ROCHE et al v. AETNA, INC. et al

Filing 226

OPINION. Signed by Judge Noel L. Hillman on 6/27/2019. (rss, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

JAY MINERLEY, individually
and as class representative,
Plaintiff,
v.
Civil No. 13-1377 (NLH/KMW)
AETNA, INC., AETNA HEALTH,
INC. (a NJ corp.), AETNA
HEALTH INSURANCE CO., AETNA
LIFE INSURANCE CO., and THE
RAWLINGS COMPANY, LLC,

OPINION

Defendants.

APPEARANCES:
CHARLES KANNEBECKER
KANNEBECKER LAW
104 W. HIGH STREET
MILFORD, PA 18337
AND
RYAN N. BOLAND
MATTHEW D’ANNUNZIO
DON P. FOSTER
OFFIT KURMAN, P.A.
1801 MARKET STREET, SUITE 2300
PHILADELPHIA, PA 19103
Attorneys for Plaintiff Jay Minerley.
ANTHONY M. CHRISTINA
RICHARD W. COHEN
GERALD LAWRENCE
URIEL RABINOVITZ
LOWEY DANNENBERG, P.C.
44 SOUTH BROADWAY, SUITE 1100
WHITE PLAINS, NY 10601-2310

Attorneys for Defendants Aetna, Inc., Aetna Health, Inc. (a
NJ corp.), Aetna Health Insurance Co., Aetna Life Insurance Co.,
and the Rawlings Company, LLC.
HILLMAN, District Judge
This case concerns the interpretation of an insurance
policy and whether the insurer may require the insured to
reimburse medical costs paid by the insurer when the insured
receives an award from a third-party tortfeasor.

Currently

before the Court is Plaintiff’s Motion for Reconsideration and
Defendants’ 1 Motion for Summary Judgment.

For the reasons

discussed herein, Plaintiff’s Motion for Reconsideration will be
denied and Defendants’ Motion for Summary Judgment will be
granted.
BACKGROUND
Our recitation of the facts is taken from Plaintiff’s and
Defendants’ newly filed statements of material facts and those
facts which the Court previously found undisputed in its
September 29, 2018 Opinion.
where relevant.

This Court notes factual disputes

Plaintiff Jay Minerley was an employee of

Weiss-Aug Company Inc. (“Weiss-Aug”), a New Jersey company, from
February 2007 through April 2017.

1

During that time, Minerley

For purposes of this Opinion, Aetna, Inc., Aetna Health, Inc.,
Aetna Health Insurance Co., and Aetna Life Insurance Co. will be
referred to as “Aetna” and Rawlings Company LLC will be referred
to as “Rawlings.” Otherwise, the Court will refer to these
entities collectively as “Defendants.”
2

enrolled in employer-sponsored health benefits provided by
Weiss-Aug.

Of relevance, Minerley attended a Weiss-Aug employee

benefits meeting on October 27, 2009 and received a plan design
document, which provided a top-level overview of the benefits
offered.

This document did not contain any discussion of a

subrogation right. 2
Minerley participated in the Weiss-Aug sponsored healthcare
benefits plan (the “ERISA Plan”).

Debra Myshkoff was the plan

administrator for the ERISA Plan and Weiss-Aug was the plan
sponsor.

Weiss-Aug received copies of the relevant policies

provided by Aetna.

It is unclear whether Myshkoff provided

copies of the policies at the October 2009 benefits meeting, but
it is undisputed that Minerley had access to plan documents
through an electronic portal provided by Aetna.
As part of the Weiss-Aug Plan, Minerley received benefits
under an Aetna Citizen Choice Point of Service HMO Plan (the
“Aetna insurance policies” or the “Aetna policies”).

Minerley’s

insurance benefits consisted of two policies: the Pennsylvania
HMO policy (the “Aetna PA Policy”), underwritten by Aetna Health
Inc., and the New Jersey Non-Referred policy (the “Aetna NJ

2

Plaintiff asserts Weiss-Aug described this document “as the
ERISA Plan.” (Pl.’s SOMF ¶ 16.) But, Debra Myshkoff’s
testimony cited by Plaintiff does not support this assertion.
Myshkoff stated that the “Plan Design Document” was “a plan
description” and “not a summary plan description.” (Pl.’s Mot.
for Partial Summ. J., Ex. E 29:20-25.)
3

Policy”), underwritten by the Aetna Health Insurance Company.
The Aetna PA Policy provided in-network benefits and emergency
services while the Aetna NJ Policy provided out-of-network and
non-referred medical services.
This Court previously determined that the Aetna PA Policy
is the insurance policy that controls in this case. 3
PA Policy contains two documents.

The Aetna

The first document was an

agreement between Weiss-Aug and the underwriting Aetna entity.
The second document was a Certificate of Coverage
(“Certificate”).

