ROCHE et al v. AETNA, INC. et al

Filing 79

OPINION. Signed by Judge Noel L. Hillman on 11/30/2016. (dmr)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
:
:
:
:
Plaintiff,
:
:
v
:
:
AETNA, INC., AETNA
:
HEALTH, INC., AETNA
:
HEALTH INSURANCE CO.,
:
AETNA LIFE INSURANCE CO.,
:
and THE RAWLINGS COMPANY,
:
LLC,
:
:
Defendants. :
__________________________________
JAY MINERLEY, Individually
and as Class Representative,

Civil No. 13-1377 (NLH/KMW)

APPEARANCES:
KLEHR HARRISON HARVEY BRANZBURG LLP
By: Charles A. Ercole, Esq.
Carianne P. Torrissi, Esq.
457 Haddonfield Road, Suite 510
Cherry Hill, New Jersey 08002
and
KANNEBECKER LAW
By: Charles Kannebecker, Esq.
104 West High Street
Milford, Pennsylvania 18337
Counsel for Plaintiff
LOWEY DANNENBERG COHEN & HART, P.C.
By: Uriel Rabinovitz, Esq.
Richard W. Cohen, Esq.
Gerald Lawrence, Esq.
One North Broadway, Suite 509
White Plains, New York 10601-2310
Counsel for Defendants

1

OPINION

HILLMAN, United State District Judge:
Discovery in this case has not begun, yet this is the third
opinion issued by the Court in this case-- the second to address
a motion for summary judgment filed by Defendants; and the third
to address Defendants’ argument that Plaintiff Minerley has
failed to exhaust his administrative remedies. 1
Presently before the Court are: (1) Defendants’ “Motion to
Dismiss Complaint, Strike Claims, and/or for Summary Judgment”;
and (2) Minerley’s “Motion for Conference.”

For the reasons set

forth below, the motions will be DENIED.
I.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY
To briefly reiterate the nature of this suit, Minerley, at

the request of Defendant Rawlings, reimbursed his health
insurer, Defendant Aetna, $3,512.82 after he successfully
recovered compensation for a car accident in which he was
involved.

Minerley contends that Defendants violated New

Jersey’s Collateral Source Statute by seeking and accepting
reimbursement from him.
In a previous opinion, the Court ruled, in relevant part,
that Minerley’s claims asserted in the First Amended Complaint
were preempted by ERISA § 502(a) and granted Minerley thirty

The Court’s previous opinions may be found at Minerley v.
Aetna, Inc., 2016 U.S. Dist. LEXIS 147600 (D.N.J. Oct. 24,
2016); and Roche v. Aetna, Inc., 167 F. Supp. 3d 700 (D.N.J.
2016).
1

2

days to amend the First Amended Complaint to state a claim under
ERISA § 502(a).

In so holding, the Court rejected Defendants’

argument that amendment would be futile because Minerley had
failed to exhaust his administrative remedies.

The Court

explained that there was a material dispute of fact as to “what
plan documents submitted into the record actually cover
Minerley”-- the documents submitted by Aetna require exhaustion,
whereas the documents submitted by Minerley do not. Roche v.
Aetna, Inc., 167 F. Supp. 3d 700, 711 (D.N.J. 2016).
On March 15, 2016, Defendants timely sought reconsideration
of that decision, arguing that the documents Minerley submitted
are not the operative ERISA plan.

The Court denied

reconsideration, stating that “a reasonable factfinder could
find that the Minerley Documents apply to Minerley and not the
Aetna Documents.” Minerley v. Aetna, Inc., 2016 U.S. Dist. LEXIS
147600 at *7 (D.N.J. Oct. 24, 2016).
A little over a week after filing the Motion for
Reconsideration, Defendants tendered to Minerley’s lawyer a
certified check for $3,512.82 with the express purpose of
“seeking to moot further litigation.” (Defendants’ Moving Brief,
Docket No. 61, p. 2)
Minerley filed his Second Amended Complaint on March 31,
2016, and returned Defendants’ uncashed check on April 22, 2016.
The Second Amended Complaint asserts three claims, on
3

behalf of Minerley and a proposed class of those similarly
situated, against Aetna and Rawlings: (1) denial of ERISA
benefits pursuant to 29 U.S.C. § 1132(a)(1)(B); (2) breach of
the fiduciary duty of loyalty pursuant to 29 U.S.C. §
1132(a)(3); and (3) breach of the fiduciary duty to disclose
pursuant to 29 U.S.C. § 1132(a)(3).

