Story v. AETNA Life Insurance Company
Filing
28
Memorandum Opinion and Order re: 9 Motion for Summary Judgment. The court is treating the summary judgment motion as partial because defendant does not seek dismissal of all of plaintiff's claims. The court ORDERS that defendant's motio n for partial summary judgment be granted as to plaintiff's breach of duty of good faith and fair dealing claim, her Texas Insurance Code claim, and her state law breach of contract claim. Each of those claims is dismissed. The court further ORDERS that defendant's motion for summary adjudication is denied. (Ordered by Judge John McBryde on 8/8/2013) (dnw)
Story v. AETNA Life Insurance Company
Doc. 28
u.s. DISTRICT-COURT
NORTHERN DISTRICT OF TEXAS
,
IN THE UNITED STATES DISTRIC CbUR r
NORTHERN DISTRICT OF TEX S
FORT WORTH DIVISION
FILED
AUG - 82013
CLE~ U.S. DISTRICT COURT
LISA STORY,
§
§
§
Plaintiff,
§
§
§
VS.
AETNA LIFE INSURANCE COMPANY,
Defendant.
1.-.
:By----:D~e-pu~tv~~ - - - ,,;;,.-..;....-
J
.
NO. 4:13-CV-149-A
§
§
§
MEMORANDUM OPINION
and
ORDER
The court has before it for decision the motion of
defendant, Aetna Life Insurance Company, for partial summary
jUdgment. 1
The court has concluded that the motion should be
granted because plaintiff is precluded from pursuing her state
law claims by reason of total ERISA preemption of those claims.
1.
Plaintiff's Claims
Plaintiff initiated this action on January 24, 2013, in the
District Court of Tarrant County, Texas, 352nd Judicial District,
by a petition asserting against defendant claims based on
IThe motion for partial summary judgment is contained in the document defendant filed April 2,
2013, urging dismissal pursuant to the authority of Rule 12(b)(6) of the Federal Rules of Civil Procedure
and, in the alternative, for summary judgment pursuant to Rule 56 ofthe Federal Rules of Civil
Procedure. Plaintiff, Lisa Story, responded to the alternative motion as well as the motion to dismiss.
The court has concluded that the nature of the record is such that a ruling on the motion for summary
judgment would be more appropriate than a ruling on the motion to dismiss. The court is treating the
summary judgment motion as partial because defendant does not seek dismissal of all of plaintiff s
claims.
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defendant's declination to make payment to plaintiff of
disability insurance benefits she contends defendant owed to her
under a policy of insurance she purchased through her employer
from defendant and for which she paid a portion of the premium.
The claims she alleged against defendant were (1) breach of duty
of good faith and fair dealing,
fraud/misrepresentation,
Texas Insurance Code,
(2) common law
(3) violations of provisions of the
(4) violations of the Texas Deceptive Trade
Practices - Consumer Protection Act,
repudiation,
(5) anticipatory breach and
(6) breach of contract.
Defendant removed the action to this court on February 25,
2013, asserting federal question and diversity of citizenship
jurisdiction.
Federal question jurisdiction was based on
defendant's contention that plaintiff's claims relate to an
employee benefit plan, with the consequence that they are
preempted by pertinent provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
On March 18, 2013, plaintiff amended her state court
pleading by filing a complaint consistent with the federal
pleading requirements.
She alleged essentially the same things
she alleged in her state court pleading, except that she
abandoned her common law fraud/misrepresentation and her
Deceptive Trade Practices - Consumer Protection Act claims.
2
In both her state court pleading and in her current
pleading, plaintiff alternatively, as part of her breach of
contract allegations, asserted a claim under ERISA, contending,
alternatively, that she is entitled to recover under the civil
enforcement provisions of, and to have equitable relief under,
ERISA.
II.
The Grounds of Defendant's Motion
Defendant seeks summary adjudication against plaintiff as to
all her claims except those she alleged under ERISA on the
grounds that the disability income insurance coverage under which
plaintiff is making her claims is an ERISA welfare benefit plan
governed by ERISA and that all of her claims except those she
asserts under ERISA should be dismissed because they are
completely preempted as being "related to" an employee benefit
plan within the meaning of 29 U.S.C.
