UNIVERSITY SPINE CENTER v. AETNA INC.

Filing 11

OPINION. Signed by Judge Kevin McNulty on 3/20/2018. (ld, )

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 1 of 14 PageID: 328

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
UNIVERSITY SPINE CENTER,
Civ. No. 17-8160 (KM)

Plaintiff,
V.

OPINION

AETNA INC.
Defendant.

KEVIN MCNULTY, U.S.D.J.:
This litigation is one of many in which out-of-network health care
providers, purporting to sue on behalf of their patients, have sought to be
reimbursed at (or at least closer to) in-network rates. Plaintiff University Spine
Center (“University Spine”), an out-of-network provider, brings this
Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C.

§

1001 et seq., action against defendant Aetna, Inc. (“Aetna”), the claims

administrator for the health plan of University Spine’s patient. University Spine
sues as assignee of a patient, L.K., and seeks to recover $133,320.98.
Aetna now moves under Fed. R. Civ. P. 12(b)(6) to dismiss the Complaint
for failure to state a claim upon which relief may be granted.
For the reasons stated herein, I wifl deny the motion to dismiss.

1

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 2 of 14 PageID: 329

I.

Background’
A. Procedural History

The Complaint was originally filed by University Spine in New Jersey
Superior Court, Passaic County, on August 30, 2017. (Compl.) The Complaint
contains three claims against Aetna: (1) breach of contract; (2) failure to make
all payments pursuant to the member’s plan under ERISA; and (3) breach of
fiduciary duty under ERISA. (Id. at

¶

17-40).

On October 12, 2017, Aetna filed a Notice of Removal to federal court
pursuant to 28 U.S.C.

§

1441 and 1446. The Notice states three grounds for

removal; “(1) Count H and Count HI explicitly allege claims that arise under
federal law; (2) the parties are completely diverse and the amount in
controversy exceeds the jurisdictional threshold; and (3) Count I is completely
preempted by ERISA Section 502(a).” (Id. at

¶

5). (See also id. at

¶

6-8.) Aetna

attached three Exhibits to the Notice, including the Complaint and its
corresponding Exhibits. (ECF no. 1-1).
One week later, on October 19, 2017, Aetna filed a motion under Federal
Rule of Civil Procedure 12(b)(6) to dismiss the Complaint with prejudice for
failure to state a claim. (Def. Brf.)
On November 6, 2017, University Spine filed an opposition to Aetna’s
motion to dismiss. (P1. BrL) One week later, on November 13, 2017, Aetna filed
a reply. (ECF no. 7).

Certain key items are abbreviated as follows:
Compl.= Complaint, ECFno. 1-1, ExIt 1
Notice of Removal Notice of Removal from New Jersey Superior Court, Passaic
County, ECF no. 1
DeL Brf. Brief of defendant Aetna in support of motion to dismiss, ECF no. 3-1
P1. BrL’ Brief of plaintiff University Spine in opposition to motion to dismiss,
ECF no. 5
Def. RepI Reply Brief of defendant Aetna, ECF no. 7

2

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 3 of 14 PageID: 330

On December 21, 2017, Aetna filed a notice of supplemental authority in
support of its pending motion to dismiss. (ECF no. 10 (attaching ECF no. 10-1,
a copy of Univ. Spine Ctr. v. Aetna, Inc., No. CV 17-7825 (JLL), 2017 WL
6514663 (D.N.J. Dec. 20, 2017)).
The parties agree that the case is governed by ERISA. Therefore,
University Spine has agreed to voluntarily dismiss Count I, a state law breach
of contract claim. See (P1. Brf. 3). Accordingly, I will consider Aetna’s motion to
dismiss as to the ERISA-related claims, Counts 2 and 3.
B. Facts2
On December 30, 2016, University Spine provided medical services to
L.K. (Compl.

¶1J

3-4). The services consisted of a spinal surgery and related

procedures. (Id. at

¶

5).

University Spine received an Assignment of Benefits from L.K. (Compl.,
Exh. B). The Assignment of Benefits3 form states, in relevant part:
I, the undersigned, certir that I (or my dependent/s) have
and assign directly to University
insurance coverage with
Spine Center, all insurance benefits, if any, otherwise payable to
me for the services rendered. I understand that I am financially
responsible for all charges, whether or not paid by insurance. I
hereby authorize the doctor to release all information necessary to
secure the payment of benefits. I authorize the use of this
signature on all insurance submissions.
Responsible Party Signature: [redacted] Relationship: self
Date: [redactedi
(Id.)
At the time medical services were provided, L.K. was a member of Aetna
Choice POS II, a self-funded health benefits plan. See (ECF no. 3-3,

¶

3; ECF

no. 3-4, Exh. 1; Def. Brf. 3). Aetna is the Claims Administrator for the Plan.

