Geaghan v. Prudential Insurance C o .

2009 DNH 178

• Court: District Court, D. New Hampshire
• Decided: November 30, 2009
• Docket: CV-09-308-JL
• Status: Published

Opinion

Geaghan v . Prudential Insurance C o . CV-09-308-JL 11/30/09 UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE

Breanne P. Geaghan

v. Civil N o . 09-cv-308-JL Opinion N o . 2009 DNH 178 Prudential Insurance Compan of America

MEMORANDUM ORDER

Plaintiff Breanne Geaghan brought a small-claims complaint

in New Hampshire state court seeking to recover about $2500 in

emotional distress damages and attorney’s fees allegedly caused

by her insurer’s initial denial of short-term disability

benefits. The insurer, Prudential Insurance Company of America

(“Prudential”), having ultimately approved the benefits on

administrative appeal, removed Geaghan’s lawsuit to this court

under 28 U.S.C. § 1441. Prudential then filed a motion to

dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing

that the Employee Retirement Income Security Act (“ERISA”), 29

U.S.C. § 1001 et seq., pre-empts Geaghan’s claims and does not

allow the types of relief she seeks. Geaghan, who is proceeding

pro s e , filed no opposition to the motion.

This court has jurisdiction under 28 U.S.C. § 1331 (federal

question) and 29 U.S.C. § 1132(e)(1) (ERISA). After oral

argument, the motion is granted. Both of Geaghan’s claims relate

to an employee welfare benefit plan covered by ERISA. Thus, to the extent that her claims arise under state law, ERISA pre-empts

them. Moreover, even if construed as federal claims in order to

avoid pre-emption, they still fail because ERISA does not allow

recovery for emotional distress damages or pre-litigation

attorney’s fees.

I. Applicable Legal Standard

To survive a motion to dismiss under Rule 12(b)(6), the

plaintiff must make factual allegations sufficient to “state a

claim to relief that is plausible on its face.” Ashcroft v .

Iqbal, 129 S . C t . 1937, 1949 (2009) (quoting Bell Atl. Corp. v .

Twombly, 550 U.S. 5 4 4 , 570 (2007)). In deciding such a motion,

the court must accept as true all of the plaintiff’s well-pleaded

facts and must draw all reasonable inferences in the plaintiff’s

favor. Gargano v . Liberty Int’l Underwriters, Inc., 572 F.3d 4 5 ,

48-49 (1st Cir. 2009). Where, as here, the plaintiff files no

opposition to the motion, the court nevertheless has an

independent “obligation to examine the complaint itself to see

whether it is formally sufficient to state a claim.” Nathan P.

v . W . Springfield Pub. Sch., 362 F.3d 143, 145 (1st Cir. 2004).

Although the plaintiff did not attach it to her complaint,

Prudential has submitted the underlying disability plan to this

court for consideration. The court of appeals has said that

where “a complaint’s factual allegations are expressly linked to

2 –- and admittedly dependent upon -– a document (the authenticity

of which is not challenged), that document effectively merges

into the pleadings and the trial court can review it in deciding

a motion to dismiss under Rule 12(b)(6)” without having to

convert the motion into one for summary judgment. Trans-Spec

Truck Svc., Inc. v . Caterpillar Inc., 524 F.3d 315, 321 (1st Cir.

2008) (quoting Beddall v . State S t . Bank & Trust Co., 137 F.3d

1 2 , 17 (1st Cir. 1998), an ERISA case). The plaintiff has not

challenged the disability plan’s authenticity or moved to strike

it from the record. This court will therefore consider it in

resolving the motion.

II. Analysis

Since Prudential’s motion to dismiss -- and, indeed, this

court’s jurisdiction -- is based on ERISA pre-emption, this court

needs to determine as a threshold matter whether the disability

plan qualifies as an ERISA plan. If s o , the next question is

whether ERISA pre-empts the plaintiff’s claims for emotional

distress damages and attorney’s fees to the extent that they

arise under state law. Finally, if they are pre-empted, this

court needs to determine whether the plaintiff’s claims could be

brought under ERISA.

3 A. ERISA plan

The threshold question in this case is whether the

disability plan qualifies as an “employee welfare benefit plan”

under ERISA. See 29 U.S.C. § 1002(1). Employee welfare benefit

plans have five essential elements: “(1) a plan, fund or program

(2) established or maintained (3) by an employer or by an

employee organization, or by both (4) for the purpose of

providing medical, surgical, hospital care, sickness, accident,

disability, death, unemployment or vacation benefits,

apprenticeship or other training programs, day care centers,

scholarship funds, prepaid legal services or severance benefits

(5) to participants or their beneficiaries.” Wickman v . N.W.

Nat’l Ins. Co., 908 F.2d 1077, 1082 (1st Cir. 1990) (quoting

Donovan v . Dillingham, 688 F.2d 1367, 1370 (11th Cir. 1982) (en

banc)) (emphasis added).