§
1144(a).
Defendant anticipated in its motion that plaintiff would
contend that the church plan exemption from ERISA contemplated by
29 U.S.C.
§
1002(33) is applicable, pointing out briefly the
reasons why plaintiff cannot successfully rely on the church plan
exemption.
3
III.
Plaintiff's Response to Defendant's Motion
In plaintiff's responsive documents, plaintiff seems to
acknowledge the correctness of all contentions advanced by
defendant in its motion for summary disposition except the
contention of defendant that the disability insurance coverage in
question is not a "church plan."
Plaintiff simplified the issues
to be dealt with by the court by stating on the first page of her
responsive brief that:
Whether this is a federal case or a state law case
turns on whether the disability insurance policy
covering employees of Texas Health Resources is a
"church plan" within the meaning of ERISA. If it is,
then this is purely a state law case. See/ e.g./
Sorensen v. St. Alphonsus Regional Medical Center,
118
P.3d 86 (Idaho 2005). If it is not a church plan, then
this is a federal ERISA case.
Plo's Br. at 1.
IV.
Analysis
A.
Applicable Summary Judgment Principles
Rule 56(a) of the Federal Rules of civil Procedure provides
that the court shall grant summary judgment on a claim or defense
if there is no genuine dispute as to any material fact and the
movant is entitled to jUdgment as a matter of law.
Fed. R. Civ.
P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247
4
(1986).
The movant bears the initial burden of pointing out to
the court that there is no genuine dispute as to any material
fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323, 325 (1986).
The movant can discharge this burden by pointing out the absence
of evidence supporting one or more essential elements of the
nonmoving party's claim, "since a complete failure of proof
concerning an essential element of the nonmoving party's case
necessarily renders all other facts immaterial."
Id. at 323.
Once the movant has carried its burden under Rule 56(a), the
nonmoving party must identify evidence in the record that creates
a genuine dispute as to each of the challenged elements of its
case.
Id. at 324.
See also Fed. R. civ. P. 56(c)
("A party
asserting that a fact . . . is genuinely disputed must support
the assertion by . . . citing to particular parts of materials in
the record . . . . ").
If the evidence identified could not lead
a rational trier of fact to find in favor of the nonmoving party
as to each essential element of the nonmoving party's case, there
is no genuine dispute for trial and summary jUdgment is
appropriate.
Matsushita Elec. Indus. Co. v. zenith Radio Corp.,
475 U.S. 574, 587, 597 (1986).
5
B.
Plaintiff Has Not Adduced Summary Judgment Evidence That the
Insurance Coverage is a "Church Plan"
Because of the concessions made by plaintiff in its
responsive documents, the court is not devoting time to a
discussion as to why defendant is correct in its assertions that
the record establishes as a matter of law that the insurance
coverage in question is an employee benefit plan within the
meaning of 29 U.S.C.
§
1144(a) and that all of plaintiff's state
court claims should be dismissed as preempted by ERISA unless the
insurance coverage is a "church plan" within the meaning of 29
U.S.C.
§
1002 (33) .
Section 1003(b) (2) of Title 29 of the united States Code,
provides that ERISA "shall not apply to any employee benefit plan
if . . . such plan is a church plan (as defined in section
1002(33) of [Title 29]) with respect to which no election has
been made under section 410(b) of title 26."
plan' means a plan established and maintained
employees .
"The term 'church
. for its
. by a church or by a convention or association of
churches which is exempt from tax under section 501 of Title 26."
29 U.S.C.
§
1002 (33) (A) .
The undisputed evidence is that plaintiff's employer, Texas
Health Resources, provided to its employees disability benefits
as part of an employee benefit plan, that plaintiff is claiming
6
benefits under that plan, and that the plan's benefits were
funded by a group disability insurance policy issued by defendant
to Texas Health Resources.
The plan documents clearly indicate
that the intent of Texas Health Resources has been that the plan
would be treated as an ERISA plan.
Mot., App. at 35-36, 71.
