Nall et al v. BNSF Railway Company et al
Filing
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OPINION AND ORDER granting 18 Motion to Dismiss.(Signed by Judge Melinda Harmon) Parties notified.(rhawkins)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
MICHAEL NALL, et al,
Plaintiffs,
VS.
BNSF RAILWAY COMPANY, et al,
Defendants.
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CIVIL ACTION NO. 4:14-CV-2819
OPINION AND ORDER
Pending before the Court is Defendant BNSF Railway Company’s1 Motion to Dismiss.
Doc. 18. Having considered the motion, response, reply, the facts in the record, and the
applicable law, the Court concludes the motion should be GRANTED and the two claims
dismissed.
I.
Background
On May 30, 1973, Plaintiff Michael Nall (“Nall”) became an employee of BNSF. Nall
alleges based on his employment he has received medical, prescription, dental, and vision
benefits (collectively, “welfare benefits”) subject to the Employee Retirement Insurance Security
Act (ERISA) of 1974, 29 U.S.C. §18 (2006). Doc. 15 ¶ 48. Plaintiff Flora Nall (“Mrs. Nall”) is
his wife and a beneficiary of his welfare benefit plan. Doc. 15 ¶ 4. The previously dismissed
defendants in this suit administer the ERISA welfare benefit plan.
In late 2010, Nall was diagnosed with Parkinson’s disease. He “temporarily went on
medical leave but quickly went back to work.” Doc. 15 ¶ 15. On April 11, 2012, BNSF
involuntarily placed him on medical leave, because he was “allegedly observed having difficulty
getting on and off engines as a result of stumbling as well as displaying a lack of concentration
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Plaintiffs have voluntarily dismissed all other defendants. Doc. 14.
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when receiving mandatory directives from dispatchers.” Doc. 15 ¶ 17. Nall alleges he was
evaluated by his doctors nine times between May 2012 and April 2013 and determined to be able
to work. Doc. 15 ¶¶ 20–38. On May 24, 2012, BNSF informed Nall it needed more information
from his doctors before allowing him to return to work. Doc. 15 ¶ 22. On August 16, 2012 BNSF
acknowledged receiving Nall’s doctors’ evaluations, yet “arbitrarily and unilaterally” decided he
still could not return to work. Doc. 15 ¶ 28. On November 2, 2012, BNSF’s Manager of
Environmental Health told Nall that “BNSF had no plans ever to let him return to work and that
the forms sent to doctors to complete were just being sent out as a courtesy.” Doc. 15 ¶ 31. On
two occasions, she asked Nall if he was “ready to retire.” Doc. 15 ¶¶ 31–32. On September 21,
2012, Nall underwent an onsite evaluation. BNSF reported, “we have determined that you are
not at a point in your recovery to safely return to work at this time.” Doc. 15 ¶ 29. BNSF also
reported Nall violated safety rules during the evaluation. Doc. 15 ¶ 36. On January 30, 2013,
BNSF informed Nall he was medically disqualified from working, effective July 2, 2013. Doc.
15 ¶ 39. BNSF also informed the Railroad Retirement Board on five occasions between May
2012 and February 2014 that Nall “apparently needed to be placed on disability leave.” The
Railroad Retirement Board sent five letters to Nall requesting that he apply for disability and/or
sickness benefits. Doc. 15 ¶ 43.
BNSF continued to contribute to Plaintiffs’ welfare benefits until 2014. Doc. 15 ¶ 48. In
late 2013, Plaintiffs received their annual enrollment package regarding their coverage for 2014.
According to this enrollment package, Plaintiffs did not need to submit anything in order to
continue their coverage for 2014. Plaintiffs relied on this notification and assumed that their
welfare benefits would continue on just as in the past. Doc. 15 ¶ 50. In late January 2014, Mrs.
Nall went to see a chiropractor. Soon after, she received a bill from the chiropractor notifying her
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that she had no medical coverage. Surprised at this notification, Mrs. Nall contacted BNSF and
was told that all of Plaintiffs’ welfare benefits had ended on December 31, 2013. Doc. 15 ¶ 51.
Furthermore, BNSF has informed Plaintiffs that Mr. Nall’s medical and prescription coverage
will end after December 31, 2014. Doc. 15 ¶ 53.
II.
Legal Standard
“To survive a Fed. R. Civ. P. 12(b)(6) 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.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). Factual matter is limited to “documents attached to or incorporated in the complaint
and matters of which judicial notice may be taken.” U.S. ex rel. Willard v. Humana Health Plan
of Texas Inc., 336 F.3d 375, 379 (5th Cir. 2003).
