United States District Court, D. South Carolina, Charleston Division
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 ...