They confirm that the plan administrator filed with the U.S.
Department of Labor the required annual Form 5500. 2
Id. at 36.
In contrast, plaintiff has adduced no summary jUdgment
evidence that would support the conclusion that the "church plan H
exception to the ERISA requirement applies.
No evidence has been
presented that Texas Health Resources is a church.
There is no
evidence that any church plays an official role in the governance
of Texas Health Resources.
The documents put in the record by
plaintiff demonstrate that Texas Health Resources "serves a
diverse population, respecting and welcoming all faiths
represented by [its] patients, employees and volunteers. H
App. at 32.
Resp.,
The record shows that Texas Health Resources is a
large health service provider, having more than 22,500 employees,
2In Duckett v. Blue Cross and Blue Shield of Alabama, 75 F. Supp. 2d 1310, 1317 (M.D. Ala.
1999), the court attached significance to the filing of a Form 5500, saying:
Baptist Health has done more than simply label a plan as one falling under the
scope of ERISA. ... It has, in addition to treating the Baptist Plan as one governed by
ERISA, represented to the IRS, by the filing of a Form 5500, that it maintains an ERISA
plan. By filing a Form 5500 and treating the Baptist Plan as one under ERISA, Baptist
Health loses all benefits, tax and otherwise, of being classified as a church plan (if it
could be classified as such).
7
25 acute care, transitional, rehabilitation, and short-stay
hospitals, 18 outpatient facilities, and more than 250 other
community access points; more than 3,800 licensed hospital beds;
more than 5,500 physicians with active staff privileges; and more
than 1,500 volunteers.
Id. at 33.
It is one of largest faith-
based nonprofit healthcare delivery systems in the united states,
and the largest in North Texas in terms of patients served.
at 34.
Id.
Texas Health Resources was formed with the assets of Fort
Worth-based Harris Methodist Health System and Dallas-based
Presbyterian Healthcare Resources.
Id.
A non-faith-based
hospital group, Arlington Memorial Hospital, joined Texas Health
Resources in 1997.
Id.
The mission of Texas Health Resources is "[t]o improve the
health of the people in the communities we serve."
Id. at 35.
There is no requirement that a majority or controlling number of
its governing body be of a particular faith.
There is nothing in
the record suggesting that Texas Health Resources receives
financial assistance from any church.
There is no evidence that
there is any church-related requirement to be an employee or
patient of Texas Health Resources.
To the contrary, there is
affirmative evidence that there is no religious or denomination
requirement to be an employee of or patient at the facilities of
Texas Health Resources.
Supplemental Reply, App. at 83.
8
Not
only has plaintiff failed to adduce summary judgment evidence
that Texas Health Resources is a church or a convention or
association of churches, the record affirmatively establishes
that it is neither.
The court has considered and rejected each of the arguments
presented by plaintiff in support of her "church plan" theory.
At page 4 of her brief in support of her response, plaintiff
relies on the wording of 29 U.S.C.
§
l002(33} (C) (i), which reads
as follows:
(C)
For purposes of this paragraph --
(i) A plan established and maintained for its
employees (or their beneficiaries) by a church or by a
convention or association of churches includes a plan
maintained by an organization, whether a civil law
corporation or otherwise, the principal purpose or
function of which is the administration or funding of a
plan or program for the provision of retirement
benefits or welfare benefits, or both, for the
employees of a church or a convention or association of
churches, if such organization is controlled by or
associated with a church or a convention or association
of churches.
The court is not persuaded that
pertinence to this action.
§
l002(33} (C) (i) has
There is no evidence in the record
that the "principal purpose or function of [Texas Health
Resources] is the administration or funding of a plan or program
for the provision of retirement benefits or welfare benefits, or
both, for the employees of a church or a convention or
9
association of churches."
Nor is there any evidence that the
employee benefits in question were
~for
employees of a church or
a convention or association of churches"; nor is there any
evidence that Texas Health Resources
~is
controlled by or
associated with a church or a convention or association of
churches."
Consequently, this section simply does not apply to
Texas Health Resources or its employee benefit plans.
