Summary
finding that because defendant was not the plan, did not control the administration of the plan, had no authority to grant or deny claims or manage or disperse fund assets or maintain claim files, and was in no way obligated to pay benefits under the terms of the plan, it was not a proper party defendant to a wrongful denial of benefits claim under § 1132(B)
Summary of this case from Burch v. Wellstream InternationalOpinion
Case No. 4:02-CV-92 CONSOLIDATED WITH Case No. 4:02-CV-98
April 14, 2003
Grady Michael Gruber, of Godwin Gruber, Dallas, TX, For Plaintiffs.
Scott Masur McElhaney, Jackson, Walker, Dallas, Tx, Thomas E. Sanders, Akin, Gump, Strauss, Hauer Feld, San Antonio, Tx, Charles Cecil Keeble, Jr., Haynes Boone, Dallas, Tx, for Defendants.
MEMORANDUM OPINION AND ORDER
Defendant Custom Benefit Consultants, Inc. ("CBC") has filed a Motion for Summary Judgment (Docket No. 96). For the reasons articulated below, CBC's Motion for Summary Judgment is GRANTED.
BACKGROUND
Robert F. Blum ("Mr. Blum") was employed by Grandy's, Inc., which is owned and otherwise controlled by Defendant Spectrum Restaurant Group ("SRG"). As a Grandy's employee, Mr. Blum was eligible to participate in the Group Life and Supplemental Life Plan for Employees of SRG (the "SRG Plan"). In November of 1999, Mr. Blum enrolled in the Grandy's Employee Benefit Program. On November 19, 1999, Mr. Blum completed his enrollment application and elected basic life insurance and supplemental life insurance coverage in an amount equal to ten times his annual salary.
At the time of his enrollment, Principal Life Insurance Company ("Principal") provided supplemental life insurance coverage to the SRG Plan. The SRG Plan consisted of two separate benefits: (1) a basic life insurance benefit affording life insurance to SRG employees such as Mr. Blum, which was purchased and paid for by SRG, and (2) a voluntary supplemental life insurance benefit which could be purchased by SRG employees through their employment by way of a payroll deduction. Principal provided supplemental coverage to eligible employees for a guarantee minimum of $100,000, without proof of good health. Employees could also apply for additional supplemental coverage in an amount up to ten times one's annual salary, subject to a limit of $1,000,000.
The basic life insurance benefit available to SRG administrative employees such as Mr. Blum in 2001 was $50,000.
In January of 2001, SRG changed life insurance carriers from Principal to Hartford Life and Accident Insurance Company ("Hartford"). Subsequently, Hartford issued a group insurance policy ("Hartford Policy") offering group life insurance coverage to employees of SRG. Hartford, through the SRG Plan, offered supplemental group term life insurance in an amount equal to 1, 2, 3, 4, or 5 times one's annual rate of basic earnings, subject to a limit of $500,000, to eligible employees who submit evidence of good health. Hartford set the guaranteed minimum amount of insurance that was available without evidence of good health at $200,000.
In October 1999, CBC entered into an insurance brokerage and administrative services contract with SRG under which CBC: (1) assisted SRG, the Plan Administrator, in procuring life insurance for SRG's employee benefit plans; and (2) agreed to provide services to SRG in connection with the administration of the SRG's employee benefits plans, including the SRG Plan. These services included handling certain enrollment and paperwork related to the administration of SRG's benefit plans, bringing insurance contracts to SRG, and handling communications regarding benefits.
On July 20, 2001, Mr. Blum died as a result of injuries suffered in a bicycling accident. Upon Mr. Blum's death, the SRG Plan paid Mrs. Blum $50,000 in the basic coverage and $200,000 in supplemental coverage, for a total of $250,000. Mrs. Blum, the beneficiary under the SRG Plan, claims that she entitled to approximately $1 million in supplemental life insurance benefits. This lawsuit followed.
