Opinion
Civil No. 04-2626 (PAM/RLE).
May 10, 2005
MEMORANDUM AND ORDER
This matter is before the Court on Defendants' Motion to Dismiss Count Two of the Amended Complaint. For the reasons that follow, the Court grants the Motion.
BACKGROUND
While employed by ADC Telecommunications, Plaintiff Barbara E. Kling received long-term disability insurance benefits. Defendant ADC Group Long-Term Disability Plan ("the Plan"), an employee welfare benefit plan as defined by 29 U.S.C. § 1002(1)(A), provided the long-term disability insurance coverage. Defendant Life Insurance Company of North America ("LINA") insured the Plan.
A. Correspondence with CIGNA and the Summary Plan Description
Kling applied for disability insurance benefits by completing a Disability Questionnaire provided by CIGNA Group Insurance. The Questionnaire identifies LINA as a subsidiary of CIGNA. (Am. Compl. Ex. A.) Thereafter, Kling received correspondence from "CIGNA Group Insurance" and "CIGNA Disability Management Solutions" personnel regarding the receipt and cancellation of her benefits. (Id. Exs. D-F, H-J.)
Kling also received a summary plan description. Under a section entitled "Important Facts about your Plans," the summary plan description states:
ADC is the Plan Administrator and Sponsor of your ADC employee benefits plans and shall make such determinations as may be required from time to time in the administration of the plans. ADC will have the sole authority, discretion and responsibility to interpret and apply the terms of the plans and to determine all factual and legal questions. This includes entitlements to benefits and resolution of claims and appeals related to benefits, unless authority to make such determinations is delegated by the Plan Administrator to another person or their party, such as an insurer. Any determination shall be conclusive and binding on all persons at any time having or making a claim to having any interest under a plan.
Benefits under the ADC employee benefit plans will be paid only if the Plan Administrator or the person/third party to whom ADC has delegated authority decides in its discretion that the claimant is entitled to them . . . All determinations, interpretations, rules and decision of the Plan Administrator shall be made in its sole discretion and shall be conclusive and binding upon all persons having or claiming to have any interest or right under a plan.
The same page of the summary plan description provides the plan administrator's mailing address and telephone phone number as follows:
Corporate Employee Benefits ADC Telecommunications, Inc. P.O. Box 1101 Minneapolis, Minnesota 55440-1101 (952) 938-8080
(Curi Aff. Ex. A.)
(Curi Aff. Ex. A.)
The summary plan description also addresses how ADC Telecommunications may delegate its duties under the Plan, and from whom a beneficiary may seek relief:
For each insured plan, the insurance company will have the sole authority, discretion and responsibility to interpret and apply the terms of the plan and to determine all factual and legal questions, including entitlement to benefits and the amount of benefits paid, if any. Each insurance company is responsible for the payment of benefits offered under the plan it insures.
The liability of ADC is limited to the payment of premiums to the applicable insurance company from its general assets or . . . a separate trust fund. No covered employee . . . shall have any claim or cause of action against ADC as to the payment of benefits under any insurance policy or contract and shall look solely to the applicable insurance policy or contract for payment of such benefits.
(Id. Ex. B-1). Another section of the summary plan description states that ADC pays CIGNA to administer and pay all eligible claims incurred under the Plan. (Am. Compl. Ex. L-2.) In addition, other sections identify "CIGNA Disability Claims Service Center" as the Plan "Administrator, Insurer or Trustee," as well as the fiduciary of the Plan. (Id. ¶ 17; Exs. L-2, L-3.) Another explains that disability benefits will end when "CIGNA determines that you are not disabled." (Curi Aff. Ex. B-4.)
After reviewing the summary plan description, Kling requested that a CIGNA appeals claim examiner provide specific information about the Plan, including the identity of the plan administrator. In response, the claim examiner did not identify the plan administrator; instead, the claim examiner merely responded that LINA was the underwriter of the Plan. (Am. Compl. Ex. M-2.)
B. Initial Complaint
Kling initially commenced this action under the Employee Retirement and Income Security Act, 29 U.S.C. § 1001 et seq. against the Plan and CIGNA — but not LINA. She named CIGNA as the plan administrator based on her review of the summary plan description and correspondence with CIGNA.
