Opinion
CIVIL ACTION No. 00-2342-CM
March 18, 2002
MEMORANDUM AND ORDER
Plaintiff Pamela Sue Taylor alleges that the decedent, Sheila Arndt, had a contract of employment providing for benefits which defendants breached and further alleges that the decedent was defrauded by defendants' representation that she would be provided employment benefits. This matter is before the court on defendants' Motion for Summary Judgment (Doc. 43).
The court construes the facts in the light most favorable to plaintiff as the non-moving party pursuant to Fed.R.Civ.P. 56.
The decedent was employed by defendants as a Utilization Review Coordinator from October 12, 1998, until November 5, 1998, on an as needed basis. From November 5, 1998, until June 12, 1999, the decedent was employed as a Utilization Review Coordinator in a full time, regular position with benefits afforded other full time employees. After leaving defendants' employment, the decedent worked for an entity which was not affiliated with any of the defendants.
On September 2, 1999, the decedent had a discussion with Bruce Johnson, then a manager at The Menninger Clinic, about working for the Menninger Call Center. The Menninger Call Center was termed by defendants as a pilot project. The Call Center was designed to provide emergency departments in area hospitals with a triage resource for patients presenting at emergency departments with mental disorders. Mr. Johnson was the management employee with direct responsibility for developing the project and recruiting staff. The decedent became employed to work for the Menninger Call Center commencing September 13, 1999, and continued to work there until January 2000, when she became ill with cancer. The Menninger Staff Handbook provisions on benefits eligibility provide for five different classifications of positions and states the eligibility for benefits as follows:
Full time (scheduled 40 hours per week or 80 hours per pay period), eligible for all employee benefits;
Part-time (scheduled 20 hours or more per week or 40 hours or more per pay period), eligible for employee benefit plans except . . .;
Part-time (scheduled less than 20 hours per week), not eligible for employee benefit plans;
Temporary, pilot, or project (for specific period of time with a known termination date), not eligible for employee benefit plans; and
PRN or call-in (called as needed), not eligible for employee benefit plans.
Defendants claim that all employees at the Call Center were classified as pilot project or PRN employees.
Plaintiff claims that the decedent and defendants entered into an employment agreement to provide the decedent with full employment benefits, including a retirement plan, and life, health, and medical insurance coverage. Plaintiff further claims that, on several occasions after the initial employment agreement was entered into, defendants made the representation that they would provide the decedent with full employment benefits. On February 8, 2000, the decedent was diagnosed with colon cancer. That same day, the decedent was verbally advised by defendants that she had no health or medical insurance coverage for her terminal illness.
In support of plaintiff's argument that the decedent was promised employment benefits, plaintiff submits the affidavit of Vincent Rubino. Mr. Rubino testified that he worked 20 hours a week at the Call Center and was promised employment benefits. Mr. Rubino further testified that there were PRN people who worked varying shifts, but that the decedent was a fellow part-time employee.
Plaintiff also relies upon an affidavit of decedent's mother, Catherine Arndt, wherein Ms. Arndt testified that she spoke with Mr. Johnson after the decedent was diagnosed with cancer. During that conversation, Ms. Arndt claims that, in response to Ms. Arndt's question about what Mr. Johnson intended to do about medical insurance coverage for her daughter, Mr. Johnson stated that he was working on it, that it would be taken care of, and that everything would be fine. Through Ms. Arndt's affidavit, plaintiff also attempts to submit a letter authored by the decedent to Mr. Johnson, detailing the alleged negotiations leading to her employment at the Call Center and setting forth the alleged promises made to the decedent by Mr. Johnson when he employed her.
II. Standards
Summary judgment is appropriate if the moving party demonstrates that there is "no genuine issue as to any material fact"and that it is "entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). A fact is "material" if, under the applicable substantive law, it is "essential to the proper disposition of the claim." Id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). An issue of fact is "genuine" if "there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way." Id. (citing Anderson, 477 U.S. at 248).
The moving party bears the initial burden of demonstrating an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Id. at 670-71. In attempting to meet that standard, a movant that does not bear the ultimate burden of persuasion at trial need not negate the other party's claim; rather, the movant need simply point out to the court a lack of evidence for the other party on an essential element of that party's claim. Id. at 671 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).