Apparently, there were individuals who had higher amounts of supplemental insurance pursuant to a Rider and individual Endorsements. These individuals received grandfathered coverages over the $500,000 cap because they had qualified for such higher amounts before January 1, 20001, the date the Hartford Policy became effective. Mrs. Blum claims that Mr. Blum was one of these individuals.
In her Third Amended Complaint, Mrs. Blum has asserted state law claims for fraud, negligent misrepresentation, violation of the Texas Insurance Code, violation of the Texas Deceptive Trade Practices Act ("DTPA"), breach of contract, and intentional infliction of emotional distress against CBC. In addition, Mrs. Blum has asserted federal common law claims for equitable estoppel and waiver, and further, violations of ERISA Sections 502(a)(1)(B) and 502(a)(3) against CBC.
Mrs. Blum has also asserted federal equitable estoppel and waiver claims and ERISA Sections 502(a)(1)(B) and 502(a)(3) claims against SRG, the SRG Plan, and Hartford.
In its Motion for Summary Judgment, CBC argues, inter alia, that: (1) Plaintiff's state law claims are preempted by ERISA; (2) CBC is not a proper Defendant to Plaintiff's wrongful denial of benefits claim under Section 502(a)(1)(B) of ERISA and she cannot show that she was wrongly denied benefits; (3) Plaintiff's Section 502(a)(2) ERISA claim fails because Plaintiff cannot seek individual recovery under that section and CBC is not a fiduciary under the SRG Plan, and (4) Plaintiff has no cause of action under Section 502(a)(3) of ERISA because (a) she has an available remedy under Section 502(a)(1)(B), (b) CBC is not a fiduciary under the SRG Plan, and (c) Plaintiff's claimed damages do not fit within Section 502(a)(3)'s "equitable relief" requirement. The Court will address each of these arguments in turn.
In Mrs. Blum's Third Amended Complaint, she is not asserting a claim under ERISA Section 502(a)(2). Accordingly, the Court will not address this argument.
SUMMARY JUDGMENT STANDARD
Summary judgment shall be rendered when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). An issue of material fact is genuine if the evidence could lead a reasonable jury to find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether a genuine issue for trial exists, the court is required to view all inferences drawn from the factual record in the light most favorable to the nonmoving party. Anderson, 477 U.S. at 248; Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986). Once the moving party has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must assert competent summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586.
Mere conclusory allegations, unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996); Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir. 1994). The party opposing summary judgment is required to identify evidence in the record and articulate the manner in which that evidence supports his claim. Ragas, 136 F.3d at 458. "Only disputes over facts that might affect the outcome of the suit under the governing laws will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248. Summary judgment must be granted if the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which it will bear the burden of proof at trial. Celotex, 477 U.S. at 322-23.
ERISA PREEMPTION
In support of its Motion for Summary Judgment, CBC argues that all of the state law claims alleged by Mrs. Blum are preempted under ERISA. "ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit plans." Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 137 (1990) (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90 (1983)). ERISA expressly "supercede[s] any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." 29 U.S.C. § 1144(a) (expressly excepting two situations not applicable here). "A state law `relates to' an employee benefit plan `if it has a connection with or reference to such plan.'" Rozzell v. Security Servs., Inc., 38 F.3d 819, 821 (5th Cir. 1994) (quoting Shaw v. Delta Air Lines, 463 U.S. 85, 96-97 (1983)). ERISA preempts a state law claim "if (1) the state law claim addresses an area of exclusive federal concern, such as the right to receive benefits under the terms of an ERISA plan; and (2) the claim directly affects the relationship between the traditional ERISA entities — the employer, the plan and its fiduciaries, and the participants and beneficiaries." Hubbard v. Blue Cross Blue Shield Ass'n, 42 F.3d 942, 945 (5th Cir. 1995). It is "well-established that the `deliberately expansive' language of [Section 514(a)] . . . is a signal that it is to be construed broadly." Corcoran v. United HealthCare, Inc., 965 F.2d 1321, 1328 (5th Cir. 1992) (citations omitted). Because of the breadth of the preemption clause and the broad remedial purpose of ERISA "state laws found to be beyond the scope of § 1144(a) are few." Jackson v. Martin Marietta Corp., 805 F.2d 1498, 1499 (11th Cir. 1986).
