Albandoz-Betancourt v. Sedgwick Claims Management Services, Inc.
Filing
57
MEMORANDUM AND ORDER re 39 Motion for Judgment on the Pleadings. The Court finds that the futility exception applies to plaintiff's failure to plead that she exhausted administrative remedies for LTD benefits. Accordingly, the Court DENIES d efendant Sedgwick's motion for judgment on the pleadings, which is based on plaintiff Albandoz's failure to plead that she exhausted administrative remedies for LTD benefits. Signed by Judge Francisco A. Besosa on 07/11/2013. (brc)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
HILDA Z. ALBANDOZ-BETANCOURT,
Plaintiff,
Civil No. 12-1147 (FAB)
v.
SEDGWICK
CLAIMS
MANAGEMENT
SERVICES, INC., et als.,
Defendants.
MEMORANDUM AND ORDER1
BESOSA, District Judge.
Before the Court is the motion for judgment on the pleadings
pursuant to Federal Rule of Civil Procedure Rule 12(c) (“Rule
12(c)”) filed by defendant Sedgwick Claims Management Services,
Inc. (“Sedgwick”).
(Docket No. 39.)
For the reasons discussed
below, the Court DENIES defendant Sedgwick’s motion.
I.
BACKGROUND
A.
FACTUAL BACKGROUND
In
its
complaint,
plaintiff
Albandoz
alleges
the
following facts, which for the purposes of deciding defendant
Sedgwick’s motion, the Court takes as true, Perez-Acevedo v.
Rivero-Cubano, 520 F.3d 26, 29 (1st Cir. 2008):
Plaintiff Albandoz began working at Walgreen’s Puerto
Rico, Inc. (“Walgreen’s”) as a Staff Pharmacist in January 2005.
1
Logan Brown, a second-year student at the Georgetown
University Law Center, assisted in the preparation of this
Memorandum and Order.
Civil No. 12-1147 (FAB)
2
(Docket No. 1 at p. 2.)
One of the benefits offered by Walgreen’s
is the Walgreen’s Income Protection Plan for Pharmacists (“the
Plan”), which is an employee welfare benefit plan as defined by the
Employee
Retirement
Income
29 U.S.C. §§ 1001 et seq.
Security
Act
of
Id. at pp. 2-3.
short-term and long-term disability benefits.
p. 2.)
1974
(“ERISA”),
The Plan provides
(Docket No. 17 at
Plan.
Defendant Sedgwick is the claims administrator for the
Id.
On April 8, 2010, Dr. Angel Narvaez-Morell diagnosed
plaintiff
Albandoz
with
(Docket No. 1 at p. 3.)
fibromyalgia
and
severe
depression.
Plaintiff Albandoz informed Walgreen’s of
this diagnosis on or around May 14, 2010.
Id. at p. 4.
On May 20,
2010, plaintiff Albandoz missed a full work day due to disability
for the first time.
Id.
She immediately applied for short-term
disability (“STD”) benefits.
Id.
Defendant Sedgwick denied
plaintiff Albandoz’s request for STD benefits on June 10, 2010,
because
she
disability.
failed
Id.
to
provide
medical
documentation
of
her
On June 17, 2010, however, after plaintiff
Albandoz submitted her medical records, defendant Sedgwick approved
plaintiff Albandoz’s application for STD benefits for the period of
May 21, 2010, through July 9, 2010.
Id. at p. 5.
When the STD benefits were initially approved, defendant
Sedgwick informed plaintiff Albandoz that if she did not recover
sufficiently to resume work by the end of the approved period, she
Civil No. 12-1147 (FAB)
3
would have to provide defendant Sedgwick with updated medical
documentation by July 5, 2010.
(Docket No. 1 at p. 6.)
Plaintiff
Albandoz saw Dr. Narvaez-Morell again on June 22, 2010, and the
notes he submitted to defendant Sedgwick established that her
condition persisted.
Id. at pp. 6-7.
As a result, plaintiff
Albandoz requested an approval of an extension of her disability
benefits.