Within this Certificate is a section

pertaining to the underwriting Aetna entities’ right of recovery
against an insured in specific situations.

In relevant part,

the Aetna PA Policy’s Certificate stated:
The Member also specifically acknowledges HMO’s right of
reimbursement. This right of reimbursement attaches, to
the fullest extent permitted by law, when HMO has
provided health care benefits for injuries or illness
for which a third party is and the Member and/or the
Member’s representative has recovered any amounts from
the third party or any party making payments on the third
party’s behalf.
By providing any benefit under this
Certificate, HMO is granted an assignment of the
proceeds of any settlement, judgment or other payment
received by the Member to the extent of the full cost of
all benefits provided by HMO.
(emphasis in original).

This was amended effective November 1,

2009, to state:

3

The Court notes that Plaintiff disputes this holding of the
Court. The Court will address Plaintiff’s argument on this
point when it analyzes Plaintiff’s Motion for Reconsideration.
4

By accepting benefits under this Plan, the Member also
specifically acknowledges HMO’s right of reimbursement.
This right of reimbursement attaches when this Plan has
provided health care benefits for expenses incurred due
to Third Party injuries and the Member or the Member’s
representative has recovered any amounts from any
sources, including but not limited to: payments made by
a third Party or any insurance company on behalf of the
Third Party . . . .
(emphasis in original).
Myshkoff, the Employee Retirement Income Security Act
(“ERISA”) plan administrator for Weiss-Aug, stated that the
Aetna PA Policy was the relevant ERISA plan document for the
time period at issue.

Weiss-Aug submitted a single Form 5500

for the year 2010, received one plan identification number, 502,
and identified through various schedules that Aetna Health,
Inc., Sun Life and Health Insurance Company, and Unum Life
Insurance Company of America would provide various benefits.
On May 20, 2010, Minerley was involved in a motor vehicle
accident in Morris County, New Jersey.

He sustained multiple

injuries, including fractured ribs, fractured vertebrae, and
herniated disks.

He was treated at St. Clare’s Hospital and

Morristown Memorial Hospital.

Minerley’s medical treatments

totaled $3,512.82 and were paid for by his Aetna PA Policy.
Minerley retained a personal injury attorney, Charles
Kannebecker.

Defendant Rawlings, which was Aetna’s subrogation

and reimbursement claims vendor at the time, notified
Kannebecker on July 21, 2010 of the Aetna PA Policy’s

5

reimbursement provision discussed supra.

Minerley later

successfully recovered from the third-party tortfeasor in this
accident.

On January 9, 2013, Rawlings received a reimbursement

check from Kannebecker, sent on Minerley’s behalf, in the amount
of $3,512.82 — the amount of the health benefits provided.
Sometime after Minerley received Rawlings’ subrogation
demand, Minerley asked the Weiss-Aug Human Resources Department
to provide him with a copy of his insurance policy.

Minerley

claims now that he received the Aetna NJ Policy, not the Aetna
PA Policy.

Defendants’ dispute the veracity of this assertion,

citing previous declarations in which Minerley did not state he
received the Aetna NJ Policy and appears to be unsure of what he
received.

Solely for purposes of deciding the pending motions,

this Court will assume that only the Aetna NJ Policy was given
to Minerley by Weiss-Aug.
To the extent relevant, Minerley asserts that “Aetna never
advised Debra Myshkoff or Weiss-Aug that it sought repayment of
medical benefits paid to Weiss-Aug employees in the event that
the employees receive a personal injury recovery.”
¶ 12.)

(Pl.’s SOMF

Nor, according to Plaintiff, did Myshkoff or Weiss-Aug

advise Weiss-Aug employees that Aetna may possess a subrogation
right.

Defendants dispute this assertion, stating the Court has

already found (1) that Aetna sent the Aetna PA Policy to WeissAug and (2) that Minerley had access to the Aetna PA Policy

6

online.

Thus, here there appears to be no dispute.

While Aetna

may not have explicitly stated to Weiss-Aug that there was a
reimbursement right, and Weiss-Aug may not have explicitly told
Minerley the same, both Weiss-Aug and Minerley had access to
this information.
Minerley did not contest this policy provision through the
administrative procedures set forth in the Aetna PA Policy (or
the Aetna NJ Policy) as described supra.

Minerley claims he did

not do so because he never received a “Notice of Adverse Benefit
Determination.”

Defendants do not contest that Minerley did not

receive a document with that title, but do state that the July
21, 2010 letter from Rawlings and their own filings in this case
serve as notice of their adverse benefit determination.

Instead

of pursuing his administrative remedies, Minerley, along with
Michelle Roche and Tim Singleton, filed a complaint against
Defendants in the New Jersey Superior Court, Law Division,
Atlantic County.
March 7, 2013.

