Gay v. National Rural Electric Cooperative Association Group Benefits Program

Filing 17

ORDER denying 8 Motion to Dismiss. Signed by Judge Gregory L Frost on 10/29/14. (kn)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
DAVID GAY,
Plaintiff,
Case No. 2:14-cv-253
JUDGE GREGORY L. FROST
Magistrate Judge Terence P. Kemp

v.
NATIONAL RURAL ELECTRIC
COOPERATIVE ASSOCIATION
GROUP BENEFITS PROGRAM,
Defendant.

OPINION AND ORDER
This matter is before the Court for consideration of Defendant National Rural Electric
Cooperative Association Group Benefits Program’s motion to dismiss or, alternatively, for
remand (ECF No. 8), Plaintiff’s memorandum in opposition (ECF No. 11), and Defendant’s
reply memorandum (ECF No. 15). For the reasons that follow, the Court DENIES the motion.
I.

BACKGROUND

Plaintiff brings his Complaint under the Employee Retirement Income Security Act, 29
U.S.C. § 1001 et seq., commonly referred to as “ERISA.” Plaintiff alleges that Defendant, which
administers a group benefit program under which Plaintiff was covered (the “Plan”), wrongly
denied his claim for long-term disability benefits. A brief summary of the facts underlying this
case is set forth below.
Plaintiff was enrolled in the Plan through his employer. In April 2012, Plaintiff allegedly
became disabled and applied for long-term disability benefits under the Plan. On July 2, 2013,

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Defendant informed Plaintiff of its determination that he was not disabled from his own
occupation so as to qualify for benefits under the Plan.
Plaintiff instituted an administrative appeal of Defendant’s decision on December 12,
2013. To support his claim that he was disabled from his own occupation, Plaintiff submitted a
file to Defendant that included an assessment by the Social Security Administration.
On March 13, 2014, a claims administrator informed Plaintiff that Defendant would not
reach a decision on his claim within ERISA’s 90-day limit. Defendant did not, in fact, reach a
decision on Plaintiff’s claim within that 90-day limit.
Having deemed his administrative remedies exhausted when the 90-day limit expired, on
March 17, 2014, Plaintiff filed the present Complaint. Plaintiff seeks an award of benefits
pursuant to 29 U.S.C. § 1132(a)(1)(B).
Defendant filed a motion to dismiss Plaintiff’s Complaint pursuant to Federal Rule of
Civil Procedure 12(b)(6) for failure to exhaust administrative remedies. In the alternative,
Defendant asks the Court to remand this case for completion of its analysis of Plaintiff’s
administrative appeal.
II.