However, "ERISA preemption is not limitless." Rozzell, 48 F.3d at 821. In particular, the Fifth Circuit has stated that "[o]f course, `some state actions may affect employee benefits plans in too tenuous, remote, or peripheral a manner to warrant a finding that the law `relates to' the plan.'" Bullock v. The Equitable Life Assurance Society, 259 F.3d 395, 399 (quoting Shaw, 463 U.S. at 100 n. 21). In order to ascertain whether a state law claim is preempted by ERISA, the Court must look past the words in the complaint and consider the substance of the claims alleged. Rozzell, 48 F.3d at 822.
Mrs. Blum has asserted state law claims for fraud, negligent misrepresentation, violation of the Texas Insurance Code, violation of the DTPA, breach of contract, and intentional infliction of emotional distress. Mrs. Blum argues that her state law claims are not preempted because (1) the claims are not directly "related to" to the SRG Plan and (2) she did not advance claims against a traditional ERISA entity. CBC argues that Mrs. Blum's state claims are a mere disguise for its ERISA claims. CBC contends that the state law claims concern the creation, operation and subsequent failure of the SRG Plan and are therefore directly "related to" the SRG Plan making it subject to preemption.
Plaintiff seeks to recover actual damages, consequential damages, exemplary damages, and treble damages based on her various state law claims.
i. Whether Mrs. Blum's state law claims address an area of exclusive federal concern?
Mrs. Blum argues that her state law claims arise out of "CBC's misrepresentations and other illegal, wrongful and criminal conduct directed toward the Blums regarding Mr. Blum's $1,000,000 supplemental life insurance coverage," and not the administration of the plan, and, therefore are "too tenuous and remote" to be preempted by ERISA. Mrs. Blum primarily relies on four documents to support her state law claims: (1) Mr. Blum's check stub showing a premium withheld for life insurance benefits under the SRG Plan; (2) a benefit enrollment worksheet showing Mr. Blum's election of supplemental life insurance benefits under the SRG Plan in the amount of ten time his annual salary; (3) a page printed from Utlralink's website confirming that Mr. Blum had elected supplemental life insurance benefits coverage in the amount of ten times his annual salary; and (4) an alleged "forgery" by CBC to Mrs. Blum's Hartford Proof Death claim form. All of these documents were prepared in connection with Mr. Blum's election and processing of supplemental life insurance benefits under the SRG Plan. Accordingly, Mrs. Blum's state law claims arise directly from the administration of the plan.
In October 2000, Ultralink, SRG, and the SRG Plan entered into an agreement under which Ultralink agreed to provide an on-line employee benefits plan enrollment system which would allow SRG employees to enroll for employee benefits and review their benefit elections on a website.
Mrs. Blum's state law claims stem from the existence of an ERISA plan, such that if the Plaintiff's claims were stripped of their nexus to the plan, they would cease to exist. See, e.g., Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47-48 (1987) (contract and tort claims alleging improper processing of ERISA benefits); Metropolitan Life Ins. v. Taylor, 481 U.S. 58, 62-63 (1987) (same); Memorial Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d 236, 250 (5th Cir. 1990) (contract claim alleging improper denial of ERISA benefits); Lee v. E.I. DuPont de Nemours Co., 894 F.2d 755, 756-58 (5th Cir. 1990) (tort claim alleging misrepresentation of details of ERISA plan); Ramirez v. Inter-Continental Hotels, 890 F.2d 760, 762-63 (5th Cir. 1989) (contract, tort, and statutory claims alleging improper denial of benefits); Cefalu v. B.F. Goodrich Co., 871 F.2d 1290, 1292-95 (5th Cir. 1989) (contract claim alleging improper denial of benefits); Degan v. Ford Motor Co., 869 F.2d 889, 893-95 (5th Cir. 1989) (same). Indeed, Plaintiff's state law claims make specific reference to, and are premised on, the existence of a plan. Plaintiff's state law claims would inevitably require the fact-finder to examine the SRG Plan in order adjudicate the Plaintiff's claims. These allegations require the court to examine and interpret the language of the instruments creating the ERISA-governed SRG Plan, the operation of the SRG Plan, and the communications made by the Defendants to the Blums concerning the terms and benefits of the SRG Plan. In essence, the "underlying conduct alleged by [Mrs. Blum] cannot be severed from its connection to the Plan." Reliable Home Health Care, Inc. v. Union Central Ins. Co., 295 F.3d 505, 516 (5th Cir. 2002).
