Filed: Nov. 04, 2014
Latest Update: Mar. 02, 2020
Summary: Case: 14-20158 Document: 00512824714 Page: 1 Date Filed: 11/04/2014 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit FILED No. 14-20158 November 4, 2014 Lyle W. Cayce Clerk JOE HOLLINGSHEAD, Individually and as Representative of All Persons Similarly Situated, Plaintiff-Appellant, v. AETNA HEALTH INC., Defendant-Appellee. Appeal from the United States District Court for the Southern District of Texas USDC No. 4:13-CV-231 Before KING, DENNIS
Summary: Case: 14-20158 Document: 00512824714 Page: 1 Date Filed: 11/04/2014 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit FILED No. 14-20158 November 4, 2014 Lyle W. Cayce Clerk JOE HOLLINGSHEAD, Individually and as Representative of All Persons Similarly Situated, Plaintiff-Appellant, v. AETNA HEALTH INC., Defendant-Appellee. Appeal from the United States District Court for the Southern District of Texas USDC No. 4:13-CV-231 Before KING, DENNIS,..
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Case: 14-20158 Document: 00512824714 Page: 1 Date Filed: 11/04/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 14-20158
November 4, 2014
Lyle W. Cayce
Clerk
JOE HOLLINGSHEAD, Individually and as Representative
of All Persons Similarly Situated,
Plaintiff-Appellant,
v.
AETNA HEALTH INC.,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:13-CV-231
Before KING, DENNIS, and CLEMENT, Circuit Judges.
PER CURIAM: *
Plaintiff-Appellant Joe Hollingshead (“Hollingshead”) brings this
putative class action against Defendant-Appellee Aetna Health Inc. (“Aetna”)
alleging that Aetna wrongfully denied him and other similarly situated
individuals medical benefits in violation of the Employee Retirement Income
Security Act (“ERISA”). The district court dismissed Hollingshead’s ERISA
claims pursuant to Fed. R. Civ. P. 12(b)(6), and also denied Hollingshead’s
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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No. 14-20158
request to amend his complaint for a second time. For the reasons set forth
below, we AFFIRM.
Hollingshead is a participant in a self-funded ERISA benefit plan (“the
Plan”), which is provided by Hollingshead’s employer, Chevron Phillips.
Hollingshead’s son, Shay, is a beneficiary under the Plan. Aetna is the Plan’s
claims administrator.
As the district court correctly observed, the Plan contains a number of
different provisions pertinent to the resolution of this case. First, the Plan
contains a Coordination of Benefits (“COB”) provision, which provides:
Many people have medical coverage from more than one source.
When this happens, benefits payable from [the Plan] are
coordinated with coverage you may have under another group
medical plan.
A separate section of the Plan titled “How Health Care Coordination of
Benefits Works” elaborates on the “COB” provision:
You or a covered dependent may be entitled to benefits from
another source that pays all or part of the expenses incurred for
health care (medical, mental health or dental). If this is the case,
benefits from [the Plan] may be reduced to an amount which,
together with all benefits payable by other group plans, would not
exceed the amount [the Plan] would have paid if no other plans
existed . . . .
As this provision explains, the Plan considers one source of insurance coverage
“primary” and another source of coverage “secondary.” This distinction
affects the order of benefit payments as follows:
If [the Plan] is primary, its benefits are determined before those of
another plan. The benefits of the other plan are not considered.
When [the Plan] is secondary, its benefits are determined after
those of the other plan. In such a case, this [P]lan’s benefits may
be reduced because of the other plan’s benefits.
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Of particular relevance, the Plan also contains a provision outlining the effect
of No-Fault Auto Insurance vis-à-vis coverage under the Plan:
First-party auto insurance coverage is considered primary. The
[P]lan coordinates the benefits payable under the [P]lan with the
first-party benefits that automobile insurance pays or would pay
without regard to fault for the same covered expenses. This also
applies to the extent first-party auto insurance coverage is legally
required but not in force.
Finally, the Plan also contains a provision (labeled “Information and Records”)
that explains the consequences of failing to provide Aetna with necessary
information and documentation:
At times the plan administrator or the claims administrator may
need additional information from you. You agree to furnish all
information and proofs that may reasonably be required regarding
any matters pertaining to the [P]lan. If you do not provide this
information when it is requested, payment of your benefits may be
delayed or denied.
On October 19, 2012, Shay was seriously injured in an automobile
accident and hospitalized at Memorial Hermann Hospital. Hollingshead
submitted numerous medical claims for this treatment to Aetna. As reflected
by correspondence attached to Hollingshead’s first amended complaint, Aetna
requested information from Hollingshead about the applicability of any no-
fault insurance coverage and pended processing of the claims until it received
this information. For example, on January 2, 2013, Hollingshead received an
e-mail from Sandra Howard, who is a patient account representative at
Memorial Hermann Hospital, which explained:
Per our phone conversation on Monday Aetna will require accident
details from Shay and also will need a letter from HIS auto
insurance stating if they are going to pay any of his medical or PIP
[i.e., Personal Injury Protection] [;] if he had liability only then just
have them send letter of exhaustion. You can email or fax me this
information and I will get it to Aetna for you. Aetna has denied
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No. 14-20158
his claims until they receive this information, any questions please
call me.
