JOANNA SEYBERT, District Judge.
Plaintiff Ida Mayer ("Plaintiff") commenced this action alleging violations of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et. seq. (Compl., Docket Entry 1.
Plaintiff is the spouse of Robert Mayer, a member of Local Union Number 3. (Compl. ¶¶ 5-6.) During 2013 and 2014, defendant Joint Industry Board of the Electrical Industry ("JIBEI") was appointed to administer the employee welfare benefit plan (the "Plan") for Local Union Number 3 employees and eligible family members. (Compl. ¶ 7.) Defendant John E. Marchell ("Marchell") is the treasurer of JIBEI. (Compl. ¶ 3.)
Mr. Mayer was a participant in the Plan, and Plaintiff and the Mayers' two minor children were eligible dependents under the Plan during 2013 and 2014. (Compl. ¶¶ 8-10.) The Plan was an "`employee welfare benefit plan' within the meaning of 29 USC 1002(1)." (Compl. ¶ 12.) The Plan also included "a group health plan within the meaning of 29 USC 1161(a)." (Compl. ¶ 13.) Additionally, JIBEI constituted "a plan sponsor within the meaning of 29 USC 1161(a)." (Compl. ¶ 14.)
On or about March 25, 2014, JIBEI terminated Plaintiff and her children's participation in the Plan. (Compl. ¶ 15.) On or about May 29, 2014, JIBEI sent Plaintiff a statutory notice of termination pursuant to 29 U.S.C. § 1166. (Compl. ¶ 16.) From March 25, 2014 until May 29, 2014, Plaintiff incurred medical expenses on behalf of herself and her children that totaled $4,361.00; JIBEI has refused to reimburse Plaintiff for these expenses. (Compl. ¶¶ 17-19.)
Plaintiff initially commenced this action in the County Court of the State of New York, County of Suffolk. (Not. of Removal, Docket Entry 1.) Plaintiff's action was removed to this Court pursuant to Defendants' Notice of Removal dated March 19, 2015, which states that the Complaint asserts claims pursuant to ERISA. (Not. of Removal.) The Complaint sets forth three causes of action: (1) a cause of action alleging that JIBEI is liable for its failure to reimburse Plaintiff for medical expenses incurred between March 25, 2014 and May 29, 2014 (Compl. ¶¶ 17-22); (2) a cause of action alleging that JIBEI is liable for statutory damages pursuant to 29 U.S.C. § 1132(c)(1)(A) based on its failure to comply with the notification requirements set forth in 29 U.S.C. § 1166(a)(4 (Compl. ¶¶ 23-24); and (3) a cause of action for attorney's fees pursuant to 29 U.S.C. § 1132(g)(1) (Compl. ¶¶ 25-26). The Complaint's sole allegation against Marchell is that he is the treasurer of JIBEI and is being named in his representative capacity. (
On March 25, 2015, Defendants filed a motion to dismiss the Complaint. (Defs.' Mot.) Defendants argue that Plaintiff's first claim should be dismissed based on the absence of any allegations that Plaintiff pursued the Plan's appeal procedure or that doing so would be futile. (Defs.' Br., Docket Entry 5-1, at 3.) Defendants further allege that Plaintiff's second cause of action fails to state a claim for a violation of COBRA's
Defendants also aver that the Complaint fails to state a claim against Marchell because Plaintiff's two substantive causes of action are only asserted against JIBEI and the Complaint does not contain any allegations of wrongdoing by Marchell. (Defs.' Br. at 5.)
Defendants annex a portion of the summary description of the Plan dated May 9, 2013 (the "Plan Description")
Plaintiff opposes Defendants' motion, arguing that the failure to exhaust administrative remedies regarding an ERISA claim is an affirmative defense that does not implicate subject matter jurisdiction and "Defendants' position that Plaintiff should be required to plead facts relating to the affirmative defense of the Defendants is not the law." (Pl.'s Br., Docket Entry 6-1, at 2.) (citations omitted). Plaintiff also alleges that the second claim states a cause of action for a violation of COBRA's notice requirements because the Plan is a "plan" within the meaning of ERISA, Defendants terminated coverage, and Defendants sent an untimely COBRA notice as the termination occurred on March 25, 2014 and the notice was not sent until May 29, 2014. (Pl.'s Br. at 3.) With respect to Marchell, Plaintiff maintains that Marchell was properly named a defendant in his representative capacity based on JIEBI's status as an unincorporated association, citing New York State law that allegedly provides that an action may be filed against a "treasurer of an unincorporated association on behalf of the association in accordance with the provisions of the general associations law." (Pl.'s Br. at 5 (citing N.Y. CPLR § 1025; N.Y. Gen. Ass'ns Law § 13 (McKinney's 2015).)