The disability plan satisfies all five elements. Self-

described as both a “plan” and “program,” it was established by

Geaghan’s employer, HCA Management Services (“HCA”), 1 through a

group insurance contract with Prudential. Both of their names

appear prominently on the plan’s cover. The stated purpose of

the plan is to provide disability benefits to HCA employees

unable to work because of injury or illness. The plan applies to

1 Geaghan worked at Portsmouth Regional Hospital, an HCA- affiliated facility.

4 all active HCA employees who earn $6000 or more per year,

provided that they work a minimum number of hours and complete an

initial waiting period. Employees contribute part of the

insurance premiums, and HCA pays the rest. The plan also sets

forth detailed procedures for participants and beneficiaries to

follow in seeking benefits from Prudential. See id. (explaining

that an ERISA plan “is established if from the surrounding

circumstances a reasonable person can ascertain the intended

benefits, a class of beneficiaries, the source of financing, and

procedures for receiving benefits”) (quoting Donovan, 688 F.2d at

1373).

Although Geaghan did not raise the issue, the court notes

that plaintiffs in this type of case most commonly contest the

third element: whether the plan has been “established or

maintained” by the employer. In making this determination,

courts look for “the undertaking of continuing administrative and

financial obligations by the employer to the behoof of employees

or their beneficiaries.” New Eng. Mut. Life Ins. C o . v . Baig,

166 F.3d 1 , 3 (1st Cir. 1999) (quoting Belanger v . Wyman-Gordon

Co., 71 F.3d 4 5 1 , 455 (1st Cir. 1995)). Here, HCA has undertaken

a continuing financial obligation to share the costs of the

disability plan with its employees. While Prudential appears to

be primarily responsible for plan administration, HCA also has

“at least ‘some minimal, ongoing administrative scheme or

5 practice,’” which is all that the law requires.2 Id. at 4

(quoting District of Columbia v . Greater Wash. Bd. of Trade, 506

U.S. 125, 130 n.2 (1992)). Based on a review of the plan, a

“reasonable employee would perceive an ongoing commitment by the

employer to provide employee benefits.” Id. (quoting Belanger,

71 F.3d at 4 5 5 ) . Out of an abundance of caution, the court

raised this issue with Geaghan at oral argument, and she conceded

that the disability plan was established and maintained by her

employer. The plan therefore qualifies as an employee welfare

benefit plan under ERISA.3

B. ERISA pre-emption

ERISA expressly pre-empts “any and all State laws insofar as

they may now or hereafter relate to any employee benefit plan.”

29 U.S.C. § 1144(a). The Supreme Court has interpreted the

2 For example, HCA must provide certain employment information to Prudential, set minimum hour requirements for plan participation, and notify employees of open enrollment periods, among other things. 3 Although whether an ERISA plan exists is a factual question ordinarily resolved on summary judgment or at trial, this is one of those circumstances where the plan document itself -- which, as explained in Part I , supra, may be considered in deciding the motion to dismiss -- is sufficient to resolve the factual issue at the pleadings stage. See, e.g., Demars v . CIGNA Corp., 173 F.3d 443, 450 (1st Cir. 1999) (resolving ERISA plan question at pleadings stage); Scheibler v . Highmark Blue Shield, 243 Fed. Appx. 6 9 1 , 693 n.2 (3d Cir. 2007) (same); Adiletto v . Media Gen., Inc., N o . 08-10524-GAO, 2008 WL 5169746 (D. Mass. Dec. 9, 2008) (same).

6 phrase “relate to” according to its “broad common-sense meaning,

such that a state law ‘relate[s] to’ a benefit plan in the normal

sense of the phrase, if it has a connection with or reference to

such a plan.” Pilot Life Ins. C o . v . Dedeaux, 481 U.S. 4 1 , 47

(1987). As a result, ERISA pre-emption “has been applied widely

to bar state claims seeking damages for alleged breach of

obligations pertaining to an ERISA plan.” Hotz v . Blue Cross &

Blue Shield of Mass., Inc., 292 F.3d 5 7 , 60 (1st Cir. 2002). Of

particular relevance here, the Supreme Court has said that ERISA

“undoubtedly” pre-empts state-law claims “based on alleged

improper processing of a claim for benefits under an employee

benefit plan.” Pilot Life, 481 U.S. at 4 8 .

Both of Geaghan’s claims fall squarely within that pre-

empted category. She alleges that the defendant improperly

processed her request for benefits under the disability plan and

seeks recovery for resulting emotional distress and attorney’s

fees. Both the Supreme Court and our court of appeals have found

similar requests for emotional distress damages to be pre-empted

by ERISA. See Metro. Life Ins. C o . v . Taylor, 481 U.S. 5 8 , 61-63

(1987); Pilot Life, 481 U.S. at 4 7 ; Carrasquillo v . Pharmacia

Corp., 466 F.3d 1 3 , 20 (1st Cir. 2006) (quoting Danca v . Private

Health Care Sys., Inc., 185 F.3d 1 , 7 n.9 (1st Cir. 1999)); see

also Stiltner v . Beretta U.S.A. Corp., 74 F.3d 1473, 1480 (4th

Cir. 1996) (explaining that the case law “uniformly” supports

7 pre-emption of such claims). Courts have also consistently held

that ERISA pre-empts requests under state law for attorney’s fees

incurred in litigating an ERISA action. See, e.g., Moffett v .

