Stafford v. BlueCross BlueShield of Illinois
Filing
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ORDER granting 35 Motion to Dismiss Signed by Chief Judge David C Norton on 9/19/11.(juwo, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
KENNETH STAFFORD,
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Plaintiff,
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v.
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WAL-MART STORES, INC.
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ASSOCIATES’ HEALTH and WELFARE )
PLAN,
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Defendant.
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Civil No. 2:10-cv-01443-DCN
ORDER
This matter is before the court on defendant’s motion to dismiss plaintiff’s
amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiff
seeks review of a denial of health insurance benefits by the Wal-Mart Stores, Inc.
Associates’ Health and Welfare Plan (Wal-Mart Plan), a self-insured, self-funded
ERISA plan. Defendant moves to dismiss plaintiff’s amended complaint for failure
to file suit within the applicable 180 day limitation period. Plaintiff asks this court to
apply the doctrine of equitable tolling to excuse his late filing and consider plaintiff’s
claim on the merits. For the reasons set forth below, the court grants defendant’s
motion to dismiss.
I. BACKGROUND
Plaintiff sued the original defendant, BlueCross BlueShield of Illinois
(BlueCross), on March 18, 2010, for breach of contract and bad faith after he was
denied benefits for a medical procedure. Defendant removed the case to federal court
on June 4, 2010, pursuant to 28 U.S.C. §§ 1441(b) and (c), based on the court’s
original jurisdiction over ERISA actions under 29 U.S.C. § 1132, which preempts
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plaintiff’s state law claims. Both parties agree that “The Wal-Mart Stores, Inc.
Associates’ Health and Welfare Plan” is the proper defendant, rather than BlueCross.
The Wal-Mart Plan has taken over the defense. Defendant filed a motion to dismiss,
or in the alternative, a motion for summary judgment on June 18, 2010. Plaintiff
opposed the motion to dismiss and moved to amend its state law complaint and for
discovery. On December 14, 2010, this court denied defendant’s motion to dismiss
and granted plaintiff’s motion to amend and correct his complaint.
Plaintiff filed an amended complaint on December 17, 2010, restyling the case
and naming the Wal-Mart Plan as the defendant. Plaintiff alleged that he is entitled to
recover health benefits from the Plan and asked the court to apply the doctrines of
equitable tolling and equitable estoppel to excuse his late filing. Specifically, plaintiff
alleged that the Plan provided misleading information regarding time limitations that
induced plaintiff and his attorney into missing the filing deadline. Defendant filed the
instant motion on January 3, 2011, moving to dismiss the amended complaint for
failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Plaintiff filed
a reply to defendant’s motion to dismiss on January 13, 2011, to which defendant
responded by filing a reply brief in support of the motion to dismiss on January 21,
2011.
Plaintiff’s wife was employed by Wal-Mart Stores, Inc., which provided
health insurance coverage to plaintiff and his wife through the Wal-Mart Plan.
Plaintiff requested coverage under the Plan after undergoing a surgical procedure and
was denied. Plaintiff appealed the Plan’s decision on November 26, 2007, which the
Plan denied on December 6, 2007. A letter dated December 6, 2007 informed
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plaintiff of his right to a voluntary, second level of appeal and explained that such an
appeal would toll the limitations period for instituting a civil suit:
If you have additional information that was not originally included in
your appeal, you may request a voluntary level appeal. . . . You must
make your request and provide this additional information within
180 days from the date of this notification. The Plan will review the
additional information and notify you of its decision as to whether or
not to uphold the Plan’s initial decision. The time period beginning
on the date the Plan receives the request for voluntary appeal (that
includes additional information) and ending on the date the Plan
responds is not counted as part of the time in which legal action
can be pursued.
December 6, 2007 Letter (emphasis added). In addition, the letter informed
plaintiff of his right to bypass the voluntary level of appeal and bring a civil
suit:
In addition to, or instead of, requesting a voluntary appeal, you may have the
right to bring a civil action suit. This right can be exercised after all required
reviews of your claims, including the non-voluntary appeal process, have been
completed if your claim was not approved, in whole or in part, and you
disagree with the outcome. Unless you request a voluntary appeal, no legal
action can be initiated with respect to a claim under the Associates’
Medical Plan and Dental Plan more than 180 days from the date of this
notification.
Id. (emphasis added).
On January 30, 2008, Stafford requested a voluntary appeal and provided
additional documentation. The Wal-Mart Plan denied this appeal on February 14,
2008, explaining that plaintiff’s procedure was excluded from coverage. A letter
dated February 14, 2008 again explained that the voluntary appeal tolled the 180 day
limitation period:
This voluntary level review does not eliminate your right to initiate
legal action. Accordingly, the time period beginning on the date
the Plan receives your written request for a voluntary appeal that
includes additional information and ending on the date the Plan
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responds is not counted as part of the time in which legal action
can be pursued. For example, if you submit a request for a voluntary
appeal and information supporting your voluntary appeal 120 days
after the Appeals Committee denied your original appeal, and the Plan
denies your voluntary appeal, you still have 60 days to file a legal
action.
