Opinion
Civil Action No. 3:03-CV-3040-G.
April 9, 2004
MEMORANDUM ORDER
Before the court is the motion of the defendants Legend Asset Management Corporation ("Legend"), Legend Asset Management Corporation Health Plan (the "Plan"), and Robbie L. Sebren ("Sebren") to dismiss this action, pursuant to FED. R. CIV. P. 12(b)(6), for failure to state a claim. For the reasons discussed below, Legend's motion is denied.
I. BACKGROUND
Dawn Eddy ("Eddy") is a former employee of Legend. Plaintiff's Original Complaint ("Complaint") ¶ 8; Brief in Support of Defendant's Motion to Dismiss ("Motion") at 3; Brief in Support of Plaintiff's Response to Defendant's Motion to Dismiss ("Response") at 3. While employed by Legend, Eddy was a "member" ( i.e., a participant or beneficiary) under a health benefits contract between Aetna U.S. Healthcare of North Texas, Inc. and Legend ( i.e., the Plan). Complaint ¶¶ 7-8; Motion at 3. After termination of her employment, Eddy made an election to secure health insurance benefits under the Plan, pursuant to the Consolidated Omnibus Budget Reconciliation Act, 29 U.S.C. §§ 1161-69 ("COBRA"). Complaint ¶ 8; Motion at 3; Response at 3.
On September 28, 2002, Eddy admitted herself into Columbia Hospital at Medical City Dallas Subsidiary, L.P. ("Medical City") for a heart condition. Complaint ¶ 9. That same day, Eddy apparently assigned to Medical City all of her rights, title, and interest in the benefits payable for the health care Medical City rendered to her, and granted Medical City an independent right of recovery against the Plan. Id. ¶ 10; Response at 3. On October 16, 2002, Eddy underwent heart surgery at Medical City and, a few days later, she slipped into a coma where she remained for several months. Complaint ¶ 13; Response at 3. Eddy died on January 27, 2003. Complaint ¶ 21.
On December 23, 2003, Medical City, as the putative assignee of Eddy's rights, brought this suit, pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq. ("ERISA"), to recover against Legend, the Plan, and Sebren, the Plan Administrator. See generally Docket Sheet; Complaint. Although its complaint makes reference to the Plan, see Complaint ¶¶ 5-8, 10-12, 15, 17, 25, 26, 28-30, 34-35, Medical City did not attach the Plan to its complaint.
Medical City alleges that Legend improperly denied Eddy's eligibility and benefits under the Plan for failure to pay COBRA premiums while she was in a coma. See Complaint ¶ 12; Response at 3. Medical City alleges that it tendered payment of Eddy's premiums at Legend's request on two separate occasions — once to Aetna, and once to Legend who promised to pay Aetna. See Complaint ¶¶ 16-18, 23; Response at 3-4. According to Medical City, Legend never tendered Eddy's COBRA premiums to Aetna and, as a consequence, Aetna has refused to recognize Eddy's COBRA rights. See Complaint ¶ 24; Response at 4.
On February 3, 2004, Legend filed the instant motion, pursuant to FED. R. CIV. P. 12(b)(6), to dismiss Medical City's complaint. See generally Docket Sheet; Motion. Legend's arguments rest on a provision in the Plan that allegedly prohibits any assignment of benefits or rights. See Motion at 3. Summarizing its arguments, Legend posits the following questions:
1. Does this Plaintiff lack standing to pursue the recovery of Plan benefits because the Plan prohibits an assignment of benefits?
2. Does this Plaintiff lack standing to sue for statutory breach of fiduciary duty or for alleged violations of ERISA under a welfare benefit plan?
3. Has this Plaintiff, as a party claiming derivative standing via an assignment, failed to exhaust mandatory administrative remedies [under the Plan]?
4. Is a claim for breach of fiduciary duty viable under the circumstances presented, as a matter of law, where the objective is to collect Plan benefits?
Defendants' Reply to Plaintiff's Response to Motion to Dismiss ("Reply") at 2. In support of its motion, Legend attached as an exhibit a document entitled "Group Agreement." See Group Agreement, attached to Appendix to Motion and Brief in Support ("Defendant's Appendix") as Tab 1. Legend asserts that this exhibit (hereinafter, the "exhibit") is the Plan governing the issues in dispute. Motion at 4-5; Defendant's Appendix at 1.