Halliburton Energy Svcs., Inc., 291 F.3d 1227, 1237 n.6 (10th

Cir. 2002); S.F. Culinary, Bartenders & Svc. Employees Welfare

Fund v . Lucin, 76 F.3d 295, 297-99 (9th Cir. 1996). Thus, to the

extent that Geaghan’s claims arise under state law, they both

relate to an ERISA plan and are pre-empted by § 1144(a).

This court recognizes, however, that Geaghan is proceeding

pro se and presumably has little familiarity with the intricacies

of ERISA, which can confound even experienced attorneys. “[T]he

fact that the plaintiff filed the complaint pro se militates in

favor of a liberal reading.” Rodi v . S . New Eng. Sch. of Law,

389 F.3d 5 , 13 (1st Cir. 2004). Accordingly, in order to avoid

ERISA pre-emption, this court liberally construes Geaghan’s

complaint as also seeking emotional distress damages and

attorney’s fees under ERISA itself. See Adiletto, 2008 WL

5169746, at *1 (taking the same approach in nearly identical

circumstances). As explained below, her claims nevertheless must

be dismissed because ERISA does not allow the types of relief she

seeks.

8 C. Emotional distress claim

First, Geaghan seeks $1500 in emotional distress damages

resulting from Prudential’s initial denial of short-term

disability benefits. As a general rule, ERISA prohibits plan

participants from recovering “extra-contractual” damages -- i.e.,

damages above and beyond the contractual benefits to which the

plan entitles them. See, e.g., Mass. Mut. Life Ins. C o . v .

Russell, 473 U.S. 1 3 4 , 144 (1985); Evans v . Akers, 534 F.3d 6 5 ,

73 (1st Cir. 2008). The court of appeals recently confirmed that

this prohibition includes, among other things, “emotional

distress resulting from a plan’s failure to honor its

obligations.” Evans, 534 F.3d at 73 (citing Reinking v . Phila.

Am. Life Ins. Co., 910 F.2d 1210, 1219-20 (4th Cir. 1990)); see

also Drinkwater v . Metro. Life Ins. Co., 846 F.2d 8 2 1 , 824 (1st

Cir. 1988). Thus, Geaghan’s claim for emotional distress damages

must be dismissed.

D. Attorney’s fees claim

Second, Geaghan seeks about $1000 for attorney’s fees that

she incurred in contesting Prudential’s initial denial of

benefits. ERISA expressly provides for recovery of attorney’s

fees and costs incurred during an “action” brought by a plan

participant under the statute’s civil enforcement provisions.

See 29 U.S.C. § 1132(g)(1). In this case, however, Geaghan seeks

9 to recover attorney’s fees incurred during the administrative

appeals process, before she filed an action. Every circuit court

to consider this issue has decided that ERISA does not allow

recovery of attorney’s fees incurred in pre-litigation

administrative proceedings. See Kahane v . UNUM Life Ins. C o . of

Am., 563 F.3d 1210, 1215 (11th Cir. 2009); Hahnemann Univ. Hosp.

v . All Shore, Inc., 514 F.3d 3 0 0 , 313 (3d Cir. 2008); Parke v .

First Reliance Std. Life Ins. Co., 368 F.3d 999, 1010-11 (8th

Cir. 2004); Rego v . Westvaco Corp., 319 F.3d 1 4 0 , 150 (4th Cir.

2003); Peterson v . Cont’l Cas. Co., 282 F.3d 1 1 2 , 119-21 (2d Cir.

2002); Anderson v . Procter & Gamble Co., 220 F.3d 449, 452-456

(6th Cir. 2000); Cann v . Carpenters’ Pension Trust Fund for N .

Cal., 989 F.2d 313, 315-17 (9th Cir. 1993); see also Colby v .

Assurant Employee Benefits, 635 F. Supp. 2d 8 8 , 99 (D. Mass.

2009). Thus, Geaghan’s claim for attorney’s fees also must be

dismissed.

III. Conclusion

The defendant’s motion to dismiss for failure to state a

claim4 is GRANTED. The clerk shall enter judgment accordingly

and close the case.

4 Document n o . 4 .

10 SO ORDERED.

___ yoZZ2> Joseph N . Laplante United States District Judge

Dated: November 3 0 , 2009

cc: Breanne P. Geaghan Patrick C . DiCarlo, Esq. Sean K. McMahan, Esq. Jonathan Eck, Esq.