ANALYSIS
A. Standard of Review

Dismissal pursuant to Rule 12(b)(6) is proper if the complaint fails to state a claim upon
which the Court can grant relief. Fed. R. Civ. P. 12(b)(6). The court must construe the pleading
in favor of the party asserting the claim, accept the factual allegations contained therein as true,
and determine whether those factual allegations present a plausible claim for relief. See Bell Atl.
Corp. v. Twombly, 550 U.S. 554, 570 (2007). The defendant bears the burden of demonstrating
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that the plaintiff failed to state a claim for relief. Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th
Cir. 2007).
Here, Defendant argues that dismissal under Rule 12(b)(6) is proper because Plaintiff
failed to exhaust his administrative remedies before filing suit. The Court agrees with Plaintiff,
however, that exhaustion is an affirmative defense. See, e.g., Beamon v. Assurant Emp. Benefits,
917 F. Supp. 2d 662, 666 (W.D. Mich. Jan. 22, 2013) (collecting cases in which courts held that
exhaustion in ERISA cases is an affirmative defense). Cf. Jones v. Bock, 549 U.S. 199, 212–16
(2007) (holding that exhaustion under the Prison Litigation Reform Act is an affirmative
defense); Retamar-Lopez v. Bd. of Educ. Of Dublin City Schs. Dist., No. 2:13-cv-0161, 2014 WL
221944, at *2 (S.D. Ohio Jan. 21, 2014) (treating failure to exhaust under the Individuals with
Disabilities Education Act as an affirmative defense). A plaintiff generally is not required to
plead facts negating an affirmative defense. See, e.g., Jones, 549 U.S. at 212–16. As such, a
court may grant a Rule 12(b)(6) motion on the basis of an affirmative defense only if the defense
appears on the face of the pleadings. Id. at 215 (quoting Leveto v. Lapina, 258 F.3d 156, 161 (3d
Cir. 2001)); see also Bishop v. Lucent Techs., Inc., 520 F.3d 516, 520 (6th Cir. 2008).
The first issue for the Court is what materials constitute the “pleadings” for purposes of
analyzing Defendant’s affirmative defense. Along with the complaint and public records,
“[d]ocuments that a defendant attaches to a motion to dismiss are considered part of the
pleadings if they are referred to in the plaintiff’s complaint and are central to her claim.” Weiner
v. Klais & Co., 108 F.3d 86, 89 (6th Cir. 1997); see also Basset v. Nat’l Collegiate Athletic
Ass’n, 528 F.3d 426, 430 (6th Cir. 2008). Documents other than those referenced above are
considered matters outside the pleadings; if those documents are presented with a motion to
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dismiss under Rule 12(b)(6), then the court must either exclude those documents from
consideration or convert the defendant’s motion to a one for summary judgment. Fed. R. Civ. P.
12(d).
Here, Defendant does not dispute that Plaintiff was entitled to deem his administrative
remedies exhausted if Defendant failed to render a decision on his appeal within ERISA’s 90-day
time limit. Plaintiff alleged in his Complaint that the 90-day limit expired and that Defendant
failed to render a decision on his administrative appeal within that time frame. Defendant
therefore cannot successfully argue that its exhaustion defense appears in the Complaint alone.
Instead, Defendant argues that the Court should consider a letter dated March 13, 2014
from its vendor to Plaintiff’s attorney (“March 13 Letter”) as part of the pleadings,1 and that the
March 13 Letter establishes that “the administrative process was actually tolled under applicable
regulations” at the time Plaintiff filed his Complaint such that the 90-day period never expired
and Plaintiff’s administrative remedies are not deemed exhausted. (ECF No. 8, at 3.) As
explained below, however, the March 13 Letter does not prove what Defendant says it does.
Accordingly, even assuming arguendo that the Court can consider the March 13 Letter as part of
the pleadings, Defendant’s exhaustion defense does not appear on the face of the pleadings.
Rule 12(b)(6) therefore does not mandate dismissal of Plaintiff’s Complaint.
B. Exhaustion Under ERISA
The parties do not dispute (for purposes of this motion to dismiss) that the Plan is subject
to ERISA’s requirements, that Plaintiff was obligated to exhaust administrative remedies under
the Plan before filing suit in this Court, and that Plaintiff initiated a first-level administrative
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Defendant attached the March 13 Letter as Exhibit A to its motion to dismiss.

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appeal after Defendant initially denied his claim for benefits. The parties similarly do not
dispute that, if Defendant failed to render a decision on Plaintiff’s appeal within the permissible
90-day time limit set forth in ERISA, Plaintiff was entitled to deem his administrative remedies
exhausted and seek judicial review of Defendant’s decision to deny his claim. See 29 C.F.R. §
2560.503-1(l) (“In the case of the failure of a plan to establish or follow claims procedures
consistent with the requirements of this section, a claimant shall be deemed to have exhausted
the administrative remedies available under the plan . . . .”); Soltysiak v. UNUM Provident
Corp./Paul Revere Co., 531 F. Supp. 2d 816, 818–19 (W.D. Mich. 2008). The issue for this
Court is whether it is clear from the pleadings that ERISA’s 90-day time limit was tolled such
that Plaintiff’s administrative remedies were not deemed exhausted at the time he filed his
Complaint.
Section 2560.503-1(i) of the Code of Federal Regulations governs this issue. Pursuant to
§ 2560.503-1(i)(1)(i),
Except as provided in paragraphs (i)(1)(ii), (i)(2), and (i)(3) of this section, the
plan administrator shall notify a claimant in accordance with paragraph (j) of this
section of the plan’s benefit determination on review within a reasonable period
of time, but not later than [45]2 days after receipt of the claimant’s request for
review by the plan, unless the plan administrator determines that special
circumstances (such as the need to hold a hearing, if the plan’s procedures provide
for a hearing) require an extension of time for processing the claim. If the plan
administrator determines that an extension of time for processing is required,
written notice of the extension shall be furnished to the claimant prior to the
termination of the initial [45]–day period. In no event shall such extension exceed
a period of [45] days from the end of the initial period. The extension notice shall
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This section provides for a 60-day timeline for administrative appeals, but § 2560.503-1(3)(i) mandates
that the Court use a 45-day timeline in disability claims cases such as this one. 29 C.F.R. § 2560.503-1(3)(i)
(“Except as provided in paragraph (i)(3)(ii) of this section, claims involving disability benefits (whether the plan
provides for one or two appeals) shall be governed by paragraph (i)(1) of this section, except that a period of 45 days
shall apply instead of 60 days for purposes of that paragraph.”).

