Opinion
CAUSE NO. IP00-0504-C-B/S
March 21, 2001
ENTRY GRANTING HARTFORD'S MOTION TO DISMISS
Plaintiff, VeraMcAlister, alleges that Defendants, Golden Books Short Term Disability Plan ("Plan"), Golden Books Publishing Company, Inc., ("Golden Books") and Hartford Life Accident Insurance Company, sued incorrectly as The Hartford ("Hartford"), wrongfully denied her claim for short-term disability benefits in violation of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Plaintiff originally filed suit in Indiana state court, and Defendants Plan and Golden Books removed this action to us, pursuant to 28 U.S.C. § 1441(b), with the consent of Hartford. Defendant Hartford moved to dismiss for failure to state a claim upon which relief may be granted, pursuant to Rule 12(b)(6). In the alternative, Hartford moved for summary judgment. For the reasons set forth below, we GRANT Hartford's Motion to Dismiss.
The Plan and Golden Books filed a Motion for Summary Judgment on October 27, 2000. The parties have indicated that they intend to supplement the record. The Court will rule subsequent to these submissions.
Factual Allegations
Prior to November of 1998, McAlister worked as an employee of Golden Books Publishing Company in Crawfordsville, Indiana. Complaint in Indiana Superior Court, Montgomery County, Cause No. D01-0002-080065 ("Complaint"), ¶¶ 3-4. While employed by Golden Books, Plaintiff was entitled to employee benefits including short-term disability benefits provided under the terms of the Plan. Id., ¶ 5. McAlister alleges that while so covered, she began to suffer arthritis, myalgias, arthralgias, and chronic back pain which ultimately rendered her unable to perform the material and substantial duties of her occupation. Id., ¶¶ 6-7. As a result of this inability to perform the duties of her position, McAlister filed a claim for short-term disability benefits in February of 1998. McAlister alleges that she received notice from Hartford that her claim for benefits had been denied. Id., second ¶ 9. McAlister further alleges that she has requested reviews of and has appealed Hartford's decision, thereby exhausting her rights to appeal under ERISA. Id., ¶ 10. Plaintiff characterizes her lawsuit as "an action against [Defendants] for its [sic] wrongful denial of short term disability benefits to Vera McAlister in violation of ERISA, . . ., including but not limited to Section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B).
In an unnumbered allegation in her complaint, McAlister asserts that "Defendants' conduct was willful and wanton and was designed to deprive Vera McAlister of her rights as guaranteed under the [sic] ERISA." Id. at 3. Plaintiff seeks general damages, including, but not limited to pain and suffering, mental anguish, humiliation, and embarrassment (and we assume her claim for benefits under the terms of the Plan), legal interest, punitive damages, costs and fees, and any other appropriate relief.
Discussion Standard of Review under Rule 12(b)(6)
Federal Rule of Civil Procedure 12(b)(6) permits the dismissal of a claim for "failure to state a claim upon which relief may be granted." See Fed.R.Civ.P. 12(b)(6). When considering a motion under this rule, courts must examine the sufficiency of the plaintiff's complaint, not the merits of the lawsuit. See Gibson v. City of Chicago, 910 F.2d 1510, 1520-21 (7th Cir. 1990); Triad Assocs., Inc. v. Chicago Housing Auth., 892 F.2d 583, 585 (7th Cir. 1989), abrogated on other grounds by Board of County Comm'rs v. Umbehr, 518 U.S. 668 (1996). Dismissal is appropriate only if it appears to a certainty that the plaintiff cannot establish any set of facts which would entitle her to the relief sought. See Hishon v. King Spalding, 467 U.S. 69, 73 (1984); Mosley v. Klincar, 947 F.2d 1338, 1339 (7th Cir. 1991). To survive a motion to dismiss, a "complaint must contain either "direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory. . . . But such allegations need only state a possible claim, not a winning claim." Herdrich v. Pegram, 154 F.3d 362, 369 (7th Cir. 1998), rev'd on other grounds, 530 U.S. 211 (2000).
We accept as true all well-pleaded factual allegations and draw all reasonable inferences in favor of the plaintiff. Dawson v. General Motors Corp., 977 F.2d 369, 372 (7th Cir. 1992). However, "a complaint which consists of conclusory allegations unsupported by factual assertions fails even the liberal standard of Rule 12(b)(6)." Panaras v. Liquid Carbonic Indus. Corp., 74 F.3d 786, 792 (7th Cir. 1996) (quoting Palda v. General Dynamics Corp., 47 F.3d 872, 875 (7th Cir. 1995)).
Failure to State a Claim for Breach of Fiduciary Duty
Plaintiff claims that Hartford is liable to her for its breach of fiduciary duty under 29 U.S.C. § 1132(a)(3)(B), which is also known as ERISA § 502(a)(3). Pl.'s Resp. to Def. Hartford's Mot. to Dismiss at 1. To properly state an ERISA claim for breach of fiduciary duty, a complaint must contain allegations which set forth: "(1) that the defendants are plan fiduciaries; (2) that the defendants breached their fiduciary duties; and (3) that a cognizable loss resulted." Herdrich, 154 F.3d at 369 (citing 29 U.S.C. § 1104(a)). As explained below, Plaintiff's complaint fails to meet this burden.