CIGNA subsequently filed a motion to dismiss for lack of personal jurisdiction, asserting that it was not the plan administrator. In support of its motion, CIGNA submitted an affidavit of Assistant Vice President Frank Barlow, who averred that LINA issued the policy to the Plan. (Am. Compl. Ex. N ¶ 9.) Barlow also averred that, while LINA is a subsidiary of CIGNA, each company maintained a separate Board of Directors, separate corporate records, separate bank accounts, and separate managements. (Id. ¶ 10.) Relying heavily on Barlow's affidavit, the Court found that CIGNA's only contact with the State of Minnesota was its status as the parent company of LINA and therefore found personal jurisdiction lacking. Accordingly, the Court dismissed CIGNA from this action. (See Oct. 14, 2004, Order.)
C. Amended Complaint
Kling then amended the Complaint to join LINA as the plan administrator. In the Amended Complaint, Kling alleges that ADC Telecommunications contracted with LINA to both administer the plan benefits and provide all insurance services, including benefit payments under the Plan. (Am. Compl. ¶ 9.)
Kling brings two claims under Count Two of the Amended Complaint. First, she claims that Defendants violated 29 U.S.C. § 1022 because the summary plan description contains materially inaccurate or false information. Specifically, Kling submits that the summary plan description misidentifies CIGNA as the "Administrator, Insurer, or Trustee." (Id. ¶ 63.) Notably, Kling does not allege that the summary plan description incorrectly identifies CIGNA — instead of LINA — as the insurer or claims administrator. Rather, she alleges that the summary plan description misidentifies CIGNA as the plan administrator. Second, Kling claims that LINA wrongfully refused to disclose the identity of the plan administrator. (Id. ¶¶ 64-65.) As part of her relief, Kling asks that the Court order the Plan to immediately provide written notice to all plan members and plan beneficiaries of its erroneous identification of CIGNA as plan administrator and provide a correct summary plan description to Kling and all plan members and beneficiaries. (Id. ¶ 69(c).)
Under Count One, Kling alleges that Defendants wrongfully terminated her benefits in violation of 29 U.S.C. § 1132.
DISCUSSION
A. Standard of Review
Where a complaint fails to set forth a legally cognizable claim the action must be dismissed. Fed.R.Civ.P. 12(b)(6). On a motion to dismiss for failure to state a claim, the Court must take the allegations in the complaint as true, view the complaint in the light most favorable to the plaintiff, and dismiss the action "only if it is clear that no relief can be granted under any set of circumstances that could be proved consistent with the allegations." Alexander v. Peffer, 993 F.2d 1348, 1349 (8th Cir. 1993) (quoting Hishon v. King Spalding, 467 U.S. 69, 73 (1984)).
When the Court considers documents outside the pleadings, the Court must treat the motion to dismiss as one for summary judgment. Fed.R.Civ.P. 12(b)(6). Because the Court must review portions of the summary plan description that are not attached to any pleading to decide this Motion, the Court converts this Motion as one for partial summary judgment. See BJC Health Sys. v. Columbia Cas. Co., 348 F.3d 685, 687-88 (8th Cir. 2003).
Summary judgment is proper if there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The Court must view the evidence and the inferences that may be reasonably drawn from the evidence in the light most favorable to the nonmoving party.Enter. Bank v. Magna Bank, 92 F.3d 743, 747 (8th Cir. 1996). However, "summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy, and inexpensive determination of every action."Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986).
The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Enter. Bank, 92 F.3d at 747. A party opposing a properly supported motion for summary judgment may not rest on mere allegations or denials, but must set forth specific facts in the record showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).
B. Misrepresentation
Kling claims that the summary plan description misrepresents who the plan administrator is by stating that CIGNA is the Plan "Administrator, Insurer, or Trustee." Defendants respond that the summary plan description conspicuously identifies the plan administrator as ADC Telecommunications. Defendants maintain ADC Telecommunications delegated the claims administration duties to LINA — but never ceded its position as plan administrator.
A summary plan description must be written "in a manner calculated to be understood by the average plan participant, and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan." 29 U.S.C. § 1022(a)(1). The summary plan description must identify the plan administrator. Id. at § 1022(b). In addition, it must state whether a "health insurance issuer is responsible for the financing or administration (including payment of claims) of the plan" and "the name and address of such issuer." Id.
A plan administrator is defined as follows:
(1) the person specifically so designated by the terms of the instrument under which the plan is operated;
(2) if an administrator is not so designated, the plan sponsor; or
(3) in the case of a plan for which an administrator is not designated and a plan sponsor cannot be identified, such other person as the Secretary of Labor may by regulation prescribe.29 U.S.C. § 1002(16)(A).