Defendants removed the action to this Court on
Motion practice, multiple opinions, and

discovery ensued.
Currently, Minerley is the only Plaintiff in this case.
Minerley, through his amended complaint, claimed the following:
•

Aetna violated 29 U.S.C. § 1132(a)(1)(B) by denying
benefits to which Minerley was entitled; and

7

•

Aetna violated 29 U.S. § 1004(a)(1)(A) and 29 U.S.C.
§ 1132(a)(3) (concerning breaches of fiduciary duty) by
requiring reimbursement of Minerley’s tort claim, for
allegedly misrepresenting its right to reimbursement, and
by failing to avoid the alleged conflict of interest in
demanding reimbursement.
On September 29, 2018, upon cross-motions for summary

judgment filed by the parties, the Court dismissed all claims
against all Defendants except for those claiming a breach of
fiduciary duty.

On October 15, 2018, Plaintiff filed a Motion

for Reconsideration on certain factual and legal findings of
this Court’s September 29, 2018 Opinion and Order.

On January

25, 2019, Defendants filed a Motion for Summary Judgment on the
remaining claims for breach of fiduciary duty.

These motions

were fully briefed and are now ripe for adjudication.
ANALYSIS
A.

Subject Matter Jurisdiction

This Court exercises jurisdiction pursuant to 28 U.S.C. §
1331 and 29 U.S.C. § 1132(f).
B.

Motion for Reconsideration Standard

The Local Rule 7.1(i) standard applies to Plaintiff’s
Motion for Reconsideration.

Under Local Rule 7.1(i), the moving

party must demonstrate “‘the need to correct a clear error of
law or fact or to prevent manifest injustice.’”

8

Andreyko v.

Sunrise Sr. Living, Inc., 993 F. Supp. 2d 475, 478 (D.N.J. 2014)
(citations omitted). 4

In doing so, the moving party must show

the “‘dispositive factual matter or controlling decisions of
law’” it believes the court overlooked in its initial decision.
Mitchell, 913 F. Supp. 2d at 78 (citation omitted).

A mere

disagreement with the Court will not suffice to show that the
Court overlooked relevant facts or controlling law.

United

States v. Compaction Sys. Corp., 88 F. Supp. 2d 339, 345 (D.N.J.
1999).
C.

Plaintiff’s Motion for Reconsideration

Plaintiff asserts this Court must reconsider its September
29, 2018 Opinion and Order granting Defendants’ partial summary
judgment and denying Plaintiff partial summary judgment as they
related to Plaintiff’s ERISA denial of benefits claims.
Plaintiff rests his reconsideration argument on two overall
arguments: (1) the Court erred when it determined that the Aetna
PA Policy controlled 5 because it was never lawfully distributed
and (2) the Court erred when it found 29 C.F.R. § 2590.715-2719

4

These are the exact grounds on which Plaintiff bases its Motion
for Reconsideration. (Pl.’s Mot. for Recons. 1 (“Plaintiff
moves this Court for reconsideration of its [September 29],
2018, Order to correct a clear error of law and fact and to
prevent manifest injustice.”).)
5

To be clear, the Court did not find that the Aetna PA Policy
was Weiss-Aug’s ERISA Plan, just that it was a plan document
that – which together with other insurance policies and benefits
purchased by Weiss-Aug – comprised Weiss-Aug’s ERISA Plan.
9

was inapplicable.

Defendants disagree, arguing there is no

reason why this Court must reconsider its previous decision.
The Court will address each argument in turn.
a. Whether the Alleged Violations of ERISA’s Disclosure
Regulations by Weiss-Aug Warrant Reconsideration of
the Dismissal of Certain ERISA Claims Against
Defendants
Plaintiff’s first argument can be further separated into
two distinct parts.

First, Plaintiff argues electronic

disclosure of the ERISA Plan was insufficient in this particular
circumstance.

Second, Plaintiff challenges whether there were

sufficient facts to support the conclusion that the Aetna PA
Policy was ever received by Weiss-Aug and distributed to the
relevant employees, here Plaintiff.

Defendants essentially

argue the Court has correctly decided that Defendants did not
violate ERISA regulations and that a non-party’s alleged
violation of ERISA regulations has no effect on this case.
Therefore, the ERISA denial of benefits claims were properly
dismissed.
Defendants are correct.
larger issue.

Plaintiff has again ignored the

Whether the Aetna PA Policy, or any policy, was

distributed correctly under ERISA regulations has no bearing on
whether Defendants violated ERISA.

The disclosure regulations

provided by Plaintiff, 29 C.F.R. § 2520.104b-1 places the
disclosure requirement on “[t]he administrator of an employee

10

benefit plan.”