The fiduciary duty claims

seek equitable relief only.
II.
A.

LEGAL STANDARDS

Fed. R. Civ. P. 12(b)(1)
A motion to dismiss pursuant to Federal Rule of Civil

Procedure 12(b)(1) challenges the existence of a federal court’s
subject matter jurisdiction.

Facial attacks contest the

sufficiency of the pleadings, and in reviewing such attacks, the
Court accepts the allegations as true. Common Cause of Pa. v.
Pennsylvania, 558 F.3d 249, 257 (3d Cir.), cert. denied, 558
U.S. 1091, 130 S. Ct. 1015, 175 L. Ed. 2d 618 (2009).

Factual

attacks, on the other hand, require the Court to weigh the
evidence at its discretion, meaning that the allegations in the
complaint have no presumptive truthfulness. See Mortensen v.
First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977).
The instant motion does not attack the sufficiency of the
pleadings and so the Court construes it as a factual attack.
B.

Fed. R. Civ. P. 56
The Court incorporates herein by reference the summary
4

judgment standard set forth in the previously issued summary
judgment opinion in this suit. See Roche v. Aetna, Inc., 167 F.
Supp. 3d 700, 705 (D.N.J. 2016).
C.

Fed. R. Civ. P. 12(b)(6)
When considering a motion to dismiss a complaint for

failure to state a claim upon which relief can be granted
pursuant to Federal Rule of Civil Procedure 12(b)(6), a court
must accept all well-pleaded allegations in the complaint as
true and view them in the light most favorable to the plaintiff.
Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005).

It is well

settled that a pleading is sufficient if it contains “a short
and plain statement of the claim showing that the pleader is
entitled to relief.”

Fed. R. Civ. P. 8(a)(2).

Under the liberal federal pleading rules, it is not
necessary to plead evidence, and it is not necessary to plead
all the facts that serve as a basis for the claim. Bogosian v.
Gulf Oil Corp., 562 F.2d 434, 446 (3d Cir. 1977).

However, “the

Federal Rules of Civil Procedure . . . do require that the
pleadings give defendant fair notice of what the plaintiff’s
claim is and the grounds upon which it rests.” Baldwin Cnty.
Welcome Ctr. v. Brown, 466 U.S. 147, 149-50 n.3 (1984)
(quotation and citation omitted).
A district court, in weighing a motion to dismiss, asks
“‘not whether a plaintiff will ultimately prevail but whether
5

the claimant is entitled to offer evidence to support the
claim.’” Bell Atlantic v. Twombly, 550 U.S. 544, 563 n.8 (2007)
(quoting Scheuer v. Rhoades, 416 U.S. 232, 236 (1974)); see also
Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009)(“Our decision in
Twombly expounded the pleading standard for ‘all civil actions’
. . . .”); Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.
2009)(“Iqbal . . . provides the final nail in the coffin for the
‘no set of facts’ standard that applied to federal complaints
before Twombly.”).
D.

Fed. R. Civ. P. 12(f)
A district court may “strike from a pleading an

insufficient defense or any redundant, immaterial, impertinent,
or scandalous matter.” Fed. R. Civ. P. 12(f).

However,

“[m]otions to strike are generally viewed with disfavor, and
will usually be denied unless the allegations in the pleading
have no possible relation to the controversy, and may cause
prejudice to one of the parties.” Sliger v. Prospect Mortgage,
LLC, 789 F. Supp. 2d 1212, 1216 (E.D. Cal. 2011) (citing 5C
Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 1380 (2d ed.))(cited in Shelton v. Hollingsworth,
No. 15-1249, 2015 U.S. Dist. LEXIS 64983, 2015 WL 2400780, at *2
(D.N.J. May 18, 2015)).
III.