Plaintiff's opposition annexes an Amended Complaint dated April 8, 2015 as an exhibit. (Am. Compl.
The Amended Complaint asserts the following additional factual allegations: (1) Mr. Mayer disappeared on June 14, 2013 and has not been seen since that date; (2) Mr. Mayer's medical and dental benefits had fully vested at the time of his disappearance and Plaintiff and her children were entitled to maintain their full medical and dental benefits; (3) Defendants were informed of Mr. Mayer's disappearance; (4) Plaintiff had not received any notification of the termination of health benefits prior to March 25, 2014; (5) Defendants appeared to have determined that a "qualifying event" had occurred and "[f]rom the facts it would most likely have been a reduction of hours under 29 U.S.C. 1163, since Robert Mayer never returned to work following his June 14 disappearance." (Am. Compl. ¶¶ 15-20.)
Defendants construe Plaintiff's inclusion of the Amended Complaint as a request for leave to file an amended complaint. (Defs.' Reply Br. at 7.) Defendants argue that such request should be denied based on Plaintiff's failure to file a motion for leave to amend and the prematurity of Plaintiff's request "since the parties do not yet know how the Court will rule on Defendants' pending motion to dismiss her current complaint." (Defs.' Reply Br. at 7.) Additionally, Defendants argue that New York's General Association Law only permits suit against an unincorporated association's treasurer if the suit is one that may be maintained against all the associates; thus, "[b]ecause the Plan specifically designates the Joint Board—and not the individuals who compose [sic] the Joint Board—as administrator, Plaintiff's claim is only against the Joint Board and not against `all the associates' within the meaning of General Association Law § 13." (Defs.' Reply Br. at 5-6.)
To withstand a motion to dismiss, a complaint must contain factual allegations that are sufficient to state a facially "plausible" claim to relief.
Generally, the Court's consideration of a Rule 12(b)(6) motion to dismiss is "limited to consideration of the Complaint itself."
As set forth above, the Complaint asserts claims in connection with Defendants' termination of Plaintiff and her children's benefits under the Plan and alleged refusal to reimburse Plaintiff for certain medical expenses. (
As previously noted, Plaintiff annexed an Amended Complaint to her opposition to Defendants' motion, which was filed on April 8, 2015. (
Federal Rule of Civil Procedure 15 provides, in relevant part, that a pleading may be amended as a matter of course within twenty-one days after the service of a motion pursuant to Rule 12(b) "if the pleading is one to which a responsive pleading is required." FED. R. CIV. P. 15(a)(1)(B). The Court notes that the Amended Complaint technically was not "filed" as Plaintiff failed to file it as a separate entry on the docket. Nevertheless, the Court will consider the Amended Complaint because it was filed as an exhibit within twenty-one days of the filing of Defendants' motion to dismiss.
While ERISA does not contain a statutory exhaustion requirement, the Second Circuit has "recognized a `firmly established federal policy favoring exhaustion of administrative remedies in ERISA cases.'"
In
Preliminarily, the Court notes that Plaintiff has not specified the branch of ERISA that she relies upon with respect to her first cause of action. (
Both the Complaint and the Amended Complaint are silent with respect to whether Plaintiff exhausted (or even pursued) administrative remedies prior to filing suit. (
Accordingly, the branch of Defendants' motion seeking dismissal of the first cause of action is GRANTED. Plaintiff's first cause of action is DISMISSED WITHOUT PREJUDICE and with leave to replead.
COBRA requires that "[t]he plan sponsor of each group health plan shall provide . . . that each qualified beneficiary who would lose coverage under the plan as a result of a qualifying event is entitled, under the plan, to elect, within the election period, continuation coverage under the plan." 29 U.S.C. § 1161(a). COBRA places a notice obligation on the employee as well as the employer when coverage is terminated due to the occurrence of a "qualifying event."
Additionally, the plan administrator is required to notify any qualified beneficiary of the beneficiary's rights under COBRA "within 14 days (or, in the case of a group health plan which is a multiemployer plan, such longer period of time as may be provided in the terms of the plan)" of the date that the administrator is notified by the employer, employee, or qualified beneficiary. 29 U.S.C. § 1166(c). An administrator that fails to comply with COBRA's notice requirements "may in the court's discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal, and the court may in its discretion order such other relief as it deems proper." 29 U.S.C. § 1132(c)(1)(A).
