Opinion
No. 8:99CV214.
October 1999.
MEMORANDUM OPINION AND ORDER
This matter is before the Court on two motions to dismiss. Defendants CIGNA Corp. and Life Insurance Company of North America ("LICNA") filed a motion to dismiss this action on the ground that Plaintiff has failed to state a claim under 29 U.S.C. § 1132(a)(1)(B) and (a)(3). Defendant Nash Finch moved to dismiss Count II of the complaint for failure to state an ERISA cause of action against the defendant. Upon careful consideration of the pleadings, briefs, and case law, I find that both motions should be denied.
BACKGROUND
This is a case brought under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 — 1461. Mr. Snook worked for the Nash Finch Company until 1996, when he became unable to work due to disability. Nash Finch had a group insurance policy with LICNA which included long-term disability benefits. Mr. Snook began receiving benefits under this policy in September 1996. However, LICNA terminated those benefits in September 1998 when it determined that Mr. Snook retained the capacity to perform sedentary work and therefore did not meet the policy definition of disability. Mr. Snook then appealed the termination of his benefits, but the company reconfirmed its denial of benefits.
Mr. Snook requested further information from both LICNA and Nash Finch. In particular, he asked LICNA for copies of whatever information the company relied on in making its decision to discontinue his benefits. He alleges that the insurance company has failed to provide him the necessary information. From Nash Finch, he requested a copy of the long-term disability plan. He received a copy of the insurance policy and was told that no other "plan document" exists.
The plaintiff then filed this lawsuit, alleging two claims for relief. The first is a claim for benefits under 29 U.S.C. § 1132(a)(1), which provides:
A civil action may be brought —
(1) by a participant or beneficiary —
(A) for the relief provided for in subsection (c) of this section [administrator's failure to provide requested information], or
(B) 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[.]
Mr. Snook alleges that LICNA and CIGNA acted in a fiduciary capacity in reviewing his appeal of the benefits denial, and that they breached that duty by the manner in which they handled the appeal. He asks the Court to conduct a de novo review of the insurance company's denial of his benefits and to reinstate those benefits.
The second claim for relief requests equitable relief under 29 U.S.C. § 1132(a)(3)(B) for the defendants' breach of their fiduciary duties to the plaintiff. That section provides:
A civil action may be brought —
* * *
(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan[.]
This claim is brought against Nash Finch for failing "to properly adopt a written plan document or summary plan description (SPD) as required pursuant to ERISA and the regulations promulgated thereunder." Compl. ¶ 21 (filing 1). It is brought against LICNA and CIGNA for failing to comply with ERISA in the manner in which the appeal was handled. Plaintiff seeks to have Nash Finch ordered to adopt and ratify a written plan document regarding its long-term disability plan, and to have LICNA and CIGNA directed to provide all persons who appeal long-term disability benefits denials with proper denial notices, identification of the nature of the information required to receive such benefits, the nature of the information relied on for the denial, reasoned opinions for the denial, and full and fair review of all such appeals.
LICNA and CIGNA have moved pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss the complaint for failure to state a cause of action under 29 U.S.C. § 1132(a)(1)(B) and (a)(3). Nash Finch has moved to pursuant to Rule 12(b)(6) to dismiss Count II as against it for failure to state a cause of action under ERISA.
STANDARD OF REVIEW
In determining a motion to dismiss, the Court must presume all factual allegations of the complaint to be true. Hafley v. Lohman, 90 F.3d 264, 266 (8th Cir. 1996), cert. denied, 519 U.S. 1149 (1997). In addition, all reasonable inferences are to be made in favor of the non-moving party, or the plaintiff in this case.McCormack v. Citibank, N.A., 979 F.2d 643, 646 (8th Cir. 1992). Dismissal will be proper only if the complaint lacks an allegation regarding a required element necessary to obtain relief, or if an affirmative defense or other bar to relief is apparent from the face of the complaint. See Doe v. Hartz, 134 F.3d 1339, 1341 (8th Cir. 1998); Hafley, 90 F.3d at 266.
At the present time there are no affidavits or admissions or other evidence before the Court in this case. At such a point in the proceedings, the Court is constrained because it may not consider any material other than the complaint and any attachments incorporated in the complaint. In Scheuer v. Rhodes, 416 U.S. 232 (1974), the Supreme Court reviewed the propriety of the district court's dismissal of the complaints before any evidence was received. The Supreme Court said:
When a federal court reviews the sufficiency of a complaint, before the reception of any evidence either by affidavit or admissions, its task is necessarily a limited one. The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims. Indeed it may appear on the face of the pleadings that a recovery is very remote and unlikely but that is not the test. . . .
In appraising the sufficiency of the complaint we follow . . . the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957) (footnote omitted).
Scheuer at 236. See also Breedlove v. Earthgrains Baking Companies, Inc., 140 F.3d 797, 799 (8th Cir.), cert. denied, ___ U.S. ___, 119 S.Ct. 276 (1998); Central Airlines, Inc. v. United States, 138 F.3d 333, 334 (8th Cir. 1998); McCormack, 979 F.2d at 646.
