Opinion
3:01-0608
January 22, 2002
MEMORANDUM
Before the Court are various motions filed by various parties. First, Defendant Unum Provident Corporation ("UPC") has filed a motion to dismiss the claims against it. Second, Plaintiff Harold Adkins ("Adkins") has filed a motion to amend his complaint. Finally, Adkins has filed two motions to append the record. For the following reasons, UPC's motion to dismiss is GRANTED, and Adkins's motions are DENIED in their entirety.
I. Relevant Facts
This is an action brought pursuant to the Employee Retirement Income Security Act ("ERISA") in which Adkins claims that his long-term disability benefits were wrongfully terminated. Adkins was employed by Defendant Sherwin-Williams Company ("Sherwin-Williams") and was covered by its Long Term Disability Plan ("the Plan"). The Plan is subject to regulation by ERISA.
Adkins was hospitalized in December 1997 with acute pulmonary edema and chest pain. He has not performed substantial gainful employment since that time. Adkins underwent triple bypass surgery in March 1998.
On June 30, 1998, Sherwin-Williams wrote to Adkins to inform him that he was eligible for benefits under the Plan effective June 13, 1998. The monthly benefit amount was to be paid to Adkins until retirement at age 65 so long as Adkins remained disabled, did not retire, or did not become employed. The basis for the disability was ischemic cardiomyopathy, which is commonly known as "congestive heart failure."
On July 17, 2001, Brian Boyd, a Customer Care Specialist for the Plan's administrator, wrote to Adkins to inform him that his disability benefits were being terminated. The termination letter stated that "[o]ur medical personnel have determined that the diagnosis of Congestive Heart Failure is not supported."
Previously, on June 19, 2001, an Administrative Law Judge ("ALJ") for the Social Security Admininstration determined that Adkins was totally disabled. The ALJ determined that Adkins's impairments include "ischemic cardiomyopathy, coronary artery disease, supraventricular tachycardia, osteoarthritis, and major depression." The ALJ concluded that Plaintiff's impairments "prevent him from performing work requiring even sedentary exertion on a regular and continuing basis." The ALJ found that Adkins had been disabled since December 19, 1997.
Adkins contends that there is no medical evidence supporting the decision to terminate his disability benefits. Consequently, Adkins seeks reinstatement of his benefits under the Plan, payment for benefits since their termination, and other relief.
II. UPC's Motion to Dismiss
In its motion to dismiss, UPC contends that it is not a proper party to the lawsuit. UPC contends that the Plan was issued by Provident Life and Accident Insurance Company ("Provident"), a subsidiary of UPC. Sherwin-Williams is the policyholder and Provident is the claims fiduciary. UPC asserts that it is not identified anywhere within the Plan nor did it play any role whatsoever with regard to the adjudication and administration of the Plan and its terms.
ERISA permits suits to recover benefits only against the plan as an entity, 29 U.S.C. § 1132 (a)(1)(B) and 1132(d), and suits for breach of fiduciary duty only against the fiduciary, 29 U.S.C. § 1109(a) and 1105(a). Gelardi v. Pertec Computer Corp., 761 F.2d 1323 (9th Cir. 1985). In this case, UPC is not properly to be considered the plan or the fiduciary. Sherwin-Williams was the policyholder for the Plan, and Provident was the administrator. UPC is a Delaware corporation and non-insurance holding company for its subsidiaries, one of which is Provident. Furthermore, UPC is not within the statutory definition of a fiduciary. ERISA defines a fiduciary as one who exercises any discretionary authority or discretionary control respecting management or disposition of its assets." 29 U.S.C. § 1002 (21)(A)(1). "A fiduciary has "authority to control and manage the operation and administration of the plan,' 29 U.S.C. § 1102 (a)(1), and must provide a `full and fair review' of claim denials." Saravolatz v. Aetna US Healthcare, 51 F. Supp.2d 806, 811 (E.D. Mich. 1999). UPC is not properly to be considered a fiduciary under the Plan.
Pursuant to the ERISA statutory framework, UPC is not a proper party to Adkins's suit for reinstatement of his benefits. In response to UPC's motion to dismiss, Adkins concedes that UPC "correctly argued that it is not a proper ERISA defendant." Adkins contends, however, that UPC should not be dismissed because Adkins has articulated several causes of action against it in his proposed amended complaint. As discussed below, the motion to amend the complaint is denied as well, and UPC is dismissed as a party to this litigation.
III. Adkins's Motion to Amend the Complaint
Adkins's amended complaint reflects no ERISA-based cause of action against UPC. Instead, Adkins adds a claim against UPC for tortious interference with contract and causes of action for intentional and negligent infliction of emotional distress. Adkins asserts that these claims are established by the administrative record provided by the defendants. Adkins contends that the record reflects that "UPC played an active and self-interested role in the appeal process denying Mr. Adkins's claim." Plaintiff argues that UPC was aware of Adkins's multiple medical conditions, including his severe depression, when it denied his appeal for benefits.
According to the amended complaint, the basis of Adkins's tortious interference with contract claim is found in several pieces of correspondence between Adkins and UPC's representatives. These letters were written on UPC letterhead. Furthermore, the representatives who wrote the letters identified themselves as UPC employees. Adkins contends that this correspondence demonstrates UPC's involvement in the decision to terminate his benefits. Rule 15(a) of the Federal Rules of Civil Procedure states that amendments to pleadings should be "freely given when justice so requires." It is well-settled that in considering whether to grant motions to amend under Rule 15, a court should consider whether the amendment would be futile, i.e., if it could withstand a motion to dismiss under Rule 12(b)(6). See Klusty v. Taco Bell Corp., 909 F. Supp. 516, 520 (S.D. Ohio 1995) (citations omitted). When considering a motion to dismiss, the district court must "construe the complaint in the light most favorable to the plaintiff, accept all factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of his claims that would entitle him to relief." In re DeLorean Motor Co., 991 F.2d 1236, 1240 (6th Cir. 1993).