Plaintiff, by way of her state law claims, seeks damages including the amount of benefits lost under the SRG Plan because of the actions allegedly taken by CBC. The Court finds that in order to compute Mrs. Blum's damages, should she succeed on her claims at trial, would require reference to the SRG Plan. This provides further support that Mrs. Blum's state law claims are preempted by ERISA. See Cefalu, 871 F.2d at 1294 (finding that a breach of contract claim was preempted by ERISA, in part, because the calculation of damages for a successful prosecution of that claim would require reference to a employment benefit plan).
The Court notes, as Mrs. Blum has indicated, that Cefalu's rationale was not followed as dicta in Rozzell, 38 F.3d at 822. In Rozell, Defendant argued, and the district court agreed, that because computation of the plaintiff's damages necessitated reference to the ERISA plan, the claim was preempted. 38 F.3d at 822. The Fifth Circuit went on to hold:
This erroneous argument finds its genesis in dicta in Cefalu v. B.F. Goodrich Co., 871 F.2d 1290, 1294 (5th Cir. 1989). In Cefalu, another ERISA preemption case, the plaintiff was employed by the defendant before purchasing a franchise from the defendant. The plaintiff alleged that the defendant breached an oral contract to continue his pension benefits at the same level when he became an independent franchisor as when he was an employee. Cefalu held that such a claim was preempted by ERISA and properly removable. In explaining that the lawsuit possessed the requisite relation to an employee benefit plan to justify preemption, the court noted that "[t]o compute [plaintiff's] damages, the court must refer to the pension plan under which appellant was covered when he worked for [defendant]." Id. at 1294. This statement does not, and can not, mean that any lawsuit in which reference to a benefit plan is necessary to compute plaintiff's damages is preempted by ERISA and is removable to federal court.
Id. This Court is not relying on the fact that the computation of Mrs. Blum's damages will necessitate reference to the SRG Plan to find that Mrs. Blum's state law claims are preempted. The Court is merely pointing out that this non-outcome determinative factor favors a finding that Mrs. Blum's state law claims address an area of exclusive federal concern and, thus, are preempted.
Plaintiff relies heavily on Hubbard v. Blue Cross Blue Shield Ass'n, 42 F.3d 942 (5th Cir. 1995) and Perkins v. Time Ins. Co., 898 F.2d 470 (5th Cir. 1990). In Perkins, the Fifth Circuit found that a plaintiff's fraudulent inducement claim against an insurance agent for misrepresenting the terms of the ERISA plan to convince plaintiff to join the plan was not preempted. The Perkins court stated:
While ERISA clearly preempts claims of bad faith as against insurance companies for improper processing of a claim for benefits under an employee benefit plan, and while ERISA plans cannot be modified by oral representations, we are not persuaded that this logic should extend to immunize agents from personal liability for their solicitation of potential participants in an ERISA plan prior to its formation. Giving the ERISA "relates to" preemption standard its common-sense meaning, we conclude that a claim that an insurance agent fraudulently induced an insured to surrender coverage under an existing policy, to participate in an ERISA plan which did not provide the promised coverage, "relates to" that plan only indirectly. A state law claim of that genre, which does not affect the relations among the principal ERISA entities (the employer, the plan fiduciaries, the plan, and the beneficiaries) as such, is not preempted by ERISA.
Id. at 473 (internal citations omitted).
Similarly, in Hubbard, the Fifth Circuit relied on Perkins in holding that a plaintiff's fraudulent inducement claim, based on allegations that the parent company of her insurer disseminated false advertising in regard to the plaintiff's insurer in an attempt to induce the plaintiff to join the insurance plan was not ERISA preempted. Hubbard, 42 F.3d at 946-47.
Perkins and Hubbard are inapplicable in the instant case. Mr. Blum was already a participant in the SRG Plan when the alleged misrepresentations occurred. Additionally, the alleged misrepresentations involve benefits supposedly owed to the Blums under the SRG Plan. Mrs. Blum alleges that CBC "advertised, marketed or brokered" life insurance benefits to the Blums, and that conduct did not involve any administrative activities under the SRG Plan. While CBC may have "advertised, marketed or brokered" life insurance benefits to the Blums, there is neither evidence of misrepresentations regarding advertising, marketing, or brokering, nor has the Plaintiff asserted such misrepresentations. The alleged fraud and misrepresentation dealt with the administration of the plan, not the solicitation of the plan.
Plaintiff argues that pursuant to 29 U.S.C. § 1144(b)(4) that the broad preemption provisions of ERISA do not apply to her state law claims because ERISA does not preempt "any generally applicable criminal law of the State." While Plaintiff's proposition is correct, it is inapplicable in this case. Plaintiffs state law claims are civil claims and, thus, they are not claims arising under a generally applicable criminal law of Texas. See, e.g., Jones v. Roadway Express, Inc., 931 F.2d 1086, 1092 (5th Cir. 1991). The purpose of the criminal statute exemption under 29 U.S.C. § 1144(b)(4) is to ensure that prosecutions under state criminal laws are not preempted. See, e.g., Sforza v. Kenco Constructional Contracting, Inc., 674 F. Supp. 1493, 1495 (D.Conn. 1986). In the instant case, there is no criminal prosecution against CBC for the alleged "forgery" that Mrs. Blum claims CBC committed. Thus, Mrs. Blum must be asserting a private right of action. However, a private right of action does not exist. See Aguilar v. Chastain, 923 S.W.2d 740, 745 (Tex.App.-Tyler 1996, no writ). Even if Mrs. Blum could assert a private right of action, other federal courts have rejected attempts to evade preemption by relying on an "implied civil remedy from a state criminal statute" because it would improperly "circumvent Congress' decision that ERISA supercedes `any and all state regulation of employee benefit plans.'" Calhoon v. Bonnabell, 560 F. Supp. 101, 109 (S.D.N.Y. 1982).
The facts Mrs. Blum relies on for this argument are as follows: Mrs. Blum alleges that sometime after receiving Mrs. Blum's signed $1,000,000 Hartford Proof of Death Claim Form, Vivian Kaiser of CBC changed Mrs. Blum's signed claim form by erasing the $1,000,000 claimed by Mrs. Blum and handwriting in $200,000 on the same line. Plaintiff alleges that this constitutes forgery because Mrs. Blum was never informed of the change.
Plaintiff has failed to cite any authority that civil state law claims that "relate to" a plan are saved from preemption because the complained of conduct might also form the basis of a criminal prosecution. If this Court were to agree with Plaintiff's argument, then any claimant who asserts a fraud or DTPA claim could always evade ERISA preemption by alleging that the complainant's conduct is a violation of a parallel criminal statute, such as Tex. Penal Code § 32.42(b)(1)-(12) in this case. This would render ERISA's preemption provision meaningless.