Additionally, on February 11, 2013, Aetna sent Hollingshead a letter again
requesting information related to no-fault insurance coverage in order to
process the claim, which specifically stated:
Please send a statement from your no-fault automobile insurance
company showing whether these expenses have been paid or
denied. When we receive this information, we will process this
claim.
Rather than provide Aetna with any of the requested information about the
applicability or not of no-fault insurance coverage, Hollingshead filed the
instant putative class action lawsuit on January 13, 2013. 1
Pertinent to this appeal, 2 Hollingshead leverages two ERISA claims
against Aetna. First, he asserts claims under ERISA § 502(a)(1)(B), 29 U.S.C.
§ 1132(a)(1)(B), to “recover all unpaid, properly submitted medical expenses
incurred under the clear terms of the plan or policy, and all statutory, equitable,
or remedial relief as deemed appropriate[.]” Second, he brings a claim under
ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), which provides a cause of action for
injunctive or equitable relief for breach of fiduciary duty.
Aetna moved to dismiss the original complaint, and Hollingshead soon
thereafter filed an amended complaint. The thrust of Hollingshead’s amended
complaint is that Aetna breached its obligations under the Plan, and thus
violated ERISA, by “immediately” denying his medical claims rather than
1 As the district court accurately noted, “Hollingshead does not claim that he ever
provided the requested automobile insurance information, and the record shows that Aetna
was still requesting the information when Hollingshead filed the lawsuit.” Hollingshead v.
Aetna Health Inc., No. 4:13-CV-231, 2014 WL 585397, at *1 (S.D. Tex. Feb. 13, 2014).
2 Hollingshead also asserted various state- and common-law claims against Aetna.
The district court dismissed those claims as preempted by ERISA, and Hollingshead does not
challenge this result on appeal. We therefore do not address those claims.
4
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denying them upon his failure to provide the requested no-fault insurance (i.e.,
personal injury protection or “PIP”) information. 3 The amended complaint
also included various exhibits, including (1) the Plan, (2) correspondence
reflecting Aetna’s attempts to obtain no-fault insurance information from
Hollingshead in order to process the claims for Shay’s medical expenses, and (3)
e-mail correspondence between a member of the Memorial Hermann Hospital
staff and Hollingshead’s counsel, in which Hollingshead’s counsel references an
unidentified patient whose claims also may have been denied by Aetna pending
receipt of liability insurance. Aetna once again moved to dismiss, and
Hollingshead thereafter moved for leave to file a second amended complaint.
During the pendency of these motions and following limited discovery,
Hollingshead filed a motion for partial summary judgment and, thereafter, an
amended motion for partial summary judgment, which sought declaratory
relief.
On February 13, 2014, the district court dismissed both of Hollingshead’s
ERISA claims for failure to state a claim. First addressing Hollingshead’s
claim that Aetna breached its fiduciary duty in violation of ERISA § 502(a)(3),
the district court held that this claim could not be maintained given that
Hollingshead had an adequate mechanism for redress of denied benefits under
section 502(a)(1)(B). See Tolson v. Avondale Indus. Inc., 141 F.3d 604, 610 (5th
Cir. 1998) (“In Varity v. Howe,
516 U.S. 489 [] (1996), the Supreme Court
In his amended complaint, Hollingshead also alleged that Aetna violated the Plan
3
by immediately denying claims until it was presented with evidence of uninsured motorist
(“UIM”) coverage—effectively amounting to, in Hollingshead’s words, a “preemptive[]
assert[ion]” of Aetna’s subrogation interest under the Plan. The district court dismissed this
claim, concluding that Hollingshead did not allege any facts that Aetna ever requested
information regarding potential UIM—as opposed to PIP—coverage at any time.
Hollingshead has waived this issue by not presenting it on appeal. See Sanders v. Unum
Life Ins. Co. of Am., 553 F.3d 922, 926 (5th Cir. 2008).
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interpreted section 1132(a)(3) to allow plaintiffs to sue for breach of fiduciary
duty for personal recovery when no other appropriate equitable relief is
available. Because [the plaintiff here] has adequate relief available for the
alleged improper denial of benefits through his right to sue the Plans directly
under section 1132(a)(1), relief through the application of Section 1132(a)(3)
would be inappropriate.”).
Next, the district court evaluated whether Hollingshead had stated a
claim under section 502(a)(1)(B) for Aetna’s purportedly immediate “denial” of
medical claims pending receipt of no-fault insurance information. Viewing the
complaint in the light most favorable to Hollingshead, the district court
concluded that Hollingshead failed to state a claim under section 502(a)(1)(B)
given that Aetna acted in accordance with the express terms of the Plan.