February 14, 2008 Letter (emphasis added).
Plaintiff received two additional letters that discussed the applicable
time period within which to file suit. First, plaintiff was provided the WalMart Stores, Inc. Associates’ Health and Welfare Plan (AHWP). Article II,
Section 3.7 (“Limitations on Actions”) stated,
Participants must follow the claims procedures, including exhausting
their rights to appeal, before taking action in any other forum
regarding a claim for benefits under the Plan. Any suit or legal action
initiated by a participant for benefits under the Plan must be
brought by the Participant no later than 180 days following a final
decision on the appeal of the claim for benefits by the person or
entity described in the Plan with the discretionary authority to
determine appeals with respect to such claim. In no case may a suit or
legal action be brought if the claim for benefits was not made within
the time period prescribed in the claims procedures of the Plan. This
limitation on suits for benefits applies in any forum where a
Participant initiates a suit or legal action.
AHWP II.3.7 (emphasis added). In addition, plaintiff’s wife received an
Explanation of Benefits letter dated April 20, 2007, which stated,
If you are dissatisfied with the decision on your appeal, you may bring
action in Federal Court under [ERISA] . . . . No legal action can be
brought with respect to a claim under the [AHWP] after 45 days
from the decision on appeal.
April 20, 2007 Explanation of Benefits Letter (emphasis added). Plaintiff
received a final letter from the Plan on May 9, 2009, explaining that all
available appeal rights had been exhausted.
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Plaintiff met with an attorney, who interpreted the December 6, 2007
and February 14, 2008 letters to mean that the 180 day limitation to file suit
would not apply if plaintiff filed a voluntary level appeal. The attorney
incorrectly applied a three-year limitation period and, accordingly, advised
plaintiff that “the statute of limitation would expire no sooner than February
14, 2011.” Cameron Marshall Aff., Ex. 3, ¶ 5. Plaintiff filed the instant
action on March 18, 2010.
II. STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) governs motions to dismiss for
“failure to state a claim upon which relief can be granted.” Rule 8(a)(2) provides that
a pleading must contain a “short and plain statement of the claim showing that the
pleader is entitled to relief.”
To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to “state a claim to relief that is
plausible on its face.” 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, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). “Facts pled that are ‘merely consistent with’
liability are not sufficient.” A Soc’y Without a Name v. Virginia, --- F.3d ---, 2011
WL 3690000, at *2 (4th Cir. Aug. 24, 2011) (quoting Iqbal, 129 S. Ct. at 1949).
“Determining whether a complaint states a plausible claim for relief will . . .
be a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” Iqbal, 129 S. Ct. at 1949. “When there are wellpleaded factual allegations, a court should assume their veracity and then determine
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whether they plausibly give rise to an entitlement to relief,” but this assumption is
inapplicable to legal conclusions. Id. at 1950.
III. DISCUSSION
Equitable tolling is a rare remedy that “allow[s] for exceptions to the strict
enforcement of deadlines” and “restore[s] a claimant’s right to review even though
she otherwise would be time-barred.” Gayle v. United Parcel Serv., Inc., 401 F.3d
222, 226 (4th Cir. 2005). “[E]quitable tolling must be guarded and infrequent, lest
circumstances of individualized hardship supplant the rules of clearly drafted
statutes.” Id. (internal quotation marks omitted). “[A]ny resort to equity must be
reserved for those rare instances where-due to circumstances external to the party’s
own conduct-it would be unconscionable to enforce the limitation period against the
party and gross injustice would result.” Harris v. Hutchinson, 209 F.3d 325, 330 (4th
Cir. 2000).
The Fourth Circuit has recognized the doctrine of equitable tolling but has
applied it only sparingly. Courts in this Circuit generally apply equitable tolling in
the following narrow situations: (1) “where the complainant has been induced or
tricked by his adversary’s misconduct into allowing the filing deadline to pass,”
Gayle, 401 F.3d at 226 (internal quotation marks omitted); (2) “where the claimant
has actively pursued his judicial remedies by filing a defective pleading during the
limitations period,” id. (internal quotation marks omitted); or (3) “extraordinary
circumstances beyond plaintiffs’ control made it impossible to file the claims on
time,” Hutchinson, 209 F.3d at 330.