UPC claims that Adkins's claims for tortious interference with contract and emotional distress are preempted by ERISA. Therefore, the proposed amended complaint could not withstand a motion to dismiss; consequently, the motion to amend should be denied.
ERISA preempts any state law that "relates to" an ERISA employee benefit plan. See 29 U.S.C. § 1144 (a); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47 (1987). A claim "relates to" an ERISA benefit plan if it has a connection with or reference to the plan at issue.Egelhoff v. Egelhoff, 532 U.S. 141 (2001). "It is not the label placed on the state law claim that determines whether it is preempted, but whether in essence such a claim is for the recovery of an ERISA plan benefit."Cromwell v. Equicor-Epuitable HCA Corp., 944 F.2d 1272, 1276 (6th Cir. 1991).
Courts have consistently held that ERISA preempts state law claims for tortious interference with contract. See Hospital Corp. of America v. Pioneer Life Ins. Co. of Illinois, 837 F. Supp. 872, 874 (M.D. Tenn. 1993). In this case, the Court concludes that Adkins's tortious interference with contract and emotional distress claims "relate to" the ERISA plan. The basis for these claims is that UPC improperly interfered with Provident's decision-making process under the Plan and ERISA is designed to be the remedy for alleged wrongdoing in the claims process.
Adkins responds by acknowledging that UPC is not a fiduciary and, therefore, "a party not covered by ERISA cannot seek refuge under ERISA." Courts have determined otherwise. State causes of action asserted against non-fiduciaries also may be preempted by ERISA. See Custer v. Pan American Life Ins. Co. 2 F.3d 410, 419 (4th Cir. 1993). The critical inquiry in determining preemption is not whether the purported defendant is a fiduciary, but whether the purported claim relates to an employee benefit plan. See id. at 418-19. ERISA preempts claims that relate to an employee benefit plan even if the defendant is a non-fiduciary. See Gibson v. The Prudential Ins. Co. of America, 915 F.2d 414, 418 (9th Cir. 1990); Guardsmark, Inc. v. Bluecross and Blueshield of Tennessee, Inc., 2001 U.S. Dist. LEXIS 18210 at *18 (W.D. Tenn. Oct. 19, 2001). The Eleventh Circuit has explained the policy behind such an expansive view of ERISA preemption, stating that "[a]llowing plan beneficiaries to assert state law claims against non-fiduciary plan administrators for the wrongful termination of benefits would upset the uniform regulation of plan benefits intended by Congress." Howard v. Parisian, Inc., 807 F.2d 1560. 1565 (11th Cir. 1987). "Preemption is required if the assertion of a state law claim would contravene the structure and purpose of a federal statute." See id.
In this case, the Court concludes that regardless of the label that Adkins places on his claims, they are in essence claims for recovery of an ERISA plan benefit. Adkins's claims, therefore, "relate to" his benefits under the Plan and are preempted. Accord Cromwell, 944 F.2d at 1276. Because the new claims could not withstand a motion to dismiss pursuant to Rule 12(b)(6), Adkins's motion to amend the complaint is DENIED.
IV. Plaintiff's Motions to Append the Record
As noted above, Adkins has filed two motions to append the record. In ERISA actions, the Sixth Circuit has held that when a court reviews the decision of a plan administrator to deny benefits, the court may consider only those facts know to the plan administrator at the time the decision concerning the benefits was made. See Smith v. Ameritech, 129 F.3d 857, 863 (6th Cir. 1997). Accordingly, a court should not consider evidence that was not presented to the administrator for consideration in the benefits decision. See Wilkins v. Baptist Healthcare System, Inc., 150 F.3d 609, 618 (6th Cir. 1998).
In his first motion to append, Adkins seeks to add medical records from the Tennessee Orthopaedic Alliance which reference a knee condition. These records were not previously submitted to, or considered by, the plan administrator. Similarly, in his second motion, Adkins asks the Court to add medical records from Baptist Hospital which were not previously submitted to, or considered by, the plan administrator. Because these records were not before the administrator during the decision regarding Adkins's benefits, they should not be part of this Court's evaluation of the administrator's decision.
In his reply brief, Adkins admits that "case law prohibits post-decision additions to the administrative record for the purpose of determining whether the contested decision was arbitrary or capricious." Adkins asserts, however, that case law permits evidence to be admitted outside the administrative record when considering a motion to remand. Adkins further asserts that "the evidence Mr. Adkins seeks to introduce was filed in anticipation of a motion to remand. Therefore, it is admissible for that purpose."
To date, Adkins has not filed a motion to remand and he admits that "a fully argued motion to remand is premature at this time." If Adkins wishes the Court to consider these additional records in the context of an as-yet-unfiled motion to remand, then his motions are premature. Until such a motion to remand is filed with the Court, it is not appropriate to consider whether the records in question should be received by the Court. Plaintiff's motions to append the record are DENIED.
V. Conclusion
For the foregoing reasons, Defendant UPC's motion to dismiss is GRANTED. Plaintiff Adkins's motion to amend the complaint is DENIED, as are both of Plaintiff's motions to append the record.
An appropriate order will enter.