According to the court:
Under the clear and unambiguous terms of the Plan’s “COB”
provisions, no-fault, first-party, automobile insurance is primary
to the Plan, and therefore, benefits under the Plan are secondary
and determined after those of an applicable automobile insurance
policy. To effectuate this coordination of benefits and order of
payment, the Plan specifically requires Aetna to request personal
injury protection (“PIP”)/no-fault coverage information before it
adjudicates a claim. In addition, the terms of the Plan require the
beneficiary “to furnish all information and proofs that may
reasonably be required regarding any matters pertaining to the
plan.” If the information is not provided when requested,
payment of benefits “may be delayed or denied.” Hollingshead
does not claim that he ever provided the requested information.
Further, the record belies Hollingshead’s assertion that his claims
were “immediately denied.” The letter sent from Aetna to
Hollingshead on February 11, 2013, clearly indicates that the
claims had not yet been processed. Based on the “COB”
provisions, Aetna acted in accordance with the terms of the Plan
by requesting the PIP-coverage information before adjudicating
Hollingshead’s claims.
6
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Hollingshead, 2014 WL 585397, at *8 (internal citations omitted). Finally, the
district court denied Hollingshead’s motion for leave to file a second amended
complaint, concluding, inter alia, that the “facts [he] adds to the SAC do nothing
to support his claims, or enable him to survive a motion to dismiss.”
Id. at *9. 4
We find no error in the district court’s dismissal of Hollingshead’s ERISA
claims. Applying de novo review as we must do in evaluating a district court’s
dismissal pursuant to Fed. R. Civ. P. 12(b)(6), see Ferrer v. Chevron Corp., 484
F.3d 776, 780 (5th Cir. 2007), we agree that Hollingshead has failed to state a
claim under section 502(a)(1)(B) that Aetna wrongfully denied medical benefits
in violation of the Plan. The materials attached to Hollingshead’s first
amended complaint establish that Aetna acted in accordance with the Plan’s
terms when it pended the processing of Hollingshead’s claims subject to
receiving information related to no-fault insurance coverage. Hollingshead’s
conclusory allegation that Aetna improperly “denied” his benefits is insufficient
to survive dismissal because it is contradicted by the documents attached to his
first amended complaint. See Associated Builders, Inc. v. Alabama Power Co.,
505 F.2d 97, 100 (5th Cir. 1974) (“Conclusory allegations and unwarranted
deductions of fact are not admitted as true especially when such conclusions are
contradicted by facts disclosed by a document appended to the complaint.”)
(internal citation omitted).
4 The district court also concluded that Hollingshead’s class allegations, “including
his anecdotal story of the teenage boy at Memorial Hermann [as referenced in an e-mail from
Hollingshead’s lawyer to a hospital employee] and his completely unsupported allegation that
Aetna engages in a practice of ‘preemptive subrogation’ ‘100’s or 1000’s of times per day,’ are
woefully inadequate to state a plausible claim for relief. As such, all of his class claims must
be dismissed pursuant to Rule 12(b)(6).” Id. at *7. On appeal, Hollingshead’s opening brief
neglects to dispute or argue this conclusion, and we therefore do not address it.
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In addition, we agree that our decision in Tolson is fatal to Hollingshead’s
claim that Aetna breached its fiduciary duty in violation of ERISA § 502(a)(3).
See 141 F.3d at 610 (holding that plaintiff could not maintain claim for breach
of fiduciary duty under section 1132(a)(3) because he had “adequate redress for
disavowed claims through his right to bring suit pursuant to section
1132(a)(1)”). As we explained in that case, “[t]he simple fact that
[Hollingshead cannot] prevail on his claim under section 1132(a)(1) does not
make his alternative claim under section 1132(a)(3) viable.”
Id. 5
We likewise perceive no error in the district court’s denial of
Hollingshead’s motion for leave to file a second amended complaint. “Denying
a motion to amend is not an abuse of discretion if allowing an amendment would
be futile.” Marucci Sports, L.L.C. v. National Collegiate Athletic Ass’n,
751
F.3d 368, 378 (5th Cir. 2014). We agree with the district court that
Hollingshead’s proposed additions to his complaint are “futile and frivolous.”
In particular, his effort to add an additional state-law claim is frivolous given
that ERISA clearly preempts such claims, Pilot Life Ins. Co. v. Dedeaux,
481
U.S. 41, 46–48 (1987), and his proposed factual additions do nothing to rescue
his claims from dismissal pursuant to Fed. R. Civ. P. 12(b)(6). In sum, because
Hollingshead was already afforded an opportunity to amend his complaint and
the proposed second amendment would be futile, we conclude that the district
court did not abuse its discretion in denying Hollingshead’s motion to amend.
See Marucci
Sports, 751 F.3d at 378–79.
For all the foregoing reasons, we AFFIRM.
5 Because we conclude that the district court properly dismissed Hollingshead’s
claims pursuant to Fed. R. Civ. P. 12(b)(6), we need not address his argument that the district
court should have granted his motion for partial summary judgment.
8