DISCUSSION

Defendants make four arguments: (1) the entire action
6

should be dismissed without prejudice because Minerley has not
exhausted his ERISA plan’s mandatory pre-litigation
administrative remedies; (2) this Court lacks subject matter
jurisdiction under Article III of the U.S. Constitution because,
in light of Defendants’ offer to pay Minerley the full amount he
paid to Aetna, no live “case or controversy” exists, U.S.
Const., Art. III, § 2; 2 (3) the fiduciary duty claims should be
dismissed because, Defendants contend, this is solely a suit for
denial of benefits in violation of ERISA § 502(a)(1)(B); and (4)
the class action allegations should be stricken.
The Court addresses the subject matter jurisdiction
argument first, and then the remaining arguments in the order in
which they are presented.
A.

Mootness 3
Defendants argue that their tender of a check for $3,512.82

during the period of time after Minerley’s claims in the First
Amended Complaint had been dismissed as preempted by ERISA, but
before Minerley filed the Second Amended Complaint asserting
claims under ERISA, mooted the dispute between the parties.

It is undisputed that this Court has statutory authority to
exercise federal question subject matter jurisdiction pursuant
to 28 U.S.C. § 1331, as Minerley’s claims arise under ERISA.
Subject matter jurisdiction under Article III of the United
States Constitution, however, is a separate issue.
2

See supra at II. A. for the legal standard applicable to this
issue.
3

7

Tender of the full amount Minerley paid to Aetna did not
moot the entire case -- as stated in either the First Amended
Complaint, or the Second Amended Complaint -- for two reasons.
First, both complaints plead not only Minerley’s individual
claims but also claims on behalf of a proposed class.

The

claims of an uncertified class cannot be mooted by an unaccepted
settlement offer which would fully satisfy only the proposed
named plaintiff’s claims. Campbell-Ewald Co. v. Gomez, 136 S.
Ct. 663 (2016). 4
Second, in this case, Defendants’ settlement offer, even if
accepted, would not have fully satisfied Minerley’s claims.
ERISA provides for fee shifting, see 29 U.S.C. § 1132(g)(1);
Hardt v. Reliance Std. Life Ins. Co., 560 U.S. 242
(2010)(holding that under § 1132(g)(1), “a court in its
discretion may award fees and costs to either party, as long as
the fee claimant has achieved some degree of success on the
merits”), thereby leaving the “live” issue of Minerley’s
attorney’s fees unresolved. Cf. Gomez, 136 S. Ct. at 668 (“The
settlement offer did not include attorney’s fees . . . because

Defendants attempt to distinguish Gomez on the ground that
Gomez involved a settlement offer under the offer of judgment
rule, Fed. R. Civ. P. 68. The Court finds this distinction
unpersuasive. See Gomez, 136 S.Ct. at 672 (“an unaccepted
settlement offer or offer of judgment does not moot a
plaintiff’s case.”).
4

8

the TCPA does not provide for an attorney’s-fee award.”). 5
The Court holds that a live case or controversy between the
parties has existed at all times during the course of this suit
to date.

Therefore this Court has Article III subject matter

jurisdiction.
B.

Defendants’ motion to dismiss will be denied.

Failure to exhaust 6
Defendants’ failure to exhaust argument is simply a

reiteration of the argument they asserted in their Motion for
Reconsideration, which this Court denied. See Minerley v. Aetna,
Inc., 2016 U.S. Dist. LEXIS 147600 (D.N.J. Oct. 24, 2016).
Issues of material fact still preclude a ruling as to what the
applicable plan documents are 7, and therefore also preclude a

5

It is also worth noting that Defendants’ settlement check
included no interest. Given that Minerley paid Aetna sometime
before the complaint was filed in 2013, and Defendants issued a
check in 2016, it cannot be said that accrued interest would be
de minimis. See Gomez, 136 S. Ct. at 669 (“‘As long as the
parties have a concrete interest, however small, in the outcome
of the litigation, the case is not moot.’”)(quoting Chafin v.
Chafin, 133 S. Ct. 1017 (2013)).
See supra at II. B. for the legal standard applicable to this
issue.
6

Minerley’s “Motion for Conference” seems to be related to this
issue. Minerley’s reason for seeking a conference is based on
the impression that Defendants have somehow “conced[ed] that
there is, in fact, no ERISA Plan documents or ERISA Summary Plan
Description.” (Motion for Conference, Docket No. 72, ¶ 3)
Defendants deny any such concession, and the Court sees no such
concession in the papers. Accordingly, Minerley’s Motion for
Conference will be denied.
7

9

ruling that Minerley must exhaust his remedies.