For the purposes of this 12(b)(6) motion to dismiss, I will assume the allegations
in the Complaint are true. See Section II, infra.
3
The Assignment of Benefits is actually titled “Assignment and Release.”
2

3

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 4 of 14 PageID: 331

(Compl.

¶

14). The terms of the Plan are set forth in a booklet entitled “What

Your Plan Covers and How Benefits are Paid.” (ECF no. 3-4, Exh. A). As stated
above, the parties do not dispute that the Plan is governed by ERISA.
University Spine is an out-of-network health care provider as to the Plan.
It sues pursuant to the Assignment of Benefits. (Compi. ¶j 26, 32). However,
the Plan includes an anti-assignment clause. (ECF no. 3-4, Exh. A at 59). In a
section entitled “Assignments,” it provides as follows: “Coverage and your rights
under this Aetna medical benefits plan may not be assigned. A direction to pay
a provider is not an assignment of any right under this plan or of any legal or
equitable right to institute any court proceeding.” Id. (emphasis in original).
As assignee, University Spine submitted a Health Insurance Claim Form
to Aetna for the services it provided to L.K. (Compl. ¶ 7)(citing Exh. C). It
requested reimbursement in the amount of $137,713.00. (Id.) However, only
$4,392.02 has been reimbursed by Aetna. (Id. at

¶

8).

In a letter dated February 28, 2017, University Spine requested that
Aetna immediately reprocess the claim. (Compl., Exh. ED). It also requested that
if Aetna decided not to pay additional benefits, it provide a written explanation
as to its decision. (Id.)
Nearly three weeks later, in a letter dated March 20, 2017, University
Spine sent Aetna a notice of appeal. (Compl. ¶ 9)(citing Exh. ED). In the letter,
University Spine once again requested that the claim be reprocessed for
additional payment, and asked Aetna to provide “a written explanation citing
applicable policy language,” pursuant to 29 C.F.R. § 2560.503-1, within 30
days if it denied the additional payment. (Compi., Exh. E). In the Complaint,
University Spine alleges that it “requested, among other items, a copy of the
Summary Plan Description, Plan Policy, and identification of the Plan
Administrator/Plan Sponsor.” (Compl.

¶

10)(citing Exh. ED).

By letter dated May 10, 2017, Aetna informed University Spine that it

4

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 5 of 14 PageID: 332

was upholding its original benefits determination. (Notice of Removal, Exh. F).
It explained that the reimbursement of University Spine’s claim was based
upon a reasonable and customary charge. (Id.)
According to University Spine, Aetna failed to provide it with a copy of
the documents it had previously requested. (Compl.

¶

11).

On or about August 30, 2017, University Spine filed this action in the
Superior Court of New Jersey, Law Division, Passaic County. (Compl.)
IT.

Legal Standards
A. 12(b)(6) Motion to Dismiss
Fed. R. Civ. P. 12(b)(6) provides for the dismissal of a complaint, in whole

or in part, if it fails to state a claim upon which relief can be granted. The
moving party bears the burden of showing that no claim has been stated.
Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion
to dismiss, a court must take all allegations in the complaint as true and view
them in the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.s.
490, 501 (1975); Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140
F.3d 478, 483 (3d Cir. 1998); see also Phillips v. County of Allegheny, 515 F.3d
224, 231 (3d Cir. 2008) (“reasonable inferences” principle not undermined by
later Supreme Court Twombly case, infra).
Fed. R. Civ. P. 8(a) does not require that a complaint contain detailed
factual allegations. Nevertheless, “a plaintiffs obligation to provide the
‘grounds’ of his ‘entitlement to relief requires more than labels and
conclusions, and formulaic recitation of the elements of a cause of action will
not do.” Bell AtI. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the factual
allegations must be sufficient to raise a plaintiffs right to relief above a
speculative level, such that it is “plausible on its face.” See id. at 570; see also
Umland v. PLANCO Fin. Seru., Inc., 542 F.3d 5, 64 (3d Cir. 2008). A claim has
“facial plausibility when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing

5

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 6 of 14 PageID: 333

Twombly, 550 U.S. at 556). While “[tlhe plausibility standard is not akin to a
‘probability requirement’