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In a factually similar case, Gayle v. United Parcel Serv., Inc., the Fourth
Circuit held that plaintiff was not entitled to equitable tolling when plaintiff’s attorney
negligently failed to file an administrative appeal to an ERISA benefits plan within a
180 day limitation period. 401 F.3d at 225-27. The court considered “whether
attorney negligence justifies equitable tolling sufficient to excuse the lack of
compliance with the plan’s appeal procedure” and “conclude[d] that it does not.” Id.
at 224; see also Estate of Spinner v. Anthem Health Plans of Va., Inc., No. 09-1092,
2010 WL 2802737, at *4 n.5 (4th Cir. June 16, 2010) (quoting Gayle, 401 F.3d at
226) (“While this Court has held that ‘[e]quitable tolling, while rare, does allow for
exceptions to the strict enforcement of deadlines,’ we have not applied the principle
to toll ERISA deadlines.”); Chao v. Va. Dep’t of Transp., 291 F.3d 276, 283 (4th Cir.
2002) (internal quotation marks omitted) (“Equitable tolling is not appropriate . . .
where the claimant failed to exercise due diligence in preserving his legal rights.”).
A. Inducement Causing Filing Deadline to Pass
Plaintiff alleged in his amended complaint that defendant provided confusing
and misleading documents causing him to miss the 180 day filing limitation. Plaintiff
makes three main contentions in this regard. First, he alleges that the information
provided by the Plan regarding time limitations is conflicting, ambiguous, and
misleading. Next, he alleges that because he was provided confusing and misleading
documents from the Plan, he was unaware that the 180 day time limitation applied to
his claim once he had filed a voluntary appeal. Finally, he claims that his attorney
also believed and counseled him that the 180 day limitation was not applicable once
they had filed a voluntary level appeal.
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To survive defendant’s motion to dismiss on this ground, plaintiff must state a
plausible claim that he was “‘induced or tricked by his adversary’s misconduct into
allowing the filing deadline to pass.’” Gayle, 401 F.3d at 226 (quoting Irwin v. Dep’t
of Veterans Affairs, 498 U.S. 89, 96 (1990)). Courts in this Circuit have consistently
held that “[a]ttorney negligence does not justify equitable tolling.” Id. at 227. “Lack
of diligence by a party’s attorney is not sufficient to justify equitable tolling of a
statute of limitations or similar time-sensitive rule.” Gruber v. Unum Life Ins. Co. of
Am., 195 F. Supp. 2d 711, 716 (D. Md. 2002) (citing Irwin, 498 U.S. 89). “As both
the Supreme Court and our Circuit have consistently recognized, a party voluntarily
chooses his attorney as his representative in the action, and, thus, he cannot later
‘avoid the consequences of the acts or omissions of this freely selected agent.’”
Robinson v. Wix Filtration Corp., 599 F.3d 403, 409 (4th Cir. 2010) (quoting Link v.
Wabash R.R. Co., 370 U.S. 626, 633-34 (1962)).
Plaintiff’s claim does not rise to a sufficient level of plausibility to survive
defendant’s motion to dismiss. Although plaintiff and his attorney may have made an
innocent mistake regarding the applicability of the limitation period, “[t]he law has
always, and necessarily, held people responsible for innocent mistakes,” and “[t]o
accept such mistakes as a ground for equitable tolling . . . would over time consign
filing deadlines and limitations periods to advisory status.” Gayle, 401 F.3d at 227.
Assuming that the letters sent from the Plan were confusing, they were not so
confusing as to constitute active inducement on the part of the Plan to cause plaintiff
to miss the filing deadline. Instead, it was plaintiff’s decision to file suit well outside
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of the 180 day window. Therefore, the court holds that equitable tolling is not
appropriate on this ground.
B. Deficient Filing Within the Limitation Period
Plaintiff filed suit on March 18, 2010, well outside of the 180 day limitation
period mandated by the Plan. Plaintiff does not allege in his amended complaint that
he made a deficient filing within the 180 day limitation period, therefore plaintiff is
not entitled to equitable tolling on this ground.
C. Extraordinary Circumstances Making it Impossible to File on Time
A final ground for equitable tolling arises when “extraordinary circumstances
beyond plaintiffs’ control made it impossible to file the claims on time.” Hutchinson,
209 F.3d at 330. Plaintiff must demonstrate that he (1) diligently pursued his rights,
and (2) some extraordinary circumstance prevented timely filing. Holland v. Florida,
130 S. Ct. 2549, 2562 (2010); Green v. Johnson, 515 F.3d 290, 304 (4th Cir. 2008).
Mistakes and misinterpretations of reasonably clear policy language do not amount to
extraordinary circumstances. Courts in this Circuit require more than an innocent
mistake on the part of plaintiff and his attorney to warrant application of equitable
tolling, see Gayle, 401 F.3d at 227; therefore, equitable relief is not appropriate on
this ground.
IV. CONCLUSION
For the foregoing reasons, this court GRANTS defendant’s motion to dismiss.
AND IT IS SO ORDERED.
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________________________________________
DAVID C. NORTON
CHIEF UNITED STATES DISTRICT JUDGE
June 19, 2011
Charleston, South Carolina
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