Legend specifically asserts that the following documents, each attached to its motion to dismiss, collectively comprise the Group Agreement: (1) the Group Agreement Cover Sheets; (2) the Group Agreement; (3) the Certificate of Coverage; and (4) the Amendments to the Group Agreement. See generally Defendant's Appendix.
Medical City alleges that, on September 11, 2003, a "[w]ritten request was made to [Legend] . . . for copies of the Plan materials." Complaint ¶ 26. Legend failed to respond to Medical City's request for Plan materials despite, according to Medical City, being under a statutory duty to do so. See id. ¶ 37; Response at 8. Legend asserts, however, that "the law does not require a plan administrator to provide copies of a plan or plan documents to anyone," including Medical City, "other than a plan member or participant." Reply at 4.
II. ANALYSIS A. Standard for Dismissal Under Rule 12(b)(6)
Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of a complaint for "failure to state a claim upon which relief can be granted." There are two primary principles that guide the court's determination of whether dismissal under Rule 12(b)(6) should be granted. First, a motion under Rule 12(b)(6) should be granted only if it appears beyond doubt that the plaintiff could prove no set of facts in support of its claims that would entitle it to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Thompson v. Goetzmann, 337 F.3d 489, 495 (5th Cir. 2003); see also Southern Christian Leadership Conference v. Supreme Court of the State of Louisiana, 252 F.3d 781, 786 (5th Cir.) (motions to dismiss for failure to state a claim are viewed with disfavor and are rarely granted), cert. denied, 534 U.S. 995 (2001). Second, the court must accept all well-pleaded facts as true and view them in the light most favorable to the nonmovant. See Calhoun v. Hargrove, 312 F.3d 730, 733 (5th Cir. 2002); Brown v. Nationsbank Corporation, 188 F.3d 579, 585-86 (5th Cir. 1999), cert. denied, 530 U.S. 1274 (2000).
B. Consideration of Documents Outside the Pleadings
In resolving the issues presented in its motion to dismiss, Legend urges the court to "look directly to the Plan itself," Motion at 4, even though that Plan was not attached to Medical City's complaint. Medical City contends, on the other hand, that the court should not consider Legend's exhibit purporting to be the Plan because its authenticity is in dispute. Response at 7. The court agrees with Medical City.
Consideration of a motion to dismiss for failure to state a claim under FED. R. CIV. P. 12(b)(6) requires a court to limit its inquiry to the contents of the pleadings, including documents attached thereto or incorporated in the complaint. See Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000); Lovelace v. Software Spectrum Inc., 78 F.3d 1015, 1017 (5th Cir. 1996). When matters outside the pleadings are considered by a district court on a motion to dismiss, Rule 12(b) requires the court to treat the motion as one for summary judgment and to dispose of it as required by Rule 56. FED. R. CIV. P. 12(b); Carter v. Stanton, 405 U.S. 669, 671 (1972) (per curiam). Although a district court may not consider materials "outside the complaint," there is one limited exception. Scanlan v. Texas AM University, 343 F.3d 533, 536 (5th Cir. 2003). A court may consider documents attached to a motion to dismiss provided that the documents "are referred to in the plaintiff's complaint and are central to the [plaintiff's] claims." Collins, 224 F.3d at 498-99 (quoting Venture Associates Corporation v. Zenith Data System Corporation, 987 F.2d 429, 431 (7th Cir. 1993)); see also Scanlan, 343 F.3d at 536. However, a court does not transform a motion to dismiss into one for summary judgment by considering documents attached to a defendant's motion to dismiss that are central to the plaintiff's claim but were left out of the complaint.
In the case sub judice, the Plan obviously controls the adjudication between Medical City and Legend. In ERISA cases, the applicable plan documents govern the rights and obligations of a participant or beneficiary — and any assignee — to invoke, obtain, and maintain benefits under that plan. See, e.g., Walker v. Wal-Mart Stores, Inc., 159 F.3d 938, 940 (5th Cir. 1998) (per curiam) (stating that a court must "interpret ERISA plans' provisions as they are likely to be `understood by the average plan participant,' consistent with ERISA's statutory drafting requirements") (quoting 29 U.S.C. § 1022(a)(1)); Letourneau Lifelike Orthotics Prosthetics, Inc. v. Wal-Mart Stores, Inc., 298 F.3d 348, 351-53 (5th Cir. 2002) (interpreting anti-assignment language in an ERISA plan); Dallas County Hospital District v. Associates' Health and Welfare Claim, 293 F.3d 282, 285-89 (5th Cir. 2002) (same). Each of Medical City's claims are brought under ERISA, see Complaint ¶¶ 27-41, and are predicated on the Plan itself. See Complaint ¶¶ 5-8, 10-12, 15, 17, 25, 26, 28-30, 34-35. Clearly, the Plan is central to all aspects of Medical City's complaint and this motion.