Plaintiff does not ask this Court to reconsider

its decision holding Defendants are not “plan administrators”
per the ERISA statute.
Undoubtedly, Defendants are not the plan administrators.
Plaintiff again appears to assume that there is only one type of
administrator and Defendants fall within that category.
incorrect.

That is

The decision in Butler v. United Healthcare of

Tennessee, Inc. by the Sixth Circuit Court of Appeals succinctly
sums up this important distinction Plaintiff fails to draw:
ERISA-governed plans, as it turns out, often have two
types of “administrators.” Corporate Counsel’s Guide to
ERISA § 4:6 (2014).
The first type — a claims
administrator — is the entity that “administers claims
for employee welfare benefit plans and has authority to
grant or deny claims.”
Moore v. Lafayette Life Ins.
Co., 458 F.3d 416, 438 (6th Cir. 2006); see also
Corporate Counsel’s Guide to ERISA § 4:6 (“[A] claims
administrator is the party responsible for claims review
and approval under the given benefit plan.”). The second
type — a plan administrator — is usually the “employer
who adopted the benefit plan in question.”
Corporate
Counsel’s Guide to ERISA § 4:6.
“The phrase ‘plan
administrator’ should not be confused with the term
‘claims administrator.’ . . . [T]h[e] role [of claims
administrator] usually does not confer on that party the
status of plan administrator.” Id. Quite often, indeed,
the claims administrator and the plan administrator are
not the same. See, e.g., Moore, 458 F.3d at 424-25, 438
(distinguishing between the employer/plan administrator
and the insurance company/claims administrator); see
also Fendler v. CNA Grp. Life Assurance Co., 247 F. App'x
754, 755, 758-59 (6th Cir. 2007).
764 F.3d 563, 570 (6th Cir. 2014).

In Butler, the Sixth Circuit

found that the insurance provider – which decided whether claims
would be granted or denied under the insurance policy - was not

11

the plan administrator and further found that it could not be
held liable for a violation of a disclosure requirement under
ERISA.

Id. at 569-71.

Because Defendants were not the plan

administrators here, the Court cannot find a violation of the
disclosure regulations allows imposition of liability against
Defendants under ERISA.
But, that is only part of Plaintiff’s argument.

Plaintiff

appears to argue that even if Myshkoff is the plan
administrator, her failure to disclose the Aetna PA Policy means
that Defendants lose their right to assert it.

Plaintiff has

cited no section of ERISA or implementing regulation, nor any
case law suggesting that a disclosure violation by a plan
administrator would void an insurance contract that an insurer
executed with the plan sponsor.
case that states so.

Nor is the Court able to find a

Plaintiff sums up the two cases it does

cite – Burke v. Kodak Retirement Income Plan, 336 F.3d 103 (2d
Cir. 2013) and Davis v. NMU Pension and Welfare Plan, 810 F.
Supp. 532 (S.D.N.Y. 1992) – as standing for the proposition that
“the consequences of disclosing the wrong documents to employees
must be placed on the employer.”

(Pl.’s Mot. for Recons. 11.)

Yet, here Plaintiff wishes to impose the consequences of
the employer’s alleged mistakes against the insurer.

Allowing

Plaintiff to impose those consequences against Defendants here
would require the Court to rewrite ERISA and the surrounding

12

case law.

It would essentially impose the duty to disclose on

the insurance company even though the regulations only impose
that duty on the plan administrator.

Moreover, it would result

in imposing a significant penalty on the insurance company even
though it did not violate the regulation.

The Court cannot

allow Plaintiff to perform an end-run around suing the parties
it asserts are actually responsible, as it would upset the
statutory balance created by Congress in enacting ERISA and the
regulations which were promulgated to enforce it. 6
Accordingly, the Court will deny Plaintiff’s Motion for
Reconsideration on these grounds.

The Court finds there has

been no clear error of fact or law nor any manifest injustice.
Plaintiff’s remaining arguments contained therein concerning the
details of the disclosure requirements and whether or not
Myshkoff or Weiss-Aug ever received the Aetna PA Policy are moot
based upon the Court’s analysis, supra.
b. Whether 29 C.F.R. § 2590.715-2719 is Applicable
Plaintiff also asserts that the Court’s finding that 29

6

Additionally, Plaintiff’s argument is internally inconsistent.
Plaintiff does not deny that he received benefits from Aetna
after he was injured in a car accident. It would be
inappropriate to find that the Aetna PA Policy was void because
of a disclosure violation yet allow Plaintiff to keep the funds
Aetna paid for his treatment. If the Aetna PA Policy is void –
or even the Aetna NJ Policy, which Plaintiff has asserted is the
controlling policy here – then Plaintiff’s argument would seem
to lead him to the same or similar outcome: no benefits.
13

C.F.R. § 2590.715-2719 was inapplicable was a clear error of
law.