...

it asks for more than a sheer possibility.” Iqbal, 556

U.S. at 678 (2009).
B. Extrinsic Documents
The parties have attached and cited certain documents extrinsic to the
complaint. Faced by extrinsic documents, a court may upon proper notice
convert the motion to dismiss into a motion for summary judgment. See FED.
R. CIV. p. 12(d). Even without converting the motion to one for summary
judgment, however, the court may consider certain extrinsic documents, even
on a motion to dismiss:
“In deciding motions under Rule 12(b)(6), courts may consider
‘document[s] integral to or explicitly relied upon in the complaint,’
In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d
Cir. 1997) (emphasis in original), or any ‘undisputedly authentic
document that a defendant attaches as an exhibit to a motion to
dismiss if the plaintiffs claims are based on the document,’ PBGC
v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993).”
In re Asbestos Products Liability Litigation (No. Vi), 822 F.3d 125, 134 n.7 (3d
Cir. 2016). See also Schmidt a Skolas, 770 F.3d 241, 249 (3d Cir. 2014)
(“However, an exception to the general rule is that a ‘document integral to or
explicitly relied upon in the complaint’ may be considered ‘without converting
the motion to dismiss into one for summary judgment.”) (quoting In re
Burlington Coat Factory, 114 F.3d at 1426); Pension Ben. Guar. Corp. v. White
ConsoL Indus., inc., 998 F.2d 112, 1196 (3d Cir. 1993).
Both sides have attached a number of documents. There appears to be
no dispute as to their authenticity, and they are all attached to the Complaint
or central to the allegations. I will therefore consider them as appropriate.
As Exhibit 1 to its Notice of Removal, Defendant Aetna attached a copy of
the state court Complaint and Exhibits A through G to the Complaint. (ECF no.
1-1, Exh. 1). These exhibits are integral to the Complaint and may be
considered on this Rule 12(b)(6) motion, in that they set forth the basis of the

6

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 7 of 14 PageID: 334

claim for reimbursement of fees, the appeal process, and the reasonable and
customary rates paid by Aetna:
Exh. A- Operative Report from Robert Wood Johnson University Hospital
Rahway
Exh. B- University Spine Center’s Notice of Privacy Practices, Assignment
of Benefits form
Exh. C-Health Insurance Claim Form prepared by University Spine and
submitted to Aetna
Exh. D- Aetna remittance advice form
Exh. E- Letter dated March 20, 2017 from University Spine Center to
Aetna’s Director of Claims, and letter dated February 28, 2017 from
University Spine Center to Aetna’s Director of Claims
Ex. F- Letter dated May 10, 2017 from Aetna to University Spine Center
Exh. G- Fair Health medical benchmarks data
(ECF no. 1-1).
Aetna also submitted one exhibit in connection with its Rule 12(b)(6)
motion, a copy of the Choice P05 II medical benefit plan booklet “prepared
exclusively for Genesis Healthcare” (“the Plan”). (ECF no. 3-4, Exh. 1). The Plan
contains the very anti-assignment clause raised as a defense by University
Spine. For obvious reasons, University Spine cannot be objecting to its
consideration.
UI.

Discussion
A. Assignment of Benefits and Statutory Derivative Standing

Before reaching the merits, I will consider Aetna’s claim that University
Spine does not have standing to pursue its ERISA claims.

Exhibit 2 to Aetna’s Notice of Removal includes computer-based redacted
versions of the Complaint’s exhibits (ECF no. 1-1, Exh. 2), which may be considered
for the sante reason.
5
I do not discuss exhibits attached for mere convenience, such as pleadings in
the case or copies of unpublished opinions.
4

7

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 8 of 14 PageID: 335

Under Section 502(a) of ERISA, only “a participant or beneficiary” may
bring a civil action to recover benefits or enforce rights under the terms of his

§

plan. 29 U.S.C.

1132(a). However, such a plan beneficiary may confer a

derivative right to sue upon a health care provider via a valid assignment. N.J.
Brain & Spine Ctr. v. Aetna, Inc., 801 F.3d 369, 372 (3d Cir. 2015);American
Chiropractic Ass’n u. American Specialty Health

ma,

625 F. App’5c 169, 175 (3d

Cir. 2015); CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165, 176 n.10 (3d
Cir. 2014). By assignment, the provider stands in the shoes of the participant
or beneficiary who is its patient.
In this case, University Spine claims to be suing Aetna in its derivative
capacity as L.K.’s assignee. (Compl. ¶1J 26, 32). The Assignment states that “I
[the patient

.