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indicate the special circumstances requiring an extension of time and the date by
which the plan expects to render the determination on review.
29 C.F.R. § 2560.503-1(i)(1)(i).
As applied to the facts of this case, it is clear that Defendant had 45 days after receipt of
Plaintiff’s administrative appeal (which, according to the Complaint, Plaintiff submitted on
December 12, 2013) to render a decision on that appeal. Defendant also had the option, at its
sole discretion, to extend that time period for an additional 45 days if “special circumstances
(such as the need to holding a hearing, if the plan’s procedures provide for a hearing) require an
extension of time for processing the claim.” Id. Defendant presumably determined that such
special circumstances existed and elected to invoke the 45-day extension. See ECF No. 1 ¶ 13;
ECF No. 8-1, at 2. As such, Defendant was required to send Plaintiff written notice of the
special circumstances that warranted the extension. 29 C.F.R. § 2560.503-1(i)(1)(i). Although
the Court can infer from the pleadings that such written notice exists, the document itself it not
part of the pleadings.3
The question now becomes whether the tolling provision set forth in § 2560.503-1(i)(4)
tolled the 45-day extension that Defendant invoked. Section 2560.503-1(i)(4) states:
For purposes of paragraph (i) of this section, the period of time within which a
benefit determination on review is required to be made shall begin at the time an
appeal is filed in accordance with the reasonable procedures of a plan, without
regard to whether all the information necessary to make a benefit determination
on review accompanies the filing. In the event that a period of time is extended as
permitted pursuant to paragraph (i)(1), (i)(2)(iii)(B), or (i)(3) of this section due to
a claimant’s failure to submit information necessary to decide a claim, the period
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Plaintiff provided a more complete record of the correspondence between the parties in connection with
his memorandum in opposition to Defendant’s motion; however, the documents he attached are not part of the
Complaint, are not public records, and are not referenced in the Complaint. Accordingly, because those documents
constitute matters outside the pleadings, the Court excludes them from its analysis of Defendant’s motion to dismiss
pursuant to Rule 12(b)(6).

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for making the benefit determination on review shall be tolled from the date on
which the notification of the extension is sent to the claimant until the date on
which the claimant responds to the request for additional information.
29 C.F.R. § 2560.503-1(i)(4). As applied to the facts of this case, that means that the initial 45day time period began to run when Plaintiff filed his appeal (or when Defendant received notice
of the same, see § 2560.503-1(i)(1)(i)), regardless of whether Plaintiff submitted all necessary
information at that time. The next sentence of the regulation—“[i]n the event that a period of
time is extended as permitted pursuant to paragraph (i)(1) . . . of this section due to a claimant’s
failure to submit information necessary to decide a claim”4—logically can only refer to the
permissible 45-day extension discussed above. As such, the tolling provision set forth in §
2560.503-1(i)(4) is only relevant if Defendant’s decision to invoke the 45-day extension was
based on the special circumstance that Plaintiff failed to submit information necessary to decide
his claim (and Defendant detailed that reason, along with a request for additional information, in
its written notification of extension). In that case, the 45-day time period would be tolled “from
the date on which the notification of the extension is sent to the claimant until the date on which
the claimant responds to the request for additional information.” 29 C.F.R. § 2560.503-1(i)(4).
The parties suggest that Defendant did, in fact, detail a request for information about
pharmacies Plaintiff utilized in its written notification of extension. The parties also suggest that
Plaintiff responded to that request by providing (what Defendant claims to be) inaccurate
information about the pharmacies he visited. But neither the date of Defendant’s request nor the
date of Plaintiff’s response are ascertainable from the pleadings. The Court therefore cannot
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The Court omits the reference to paragraph (i)(2)(iii)(B) and (i)(3) from this section because the former
applies to multiemployer plans (which are not at issue here) and the latter simply references the fact that paragraph
(i)(1) applies to disability claims such as Plaintiff’s.