Defendants’

motion for summary judgment will be denied.
C.

The fiduciary duty claims 8
Defendants argue, “[p]laintiff’s claims for breach of

fiduciary duties merely duplicate his claims for ERISA benefits
due” (Moving Brief, Docket No. 61, p. 16), and therefore,
Defendants assert, the fiduciary duty claims should be
dismissed.

In support of their argument, Defendants quote a

portion of one sentence from Harrow v. Prudential Ins. Co. of
America, which states that ERISA plaintiffs suing for denial of
benefits cannot “artfully plead benefit claims as breach of
fiduciary duty claims.” 279 F.3d 244, 253 (3d Cir. 2002).
Minerley asserts that Defendants mischaracterize his
claims, and explains that the rule articulated in Harrow
dictates that his claims must remain.

The Court agrees.

Harrow held that when fiduciary duty claims are pled merely
in an attempt to “circumvent the [ERISA plan’s] exhaustion
requirement,” such claims are properly dismissed. 279 F.3d at
253.

The Court went on, however, to explain how to determine

whether a fiduciary duty claim is merely artful pleading, or
independent from the denial of benefits claim: “[a] claim for
breach of fiduciary duty is actually a claim for benefits where

See supra at II. C. for the legal standard applicable to this
issue.
8

10

the resolution of the claim rests upon an interpretation and
application of an ERISA-regulated plan rather than upon an
interpretation and application of ERISA.” Id. at 254 (internal
citation and quotation omitted).
Minerley explains that his fiduciary duty claims are
plainly not based upon any ERISA plan language, observing that,
the plan (whether the plan is embodied in Minerley’s documents
or Aetna’s documents) undisputedly provides for subrogation,
whereas Minerley’s claim is that the plan language
notwithstanding, Aetna was not entitled to subrogation under New
Jersey law.

According to Minerley, his fiduciary duty claims

are based on “the interpretation and application of ERISA’s
savings clause as applied to the New Jersey anti-subrogation
regulation, N.J.A.C. 11:4-42.10.” (Pl’s Opposition Brief, Docket
No. 64, p. 24)
Minerley’s explanation is consistent with this Court’s
previous ruling that N.J.A.C. 11:4-42.10 “provides the relevant
rule of decision for determining what benefits are due.” Roche,
167 F. Supp. 3d at 709; see also id. at 710 (“The subrogation
prohibition contained with Section 42.10 therefore supplies the
relevant rule of decision for any ERISA § 502(a) claim.”).
Because the Court will look to New Jersey law, rather than the
plan language, in adjudicating Minerley’s fiduciary duty claims,
Harrow does not support dismissal of the fiduciary duty claims.
11

Defendants’ motion to dismiss the fiduciary duty claims will be
denied.
D.

The class action allegations 9
Defendants assert that the “class action allegations should

be stricken because determination of Defendants’ liability to
any putative class member would require individual evidence
regarding his or her exhaustion of pre-litigation remedies and
voluntary payment.” (Moving Brief, Docket No. 61, p. i)
The Court finds Defendants’ argument premature.

The issue

is more properly addressed upon a fully-briefed motion for class
certification.
Defendants’ motion to strike the class action allegations
will be denied.
IV.

CONCLUSION
For the foregoing reasons, Defendants’ Motion will be

denied in its entirety, and Monerley’s “Motion for Conference”
will be denied.

An appropriate order accompanies this opinion.

Date: November 30, 2016
At Camden, New Jersey

__s/ Noel L. Hillman____
NOEL L. HILLMAN, U.S.D.J.

See supra at II. D. for the legal standard applicable to this
issue.
9

12