Deas v. Plan Administration Committee of HCA Health and Welfare Benefits Plan

          ORDER

          DAVID C. NORTON, UNITED STATES DISTRICT JUDGE.

         This matter is before the court on defendant Plan Administration Committee of HCA Health and Welfare Benefits Plan's (“the Committee”) motion to dismiss, ECF No. 20. For the reasons set forth below, the court grants the motion to dismiss but permits Deas to amend her complaint.

         I. BACKGROUND

         Plaintiff Cheryl Deas (“Deas”) was employed by HCA, making her eligible to participate in the HCA Health and Welfare Benefits Plan (“the Plan”). The Plan is administered by the Committee, and, pursuant to the Plan, long-term disability insurance coverage could be obtained through Prudential Insurance Company of America (“Prudential”). Deas's amended complaint refers to “HCA's long term disability plan, ” ECF No. 11 at 1; however, a review of the Plan documents shows that the “long term disability plan” is long-term disability benefits program that, while provided for by the Plan, is administered by Prudential. ECF No. 20-3 at 3.^[1] During annual enrollment in 2014, Deas elected long-term disability insurance coverage. In order to obtain the coverage, Deas was required to submit an evidence of insurability (“EOI”) form. Deas alleges that the EOI form could be obtained from HCA, and that the Plan stated that if EOI is required, an EOI form would be mailed directly to the insured.

         Deas went on a leave of absence from work in January 2014. She then returned to work until her medical conditions caused her to stop working on May 29, 2015. When Deas subsequently filed a claim for long-term disability insurance coverage with Prudential, Prudential denied the claim because Deas never submitted an EOI form, meaning she never received long-term disability insurance coverage from Prudential. Deas alleges that neither the Committee nor any employee of HCA informed Deas that an EOI form was required for long-term disability insurance coverage to be effective or sent Deas an EOI form to be completed.

         As a result, Deas filed the instant action. Deas filed her initial complaint on December 7, 2018 and subsequently filed an amended complaint on February 25, 2019. Her amended complaint brings one cause of action for breach of fiduciary duty under the Employment Retirement Income Security Act (“ERISA”). The Committee filed its motion to dismiss on March 26, 2019. ECF No. 20. Deas responded on April 9, 2019, ECF No. 21, and the Committee replied on April 16, 2019, ECF No. 23. The motion is ripe for review.

         II. STANDARD

         A Rule 12(b)(6) motion for failure to state a claim upon which relief can be granted “challenges the legal sufficiency of a complaint.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (“A motion to dismiss under Rule 12(b)(6) . . . does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.”). To be legally sufficient, a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A Rule 12(b)(6) motion should not be granted unless it appears certain that the plaintiff can prove no set of facts that would support his claim and would entitle him to relief. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). When considering a Rule 12(b)(6) motion, the court should accept all well-pleaded allegations as true and should view the complaint in a light most favorable to the plaintiff. Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir.1999); Mylan Labs., Inc., 7 F.3d at 1134. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         III. DISCUSSION

         The Committee argues that Deas's amended complaint should be dismissed because (1) the Committee is not a fiduciary with respect to long-term disability benefits program and therefore not a proper defendant, and (2) Deas has failed to allege any fiduciary breach actionable under ERISA. Both of these arguments relate to whether the Committee has a fiduciary status as the long-term disability benefits program. The court finds that the Committee is not a fiduciary for the long-term disability benefits program, and for that reason, Deas's amended complaint must be dismissed.

         “Before one can conclude that a fiduciary duty has been violated, it must be established that the party charged with the breach meets the statutory definition of ‘fiduciary.'” Coleman v. Nationwide Life Ins. Co., 969 F.2d 54, 60-61 (4th Cir. 1992), as amended (July 17, 1992). The Committee first argues that it is not a fiduciary with respect to long-term disability benefits program based on the language of the Plan. The Committee explains that pursuant to the terms of the Plan, the fiduciary status related to the long-term disability benefits program belongs to Prudential, not to the Committee. As Deas correctly notes, the Committee is the named fiduciary of the Plan. ECF No. 20-4 at 4 (“The [Committee] is the named fiduciary of the Plan (as that term is used by ERISA) and shall have the authority to control and manage the operation and administration of the Plan.”). And as the Committee also correctly notes, it delegated its fiduciary duties related to the insured benefits programs; therefore, the named fiduciary for any insured benefits program is the insurance company that administers the benefits. ECF No. 20-2 at 4, 20-4 at 3. Here, the insurance company that provides long-term disability benefits is Prudential; therefore, Prudential is the named fiduciary for the long-term disability benefits program.

         The issue that arises here is Deas's use of the phrase “long term disability plan” in her amended complaint. As discussed above, there is the Plan, which offers the option of enrolling in the long-term disability benefits program, and the long-term disability benefits program itself, which is administered by Prudential. Deas alleges that the Committee “is a plan administrator and fiduciary under the subject long term disability plan.” ECF No. 11 at 3. In referring to the “long term disability plan, ” and in arguing that the Committee is the “named fiduciary” of the Plan pursuant to the terms of the Plan, Deas conflates the Plan and the long-term disability benefits program. As discussed above, the Plan documents indicate that the “long term disability plan” is in fact the long-term disability benefits program. The text of the Plan clearly delegates fiduciary duties with relation to the long-term disability benefits program to Prudential. Therefore, pursuant to the language of the Plan, the fiduciary of the long-term disability benefits program is Prudential, not the Committee.

         The Committee also argues that Deas failed to allege a breach of fiduciary duty with respect to the long-term disability benefits program because the Committee exercises no discretion in determining eligibility for the benefits, and the issuance of an EOI form is a ministerial, non-fiduciary act. While this argument actually goes to whether the Committee was a fiduciary, not whether there was a breach of fiduciary duty, the Committee's argument still has merit. “[B]ecause the definition of ERISA fiduciary ‘is couched in terms of functional control and authority over the plan,' [the court] must ‘examine the conduct at issue when determining whether an individual is an ERISA fiduciary.'” Moon v. BWX Techs., Inc., 577 Fed.Appx. 224, 229 (4th Cir. 2014) (quoting Wilmington Shipping Co. v. New England Life Ins. Co., 496 F.3d 326, 343 (4th Cir. 2007)). Pursuant to ERISA, a person is a fiduciary when:

(i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting ...