Opinion
Civil Action No. 3:03-CV-2397-L.
November 4, 2004
ORDER
Before the court is Defendant Corporate Solutions, Inc.'s Motion for Summary Judgment, filed October 4, 2004. After careful consideration of the motion, brief, appendix, competent summary judgment evidence, and applicable law, the court grants Defendant Corporate Solutions, Inc.'s Motion for Summary Judgment.
Plaintiffs did not file a response to Defendant's Motion for Summary Judgment. Plaintiffs' failure to respond does not, of course, permit the court to enter a "default" summary judgment. Eversley v. MBank Dallas, 843 F.2d 172, 174 (5th Cir. 1988). The court is permitted, however, to accept Defendant's evidence as undisputed. Id.; Tutton v. Garland Indep. Sch. Dist., 733 F.Supp. 1113, 1117 (N.D.Tex. 1990). Moreover, Plaintiffs' failure to respond means that they have not designated specific facts showing that there is a genuine issue for trial. "A summary judgment nonmovant who does not respond to the motion is relegated to [his] unsworn pleadings, which do not constitute summary judgment evidence." Bookman v. Schubzda, 945 F.Supp. 999, 1002 (N.D.Tex. 1996) (citing Solo Serve Corp. v. Westowne Assocs., 929 F.2d 160, 165 (5th Cir. 1991)). As Plaintiffs' pleadings are not sworn to, they have no competent summary judgment evidence before the court.
I. Factual and Procedural Background
Defendant Corporate Solutions, Inc. ("Defendant" or "Corporate Solutions") is a staff leasing company that enters into co-employment agreements with small companies to outsource employment related functions, including employee benefits. Corporate Solutions entered into a co-employment agreement ("Agreement") with Mid-States Services, Inc. As a result of the Agreement, Plaintiff Elbert M. "Jack" Madera ("Jack Madera") was considered an employee of Corporate Solutions from February 23, 2001 until February 6, 2002.
Under the Agreement, Corporate Solutions provided its employees, among other things, benefits pursuant to a group medical plan. The group medical plan is summarized in a booklet titled, Plan Document and Summary Plan Description For Corporate Solutions, Inc. Group Medical Benefit Plan ("Booklet"), which includes a Summary Plan Description and a description of the benefits and claims procedures. Jack Madera and his wife, Plaintiff Sue Madera ("Sue Madera") (collectively, "Plaintiffs"), enrolled in the group medical plan during the relevant time period.
On August 29, 2003, Plaintiffs filed this action in state district court, contending that Corporate Solutions was negligent because it failed to properly procure appropriate health care coverage for Plaintiffs; failed to properly research, investigate and perform due diligence prior to recommending the retention of American Benefit Plans to provide health care coverage for Plaintiffs; and failed to adopt, implement or formulate appropriate policies and procedures for the investigation of health insurance carriers recommended to their employees. On October 14, 2003, Corporate Solutions removed this case to federal court on the basis of federal question jurisdiction, contending that Plaintiffs' negligence claims are completely preempted by the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001, et seq. ("ERISA"). Corporate Solutions subsequently filed for summary judgment on Plaintiffs' claims. The court now considers this motion.
II. 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). A dispute regarding a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the court is required to view all inferences drawn from the factual record in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986); Ragas, 136 F.3d at 458. Further, a court "may not make credibility determinations or weigh the evidence" in ruling on motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 254-55.
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 come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586. Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir.), cert. denied, 513 U.S. 871 (1994). The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his claim. Ragas, 136 F.3d at 458. Rule 56 does not impose a duty on the court to "sift through the record in search of evidence" to support the nonmovant's opposition to the motion for summary judgment. Id.; see also Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 n. 7 (5th Cir.), cert. denied, 506 U.S. 832 (1992). "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. Disputed fact issues which are "irrelevant and unnecessary" will not be considered by a court in ruling on a summary judgment motion. Id. 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, summary judgment must be granted. Celotex, 477 U.S. at 322-23.
III. Analysis
A. ERISA
Corporate Solutions first contends that Plaintiffs' negligence claims are preempted by ERISA. The court agrees. ERISA's preemption provision is broad and "supersede[s] any and all State laws insofar as they may . . . relate to any employee benefit plan." 29 U.S.C. § 1144(a). This language is "deliberately expansive," and is designed to make regulation of employee benefit plans an exclusively federal concern. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46 (1987).