Id. at p. 6.
On July 14, 2010, defendant Sedgwick informed plaintiff
Albandoz that she did not qualify for continuing benefits and
denied her claim.
(Docket No. 1 at p. 7.)
Plaintiff Albandoz
filed her first-level appeal on August 31, 2010, in which she
submitted additional information from Dr. Annette Martinez that
supported the previous diagnosis.
Id. at p. 8.
On October 14,
2010, defendant Sedgwick denied plaintiff Albandoz’s first-level
appeal and advised her of her right to a second-level appeal.
Id.
at p. 9.
Plaintiff
December 29, 2010.
Albandoz filed
her
second-level
(Docket No. 1 at p. 10.)
appeal
on
While the second-
level appeal was ongoing, plaintiff Albandoz’s healthcare benefits
were cancelled,2 and she filed for Social Security disability
2
Plaintiff Albandoz alleges that the cancellation of her
healthcare benefits violated the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”), 29 U.S.C. § 1166, because defendant
Sedgwick “did not notify plaintiff [Albandoz] of her COBRA rights
once her employment was deemed terminated.”
(Docket No. 1 at
p. 17.) Plaintiff Albandoz, however, fails to allege the date when
her employment was deemed terminated.
Civil No. 12-1147 (FAB)
4
benefits. Id. The Social Security Administration (“SSA”) required
that
plaintiff
Albdanoz
submit
Dr. Luis P. Sanchez-Longo.
Id.
a
neurological
evaluation
by
Dr. Sanchez-Longo concluded that
due to a combination of physical and emotional problems, plaintiff
Albandoz was functionally impaired.
Albandoz
submitted
Dr.
Id. at p. 11.
Sanchez-Longo’s
report
to
Plaintiff
the
SSA
February 4, 2011, and to defendant Sedgwick on March 18, 2011.
at p. 10.
on
Id.
The SSA approved Plaintiff Albandoz’s social security
benefits on April 6, 2011.
Id. at p. 11.
On April 25, 2011,
defendant Sedgwick denied plaintiff Albandoz’s second-level appeal
and advised her of her right to file a civil action pursuant to
ERISA section 502(a).
B.
Id. at p. 12.
PROCEDURAL HISTORY
On March 2, 2012, plaintiff Albandoz filed her complaint,
alleging
that
defendant
Sedgwick
(1)
violated
ERISA
section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), by denying her
disability benefits, and (2) violated the Consolidated Omnibus
Budget Reconciliation Act (“COBRA”), 29 U.S.C. § 1166, by failing
to provide her with proper notice of continued coverage where she
was terminated.
(Docket No. 1 at pp. 15-17.)
Defendant Sedgwick
filed a motion to dismiss for failing to state a claim on July 9,
2012, alleging that plaintiff Albandoz failed to identify defendant
Sedgwick as the plan administrator as required in ERISA and COBRA
actions.
(Docket No. 14.)
On July 30, 2012, plaintiff Albandoz
Civil No. 12-1147 (FAB)
5
amended her complaint to allege that defendant Sedgwick, or in the
alternative, her employer Walgreen’s, is the plan administrator.
(Docket No. 17.)
On December 20, 2012, defendant Sedgwick filed a motion
for judgment on the pleadings requesting that the Court dismiss
plaintiff Albandoz’s ERISA claim for long-term disability (“LTD”)
benefits because
she
failed
to
plead
that
she
administrative remedies for those benefits.
Plaintiff
Albandoz
opposed
defendant
exhausted her
(Docket No. 39.)
Sedgwick’s
motion
on
January 1, 2013, contending that, among other arguments,3 the facts
show
that
plaintiff
administrative
Albandoz
remedies
for
exhausted
her
all
claims.
of
the
(Docket
available
No.
47.)
Defendant Sedgwick replied to plaintiff Albandoz’s opposition on
January 18, 2013.
II.
(Docket No. 51.)
RULE 12(c) STANDARD
“When as now, a motion for judgment on the pleadings under
[Rule 12(c)] is employed as a vehicle to test the plausibility of
a complaint, it must be evaluated as if it were a motion to dismiss
under Federal Rule of Civil Procedure 12(b)(6).”
