiums for the STD plan were paid by Nexstar. However, enrollment in the LTD plan
was optional, and monthly premiums were deducted from the employee’s wages. Guardian
offered LTD coverage to Nexstar employees beginning on January 1, 2011. Any Nexstar
employee who sought to enroll in the LTD plan was required to do so by February 2, 2011. If an
employee did not enroll within the first 31 days, enrollment was subject to the discretion of

Guardian. An employee was required to submit evidence of insurability and receive Guardian’s
written approval before coverage commenced.
Piro submitted an application on March 1, 2011. On March 11, 2011, Guardian sent a
notice to Piro requesting evidence of insurability. Piro never responded to that notice, and
Guardian never issued written approval to Piro. However, Nexstar inexplicably began deducting
LTD premiums from Piro’s wages, a practice that continued through June 10, 2011.1 After Piro
instituted this action, Nexstar refunded all LTD premiums collected from Piro.
On June 7, 2011, Guardian received Piro’s claim for STD benefits. Guardian later
received an attending physician’s statement of disability stating that Piro became totally disabled
as of June 14, 2011. Guardian determined that Piro was entitled to STD benefits through
December 9, 2011, but was not entitled to LTD benefits because he was not enrolled in the LTD
plan.
Piro’s employment with Nexstar officially ended on July 1, 2011. On that date, Piro and
Nexstar entered a “Severance Agreement and General Release” (the “Release”), which released
Nexstar and its employee benefit plans and administrators of any and all claims in exchange for
severance pay of $5,712.00.
On October 20, 2011, Piro filed this action in the Fourth Judicial District Court.
Defendants removed the action to this Court on the basis of federal question jurisdiction pursuant
to ERISA preemption, as well as diversity jurisdiction. On January 27, 2012, Defendants filed
Motions to Dismiss for failure to exhaust the administrative remedies provided by the Plan.
On June 8, 2012, this Court entered a Ruling [Doc. No. 43] and Judgment [Doc. No. 44],
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Nexstar neither acknowledges nor denies that these deductions occurred.
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granting Defendants’ Motions to Dismiss without prejudice. However, at that time, Piro filed an
Amended Complaint [Doc. No. 42], asserting a detrimental reliance claim against Nexstar. The
Court stayed the matter for seven months pending Piro’s exhaustion of administrative remedies
and ordered him to file a status report by January 8, 2013.
After the January 8, 2013 deadline passed without any filing, the Court contacted Piro’s
counsel. The parties filed multiple status reports [Doc. Nos. 46, 49, 51, 52], and a status
conference was held before Magistrate Judge Karen L. Hayes [Doc. No. 50]. On the basis of the
representations made in the status reports and during the status conference, this Court ordered the
stay lifted on March 12, 2013, and invited the parties to file dispositive motions [Doc. No. 53].
II.

LAW AND ANALYSIS
A.

Summary Judgment Standard of Review

Summary judgment “should be rendered if the pleadings, the discovery and disclosure
materials on file, and any affidavits show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.” FED . R. CIV . P. 56(c)(2). The moving
party bears the initial burden of informing the court of the basis for its motion by identifying
portions of the record which highlight the absence of genuine issues of material fact. ACE Am.
Ins. Co. v. Freeport Welding & Fabricating, Inc., 699 F.3d 832, 839 (5th Cir. 2012) (citing
Celotex Crop. v. Catrett, 477 U.S. 317, 323 (1986)). A fact is “material” if proof of its existence
or nonexistence would affect the outcome of the lawsuit under applicable law in the case.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is
“genuine” if the evidence is such that a reasonable fact finder could render a verdict for the
nonmoving party. Id.
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If the moving party can meet the initial burden, the burden then shifts to the nonmoving
party to establish the existence of a genuine issue of material fact for trial. ACE Am. Ins. Co, 699
F.3d at 839. The nonmoving party must show more than “some metaphysical doubt as to the
material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586
(1986). In evaluating the evidence tendered by the parties, the Court must accept the evidence of
the nonmovant as credible and draw all justifiable inferences in its favor. Anderson, 477 U.S. at
255.
B.

