United States District Court, D. South Carolina, Charleston Division
J. William Smoak, III, and Smoak's Air Conditioning Co., Inc., Plaintiffs,
Elizabeth Cangialosi; ADP TotalSource, Inc.; Automatic Data Processing, Inc.; Automatic Data Processing Insurance Agency, Inc.; and Aetna Life Insurance Company, Defendants.
ORDER AND OPINION
Richard Mark Gergel United States District Court Judge.
matter is before the Court on Defendants Elizabeth
Cangialosi, ADP Totalsource, Inc., Automatic Data Processing,
Inc., and Automatic Data Processing Insurance Agency,
Inc.'s (collectively, the "ADP Defendants")
motion to dismiss and to strike (Dkt. No. 5) and Defendant
Aetna Life Insurance Company's motion to dismiss and to
strike (Dkt. No. 6). For the reasons set forth below, the
Court grants the ADP Defendant's motion, grants in part
and denies as moot in part Aetna's motion to dismiss,
dismisses claims against Aetna without prejudice, and grants
leave to amend the complaint within 21 days.
allege Defendants failed to pay death benefits for decedent
Helen B. Smoak, who was an employee of ADP Totalsource,
agreed under a group life policy Aetna issued to ADP
Totalsource. They filed suit in the Charleston County Court
of Common Pleas on May 22, 2015. Defendants were served
between May 30, 2017 and June 4, 2017, and this action was
timely removed on June 29, 2017.
12(b)(6) of the Federal Rules of Civil Procedure permits the
dismissal of an action if the complaint fails "to state
a claim upon which relief can be granted." Such a motion
tests the legal sufficiency of the complaint and "does
not resolve contests surrounding the facts, the merits of the
claim, or the applicability of defenses. . . . Our inquiry
then is limited to whether the allegations constitute 'a
short and plain statement of the claim showing that the
pleader is entitled to relief" Republican Party o/
N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992)
(quotation marks and citation omitted). In a Rule 12(b)(6)
motion, the Court is obligated to "assume the truth of
all facts alleged in the complaint and the existence of any
fact that can be proved, consistent with the complaint's
allegations." E. Shore Mkts., Inc. v. J.D. Assocs.
Ltd P'ship, 213 F.3d 175, 180 (4th Cir. 2000).
However, while the Court must accept the facts in a light
most favorable to the non-moving party, it "need not
accept as true unwarranted inferences, unreasonable
conclusions, or arguments." Id.
survive a motion to dismiss, the complaint must state
"enough facts to state a claim to relief that is
plausible on its face." Bell Ail. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). Although the
requirement of plausibility does not impose a probability
requirement at this stage, the complaint must show more than
a "sheer possibility that a defendant has acted
unlawfully." Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). A complaint has "facial plausibility"
where the pleading "allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged." Id.
move for dismissal under Rule 12(b)(6) of the Federal Rules
of Civil Procedure because the Employment Retirement Income
Security Act of 1974 ("ERISA") preempts all
Plaintiffs' state law claims and that 29 U.S.C. §
1132 provides the exclusive remedy available to Plaintiffs.
In response, Plaintiffs concede their claims are preempted
and ask for leave to amend the complaint to proceed under 29
U.S.C. § 1132. (Dkt. No. 9.) Leave to amend the
complaint should be freely given when no reason to the
contrary is apparent. Foman v. Davis, 371 U.S. 178,
182 (1962). The Court therefore dismisses the complaint
without prejudice and grants leave to file an amended
complaint within 21 days of the date of this order.
the complaint is dismissed, the Court cannot reach
Defendants' arguments about striking demands from the
complaint. Defendants may reassert those arguments if they
remain germane after amendment of the complaint.
only ripe dispute before the Court at present is whether the
ADP Defendants are proper defendants in an ERISA action.
According to the ADP Defendants, "ERISA allows a plan
participant to bring an action to recover benefits that were
allegedly wrongfully denied only against the benefit plan
itself and any fiduciary that controls the administration of
the plan." (Dkt. No. 5- 1 at 15 (citing several
unpublished cases).) Defendants argue the ADP Defendants
cannot be fiduciaries controlling administration of the plan
because the plan documents explicitly provide Aetna makes all
claim determinations. (See Dkt. No. 1-3 at 115.) Plaintiffs
respond that the ADP Defendants are proper parties because
they were Aetna's agents and because 29 U.S.C. §
1132(a)(3) does not limit claims to the plan or those
who make benefit determinations. Because Plaintiffs
effectively assert the ADP Defendants will be named in an
amended complaint asserting claims under ERISA, this issue is
is no controlling authority in this Circuit on this issue,
but this District has consistently held that a party with no
control over claims administration is not a proper defendant
in an ERISA action. See, e.g., Winburn v. Progress Energy
Carolinas, Inc., Civ. No. 4:11-3527-RBH, 2015 WL 505551,
at *13 (D.S.C. Feb. 6, 2015); Fryer v. AccutrexProd,
Inc., Civ No. 0:10-2811-JFA-PJG, 2011 WL 4008126, at *3
(D.S.C. Aug. 2, 2011), report and recommendation
adopted, Civ. No. 0:10-2811-JFA-PJG, 2011 WL 4102099
(D.S.C. Sept. 8, 2011). Unpublished Fourth Circuit precedent
accords with that view. See Gluth v. Wal-Mart Stores,
Inc., 117 F.3d 1413 (4th Cir. 1997) (unpublished table
decision). Here, the plan documents unambiguously identify
Aetna, not any ADP Defendant, as the plan's ERISA
fiduciary. (Dkt. No. 1-3 at 115.) Even if they are in some
sense Aetna's marketing agents, that could not make them
plan fiduciaries under ERISA because they have no control
over benefit determinations. (Id.) Although there is
a circuit split on the issue of whether a plan fiduciary can
be a defendant in an ERISA action for benefits or whether
only the plan administrator may be a defendant, Anselmo
v. W. Paces Hotel Grp., LLC, Civ. No. 9:09-2466-MBS,
2011 WL 1049195, at *12 (D.S.C. Mar. 18, 2011) (collecting
cases), there is no authority for the proposition that a
party that is not even a plan fiduciary can be a defendant in
an ERISA action. The Court therefore holds the ADP Defendants
are improper defendants under ERISA action and they are
dismissed with prejudice from this action.
Plaintiffs present a preemptive argument that Defendants are
estopped from asserting that Plaintiffs failed to exhaust
administrative remedies. (See Dkt. No. 9 at 3 n.l.)
The Court cannot address that argument because Defendants did
not present any exhaustion argument, presumably because they
were moving to dismiss state law causes of action having no
exhaustion requirements. If Defendants argue failure to
exhaust administrative remedies in response to an amended
complaint proceeding under § 1132, the Court will
address the argument at that time.