Ports Auth., 682 F.3d 40, 44 (1st Cir. 2012).
Grajales v. P.R.
When considering a
motion pursuant to Rule 12(c), a “court must view the facts
3
Because the Court finds that plaintiff Albandoz’s argument
that she exhausted the available administrative remedies for
disability benefits persuasive, it need not address the other
arguments.
Civil No. 12-1147 (FAB)
6
contained in the pleadings in the light most favorable to the
nonmovant and draw all reasonable inferences therefrom . . . .”
Perez-Acevedo, 520 F.3d at 29 (quoting R.G. Fin. Corp. v. VergaraNuñez,
446
F.3d
178,
182
(1st
Cir.
2006)).
“[A]n
adequate
complaint must provide fair notice to the defendants and state a
facially plausible legal claim.”
Ocasio-Hernandez v. Fortuño-
Burset, 640 F.3d 1, 12 (1st Cir. 2011).
When faced with a motion for judgment on the pleadings, “[a]
plaintiff is not entitled to ‘proceed perforce’ by virtue of
allegations
action.”
that
merely
parrot
the
elements
of the
cause of
Ocasio-Hernandez, 640 F.3d at 9 (quoting Ashcroft v.
Iqbal, 129 S.Ct. 1937, 1950 (2009)). Any “[n]on-conclusory factual
allegations in the complaint[, however,] must . . . be treated as
true, even if seemingly incredible.”
at 1951).
Id. (citing Iqbal, 129 S.Ct.
Where those factual allegations “allow[] the court to
draw the reasonable inference that the defendant is liable for the
misconduct alleged,” the claim has facial plausibility.
(citing Iqbal, 129 S.Ct. at 1949).
Id.
The Court must base its
determination on the material submitted as part of the complaint
and expressly incorporated within it. See Alt. Energy, Inc. v. St.
Paul Fire & Marine Ins. Co., 267 F.3d 30, 33 (1st Cir. 2001).
Additionally, the Court “may augment these facts and inferences
with data points gleaned from documents incorporated by reference
into the complaint, matters of public record, and facts susceptible
Civil No. 12-1147 (FAB)
to judicial notice.”
7
Haley v. City of Boston, 657 F.3d 39, 46 (1st
Cir. 2011).
The factual material pled must be sufficient “to raise a right
to relief above the speculative level,” and to permit the Court to
“draw the reasonable inference that the defendant is liable for the
misconduct alleged.”
Ocasio-Hernandez, 640 F.3d at 12 (quoting
Iqbal, 556 U.S. at 678).
A district court may not “attempt to
forecast a plaintiff’s likelihood of success on the merits; ‘a
well-pleaded complaint may proceed even if . . . a recovery is very
remote and unlikely’.”
Id. at 13 (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 556 (2007)).
Overall, the relevant inquiry
“focuses on the reasonableness of the inference of liability that
the plaintiff is asking the court to draw from the facts alleged in
the complaint.”
Id.
III. ANALYSIS
“ERISA is a comprehensive federal statute that governs the
rights and responsibilities of parties in relation to employee
pension, welfare, and benefit plans.”
426 F.3d 56, 61 (1st Cir. 2005).
Madera v. Marsh USA, Inc.,
The statute provides a civil
enforcement mechanism for “a participant or beneficiary . . . to
recover benefits due to him under the terms of his plan, to enforce
his rights under the terms of the plan, or to clarify his rights to
future
benefits
§ 1132(a)(1)(B).
under
the
terms
of
the
plan.”
29
U.S.C.
Civil No. 12-1147 (FAB)
8
Generally, “[b]efore a plaintiff asserts an ERISA claim . . .
he must first exhaust his administrative remedies.”
F.3d
at
61.
“An
employee
is
not
required
to
Madera, 426
exhaust
his
administrative remedies [, however,] in those instances where it
would be futile for him to do so.”
Id. at 62.