The Court opined that this regulation was not applicable

as it was only effective on or after January 1, 2017.

Plaintiff

argues here that it was asserting a violation under an older
version of the regulation which was effective “for plan years
beginning on or after September 23, 2010.”
Recons. 12.)

(Pl.’s Mot. for

Defendants agree the Court made an error in

identifying the effective date, but argue this was a harmless
error as (1) the effective date was still after the plan year at
issue and (2) there were other bases for dismissal of this
argument.
The Court finds it was mistaken in ruling that the
effective date was January 1, 2017.

While that is the effective

date of a new version, that was not the effective date of the
version at-issue.
harmless error.

But, the Court additionally finds this was a
The undisputed facts show the Plaintiff’s

accident occurred in May 2010 and he received the benefits in
May and June 2010.

Obviously, the benefits he received were

under an ERISA Plan with a plan year that both predated the
final approval of the regulation at-issue (July 2010) and the
effective date (plan years beginning on or after September 23,
2010).
Plaintiff explains that even though the benefits given were
under an ERISA plan with a plan year preceding the regulation,

14

the subrogation demands were made after the regulation was
deemed effective.

The legal import, according to Plaintiff, is

that the regulation thus applied because subrogation demands
were made while the regulation was effective.
inapposite.

This argument is

To determine the regulation’s effective date, the

Court does not consider whether attempts to collect on a
subrogation claim occurred after the effective date, but whether
it involves a plan that has a plan year beginning on or after
September 23, 2010.

Thus, the only relevant fact to determine

whether the regulation is applicable is whether the actions
concern an ERISA plan with a certain plan year.

The ERISA Plan

precedes the plan year required by the regulation.

This

regulation is inapplicable. 7
Accordingly, this Court finds that Plaintiff’s Motion for
Reconsideration must be denied on these grounds.

Thus, the

Court will deny Plaintiff’s Motion for Reconsideration, in its
entirety.
D.

Summary Judgment Standard

Summary judgment is appropriate where the Court is
satisfied that “‘the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the

7

Not only is Plaintiff’s argument inapposite, but it would also
essentially rewrite the regulation to govern conduct the
relevant agency did not intend to govern. That cannot be done
by this Court.
15

affidavits if any,’ . . . demonstrate the absence of a genuine
issue of material fact” and that the moving party is entitled to
a judgment as a matter of law.

Celotex Corp. v. Catrett, 477

U.S. 317, 322-23 (1986) (citing FED. R. CIV. P. 56).
An issue is “genuine” if it is supported by evidence such
that a reasonable jury could return a verdict in the nonmoving
party’s favor.
248 (1986).

Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

A fact is “material” if, under the governing

substantive law, a dispute about the fact might affect the
outcome of the suit.

Id.

“In considering a motion for summary

judgment, a district court may not make credibility
determinations or engage in any weighing of the evidence;
instead, the non-moving party’s evidence ‘is to be believed and
all justifiable inferences are to be drawn in his favor.’”
Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004)
(citing Anderson, 477 U.S. at 255).
Initially, the moving party bears the burden of
demonstrating the absence of a genuine issue of material fact.
Celotex, 477 U.S. at 323 (“[A] party seeking summary judgment
always bears the initial responsibility of informing the
district court of the basis for its motion, and identifying
those portions of ‘the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any,’ which it believes demonstrate the absence

16

of a genuine issue of material fact.”); see Singletary v. Pa.
Dep’t of Corr., 266 F.3d 186, 192 n.2 (3d Cir. 2001) (“Although
the initial burden is on the summary judgment movant to show the
absence of a genuine issue of material fact, ‘the burden on the
moving party may be discharged by “showing”—that is, pointing
out to the district court—that there is an absence of evidence
to support the nonmoving party’s case’ when the nonmoving party
bears the ultimate burden of proof.” (citing Celotex, 477 U.S.
at 325)).
Once the moving party has met this burden, the nonmoving
party must identify, by affidavits or otherwise, specific facts
showing that there is a genuine issue for trial.
U.S. at 324.

Celotex, 477

A “party opposing summary judgment ‘may not rest

upon the mere allegations or denials of the . . . pleading[s].’”
Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001).

For

“the non-moving party[] to prevail, [that party] must ‘make a
showing sufficient to establish the existence of [every] element
essential to that party’s case, and on which that party will
bear the burden of proof at trial.’”

Cooper v. Sniezek, 418 F.

App’x 56, 58 (3d Cir. 2011) (citing Celotex, 477 U.S. at 322).
Thus, to withstand a properly supported motion for summary
judgment, the nonmoving party must identify specific facts and
affirmative evidence that contradict those offered by the moving
party.