.
.

]

assign directly to University Spine Center, all insurance

benefits, if any, otherwise payable to me for the services rendered.” (Compl. Ex.
B). At issue is the scope of the anti-assignment clause in the “Assignments”
section of the Plan. It states: “jc]overage and your rights under this Aetna
medical benefits plan may not be assigned. A direction to pay a provider is not
an assignment of any right under this plan or of any legal or equitable right to
institute any court proceeding.” (ECF no. 3-4, Exh. A at 59) (emphasis in
original).
University Spine says that L.K.’s assignment of “benefits” is not barred
by the anti-assignment clause, which explicitly prohibits only the assignment
of “[c}overage and your rights” under the Plan. (P1. Brf. at 3)(cidng ECF no. 34, Exh. A at 59). “Coverage” and “rights,” says University’ Spine, are not defined
in the Plan’s glossary, but in any event are not synonymous with “benefits.” (Id.
at 3)(citing ECF no. 3-4, Exh. A at 1-6, 71-89). Aetna asserts that the antiassignment clause in the Plan “clearly and unequivocally precluded the patient
from assigning its benefits to University Spine.” (DeL Brf. at 6). “Coverage,” as
that term is used in the Plan and the anti-assignment clause, is synonymous
with “benefits” in Aetna’s view. (Def. Reply 2).

S

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 9 of 14 PageID: 336

The anti-assignment clause appears on its face to limit the prohibition of
assignments to only coverage and rights. In some tension with that language is
the following sentence, which states that a direction to pay a provider is not an
assignment of rights.6 The claimed equivalence between “coverage” and
“benefits,” too, merits factual development.
The interpretation of the anti-assignment clause is not so clear and
unambiguous as a matter of law as to permit resolution on a motion to
dismiss. The motion to dismiss is therefore denied without prejudice to renewal
of those contentions on summary judgment.
The relationship between a “direction to pay” and an “assignment of benefits” is
unexplored.
University Spine also presents a policy-related argument. Relying on a 26-yearold decision from the United States Court of Appeals for the Fifth Circuit, it argues
that the anti-assignment clause is “inapplicable” because it cannot be used to
frnsfrate a healthcare provider’s ability to recover payment “from the plan whose very
purpose is to provide payment to such providers.” (P1. Brf. 5)(citing Hennann Hasp. v.
MEBA Med. & Benefits Plan, 959 F.2d 569 (5th Cfr. 1992), ovemiled on other grounds,
Access Mediquip, LL.C. v. UnitedHealthcare Ins. Co., 698 F.3d 229 (5th Cir. 2012)). In
Hermann, the Fifth Circuit found that an anti-assignment clause, even if generally
applicable, should not apply to an assignee who “is the provider of the very services
which the plan is maintained to furnish.” 959 F.2d at 575.
I find that University Spine’s reliance on Hemwnn is misplaced. As I have
previously recognized, Hermann “is not binding and has otherwise been limited.” Univ.
Spine Ctr. v. Horizon Blue Cross Blue Shield of New Jersey, 262 F. Supp. 3d 105, 111
(D.N.J. 2017). See LeToumeau LLfelike Orthotics & Prosthetics, Inc. v. Wal-Mart Stores,
Inc., 298 F.3d 348, 352 (5th Cir. 2002) (cautioning that Hennann does not “stand for
the proposition that all anti-assignment clauses are per se invalid vis-ã-vis providers
of health care services.”) Notably, New Jersey has declined to invalidate antiassignment clauses as a policy matter. Kaul v. Horizon Blue Cross Blue Shield, No. CV
15-8268, 2016 WL 4071953, at *2 (D.N.J. July 29, 2016)(citing Advanced Orthopedics,
2015 WL 4430488, at *5 (D.N.J. July 20, 2015)); Somerset OrthopedicAssocs. Li.
Horizon Blue Cross & Blue Shield of N.J., 345 N.J. Super. 410, 423, 785 A.2d 457
(App. Div. 2001) (holding “the anti-assignment clause in Horizon’s subscriber
contracts is valid and enforceable to prevent assignment by subscribers of policy
benefit payments to non-participating medical providers without Horizon’s consent”).
Accordingly, given that University Spine’s policy-related argument is contrary to
applicable precedent, I find no basis to invalidate Aetna’s anti-assignment clause
based on public policy.
Notwithstanding my rejection of those arguments, for the reasons explained in
this opinion, I deny University Spine’s motion to dismiss as to the standing issue.