Documents found outside of the complaint that are central to the plaintiff's claims, however, must also be undisputed to merit consideration by the court. See Brock v. Baskin-Robbins USA Company, 113 F. Supp. 2d 1078, 1092 (E.D. Tex. 2000) (stating that a court may consider "an undisputably authentic document" that a defendant attaches as an exhibit to a motion to dismiss); Holmes v. National Football League, 939 F. Supp. 517, 520 n. 2 (N.D. Tex. 1996) (finding that a document whose authenticity no party questions may be considered in ruling on a motion to dismiss). "`Undisputed' in this context means that the authenticity of the document is not challenged." Horsely v. Feldt, 304 F.3d 1125, 1134 (11th Cir. 2002).
In this case, Medical City did not attach the original or a copy of the Plan to its complaint, although Medical City refers generally to the Plan throughout its complaint. Legend has attached what purports to be the Plan as an exhibit to its motion to dismiss. Medical City raises questions about the authenticity of, and specifically objects to the attachment of, this exhibit. See Response at 7-8. Although Medical City posits several arguments challenging the authenticity of the exhibit, the court need not decide whether the exhibit is authentic — it is enough that Medical City has contested its authenticity. Thus, the court will exclude the exhibit from its consideration.
Medical City argues that: (1) there is no stipulation or evidence that the Plan is what is purports to be; (2) although the Plan is signed by an Aetna representative, it has not been signed by Legend; and (3) the Plan, which appears to have expired April 30, 2001 (over one year before the events in dispute in this case), may not have been in effect during the time relevant to this case. See Response at 7-8.
Absent consideration of the actual Plan, Legend's motion to dismiss must fail. According to Legend, "[t]he Plan controls the adjudication of all aspects of this motion. . . ." See Motion at 4. This statement is supported by the four grounds upon which Legend's motion rests. With respect to its first two grounds, Legend argues that Medical City lacks standing to recover plan benefits and to sue for breach of fiduciary duty because the Plan prohibits an assignment of benefits. See id. at 5, 9. Legend argues, in its third ground, that Medical City has failed to exhaust mandatory administrative remedies outlined in the Plan. Id. at 9-10. In its fourth and final ground, Legend contends that Medical City's claim for breach of fiduciary duty is not viable because the true claim at issue is for benefits under the Plan. Id. at 12.
Because the Plan is integral to deciding each ground upon which Legend's motion to dismiss rests, and because the court will not assume that Legend's exhibit is, in fact, the Plan, the court cannot determine whether or not Eddy's assignment to Medical City was proper. Indeed, "the validity of [an] assignment depends on a construction of the plan at issue." Letourneau, 298 F.3d at 352. The court must accept as true Medical City's well-pleaded facts, see Calhoun, 312 F.3d at 733, including Medical City's assertion that it is an assignee of Eddy's benefits under the Plan. See Complaint ¶ 10. Accordingly, Medical City has stated a claim upon which relief can be granted.
The court is also satisfied that Medical City has pleaded facts sufficient to support its claim that Legend is estopped from enforcing any anti-assignment provision that might exist in the Plan. See Response at 14; supra note 1. See also Hermann Hospital v. MEBA Medical and Benefits Plan, 959 F.2d 569, 574-75 (5th Cir. 1992) (finding that the defendant Plan was estopped from asserting its anti-assignment clause because of its protracted failure to assert anti-assignment when the hospital requested payment as an assignee).
III. CONCLUSION
In sum, Medical City has shown sufficient allegations to survive Legend's motion to dismiss, pursuant to FED. R. CIV. P. 12(b)(6), for failure to state a claim. Consequently, Legend's motion to dismiss is DENIED.
SO ORDERED.