Greenbaum v. Sedgwick Claims Management Services, Inc. et al

Filing 12

ORDER DENYING 5 Motion to Dismiss Signed by Judge Robert Pitman. (wg)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

YVONNE GREENBAUM,
Plaintiff
V.
SEDGWICK CLAIMS MANAGEMENT
SERVICES, INC. and HCA HEALTH
AND WELFARE BENEFITS PLAN,
DefendantS

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5:15-CV-127 RP

ORDER
Before the Court are Defendant HCA Health and Welfare Benefits Plan’s Motion to Dismiss,
filed April 20, 2015 (Clerk’s Dkt. #5), and Plaintiff’s Response to the Plan’s Motion to Dismiss, filed
May 4, 2015 (Clerk’s Dkt. #9). Having reviewed the parties’ pleadings, the applicable case law and
the entire case file, the Court issues the following Order.
Background
Plaintiff was employed as a registered nurse by Methodist Metropolitan Hospital in San
Antonio, Texas beginning in 1996. In 2014, in an effort to counteract bilateral hearing loss, Plaintiff
underwent surgery for the implantation of a Cochlear Implant. As a result of the surgery, Plaintiff
applied for short-term disability benefits (“STD Benefits”) from her employee benefit plan, the HCA
Health and Welfare Benefits Plan (the “Plan”), which plan is administered by Sedgwick Claims
Management Services, Inc. (“Sedgwick”). Plaintiff sought STD Benefits for the six-month period
between June 11, 2014 and December 11, 2014. Sedgwick approved STD Benefits, but only for
the time period between June 11, 2014 to August 2, 2014. Plaintiff appealed the denial of STD
Benefits after August 2, 2014, which appeal was denied by Sedgwick by letter dated September
30, 2014.

Sedgwick declined to reconsider its decision, even after the Social Security

Administration (the “SSA”) approved Plaintiff’s claim for SSA disability benefits on November 17,
2014.
On February 18, 2015, alleging Sedgwick abused its discretion by denying Plaintiff the full
six months of STD Benefits, Plaintiff filed this lawsuit against the Plan and Sedgwick under the
Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq, seeking the STD
Benefits she was denied from August 2, 2014 to December 11, 2014. The Plan moves to dismiss
Plaintiff’s claim against it pursuant to Federal Rule Civil Procedure 12(b)(6).
Standard of Review
When evaluating a motion to dismiss under Rule 12(b)(6) the complaint must be liberally
construed in favor of the plaintiff and all facts pleaded therein must be taken as true. Leatherman
v. Tarrant County Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164 (1993); Baker v.
Putnal, 75 F.3d 190, 196 (5th Cir. 1996). Although Federal Rule of Civil Procedure 8 mandates
only that a pleading contain a “short and plain statement of the claim showing that the pleader is
entitled to relief,” this standard demands more than unadorned accusations, “labels and
conclusions,” “a formulaic recitation of the elements of a cause of action,” or “naked assertion[s]”
devoid of “further factual enhancement.” Bell Atlantic v. Twombly, 550 U.S. 544, 555-57 (2007).
Rather, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to
relief that is plausible on its face.” Id., 550 U.S. at 570. The Supreme Court has made clear this
plausibility standard is not simply a “probability requirement,” but imposes a standard higher than
“a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). The standard is properly guided by "[t]wo working principles." Id. First, although "a court
must accept as true all of the allegations contained in a complaint," that "tenet" "is inapplicable to
legal conclusions" and "[t]hreadbare recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice." Id., 556 U.S. at 678-79. Second, "[d]etermining

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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." Id., 556 U.S.
at 679. Thus, in considering a motion to dismiss the court must initially identify pleadings that are
no more than legal conclusions not entitled to the assumption of truth, then assume the veracity
of well-pleaded factual allegations and determine whether those allegations plausibly give rise to
an entitlement to relief. If not, “the complaint has alleged-but it has not ‘show[n]’–‘that the pleader
is entitled to relief.’” Id. (quoting FED. R. CIV. P. 8(a)(2)).
Discussion
The Plan argues it is not a proper defendant in this action because the Plan has no
discretion or authority to adjudicate the disputed claim and is not liable for the payment thereof.
Plaintiff maintains the Plan is still liable under ERISA for her STD Benefits.
ERISA governs employee benefit plans “established or maintained for the purpose of
providing its participants or their beneficiaries, through the purchase of insurance of otherwise, .
. . benefits in the event of sickness, accident, disability, death or unemployment . . ..” 29 U.S.C.
§ 1002(1)(A). A civil action may be brought under ERISA by a plan 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 under the terms of the plan.”

29 U.S.C. §

1132(a)(1)(B). See also Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 108 (2008) (person denied
benefits may challenge denial in federal court).
Under the express language of ERISA’s remedial provision, an employee benefit plan is a
proper defendant under the statute. See 29 U.S.C. § 1132(d)(1). The Plan contends, however,
it is not a proper party to this suit because it is not responsible for processing or paying the claim.
None of the cases cited by the Plan support this contention. While it is true a third party
cannot be held liable under ERISA where it does not exercise actual control over the benefits and

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is not responsible for paying the disputed benefits, this applies to a party that is not the plan
administrator or the benefit plan itself. See LifeCare Mgmt. Servs. LLC v. Ins. Mgmt. Adm’rs, 703
F.3d 835 (5th Cir. 2013). All of the case law cited by the Plan as support for its argument address
whether a party other than the plan is a proper defendant in an ERISA action. See Kinnison v.
Humana Health Plan of Texas, Inc., 2008 U.S. Dist. LEXIS 47352 (S.D. Tex. June 17,
2008)(holding an “independent review organization” that was neither the plan nor the plan
administrator was not a proper defendant under ERISA); Cooksey v. Metro. Life Ins. Co., 2004 U.S.
Dist, LEXIS 11850 (N.D. Tex. June 17, 2004)(holding plaintiff’s employer was not a proper
defendant under ERISA); and Metro. Life Ins. Co. v. Palmer, 238 F. Supp. 2d 826 (E.D. Tex.
2002)(holding plaintiff’s employer was not a proper defendant under ERISA). In fact, not one of
the cases presented by the Plan stands for the proposition that there is ever a circumstance under
which the employee benefit plan itself is not a proper defendant in an ERISA lawsuit seeking
benefits under said plan.
This Court finds the Plan’s motion to dismiss under Rule 12(b)(6) should be denied.
IT IS THEREFORE ORDERED Defendant HCA Health and Welfare Benefits Plan’s Motion
to Dismiss (Clerk’s Dkt. #5) is hereby DENIED.
SIGNED on May 29, 2015.

ROBERT L. PITMAN
UNITED STATES DISTRICT JUDGE

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