Next, plaintiff relies on the language of 29 U.S.C.
§
1002(33) (C) (ii) (II), which provides as follows:
(C)
For purposes of this paragraph
* * * * *
(ii) The term employee of a church or a convention
or association of churches includes-* * * * *
(II) an employee of an organization, whether
a civil law corporation or otherwise, which is
exempt from tax under section 501 of Title 26 and
which is controlled by or associated with a church
or a convention or association of churches . .
The court is uncertain from reading plaintiff's response what
point that plaintiff is trying to make by her reliance on
§
1002(33) (C) (ii) (II).
In any event, it has no relevance to this
case because, inter alia, there is no evidence that Texas Health
Resources is
~controlled
by or associated with a church or
convention or association of churches."
10
At several places in her responsive documents, plaintiff
makes the point that there is no evidence that Texas Health
Resources made an election of the kind contemplated by 26 U.S.C.
§
410(d) (1), which reads as follows:
If the church or convention or association of
churches which maintains any church plan makes an
election under this subsection (in such form and manner
as the Secretary may by regulations prescribe), then
the provisions of this title relating to participation,
vesting, funding, etc. (as in effect from time to time)
shall apply to such church plan as if such provisions
did not contain an exclusion for church plans.
Plaintiff's reliance on 26 U.S.C.
§
410(d) (1) assumes in
favor of plaintiff the main issue that the court must decide -was the disability plan under which plaintiff is making a claim a
"church plan"?
Only if it was a "church plan" was there any
occasion for an election under
§
410(d) (1).
Inasmuch as the
court has concluded that plaintiff has failed to provide evidence
that it was a church plan,
§
410(d) (1) simply has no role in this
litigation.
In her supplemental response, plaintiff places reliance on
certain language used in parts of Texas Health Resources'
corporate documents.
Not only is the language upon which
plaintiff relies taken and used out of context, even when
considered out of context the language does not provide any
evidence that Texas Health Resources is a church or a convention
11
or association of churches.
The language demonstrates no more
than the acknowledged facts that, for the most part, Texas Health
Resources if a faith-based healthcare organization and that it
takes religious principles into account in providing the health
services it renders to everyone, without regard to religious
beliefs or preferences.
C.
Conclusions
Plaintiff correctly noted in her responsive brief that if
the insurance plan against which plaintiff is making her claims
in this action "is not a church plan, then this is a federal
ERISA case."
Supra at 4.
The court concludes that plaintiff has
failed to adduce evidence that would support a finding that the
plan in question is a church plan.
Therefore, this is a federal
ERISA case.
That being so, all of plaintiff's state law claims are
completely preempted by ERISA, and must be dismissed.
The claims
to which the court refers are plaintiff's breach of duty of good
faith and fair dealing claim described in paragraphs 28-30 of her
amended complaint, her Texas Insurance Code claim described in
paragraphs 31-35 of her amended complaint, and her state law
breach of contract claim described in paragraph 40 of her amended
complaint.
Plaintiff's ERISA claims described in paragraph 41 of
her amended complaint survive.
12
Neither party has provided the court any authority on the
issue of whether the anticipatory breach and repudiation features
of plaintiff's amended complaint, alleged at paragraphs 36-39,
should be viewed to be state court claims to be dismissed because
of preemption.
are.
The court declines to hold at this time that they
If defendant wishes to provide further briefing on that
sUbject, the court will reconsider the possibility of a summary
dismissal of the anticipatory breach and repudiation aspects of
the amended complaint.
v.
Order
Consistent with the foregoing,
The court ORDERS that defendant's motion for partial summary
judgment be granted as to plaintiff's breach of duty of good
faith and fair dealing claim alleged at paragraphs 28-30 of her
amended complaint, her Texas Insurance Code claim as alleged at
paragraphs 31-35 of her amended complaint, and her state law
breach of contract claim as alleged at paragraph 40 of her
amended complaint, and that each of those claims be, and is
hereby, dismissed.
13
The court further ORDERS that, otherwise, defendant's motion
for summary adjudication be, and is
SIGNED August 8, 2013.
14
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