An employee benefit plan is defined as "any plan, fund or program" established or maintained by an employer or employee organization to provide participants and their beneficiaries with "medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment." 29 U.S.C. § 1002(1). An employer is defined as "any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan," including "a group or association of employers acting for an employer in such capacity." 29 U.S.C. § 1002(5). Here, the summary judgment evidence establishes that Jack Madera was an employee of Corporate Solutions during the relevant time period, and as such, both Jack Madera and Sue Madera were beneficiaries of Corporate Solutions' group medical plan. The summary judgment evidence further establishes that the group medical plan itself is an employee benefit plan as defined by ERISA. Accordingly, the court determines that Corporate Solutions' group medical plan is subject to regulation under ERISA, as an employee benefit plan.
The court must next determine whether Plaintiffs' claims "relate to" Corporate Solutions' ERISA plan. A state law claim "relates to" a benefit plan "if it has a connection with or reference to such a plan." Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 739 (1985). In some cases, however, the connection with or reference to an ERISA plan may be "too tenuous, remote, or peripheral" to warrant preemption. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 100 n. 21 (1983); see also Rokohl v. Texaco, Inc., 77 F.3d 126, 129 (5th Cir. 1996). "The ultimate question is whether, if the appellant['s] claims were stripped of their link to the pension plans, they would cease to exist." Rokohl, 77 F.3d at 130 (quoting Hook v. Morrison Milling Co., 38 F.3d 776, 784 (5th Cir. 1994)) (internal quotations omitted). Here, Plaintiffs contend that Corporate Solutions' alleged negligence in selecting a health insurance provider resulted in unpaid health care expenses which caused them mental anguish and economic damages. Clearly, these claims would not exist without the ERISA plan provided by Corporate Solutions. In other words, Plaintiffs' claims are related to Defendant's employee benefit plan. Plaintiffs' claims are therefore preempted by ERISA.
There is no evidence in the record to establish, nor have Plaintiffs contended, that an exception to preemption applies in this case.
Corporate Solutions next contends that that it is not a proper party to an ERISA claim brought by a beneficiary of its employee benefit plan. Specifically, it contends that (1) a claim to recover individual benefits due under an employee benefit plan must be brought against the plan itself; and (2) a claim for a breach of a fiduciary duty must be brought by the plan itself.
Although the Fifth Circuit has not addressed the issue of whether a plan is the only proper defendant in a lawsuit seeking to recover ERISA benefits, the court agrees with other district courts in this circuit which have held that a suit seeking to recover benefits or enforce rights under an ERISA plan must be brought against the plan itself. See Metropolitan Life Ins. Co. v. Palmer, 238 F.Supp.2d 831, 835 (E.D. Tex. 2002); Murphy v. Wal-Mart Assocs.' Group Health Plan, 928 F.Supp. 700, 709-710 (E.D. Tex. 1996). Such is not the case here. Plaintiffs have sued Jack Madera's employer, not the plan itself. Moreover, recovery for a breach of fiduciary duty claim inures to the employee benefit plan, not to a beneficiary of the plan. Palmer, 238 F.Supp.2d at 835; Murphy, 928 F.Supp. at 710. Plaintiffs therefore cannot recover for a breach of fiduciary duty. Accordingly, for the reasons herein stated, Corporate Solutions is entitled to summary judgment on Plaintiffs' negligence claims.
The court need not consider or address whether Corporate Solutions is the true party in interest, as no such contention has been made by Plaintiffs.
B. Negligence
Last, Corporate Solutions contends, in the alternative, that it is entitled to summary judgment because Plaintiffs have no evidence to support their negligence claims. The court agrees. The elements of a negligence action are a duty, a breach of that duty, and damages proximately caused by the breach. Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990). Corporate Solutions contends that there is no evidence to support a claim of negligence. The court agrees. As they filed no response or set forth competent summary judgment evidence, Plaintiffs fail to raise a genuine issue of material fact with respect to any of the elements of negligence. Corporate Solutions is therefore entitled to judgment as a matter of law. Accordingly, the court finds, as an alternative basis for granting summary judgment in favor of Corporate Solutions, that, even if Plaintiff's negligence claims were not preempted by ERISA, they nevertheless fail because there is no evidence to support their existence.
IV. Conclusion
For the above stated reasons, no genuine issues of fact exist with respect to any of Plaintiffs' claims, and Defendant is entitled to judgment as a matter of law on these claims. Accordingly, the court grants Defendant Corporate Solutions, Inc.'s Motion for Summary. All of Plaintiffs' claims are dismissed with prejudice. The court will issue judgment by separate document pursuant to Fed.R.Civ.P. 58.
It is so ordered.