In factual contexts involving the payment and processing of claims, the Fifth Circuit has consistently held that the state law claims asserted by Mrs. Blum are preempted by ERISA-breach of contract, fraud, negligent misrepresentation, equitable estoppel, intentional infliction of emotional distress, violation of the DTPA, and violation of Article 21.21 of the Texas Insurance Code. See, e.g., Hogan v. Kraft Foods, 969 F.2d 142, 144-45 (5th Cir. 1992); Hermann Hosp. v. MEBA Med. Benefits Plan, 959 F.2d 569, 577-78 (5th Cir. 1992); Hansen, 940 F.2d at 979; Lee v. E.I. DuPont de Nemours Co., 894 F.2d 755, 756-58 (5th Cir. 1990); Ramirez v. Inter-Continental Hotels, 890 F.2d 760, 763-64 (5th Cir. 1989); Boren v. NL Indus., Inc., 889 F.2d 1463, 1465-66 (5th Cir. 1989). The first element of preemption, whether the state law claims address areas of exclusive federal concern, such as the right to receive benefits under an ERISA plan is met.
ii. Whether Mrs. Blum's state law claims directly affects the relationship between the traditional ERISA entities?
The Court must also address whether Mrs. Blum's state law claims directly affect the relationship between the traditional ERISA entities — the employer, the plan and its fiduciaries, and the participants and beneficiaries. Mrs. Blum, a beneficiary, is undoubtedly a traditional ERISA entity. However, it appears that CBC is not a traditional ERISA entity because it is neither the employer, the plan, a plan fiduciary, nor a plan beneficiary or participant. Admittedly, the fact that CBC is not a traditional entity makes this a close case. However, while the Fifth Circuit has instructed district court's to analyze whether the state law claims directly affect the relationship between traditional ERISA entities, in practice, this element seems to be trumped when the state law claims implicate an ERISA plan's administration of benefits given the deliberately expansive ERISA preemption provision. See, e.g., Reliable, 295 F.3d 515-16 (preempting fraud claim asserted against a non-fiduciary insurance agent since the claim could not be severed from the ERISA plan); Corcoran, 965 F.2d at 1334; Hubbard, 42 F.3d at 946;; cf. Memorial Hosp., 904 F.2d at 247. Here, as stated above, Mrs. Blum's state law claims implicate an ERISA plan's administration of benefits. Other Courts of appeals that have considered the question agree preemption applies when the essence of a claim seeks the recovery of benefits or otherwise relates to an employee benefit plan, even when brought against a third-party, non-fiduciary. Consolidated Beef Indus., Inc. v. New York Life Ins. Co., 949 F.2d 960, 964 (8th Cir. 1991), cert. denied, 503 U.S. 985 (1992); Gibson v. Prudential Ins. Co. of Am., 915 F.2d 414, 418 (9th Cir. 1990); Howard v. Parisian, Inc., 807 F.2d 1560, 1564 (11th Cir. 1987). Accordingly, even though CBC is not a traditional ERISA entity, Mrs. Blum's state law claims are still preempted by ERISA.
Mrs. Blum argues that prohibiting her state law claims against CBC would leave a "gap" in the law because CBC would not be liable under either ERISA or state law. This argument has some appeal because, as will be explained further below, Mrs. Blum cannot recover from CBC under ERISA. However, this Court's duty is to focus on whether the action relates to any employee welfare program, not whether remedies are provided by the Act. In Mertens v. Hewitt Assocs., 508 U.S. 248 (1993), the Supreme Court seemed to assume, without expressly deciding, that claims against nonfiduciaries would be preempted. While the majority did not find it necessary to decide whether claims against nonfiduciaries were preempted, Justice White stated in his dissent that while the majority chose not to reach the preemption question, "it is difficult to imagine how any common-law remedy for the harm alleged here — participation in a breach of fiduciary duty concerning an ERISA-governed plan — could have survived enactment of ERISA's `deliberately expansive' preemption provision." Id. at 267 n. 2 (White, J., dissenting) (citation omitted). This Court follows the lead of the majority of jurisdictions and finds that Plaintiff's generalized contention that there should be some form of action available against nonfiduciaries is insufficient to overcome the specific language of the statute which provides for preemption of any claim that relates to an employee benefit plan. See, e.g., Consolidated Beef Indus., Inc. v. New York Life Ins. Co., 949 F.2d 960, 964 (8th Cir. 1991), cert. denied, 503 U.S. 985 (1992); Gibson v. Prudential Ins. Co. of Am., 915 F.2d 414, 418 (9th Cir. 1990); Howard v. Parisian, Inc., 807 F.2d 1560, 1564 (11th Cir. 1987).