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determine at this stage of the litigation the length of time (if any) that the 45-day extension was
tolled pursuant to 29 C.F.R. § 2560.503-1(i)(4).
Defendant suggests in its briefs that Plaintiff never “responded” to its request within the
meaning of the regulation because the information he submitted was not accurate; however, the
case law does not support that position. To the contrary, courts addressing this issue have
concluded that a claimant “responds” to a plan administrator’s request for information (so as to
end the tolling period set forth in § 2560.503-1(i)(4)) at the time he or she actually responds to
the request, without regard to whether he or she produces accurate (or any) information at that
time. See, e.g., McDowell v. Std. Ins. Co., 555 F. Supp. 2d 1361, 1368–70 (N.D. Ga. 2008)
(holding that a plan administrator could not toll the 45-day time limit once the claimant
responded to the request for outstanding information by informing the plan administrator that he
did not intend to produce the requested information); Holmes v. Colorado Coalition for the
Homeless Long Term Disability Plan, 762 F.3d 1195, 1207 (10th Cir. 2014) (“Furthermore, [the
claimant] had the power to end the tolling period and recommence the running of the time for
decision simply by responding to [the plan administrator’s] request, even if the response was a
refusal to provide the documents.”); accord Employee Retirement Income Security Act of 1974;
Rules and Regulations for Administration and Enforcement; Claims Procedure, 65 Fed. Reg.
70246-01, 70249 n. 21 (Nov. 21, 2000) (“This tolling period [set forth in 29 C.F.R. § 2560.5031(i)(4)] ends on the date on which the plan receives the claimant’s response to the notice, without
regard to whether the claimant's response supplies all of the information necessary to decide the
claim.”). Although the Sixth Circuit has not, to the Court’s knowledge, addressed this specific

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issue, the cited cases comport with the plain language of the regulations. Defendant does not
offer any authority or argument to the contrary.
Applying the cited authority here, the Court rejects Defendant’s position that the 45-day
time period was tolled until Plaintiff provided accurate information in response to its request.
Although that time period may have been tolled between the date of Defendant’s written
notification of extension through the date on which Plaintiff responded to that notification, those
dates are not ascertainable from the Complaint or from the March 13 Letter. Defendant’s
affirmative defense therefore does not appear on the face of the pleadings. The Court need not
address Plaintiff’s alternative argument that Defendant sought the extension for an impermissible
purpose.
As a final note, the Court acknowledges that, at the time the administrative appeal was
taking place, Defendant did not appear to believe its own argument that the tolling provision set
forth in § 2560.503-1(i)(4) applies to the facts of this case. In the March 13 Letter, Defendant’s
claims administrator did not reference tolling or § 2560.503-1(i)(4). See ECF No. 8-1. To the
contrary, the claims administrator stated that ERISA required her to complete her review of
Plaintiff’s claim by March 14, 2014. (Id. at 1.) The claims administrator further stated that she
was requesting a second 45-day extension and that she expected to complete her review by April
27, 2014. (Id.) The Court therefore agrees with Plaintiff that the March 13 Letter “did not notify
Plaintiff that Defendant was invoking any right to toll.” (ECF No. 22, at 10.) Having found,
however, that Defendant is not entitled to dismissal of Plaintiff’s Complaint, the Court need not
address the legal implications (if any) of Defendant’s failure to notify Plaintiff that it was
invoking its right to toll the 45-day time period.
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C. Defendant’s Alternative Request for Remand
In the alternative to its motion to dismiss, Defendant requests that the Court remand
Plaintiff’s claim so Defendant can complete its review of Plaintiff’s administrative appeal.
Under Defendant’s logic, however, remand would be appropriate any time a plan administrator
failed to render a decision on a claimant’s appeal within the permissible 90-day window. That
result directly contradicts § 2560.503-1(l), which permits a claimant to seek judicial review of
his or her claim determination in the event the plan administrator fails to reach a timely decision
on the claim. See 29 C.F.R. § 2560.503-1(l) (referencing section 502(a) of the Act, 29 U.S.C. §
1132(a), which discusses the circumstances under which a claimant may pursue a civil action).
Defendant does not offer any explanation as to why this case warrants a different analysis or why
Defendant should essentially be excused from complying with the time limits set forth in §
2560.503-1(i)(1)(i). The Court therefore denies Defendant’s request for remand.
III.

CONCLUSION

For the foregoing reasons, the Court concludes that Defendant did not meet its burden in
demonstrating that Plaintiff’s Complaint fails to state a claim for relief. The Court therefore
DENIES Defendant’s motion to dismiss or, alternatively, for remand. (ECF No. 8.)
IT IS SO ORDERED.
/s/ Gregory L. Frost
GREGORY L. FROST
UNITED STATES DISTRICT JUDGE

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