The Court finds that the Amended Complaint states a claim under 29 U.S.C. § 1132(c)(1)(A) for a violation of COBRA's statutory notice requirements. The Amended Complaint alleges that Mr. Mayer disappeared on June 14, 2013 and that "Defendants were fully informed about Mr. Mayer's disappearance and had knowledge of this occurrence." (Am. Compl. ¶¶ 15, 17.) The Amended Complaint further alleges that "apparently, the Defendants made a determination that a qualifying event had occurred at some point . . . it would most likely have been a reduction of hours under 29 U.S.C. 1163, since Robert Mayer never returned to work following his June 14 disappearance." (Am. Compl. ¶ 20.) Accepting the factual allegations in the Amended Complaint as true, it is certainly plausible that Defendants were notified of Mr. Mayer's disappearance and determined that Mr. Mayer's failure to return to work was a termination or reduction of hours and, accordingly, a "qualifying event" as set forth in 29 U.S.C. § 1163(2).
Defendants' argument that the Complaint does not contain "facts showing that notice of the occurrence of a `qualifying event' was provided to [JIBEI] either by [Mr. Mayer's] employer or by any beneficiary pursuant to 29 U.S.C. § 1166(a)(2)-(3)" has been rendered moot based on the additional allegations in the Amended Complaint. (Defs.' Br. at 4.) Further, to the extent that Defendants argue that the "complaint fails to allege that [Mr. Mayer's] employer ever terminated him or reduced his hours, or that the Plan ever determined that it had," the Amended Complaint similarly remedies that alleged defect. (Defs. Br. at 4 n.4.)
Accordingly, the branch of Defendants' motion seeking the dismissal of Plaintiff's second cause of action is DENIED. The Court declines to stay proceedings on Plaintiff's second claim pending "Plaintiff's exhaustion of the Plan's internal appeals procedures regarding the First Cause of Action." (Defs. Reply Br. at 5.)
Disagreement exists among the courts in this Circuit and other Circuits with respect to the proper defendants in an ERISA action for denial of benefits.
However, courts in this Circuit have also held that an insurer may be sued as a plan administrator regarding an ERISA Section 502(a)(1)(B) claim "insofar as any of the insurance company defendants . . . actually controlled the distribution of funds and decided whether or not to grant benefits under one of the plans."
In light of the absence of any factual allegations with respect to Marchell and the Court's dismissal of the first cause of action, it is not necessary for the Court to determine whether Marchell is an appropriate defendant in an ERISA recovery of benefits action based on his position as Plan treasurer. (
Plaintiff's second cause of action alleging a violation of COBRA's notice requirements is similarly devoid of any factual allegations regarding Marchell. (Am. Compl. ¶¶ 30-31.) In any event, the Amended Complaint specifically asserts that JIBEI is liable pursuant to 29 U.S.C. § 1132(c)(1)(A), which applies to plan administrators and does not set forth any express basis for individual liability.
Accordingly, the branch of Defendants' motion seeking the dismissal of Marchell from this action is GRANTED and the Amended Complaint is DISMISSED WITH PREJUDICE against Marchell. While, as previously noted, the Court's general practice is to grant leave to amend the complaint when grating a motion to dismiss, "the district court has the discretion to deny leave to amend where there is no indication from a liberal reading of the complaint that a valid claim might be stated."
Plaintiff's third cause of action seeks an award of attorney's fees pursuant to Section 1132(g). (Am. Compl. ¶ 33.) 29 U.S.C. § 1132(g)(1) provides, in relevant part, that "[i]n any action under this subchapter . . . by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fees and costs of action to either party." Defendants' motion is silent with respect to the third cause of action. (
For the foregoing reasons, Defendants' motion is GRANTED IN PART and DENIED IN PART. The Amended Complaint's first cause of action is DISMISSED WITHOUT PREJUDICE against defendant Joint Industry Board of the Electrical Industry and with leave to replead. If Plaintiff wishes to replead this claim, she must do so within thirty (30) days of the date of this Memorandum and Order. The Amended Complaint is DISMISSED WITH PREJUDICE against defendant John E. Marchell, as Treasurer of the Joint Industry Board of the Electrical Industry. Plaintiff's remaining claims are her second cause of action for violation of COBRA's notice requirements and her third cause of action for attorney's fees.
The Clerk of the Court is directed to TERMINATE Marchell as a party to this action. The Clerk of the Court also is directed to file the Amended Complaint (Pl.'s Decl., Ex. C., Docket Entry 6-4) on the docket as a separate entry.
SO ORDERED.