ERISA
Plaintiff asserts two ERISA claims against CBC. Specifically, Plaintiff claims that: (1) she was wrongfully denied benefits under Section 502(a)(1)(B); and (2) CBC breached its fiduciary duties under Section 502(a)(3). CBC moves for summary judgment on all of these claims.
i. ERISA Section 502(a)(1)(B)
CBC argues that it is not a proper defendant to Mrs. Blum's wrongful denial of benefits claim under Section 502(a)(1)(B). There is a split in authority regarding whether a plan is the only proper defendant in a suit to recover benefits under ERISA. In Gelardi v. Pertec Computer Corp., the Ninth Circuit determined that ERISA permits suits to recover benefits under section 502(a)(1)(B) to be brought only against the plan as an entity. 761 F.2d 1323, 1324-25 (9th Cir. 1985) (per curiam); accord Riordan v. Commonwealth Edison Co., 128 F.3d 549, 551 (7th Cir. 1997) ("It is true that ERISA permits suits to recover benefits only against the plan as an entity.") (citing Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1490 (7th Cir. 1996)); Lee v. Burkhart, 991 F.2d 1004, 1009 (2d Cir. 1993) (same). In so concluding, the Gelardi court cited to section 1132(d)(2) of ERISA, which provides:
Any money judgment under this subchapter against an employee benefit plan shall be enforceable only against plan as an entity and shall not be enforceable against any other person unless liability against such person is established in his individual capacity under this subchapter.
In contrast to Gelardi, the Third Circuit has determined that ERISA permits an entity other than a plan to be sued to recover benefits if that entity is a fiduciary with sufficient discretionary authority and responsibility in the administration of the plan. See Curcio v. John Hancock Mut. Life Ins. Co., 33 F.3d 226, 233 (3d Cir. 1994); see also Layes v. Mead Corp., 132 F.3d 1246, 1249 (8th Cir. 1998) (proper party against whom claim for ERISA benefits may be brought is party that controls administration of the plan); Garren v. John Hancock Mut. Life Ins. Co., 114 F.3d 186, 187 (11th Cir. 1997) (same); Daniel v. Eaton Corp., 839 F.2d 263, 266 (6th Cir. 1988) (employer can be proper party defendant in action under section 1132(a)(1)(B) if shown to control plan administration). Although the Fifth Circuit has not yet addressed this issue, other district courts in this circuit have agreed with the Ninth Circuit's holding in Gelardi that the only proper defendant in a suit to recover benefits is the plan. See, e.g., Murphy v. Wal-Mart Assocs.' Group Health Plan, 928 F. Supp. 700 (E.D.Tex. 1996) (no action against claims administrator for recovery of benefits under section 1132(a)(1)(B)); Crawford v. Exxon Corp., 851 F. Supp. 242, 244 (M.D.La. 1994) (granting summary judgment in Exxon's favor "because ERISA only provides for suits against the Plan as an entity to recover benefits"); Holloway v. HECI Exploration Co. Employees' Profit Sharing Plan, 76 B.R. 563, 570 (N.D.Tex. 1987) (citing Gelardi and 29 U.S.C. § 1132(d)), aff'd, 862 F.2d 513 (5th Cir. 1988)). Under either the Gelardi line of cases or the Curcio line of cases, CBC is not a proper party to a wrongful denial of benefits claim under Section 502(a)(1)(B). It is self evident that CBC is not the Plan. Also, CBC did not control the administration of the SRG Plan — it had no authority to grant or deny claims, manage or disperse fund assets, or maintain claim files. Further, CBC was in no way obligated to pay the benefits under the terms of the SRG Plan. Accordingly, the Court concludes that CBC is not a proper party to a wrongful denial of benefits claim under Section 502(a)(1)(B).