Although a chart in the summary plan description identifies CIGNA as the Plan "Administrator, Insurer, or Trustee," the "Important Facts about your Plans" section of the summary plan description clearly identifies ADC Telecommunications as "the Plan Administrator and Sponsor of your ADC employee benefits plans." The fact that the chart identifies CIGNA as a Plan "Administrator, Insurer or Trustee," does not misrepresent who the plan administrator is. Rather, the conjunction "or" indicates that CIGNA plays one of three roles in the Plan. Conversely, the "Important Facts about your Plans" section clearly identifies who the plan administrator is.
Kling also maintains that ADC Telecommunications delegated all plan administration responsibilities to LINA, and therefore LINA is the de facto plan administrator. The summary plan description does state that ADC Telecommunications may delegate benefit claims determination and administration to the insurer. Moreover, the summary plan description limits the liability of ADC "to the payment of premiums to the applicable insurance company" and prohibits an employee from having "any claim or cause of action against ADC as to the payment of benefits under any insurance policy or contract." Based on this language, Kling argues that LINA, the insurer, must be the plan administrator. To the contrary, this language makes LINA the claims administrator — i.e., the fiduciary who will be liable for a wrongful denial of benefits. See Layes v. Mead Corp., 132 F.3d 1246, 1249 (8th Cir. 1998) (party that controls administration of the plan is the proper party in an action concerning ERISA benefits); see also Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030, 1033 (9th Cir. 2000) ("When an insurance company administers claims for an employee welfare benefit plan and has authority to grant or deny the claims, the company is an ERISA fiduciary under 29 U.S.C. § 1002(21)(A)(iii)."). A claims administrator is not synonymous to a plan administrator, and the mere delegation of claims administration to the insurer does not elevate the insurer to the status of plan administrator.
Ross v. Rail Car America Group Disability Insurance Plan, 285 F.3d 735 (8th Cir. 2002) is directly on point. In Ross, the plaintiff had been receiving disability income benefits pursuant to a group insurance policy issued to his employer by Canada Life Assurance Company. When Canada Life determined that the plaintiff was no longer disabled, his benefits ceased.
The plaintiff then sued three entities: Canada Life, the insurer; Rail Car America, Inc., his employer; and Rail Car America Group Disability Income Plan, the employee benefit plan established to provide disability income benefits to Rail Car employees. The plaintiff later voluntarily dismissed the action against his employer. The district court then entered summary judgment in favor of Canada Life and the disability benefits plan.
The plaintiff then appealed, arguing that the district court erred in finding that Canada Life was not the plan administrator. He maintained that the summary plan description was inherently ambiguous as to the identity of the administrator because Canada Life served as claims administrator and was the repository of the plan documents. In rejecting the plaintiff's argument, the Eighth Circuit stated:
[The] arguments cannot stand in the face of the uncontroverted facts, ERISA, and settled case law. The Summary Plan Description unambiguously identifies Rail Car as the Plan Administrator. Canada Life admits that it had control over claims under the policy, but assuming that function did not transform it into the Plan Administrator.Id. at 743. Based on the summary plan description, as well asRoss, the Court concludes that the misrepresentation claim under Count Two fails as a matter of law.
B. Breach of Duty to Provide Additional Information
Kling wrote to CIGNA twice for the identification of the plan administrator "if other than CIGNA." In response to Kling's inquiry, the claim examiner merely responded that LINA was the underwriter of the disability insurance policy. Kling asserts that this response was insufficient and thereby violated 29 U.S.C. § 1132. (Am. Compl. ¶¶ 64-65.)
A plan administrator has a duty to provide a plan summary and other documents to each participant upon request. Failure or refusal to provide such information may result in fines up to $100 per day from the date of the refusal. 29 U.S.C. § 1132(c). However, this claim can only be brought against the plan administrator. Ross, 285 F.3d at 743 (insurer who assumed control over claims was not plan administrator and therefore not responsible for providing the plan documents); see also Moran v. Aetna Life Ins. Co., 872 F.2d 296, 298-300 (9th Cir. 1989) (because insurance company was not plan administrator, it was not liable for failure to provide plan documents). Because LINA is simply the claims administrator — and not the plan administrator — it is not subject to suit under § 1132. Thus, the failure to disclose information claim under Count Two fails as a matter of law.
CONCLUSION
Kling seemingly confuses a claims administrator with a plan administrator. The summary plan description clearly identifies ADC Telecommunications as the plan administrator of the long-term disability plan at issue in this case. As such, only ADC Telecommunications may be liable for a failure to disclose under 29 U.S.C. § 1132. For the foregoing reasons, and upon all of the files, records, and proceedings herein, IT IS HEREBY ORDERED that Defendants' Motion to Dismiss Count Two of the Amended Complaint (Clerk Doc. No. 57) is GRANTED.