Nevertheless, “[a]
blanket assertion, unsupported by any facts, is insufficient to
call this exception into play.”
Drinkwater v. Metro. Life Ins.
Co., 846 F.2d 821, 826 (1st Cir. 1988).
Defendant Sedgwick contends that plaintiff Albandoz failed to
plead that she exhausted her administrative remedies for the denial
of LTD benefits, and, as a result, her claims for those benefits
should
be
dismissed.
(Docket
No.
39.)
Defendant
Sedgwick
accurately notes that plaintiff Albandoz failed to plead that she
ever requested LTD benefits.
(Docket No. 39 at p. 6.)
Plaintiff
Albandoz did contend, however, that the administrative mechanism
for
appealing
the
exhausted . . . .”
denial
of
disability
benefits
“ha[d]
been
(Docket No. 1 at pp. 1-2.)
As defendant Sedgwick correctly notes, a plaintiff’s belief
that
bringing
administrative
remedies
would
be
futile
insufficient to call the futility exception into play.
No. 39 at pp. 5-6.)
is
(Docket
If, however, the plaintiff’s belief is
accurate — as demonstrated by factual evidence — and exhausting the
administrative
remedies
would,
in
fact,
be
futile,
then
the
Civil No. 12-1147 (FAB)
9
futility exception is called into play.
See Drinkwater, 846 F.2d
at 826.
In
Drinkwater,
the
plaintiff
contended
that
the
review
procedure provided by the defendant was futile because there was
“not the slightest possibility that the plan administrator could be
objective,
unbiased
and
act
in
the
best
interest
beneficiary” when reviewing the plaintiff’s claim.
of
the
846 F.2d
at 825-26. Because the plaintiff failed to produce evidence, apart
from the blanket assertion, to show that the review process would
have been futile, the First Circuit Court of Appeals found that the
futility exception was not applicable, and accordingly plaintiff’s
failure to exhaust administrative remedies was not excused.
Id.
at 826.
In contrast, here plaintiff Albandoz provided the eligibility
requirements of the Plan as evidence supporting the assertion that
it would have been futile for her to pursue the administrative
process for LTD benefits.4
LTD
benefits,
the
Plan
180 days of STD benefits.
(Docket No. 47-2.)
requires
Id.
that
an
To be eligible for
employee
accumulate
Once plaintiff Albandoz was denied
her STD benefits, and had exhausted her administrative appeals for
them, she was not and could not become eligible for LTD benefits.
4
Although plaintiff Albandoz failed to provide the
eligibility requirements of the Plan in either its original or
amended complaint, the Court includes them in its analysis because
the Plan is incorporated by reference in both complaints.
See
Haley, 657 F.3d at 46.
Civil No. 12-1147 (FAB)
10
Applying for benefits for which one is not eligible would be, in
defendant Sedgwick’s words, “simply non-sensical [sic].”
(Docket
No. 51 at p. 8.)
The Court finds that even if plaintiff Albandoz brought an
administrative claim for LTD benefits, her efforts would have been
futile because she had already been denied STD benefits and was,
therefore, ineligible for LTD benefits.
Accordingly, the futility
exception applies to plaintiff Albandoz’s failure to plead that she
exhausted
administrative
remedies
for
LTD
benefits.
Because
defendant Sedgwick’s motion for judgment on the pleadings is based
solely on plaintiff Albandoz’s failure to plead that she exhausted
administrative remedies for LTD benefits, it is DENIED.
IV.
CONCLUSION
For the reasons discussed above, the Court finds that the
futility exception applies to plaintiff’s failure to plead that she
exhausted administrative remedies for LTD benefits.
Accordingly,
the Court DENIES defendant Sedgwick’s motion for judgment on the
pleadings, which is based on plaintiff Albandoz’s failure to plead
that she exhausted administrative remedies for LTD benefits.
IT IS SO ORDERED.
San Juan, Puerto Rico, July 11, 2013.
s/ Francisco A. Besosa
FRANCISCO A. BESOSA
UNITED STATES DISTRICT JUDGE
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