ii. ERISA Section 502(a)(3)
CBC also contends that Mrs. Blum cannot assert a breach of fiduciary duty claim under ERISA section 502(a)(3). ERISA section 502(a)(3) authorizes suits by a participant, beneficiary or fiduciary "to obtain other appropriate equitable relief." It is well established that a plaintiff cannot bring a private action for breach of fiduciary duty under the residual, catch-all provision of section 502(a)(3) when the civil enforcement provisions of ERISA provide a possible remedy. See, e.g., Bratton v. Nat'l Union Fire Ins. Co., 215 F.3d 516, 526 (5th Cir. 2000); Rhorer v. Raytheon Engineers Contr., Inc., 181 F.3d 634, 639 (5th Cir. 1999). "It is settled law in this circuit that a potential beneficiary may not sue for breach of fiduciary duty if he has a pending claim under section [502(a)(1)(B)] for benefits allegedly owed." See Metropolitan Life Ins. Co. v. Palmer, 2002 WL 31742928, at *3 (E.D.Tex. 2002). Because Plaintiff is currently pursuing a claim against the relevant plans for benefits, under the law of this circuit, she cannot simultaneously sue CBC for breach of fiduciary duty.
If Plaintiff asserts a claim for benefits against the Plan under ERISA section 502(a)(1)(B), she cannot maintain a claim for breach of fiduciary duty, regardless of whether the claim for benefits is ultimately successful or not. See Bratton, 215 F.3d at 526 (holding no breach of fiduciary claim available even where section 502(a)(1)(B) claim failed); Rhorer, 181 F.3d at 639 ("because [section 502(a)(1)(B)] affords [Plaintiff] an avenue for legal redress, she may not simultaneously maintain her claim for breach of fiduciary duty"). Accordingly, even if Plaintiff's claim under section 502(a)(1)(B) is unsuccessful, that would not make her alternative claim for equitable relief viable. Therefore, "equitable relief" under section 502(a)(3) is not appropriate.
Furthermore, the plain language of the statute does not provide for monetary relief and a review of the legislative history confirms that Congress did not contemplate that this phrase would include an award of money damages. See S. Rep. No. 383, 93rd Cong., 2d Sess. 105-6 reprinted in 1974 U.S. Code Cong. Admin. News 4639, 4890, 4989 ("For example, injunctions may be granted . . . a constructive trust may be imposed . . . [and] a fiduciary may be removed"). See also Novak v. Andersen Corp., 962 F.2d 757 (8th Cir. 1992) (reviewing legislative history of ERISA and concluding that Section 502(a)(3) does not authorize award of money damages). In Mrs. Blum's Third Amended Complaint, she is seeking equitable and remedial relief; however, she has failed to state what type of equitable and remedial relief she is seeking.
EQUITABLE ESTOPPEL AND WAIVER
Mrs. Blum has also asserted federal common law equitable estoppel and waiver claims against CBC under ERISA. However, since CBC is not a proper party to a wrongful denial of benefits claims under Section 502(a)(1)(B), Mrs. Blum cannot assert an ERISA equitable estoppel and waiver claim against CBC. In essence, CBC did not have any authority to grant or deny benefits and, accordingly, cannot be estopped from denying the supplemental life insurance benefits to Mrs. Blum.CONCLUSION
In sum, the Court finds that the express language of § 1144(a) and the jurisprudence mandate a finding that ERISA preempts Mrs. Blum's state law causes for fraud, negligent misrepresentation, violation of the Texas Insurance Code, violation of the DTPA, breach of contract, and intentional infliction of emotional distress. In addition, the Court finds that Mrs. Blum cannot assert a claim against CBC under ERISA Sections 502(a)(1)(B) and 502(a)(3). Further, the Court finds that Mrs. Blum cannot assert an ERISA estoppel and waiver claims against CBC. Accordingly, CBC's Motion for Summary Judgment is GRANTED.
IT IS SO ORDERED.