Anderson, 477 U.S. at 257.

17

E.

Motion for Summary Judgment

In its September 29, 2018 Opinion, this Court stated that
it could not decide on the briefing before it whether the
fiduciary duty claims asserted against Defendants may proceed.
As a result, Magistrate Judge Karen M. Williams ordered the
parties to complete further discovery, if necessary, and file
new summary judgment motions on the fiduciary duty claims.
Defendants thereafter filed a motion for summary judgment.
Defendants present three reasons why the fiduciary duty
claims asserted against them - both for loyalty and
misrepresentation - must be dismissed.

First, Defendants argue

Plaintiff’s fiduciary duty claims are duplicative of his denial
of benefits claim, therefore requiring its dismissal per Third
Circuit case law interpreting ERISA.

Second, Defendants argue

even if the cause of action may proceed to the merits, they are
not fiduciaries nor were they acting in a fiduciary capacity.
Third, Defendants argue that there was neither a
misrepresentation made by them nor a breach of the duty of
loyalty in enforcing the Aetna PA Policy.
Plaintiff disagrees.

Plaintiff argues the claims are

permissible because the facts they are based on are
categorically different from those facts on which he based his
denial of benefits claim.

Plaintiff also argues that Defendants

may be fiduciaries as defined by ERISA because the statute does

18

not limit its definition of fiduciaries to the “plan
administrator” or “plan sponsor.”

Plaintiff argues – through

the application of agency law and the actions of Weiss-Aug –
that Defendants misrepresented which policy covered him in this
instance.

Moreover, Plaintiff argues Defendants breached their

duties of loyalty because (1) they determined Plaintiff was
required to subrogate his claim and (2) the policies sold to
Weiss-Aug were not uniform.
Before analyzing the parties’ arguments and Plaintiff’s
claims, the Court lays out the elements of an ERISA fiduciary
duty claim.

The statutory basis for an ERISA breach of

fiduciary duty claim is found at 29 U.S.C. § 1104(a)(1)(A)(i).
There, the statute stats: “a fiduciary shall discharge his
duties with respect to a plan solely in the interest of the
participants and beneficiaries and - . . . for the exclusive
purpose of . . . providing benefits to participants and their
beneficiaries.”

29 U.S.C. § 1104(a)(1)(A)(i).

The private

cause of action is found at 29 U.S.C. § 1132(a)(3).
In implementing the private cause of action and ERISA’s
fiduciary requirements, the Third Circuit has found a plaintiff
must establish four elements to show an ERISA breach of
fiduciary duty claim: “(1) the defendant’s status as an ERISA
fiduciary acting as a fiduciary; (2) a misrepresentation on the
part of the defendant; (3) the materiality of that

19

misrepresentation; and (4) detrimental reliance by the plaintiff
on the misrepresentation.”

Burstein v. Ret. Account Plan for

Emps. of Allegheny Health Educ. & Research Found., 334 F.3d 365,
384 (3d Cir. 2003) (quoting Daniels v. Thomas & Betts Corp., 263
F.3d 66, 73 (3d Cir. 2001)).
Under ERISA case law, the Court cannot determine – in the
abstract – whether Defendants are or are not fiduciaries, but
must determine whether Defendants acted in a fiduciary capacity
as to each claimed breach.

See Fechter v. Conn. Gen. Life Ins.

Co., 800 F. Supp. 182, (E.D. Pa. 1992) (“[A]s reflected by the
statutory language of the definition, a person is a fiduciary
only ‘to the extent’ he or she exercises control over those
specific breaches of fiduciary duty on which plaintiffs base
their claims.” (citing 29 U.S.C. § 1002(21)(A)).
Therefore, it is most efficient to address each alleged
breach to determine whether it may proceed past summary
judgment.

The breaches, as argued by Plaintiff are as follows:

(1) Defendants breached their fiduciary duty because Weiss-Aug,
as their agent, misrepresented which insurance policy controlled
the benefits paid to Plaintiff and Defendants’ subrogation
rights; (2) Defendants breached their fiduciary duty of loyalty
by demanding subrogation; (3) Defendants breached their
fiduciary duty of loyalty by providing non-uniform benefits

20

based on the state of domicile of the beneficiary.

The Court

will consider each in turn.
a. Whether Defendants Breached their Fiduciary Duties
because Non-Party Weiss-Aug Gave Plaintiff the Aetna
NJ Policy
Defendants argue, even if this Court were to assume that
Plaintiff’s cause of action is proper and they owe a fiduciary
duty - i.e. are fiduciaries – that they have made no
misrepresentation to Plaintiff.