6

9

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 10 of 14 PageID: 337

B. Waiver

University Spine argues in the alternative that even if the antiassignment clause is enforceable, Aetna has waived enforcement of the clause
through a course of direct dealing with University Spine. (P1. Brf. 6). University
Spine asserts that Aetna did not raise any issue about University Spine’s right
to engage in payment-related processes when responding to University Spine’s
actions as L.K.’s assignee. (Id.) In particular, 1) Aetna submitted a partial
payment to L.K. based on University Spine’s Health Insurance Claim Form7,
and 2) Aetna processed University Spine’s appeal without mentioning the antiassignment clause and invited University Spine to further appeal Aetna’s
decision. (Id.)(citing ECF no. 5-4, Exh. C).
Under New Jersey law, a party may waive an anti-assignment clause “by
a written instrument, a course of dealing, or even passive conduct, i.e., taking
no action to invalidate the assignment vis-a-vis the assignee.” Garden State
Bldgs., L.P.

ii.

First Fid. Bank, N.A., 305 N.J. Super. 510, 524 (App. Div. 1997),

certif denied, 153 N.J. 50 (1998). “Waiver is the voluntary and intentional
relinquishment of a known right.” Knorr v. Smeal, 178 N.J. 169, 177
(2003) (citation omitted). Therefore to prove waiver, “it must be shown that the
party charged with the waiver knew of his or her legal rights and deliberately
intended to relinquish them.” She bar a Sanyo Bus. Corp., 111 N.J. 276, 291
(1988). The intent to waive “need not be stated expressly, but may be spelled
out from a state of facts exhibiting full knowledge of the circumstances
University Spine attaches a letter dated March 10, 2017 sent from Aetna to
University Spine. (ECF no. 5-4, Exh. C). The letter states, in relevant part:
[fjollowing our review, we have determined that this member’s group
benefits coverage allows $4392.02 An amount of $2196.02 was applied
towards coinsurance, which is the member’s responsibility.
Our records indicate that we processed this claim according to the
provisions of this member’s plan. On 02-21-2017, we paid these services
according to the plan contract.
(Id.) Whether or not the letter is properly sponsored and submitted on this motion to
dismiss, it suggests that the issue might profitably be explored on summary judgment.
7

10

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 11 of 14 PageID: 338

producing a right and continuing indifference to exercise of that right.”
Merchants Indem. Corp. u. Eggleston, 68 N.J. Super. 235, 254 (App. Div. 1961).
See also Knot-,-, 178 N.J. at 177 (citing Merchants Indem. Corp., 68 N.J. Super.
at 254) (stating that “[t]he intent to waive need not be stated expressly, provided
the circumstances clearly show that the party knew of the right and then
abandoned it, either by design or indifference.”)
Waiver, as the above authorities imply, will often pose issues of fact. See
Shebar, 111 N.J. at 291 (stating that questions of waiver are questions of
intent, which are factual determinations). The Complaint and its exhibits lend
some plausible support to such a waiver theory, however. The Complaint states
that University Spine prepared a Health Insurance Claim Form formally
demanding reimbursement from Aetna for the services rendered to L.K., and
that in response Aetna “allowed reimbursement totaling $4,392.02.” (Compl. ¶
7, 8)(citing Exhs. C & D). It also states that University Spine engaged in Aetna’s
appeal process, and also requested certain documents. (Id. at ¶ 9, 10)(citing
Exh. E). The Complaint implies that Aetna processed University Spine’s appeal,
ultimately denying it. (Id. at

¶

1 l)(citing Exh. F). By letter dated May 10, 2017,

Aetna explained to University Spine that its reimbursement was based upon a
reasonable and customary charge. (Compl., Exh. F).
Neither party discusses a remittance advice form attached to the
Complaint. That form, however, seems to indicate a February 24, 2017
direct payment from Aetna to University Spine. (Compl., Exh. D). Aetna
is identified as the payor, and University Spine is identified as the payee
(Id.) This evidence, too, could be used to support a waiver argument.8

Attached to University Spine’s opposition brief is a letter dated March 10, 2017
sent from Aetna to University Spine. (ECF no. 5-4, Eth. C). It contains Aetna’s initial
decision and invites University Spine to file an appeal if it does not agree:
Following our review, we have determined that this member’s group
benefits coverage allows $4392.02 An amount of $2196.02 was applied
towards coinsurance, which is the member’s responsibility.