Thus, the plaintiff's causes of action against the defendants must be analyzed in a light most favorable to the plaintiff, presuming all of the allegations to be true, and making all reasonable inferences in favor of the plaintiff. Double D Spotting Service, Inc. v. Supervalu, Inc., 136 F.3d 554, 557 (8th Cir. 1998); Central Airlines, 138 F.3d at 334. If it is clear that no relief could be granted even though the plaintiff could prove facts consistent with the allegations, the motion must be granted.Doe v. Hartz, 134 F.3d at 1341 (citing Hishon v. King Spalding, 467 U.S. 69, 73 (1984)). However, because it is not apparent "beyond doubt that the plaintiff can prove no set of facts in support of his claim," the motions will be denied.
DISCUSSION
LICNA/CIGNA
LICNA and CIGNA argue that the first cause of action should be dismissed as against them because a claim for benefits may be brought only against the plan administrator. Because Nash Finch is clearly identified in the Summary Plan Description as the plan administrator, LICNA and CIGNA maintain they cannot be sued under 29 U.S.C. § 1132(a)(1).
However, case law makes clear that entities other than the plan administrator, acting in a fiduciary capacity, can be sued for ERISA violations. See, e.g., Hall v. LHACO, Inc., 140 F.3d 1190, 1194 (8th Cir. 1998); Molasky v. Principal Mut. Life Ins. Co., 149 F.3d 881, 884 (8th Cir. 1998); Kerns v. Benefit Trust Life Ins. Co., 992 F.2d 214 (8th Cir. 1993). The defendants attempt to rely on Hall for the proposition that only plan administrators may be sued under § 1132(a)(1), but the case is clearly distinguishable. Hall indicates that while the party who controls administration of the plan is a proper party defendant, there could be more than one entity involved in plan administration and all may have fiduciary responsibilities to the plaintiff. See id. at 1194-95.
CIGNA and LICNA argue that Plaintiff has failed to establish which, if either, entity exercised actual control over the plan administration or the benefits decision. This, however, will not cause a dismissal. The plaintiff alleged that either or both were involved in the process, which is sufficient to put the defendants on notice of his claim pursuant to Federal Rule of Civil Procedure 8. The weight of Plaintiff's evidence in support of these allegations is more appropriately addressed in a motion for summary judgment.
Next, there appears to be some confusion over whether Plaintiff's second cause of action really states a separate claim. CIGNA and LICNA argue that it goes only to the standard of review to be applied by this Court, rather than to the merits of a separate claim. Again, the case law supports Plaintiff's position.See Kerr v. Chas. F. Vatterott Co., 184 F.3d 938, 944 (8th Cir. 1999) ("[S]ection 1132(a)(3) provides relief for the individual harm that [Plaintiff] may have suffered from [Defendant's] breach of its fiduciary duties, but limits his recovery to 'appropriate equitable relief,' which includes injunctive, restitutionary, and mandamus relief, but does not include compensatory damages."). See also Conley v. Pitney Bowes, 176 F.3d 1044 (8th Cir. 1999), where the plaintiff alleged fiduciary violations such as failure to provide him with proper notice of his opportunity to appeal, failure to maintain a complete administrative record, and failure to conduct a full and impartial investigation. He sought equitable relief under § 1132(a)(3)(B) in the form of past and future benefits. The court affirmed the dismissal of his claim, noting that "Mr. Conley has a claim for benefits under § 1132(a)(1)(B) and therefore may not seek the same benefits in the form of equitable relief under § 1132(a)(3)(B)." 176 F.3d at 1047. Mr. Snook is not requesting compensatory relief under § 1132(a)(3)(B), so the problem addressed in Conley is not an issue here.
For these reasons, the motion to dismiss by LICNA and CIGNA will be denied in its entirety.
Nash Finch
Nash Finch, Mr. Snook's former employer and the plan administrator, seeks to have Count II dismissed against it for failure to state a claim. As to Plaintiff's claim that Nash Finch be ordered to adopt a written plan document, the company argues that the Summary Plan Description and the group policy together "substantially comply" with the statutory requirements for an employee benefit plan under 29 U.S.C. § 1102(b). Once again, this is an issue more appropriately considered in the summary judgment context. Plaintiff's allegations are sufficient to survive a motion to dismiss.
Finally, Nash Finch makes the same argument that LICNA and CIGNA made regarding the lack of a claim for breach of fiduciary duties in Count II. This argument will be denied for the reasons explained above. See Kerr v. Chas. F. Vatterott Co., supra.
IT IS ORDERED:
The motion to dismiss filed by Defendants Life Insurance Company of North America and CIGNA Corporation (filing 16) is hereby denied.
The motion to dismiss Count II filed by Nash Finch Company (filing 21) is hereby denied.