Defendants argument can be

boiled down thusly: because Defendants stated they had a
subrogation right and the Court has ruled - and Plaintiff has
admitted - there is a subrogation right under the Aetna PA
Policy, there has been no misrepresentation.
Plaintiff does not address this argument directly.
Instead, Plaintiff argues Weiss-Aug incorrectly provided him
with the Aetna NJ Policy instead of the Aetna PA Policy.
Obviously, it cannot be said that Defendants made a
misrepresentation to Plaintiff because the actions of Weiss-Aug
cannot be factually attributed to Defendants in this situation.
But, Plaintiff argues it may be legally attributed to Defendants
through the federal common law of agency created to implement
ERISA.
The only case law cited by Plaintiff in support of this
argument is Salyers v. Metropolitan Life Insurance Co., 871 F.3d
934 (9th Cir. 2017).

Citing the Restatement (Third) of Agency,

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the Ninth Circuit read into ERISA the following agency
principles:
The Restatement of Agency defines agency as “the
fiduciary relationship that arises when one person (a
‘principal’) manifests assent to another person (an
‘agent’) that the agent shall act on the principal’s
behalf and subject to the principal’s control, and the
agent manifests assent or otherwise consents so to act.”
Restatement (Third) of Agency § 1.01 ([Am. Law Inst.]
2006). The legal consequences of an agent's actions may
be attributed to a principal when the agent is acting
within its authority.
Restatement (Third) of Agency §
2.01 intro. note ([Am. Law Inst.] 2006). Additionally,
a principal is generally charged with notice of facts
that an agent knows or has reason to know and that are
material to her duties as an agent. Restatement (Third)
of Agency § 5.03 ([Am. Law Inst.] 2006).
* * *
The legal consequences of an agent’s actions may be
attributed to a principal when the agent has actual
authority (express or implied) or apparent authority.
Restatement (Third) of Agency § 2.01 intro. note ([Am.
Law Inst.] 2006). “Express actual authority derives from
an act specifically mentioned to be done in a written or
oral communication.”
NLRB v. Dist. Council of Iron
Workers of the State of Cal. & Vicinity, 124 F.3d 1094,
1098 (9th Cir. 1997).
“Implied actual authority comes
from a general statement of what the agent is supposed to
do; an agent is said to have the implied authority to do
acts consistent with that direction.”
Id.
“Apparent
authority results when the principal does something or
permits the agent to do something which reasonably leads
another to believe that the agent had the authority he
purported to have.”
Hawaiian Paradise Park Corp. v.
Friendly Broad. Co., 414 F.2d 750, 756 (9th Cir. 1969).
Id. at 939-40.
In this case, Plaintiff has not presented any evidence
which would suggest Weiss-Aug was Defendants’ agent or that it
had express, implied, or apparent authority in making a

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representation as to the rights and obligations of Plaintiff
under any Aetna insurance policies.
and Weiss-Aug 8 is part of the record.

The contract between Aetna
The relevant provisions

disclose that Aetna and Weiss-Aug explicitly did not have an
agency or employment relation.

(Defs.’ Reply Br. 4-5.)

Obviously, this would disclose any express actual authority.
Plaintiff presents no record evidence which would suggest the
implied or apparent authority of Weiss-Aug to make
representations on behalf of Aetna concerning the rights and
obligations of an employee under the insurance policies.
Moreover, the Salyers case is distinguishable in multiple
ways.

Most importantly, in deciding the Salyers case, the Ninth

Circuit stated: “[w]e cannot say whether Providence was acting
with express actual authority as an agent of MetLife, because
the contract and other relevant communications between
Providence and MetLife are not in the record.”
F.3d at 940.

Salyers, 871

As noted supra, the contract is in the record, is

uncontested, and discloses that Aetna and Weiss-Aug explicitly
did not have an agency or employment relation.

8

(Defs.’ Reply

Plaintiff has presented no evidence of any relationship between
Weiss-Aug and Rawlings. Although it does not appear Plaintiff
argues Rawlings and Weiss-Aug have an agency relationship, the
Court nevertheless additionally finds there is none between
those two entities and that no representation by Weiss-Aug can
be legally attributed to Rawlings.
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Br. 4-5.)

Therefore, it cannot be said that Aetna gave Weiss-

Aug “express actual authority.”

Salyers, 871 F.3d at 940.

Moreover, the lynchpin of the Ninth Circuit’s decision that
the employer was the agent of the insurer was that the employer
handled “nearly all the administrative responsibilities” of the
life insurance benefits it offered to employees.
(citation omitted).

Id. at 940

The employer enrolled the employee in the

life insurance plan, noted the amount of life insurance the
employee wanted, and appeared to have the duty to collect
evidence of insurability from those who elected to take the
benefit.

Id. at 936-38, 41.

Here, Plaintiff presents no evidence that Weiss-Aug
performed these functions, nor that Weiss-Aug was Aetna’s agent
in informing employees what rights and obligations existed under
Aetna’s insurance policies.