8

11

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 12 of 14 PageID: 339

At this preliminary stage, I find that waiver is adequately suggested by
the allegations of the Complaint and cannot be set aside as a matter of law at
this stage. Whether the anti-assignment Clause was indeed waived by a course
of dealing is an issue that may be further explored in discovery. See Shah zc
Horizon Blue Cross Blue Shield of New Jersey, No. 1 17CVOO166NLHJS, 2017
WL4284470, at*3 (D.N.J. Sept. 27, 2017); At!. OrthopaedicAssocs., LLCv.
Blue Cross, No. 15-CV-1854 (KM), 2016 WL 889562, at *5 (D.N.J. Mar. 7,
2016).
C. Breach of Fiduciary Duty under ERISA
Relying on VaHty Corp. v. Howe, 516 U.S. 489 (1996), Aetna maintains
that Count III, breach of fiduciary duty under ERISA, should be dismissed
because it is duplicative of Count II, failure to make all payments pursuant to
member’s plan under ERISA. (Def. Brf. 15-17). Aetna emphasizes that
University Spine asserts the same injury in both Counts, and also seeks the
same relief in both counts. (Id. at 15, 17). (See Compl., text following
following

¶ 31, text

9 40).

To state a claim for breach of fiduciary duty under an ERISA plan,
University Spine must plausibly allege three elements: that the defendant was
a fiduciary under the Plan, that the defendant breached a fiduciary duty, and
that the breach hanned University Spine. Kenseth v. Dean Health Plan, Inc.,
610 F.3d 452, 464 (7th Cir. 2010). Here, Count III alleges that Aetna was
acting as a fiduciary when it denied payment for L.K.’s medical bills and
responded to University Spine’s administrative appeals. (Compl.

¶ 39). In

particular, it alleges that Aetna acted as a fiduciary because “among other
reasons, (Aetna] acted with discretionary authority or control to deny the
Our records indicate that we processed this claim according to the
provisions of this member’s plan. On 02-21-2017, we paid these services
according to the plan contract.
(Id.) See also (Notice of Removal, Exh. E)(including a February 28, 2017 letter
from University Spine to Aetna which acknowledges receipt of payment and
states that the claim paid $2,196.02).

12

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 13 of 14 PageID: 340

payment and to manage the administration of the employee benefit plan at
issue

[.1”

(Id.) According to University Spine, Aetna breached its fiduciary duties

by 1) failing to issue an Adverse Benefit Determination; 2) “participating
knowingly in, or knowingly undertaking to conceal, an act or omission of such
other fiduciary, knowing such act or omission is a breach; 3) failing to make
reasonable efforts to remedy the breach of the other fiduciary; and 4)
wrongfully withholding money belonging to University Spine. (Id. at

¶

40). The

prayer for relief requests, in part, an order directing Aetna to pay $133,320.98,
the allegedly unpaid balance of benefits due under the terms of the Plan. (Id.,
text following

¶

40).

In Varity, the United States Supreme Court stated that

§

502(a)(3) is a

“catchall” provision that allows “appropriate equitable relief for injuries caused
by [ERISA} violations that

§

502 does not elsewhere adequately remedy.” 516

U.S. at 512. However, as I have previously recognized, I do not believe that
Varity precludes the assertion of Counts II and III at the pleading stage.
See Masri v. Horizon Healthcare Sen’s.,

mc,

No. CV166961KMJBC, 2017 WL

4122434, at 5..6 (D.N.J. Sept. 18, 2017); Atl. OrthopaedicAssocs., LLC, 2016
WL at *6. See also Shah v. Horizon Blue Cross Blue Shield, Civ. No. 15-8590,
2016 WL 4499551 at *10 (D.N.J. Aug. 25, 2016). A plaintiff may plead in the
alternative, or plead causes of action against parties who may be jointly or
solely liable. See generally Fed. I?. Civ. P. 8(d). Without a more developed
factual record, it is too early to identify if either Count or neither Count is
proper.
I will therefore deny the motion to dismiss Count III for failure to state a
claim.

13

Case 2:17-cv-08160-KM-CLW Document 11 Filed 03/20/18 Page 14 of 14 PageID: 341

flY.

Conclusion

For the reasons set forth above, Aetna’s motion (ECF no. 3) to dismiss
the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) is DENIED.
An appropriate order will issue.

K*IN MCNULTY, U.S.D.JQ
Date: March 20, 2018

14