III.
Discussion
After previous dismissals of Claims “B” (failure to accommodate), “E”
(Retaliation and/or Interference with ERISA rights under 29 U.S.C. §1140 ), and “G” (negligent
misrepresentation), Plaintiffs assert the following claims against BNSF: “A” (disability
discrimination), “C” (age discrimination) “D” (retaliation under ADA, ADEA, and the Texas
Labor Code) and “F” (ERISA-Estoppel). The pending motion to dismiss only addresses claim
“F” ERISA Estoppel under 29 U.S.C. § 1140.
The elements under an ERISA estoppel claim are: “(1) a material misrepresentation; (2)
reasonable and detrimental reliance upon the representation; and (3) extraordinary
circumstances.” Mello v. Sara Lee Corp., 431 F.3d 440 (5th Cir. 2005). Plaintiffs cannot prevail
on an ERISA-estoppel claim based on “simple ERISA reporting errors or disclosure violations.”
Khan v. Am. Intern. Group, Inc., 654 F. Supp. 2d 617, 629 (S.D. Tex. 2009) (quoting Burstein v.
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Retirement Account Plan for Employees of Allegheny Health Educ. & Research Foundation, 334
F.3d 365, 383 (3d Cir. 2003)).“Material misrepresentations [require] a substantial likelihood that
a reasonable employee would be misled about making adequately informed decisions by
employer’s benefits statements’ errors.” Mello, 431 F.3d at 440.
In regard to material misrepresentation, Plaintiffs allege, “BNSF represented to Plaintiffs
(directly or indirectly based on information it provided to Plaintiffs’ insurance provider), prior to
January 1, 2014, that their welfare benefits would continue as is into 2014. Plaintiffs relied on
these representations. These representations turned out to be false.” Doc. 15 ¶ 80. “In late 2013,
Plaintiffs received their annual enrollment package regarding their coverage for 2014 . . .
According to this enrollment package, Plaintiffs did not need to submit anything in order to
continue their coverage for 2014.” Doc. 15 ¶ 50. Plaintiffs also allege, “It appears BNSF may
have either instructed Plaintiffs’ insurance provider to no longer continue Plaintiffs’ benefits or
provided false information to their insurance provider that it relied upon to adversely affect
Plaintiffs’ benefits.” Doc. 15 ¶ 51. Here, Plaintiffs do not allege facts that would show how
BNSF’s statement regarding coverage in the plan brochure was a material misrepresentation
made or sent by BNSF in the enrollment package.
In regard to reliance, Plaintiffs allege the enrollment package represented that “Plaintiffs
did not need to submit anything in order to continue their coverage for 2014. Plaintiffs relied on
this notification to assume that their welfare benefits would continue on just as in the past.” Doc.
15 ¶ 50. Plaintiffs do not allege additional facts suggesting their welfare benefits would continue.
In regard to extraordinary circumstances, Plaintiffs have failed to allege “‘egregious
circumstances’ amounting to bad faith, active concealment, or fraud.” High v. E-Sys. Inc., 459
F.3d 573, 580 n.3 (5th Cir. 2006) (listing “case illustrations”); Burstein v. Ret. Account Plan for
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Emps. of Allegheny Health Educ. & Research Found., 334 F.3d 365, 383 (3d Cir. 2003) (noting
that extraordinary circumstances generally involve “acts of bad faith on the part of the employer,
attempts to actively conceal a significant change in the plan, or commission of fraud.”); Smith v.
Hartford Ins. Grp., 6 F.3d 131, 142 (3d Cir.1993) (extraordinary circumstances shown by
“repeated oral and written misrepresentations” and plaintiff’s “diligence in attempting to obtain
accurate answers”).
In regard to extraordinary circumstances, Plaintiffs merely recite an allegation that
“BNSF acted in bad faith and/or misled plaintiffs.” Doc. 15 ¶ 83. Plaintiffs further allege:
“because Mr. Nall’s disease requires medication and frequent doctor’s visits, and the fact that
Mrs. Nall spent all of 2013 without health insurance, Plaintiffs have accordingly alleged that
extraordinary circumstances exist and/or that Mr. Nall is especially vulnerable.” Doc. 22 at 3-4.
Plaintiffs have failed to allege extraordinary circumstances.
For the foregoing reasons, it is hereby ORDERED that Defendant’s Motion to Dismiss
claim “F” ERISA-Estoppel (Doc. 18), is GRANTED.
SIGNED at Houston, Texas, this 16th day of September, 2015.
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MELINDA HARMON
UNITED STATES DISTRICT JUDGE
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