Although her complaint makes no reference to Section 502(a)(3) or to any fiduciary duties of Hartford, McAlister argues that the complaint states a Section 502(a)(3) breach of fiduciary duty claim. The complaint is sufficient, according to Plaintiff, because "[t]he original complaint filed by Plaintiff was filed in the Indiana state courts, which require only notice pleading." Pl.'s Resp. to Def. Hartford's Mot. to Dismiss at 1. However, contending that removal, rather than poor drafting of the complaint, is responsible for the complaint's insufficiencies will not help McAlister's case. Federal Rule of Civil Procedure 8(a) establishes a liberal system of "notice pleading" also. Leatherman v. Tarrant County Narcotics Intelligence and Coordination Unit, 507 U.S. 163, 168 (1993).
In fact, "[b]ecause the Indiana rules are modeled closely on the federal rules, Indiana courts often look to federal cases for guidance in applying the Indiana rules." Daniels v. USS Agri-Chemicals, 965 F.2d 376, 381 n. 1 (7th Cir. 1992). Under Rule 8(a)(2), the complaint need only include "a short plain statement of the claim showing that the pleader is entitled to relief." Leatherman, 507 U.S. at 168 (quoting Rule 8(a)(2)). This federal rule is exactly like that of Indiana. Indiana Rule of Trial Procedure 8(a)(1) also requires that the complaint contain "a short plain statement of the claim showing that the pleader is entitled to relief."
Despite the requirement that Plaintiff include a "short plain statement of the claim showing that the pleader is entitled to relief" under the state rules (that bound McAlister upon the filing of her complaint), McAlister's complaint fails to do so. The complaint contains neither an allegation nor support for the inference that Hartford was in fact a fiduciary of the Plan as defined by ERISA. ERISA defines a fiduciary, in relevant part, as one who "exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets . . . or . . . has any discretionary authority or discretionary responsibility in the administration of such plan." 29 U.S.C. § 1002(21)(A). In specific reference to Hartford, the complaint alleges only that "McAlister received notice from The Hartford that her claim for short term disability benefits had been denied." Complaint, second ¶ 9. Such a statement completely fails to allege any fact permitting the inference that Hartford exercised any discretionary authority or discretionary control in the management or administration of the Plan. Blickenstaff v. R.R. Donnelley Sons Co. Short-Term Disability Plan, 2001 WL 87480, at *4 (S.D. Ind. Jan. 29, 2001). The complaint does not even suggest the nature of the role Hartford played in reviewing the claim or in applying the Plan's terms. Id.
The Court decided Blickenstaff a few months after the completion of briefing on the case currently before us. Blickenstaff is remarkably on point. In fact, even much of the wording of this opinion closely parallels that of our earlier decision. It is only for the sake of thoroughness that we explicitly apply the same law and reasoning to the very similar facts supporting Hartford's motion to dismiss in McAlister's case.
Even if we were to give a strained reading to the complaint so as to conclude that such fiduciary status has been alleged as to Hartford, the complaint also lacks any allegations sufficient to create an inference that a breach of fiduciary duty has occurred. ERISA requires that a fiduciary "discharge his duties with respect to a plan solely in the interest of the participants and reasonable beneficiaries and . . . for the exclusive purpose of . . . providing benefits to participants and their beneficiaries. . . ." 29 U.S.C. § 1104(a)(1).
A fiduciary breaches this statutory duty whenever he acts to benefit his own interests, such as found in 29 U.S.C. § 1106(b), 1109. Herdrich, 154 F.3d at 371; Anweiler v. American Elec. Power Serv. Corp., 3 F.3d 986, 991-92 (7th Cir. 1993). The allegation that McAlister's claim for benefits was wrongly denied hardly suffices as a claim that Hartford acted to benefit its own interests in reviewing and denying her claim. Blickenstaff, 2001 WL 87480, at *5. As such, the complaint lacks the necessary elements of a breach of fiduciary duty claim, and we are unable fairly to construe it to contain one. In this way also, Plaintiff's complaint fails to state a claim upon which relief may be granted under ERISA § 502(a)(3).
Failure to State a Claim under Section 502(a)(1)(B)
Plaintiff's only other possible claim against Hartford is to recover benefits owed her under the terms of the Plan, pursuant to 29 U.S.C. § 1132(a)(1)(B). Hartford contends that Plan is the only proper defendant in a Section 502(a)(1)(B) claim for short-term benefits. Hartford's Memo. in Supp. of Mot. to Dismiss at 6. In response, McAlister states only that her "claim against Hartford is based upon a different section of the statute," namely Section 502(a)(3). Pl.'s Resp. to Def. Hartford's Mot. to Dismiss at 1. With this response, Plaintiff has waived any Section 502(a)(1)(B) claim she may have had against Hartford. Cf. Teumer v. General Motors Corp., 34 F.3d 542, 545-46 (7th Cir. 1994) (plaintiff waived legal theory when he "fail[ed] . . . to present legal arguments linking the claim described in the complaint to the relevant statutory (or other) sources for relief").
Moreover, Seventh Circuit law on this issue clearly states that "ERISA permits suits to recover benefits only against the Plan as an entity." Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1490 (7th Cir. 1996) (quoting Geraldi v. Pertec Computer Corp., 761 F.2d 1323, 1324 (9th Cir. 1985)). Therefore, suits for benefits under the terms of the plan are improper as against the plan administrator, which is the role Hartford played. Even if we did not deem McAlister's silence to constitute a waiver of her Section 502(a)(1)(B) claim against Hartford, this claim would warrant dismissal.
Conclusion
Hartford's Motion to Dismiss is GRANTED. Hartford is no longer a defendant in this case.
It is so ORDERED this day of March 2001.