In fact, it appears from the

evidence that Aetna kept that role for itself, as it ultimately
determined an insured’s eligibility for benefits.
argument here lacks both factual and legal support.

Plaintiff’s
This Court

cannot allow a fiduciary duty claim based on Weiss-Aug’s
supposed misrepresentation proceed against Defendants. 9

9

Alternatively, Defendants are also correct that Plaintiff has
not shown detrimental reliance. Plaintiff does not present any
record evidence that shows reliance on Weiss-Aug’s
representation that the Aetna NJ Policy controlled the
subrogation issue. The fact that Plaintiff was represented by
counsel and that his counsel and Rawlings exchanged multiple
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The remaining portion of Plaintiff’s argument on this point
solely concerns general case law on ERISA fiduciary duties as it
relates to misrepresentations, actions taken by Weiss-Aug, not
Defendants, and the contents of the Aetna PA Policy and Aetna NJ
Policy.

This portion of the argument, based on this Court’s

ruling, is moot and need not be addressed on the merits.
b. Whether Defendants Breached their Fiduciary Duty of
Loyalty by Enforcing the Subrogation Right under the
Aetna PA Policy
Plaintiff argues Defendants breached their fiduciary duty
of loyalty by asserting the subrogation right found in the Aetna
PA Policy.

Plaintiff argues Rawlings had a financial interest

in recovering the benefits paid by Aetna on behalf of Plaintiff
for emergency services.

According to Plaintiff, this financial

interest is in itself a breach of the fiduciary duty of loyalty,
because a fiduciary must always act in the best interest of the
beneficiary, here Plaintiff.

Similarly, Plaintiff argues Aetna

breached its fiduciary duty of loyalty because it had a
financial interest in recovering money from Plaintiff.

Whatever

amount Plaintiff reimbursed Aetna went directly into Aetna’s
coffers instead of being used to pay for benefits for other
beneficiaries.

letters suggests just the opposite: Plaintiff did not rely on
Weiss-Aug’s supposed misrepresentation.
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Defendants present the common-sense argument that it cannot
be a breach of the fiduciary duty of loyalty for an insurance
company to enforce the terms of an insurance policy.
agrees.

The Court

The Supreme Court did not address this question

directly, but has been confronted by two cases where either an
insurer or an ERISA plan administrator has brought suit against
an insured under ERISA to enforce a reimbursement clause.

US

Airways, Inc. v. McCutchen, 569 U.S. 88 (2013); Sereboff v. Mid
Atl. Med. Servs., 547 U.S. 356 (2006).

In neither of those

cases did the Supreme Court suggest that asserting a
reimbursement right in an insurance contract may itself be a
breach of fiduciary duty.

This Court finds this persuasive.

Plaintiff’s fiduciary duty claims based on this breach of
loyalty argument will be dismissed.
This claim is also soundly rebutted by another Supreme
Court case.

In the Supreme Court’s decision concerning

fiduciary duties owed by HMOs to patients under ERISA, the
Supreme Court rejected just such a claim.
530 U.S. 211, 232 (2000).

Pegram v. Herdrich,

In deciding the question of whether

“HMOs that make mixed decision in the course of providing
medical care for profit” breach fiduciary duties because of
their inherently divided loyalty, the Supreme Court found that
the claim could not proceed because it “would be nothing less
than the elimination of the for-profit HMO.”

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Id. at 232-33.

The Supreme Court opined “that the Judiciary has no warrant to
precipitate the upheaval that would follow a refusal to dismiss”
the ERISA claim presented.

Id. at 233 (emphasis added).

This

Court, as part of the Judiciary, must dismiss this claim as
well.
c. Whether Non-Uniformity of Benefits is a Breach of
Fiduciary Duty
Plaintiff argues Defendants breached their fiduciary duties
by offering non-uniform benefits based on the employee’s place
of domicile.

Plaintiff admits in a footnote that this argument

was made in a previous motion and rejected by this Court and
that it merely re-argues it here so that it ensures it is not
waived in case of appeal.
argument substantively.

This Court will not address this
Instead, this Court holds that for the

same reasons discussed in its September 29, 2018 Opinion, it
will reject Plaintiff’s argument again here.
Accordingly, this Court will grant Defendants’ Motion for
Summary Judgment in its entirety and dismiss this case.

The

remaining arguments made by Defendants are moot and the Court
will not consider them on their merits.
CONCLUSION
Based on the foregoing analysis, Plaintiff’s Motion for
Reconsideration will be denied and Defendants’ Motion for

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Summary Judgment will be granted.

This case will be dismissed

in its entirety.
An appropriate Order will be entered.

Date: June 27, 2019
At Camden, New Jersey

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

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