Piro’s Claims Against Nexstar

Most claims against Nexstar were dismissed without prejudice by this Court on June 8,
2012 [Doc. Nos. 43, 44]. However, in his Amended Complaint, Piro added a claim for
detrimental reliance. Piro contends that he relied on the fact that Nexstar was deducting LTD
premiums from his wages as evidence that he had properly enrolled in the LTD plan, and no
further action was necessary for enrollment.
The merit of Piro’s claim turns on the Release agreement he signed when his employment
ended. Pursuant to the Release, Piro agreed to “knowingly and voluntarily release and forever
discharge Nexstar Broadcasting Group, Inc, . . . of and from any and all claims, known and
unknown, asserted or unasserted, which the Employee has or may have against the Releasees as
of the date of execution . . . .” The parties signed the agreement on July 1, 2011, Piro’s last day
of employment with Nexstar. In consideration, Piro received a sum of $5,712.00. He was given
an additional seven days to revoke his acceptance of the agreement, and he reaffirmed his
acceptance on July 8, 2011.
Piro’s sole argument is that the Release is not enforceable because it is a contract of
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adhesion. “Generally speaking, a contract of adhesion is a standard contract, usually in printed
form, prepared by a party of superior bargaining power for adherence or rejection of the weaker
party.” Velazquez v. Brand Energy & Infrastructure Servs, Inc., 781 F. Supp. 2d 370, 376 (W.D.
La. 2011) (quoting Rogers v. Brown, 986 F. Supp. 354, 359-60 (M.D. La. 1997)). A contract is
one of adhesion when either its form, print, or unequal terms call into question the consent of the
non-drafting party and it is demonstrated that the contract is unenforceable, due to lack of
consent or error, which vitiates consent. Aguillard v. Auction Mgmt Corp., 2004–2804 (La.
6/29/05); 908 So.2d 1, 17. Even if a contract is standard in form and printed in small font, if it
does not call into question the non-drafting party’s consent, there is no adhesion. Velazquez, 781
F. Supp. at 377.
Here, there is no indication that Piro did not freely consent when he signed the Release.
The Release was standard in form but was not printed in small font. In fact, much of the text was
in bold. The Release advised Piro to consult with an attorney before signing. Piro had up to 45
days to consider the Release before signing. Once he signed the Release, Piro had an additional
seven days to revoke his acceptance.
Piro argues that the Release is invalid because of its “grossly unequal” terms. The terms
were offered on a take-it-or-leave-it basis, and if Piro did not sign the Release, he would not
receive his severance pay. However, by definition, severance pay is the consideration received in
exchange for giving up something. Piro received $5,712.00 in exchange for waiving any causes
of action he may have against Nexstar. He could have declined the severance pay and, instead,
pursued whatever claims he believed he had against Nexstar. In accepting the severance pay,
Piro also accepted the risk that he waived any present and future claims against Nexstar.
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Because Piro has raised no persuasive evidence to the contrary, he has not raised a
genuine dispute of material fact as to Nexstar’s liability.
C.

Piro’s Claims Against Guardian

Piro’s Amended Complaint raised only a detrimental reliance claim, which is alleged
against Nexstar. Thus, it appears that all claims against Guardian have already been dismissed by
the Court without prejudice because of Piro’s failure to exhaust his administrative remedies.
However, in an abundance of caution, Guardian brings its Motion for Summary Judgment.
First, it is clear that Piro never enrolled in Guardian’s LTD plan. Piro did not enroll
within 31 days of becoming eligible for coverage on January 1, 2011. When he attempted to
enroll after the open period, Piro neither submitted evidence of insurability nor obtained written
approval from Guardian to enroll. Piro presented no evidence that Guardian received any LTD
premium payments from Nexstar. Thus, he is not entitled to LTD benefits from Guardian.
Second, Piro waived any rights he had against Guardian when he signed the Release. The
agreement states that Piro “knowingly and voluntarily released and forever discharged Nexstar
Broadcasting Group, Inc, . . . and their employee benefit plans and programs and their
administrators and fiduciaries . . . of and from any and all claims, known and unknown, asserted
or unasserted, which the Employee has or may have against the Releasees as of the date of
execution . . . .” Guardian is an employee benefit plan or program administrator. Piro makes no
argument that Guardian falls outside the scope of the Release. Thus, when Piro signed the
Release, waiving his claims against Nexstar, he also waived any claims against Guardian.
Finally, even after a lengthy stay, Piro still has not exhausted his administrative remedies.
Guardian’s policies have specific procedures for making a claim and appealing an adverse
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decision. Piro’s own affidavit is ambiguous at best and intentionally evasive and misleading at
worst. Piro simply states that he was informed that he “would have to demonstrate [his]
insurability before [he] could apply for these benefits,” and because he was already disabled, “it
was impossible to demonstrate insurability.” Piro makes no affirmation that he exhausted his
remedies, appealed any decision, or made any effort to resolve this dispute through Guardian’s
administrative procedure, even though this Court ordered him to do so.
Federal Rule of Civil Procedure 41(b) authorizes a district court to dismiss an action for
want of prosecution or failure to comply with a court order. Piro has made no effort to pursue his
claims since the June 6, 2012 stay order. Thus, dismissal is proper on these grounds, as well as
the merits.
Piro has not raised a genuine dispute of material fact for trial as to Guardian’s liability,
and he has failed to exhaust his administrative remedies.
III.

CONCLUSION
For the foregoing reasons, Defendants Nexstar Broadcasting, Inc.’s and Guardian Life

Insurance Corporation of America’s Motions for Summary Judgment [Doc. Nos. 54, 55] are
GRANTED, and Plaintiff Paul Piro’s claims are DISMISSED WITH PREJUDICE.

MONROE, LOUISIANA, this 10th day of June, 2013.

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