Once the movant has met this initial burden, the burden shifts to the nonmoving party to "set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 256; see Adler, 144 F.3d at 671 n. 1 (concerning shifting burdens on summary judgment). The nonmoving party may not simply rest upon its pleadings to satisfy its burden. Anderson, 477 U.S. at 256. Rather, the nonmoving party must "set forth specific facts that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant." Adler, 144 F.3d at 671. "To accomplish this, the facts must be identified by reference to affidavits, deposition transcripts, or specific exhibits incorporated therein." Id.
Finally, the court notes that summary judgment is not a "disfavored procedural shortcut"; rather, it is an important procedure "designed to secure the just, speedy and inexpensive determination of every action." Celotex, 477 U.S. at 327 (quoting Fed.R.Civ.P. 1).
III. Discussion
Defendants first argue that the decedent was not eligible for health care benefits because she was not a regular full-time or part-time employee as defined for eligibility purposes. Defendants also argue that plaintiff's claims of breach of contract and fraud are preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq. The court first addresses the issue of whether plaintiff's claims are preempted by ERISA.
Under ERISA, "all State laws insofar as they may now or hereafter relate to any employee benefit plan" are preempted. 29 U.S.C. § 1144(a). ERISA's preemption provision is "deliberately expansive," and the statutory phrase "relate to" is given "broad common-sense meaning." Settles v. Golden Rule Ins. Co., 927 F.2d 505, 508 (10th Cir. 1991) (citing Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46, 47 (1987)). A law relates to a benefit plan "if it has a connection with or reference to such a plan." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97 (1983).
A state law claim does not relate to an ERISA plan simply because the alleged damages may economically impact the ERISA plan. Hospice of Metro Denver, Inc. v. Group Health Ins. of Okla., Inc., 944 F.2d 752, 754 (10th Cir. 1991). An employee may rely on state law to redress claims such as breach of an employment contract and fraud, notwithstanding the presence of an ERISA plan, if the factual basis of the suit is independent of the rights and duties created by the plan. Krause v. Dresser Indus., Inc., 910 F.2d 674, 676 (10th Cir. 1990). The court must therefore focus on the factual basis of plaintiff's state law claims.
The factual basis of plaintiff's state law claims is as follows: Plaintiff claims that the decedent and the defendants entered into an employment agreement in September 1999. Pursuant to that agreement, defendants employed the decedent to work at the Call Center. Plaintiff contends that defendants also agreed at that time to provide the decedent with full employment benefits. It is this alleged representation upon which plaintiff bases her claims of breach of contract and fraud. The question therefore is whether this alleged term of the employment agreement (the promise of employment benefits) is enforceable independently of any legal rights plaintiff may have under an ERISA plan. The court looks to other cases in this circuit for guidance.
In Wilcott v. Matlack, Inc., 64 F.3d 1458 (10th Cir. 1995), the plaintiff alleged that he was wrongfully discharged in breach of the defendants' assurance that he (plaintiff) would have a job for as long as he wished. On this claim, the court held that plaintiff's claim was not preempted by ERISA because the employment agreement was enforceable independent of any rights under ERISA. Id. at 1463. However, plaintiff also alleged fraud based on the defendants' alleged misrepresentation that utilizing plaintiff's disability leave would not jeopardize his job. The court held that ERISA preempted such a claim. The court stated that "[d]efendants' alleged misrepresentations relate directly to the nature of plaintiff's rights under the plan — i.e., whether employee disability benefits are secured by guarantees against adverse employment consequences." Id. at 1464.
In Straub v. Western Union Telegraph Co., 851 F.2d 1262 (10th Cir. 1988), the plaintiff sued the defendant, his employer, alleging breach of contract for not including him in a certain increase in pension benefits. The plaintiff also alleged a claim of negligent misrepresentation for failing to inform him that his pension benefits might be affected by a transfer of employment to a wholly owned subsidiary of defendant. The court held that the plaintiff's state law claims related to the pension plan and therefore properly were preempted by ERISA. Id. at 1264.
In Kelso v. General American Life Insurance Co., 967 F.2d 388 (10th Cir. 1992), the plaintiff alleged that the defendant insurance company misrepresented that his wife was eligible for insurance coverage. The plaintiff claimed that the defendant was liable for medical and other benefits upon his wife's death. The court held that the factual basis of plaintiff's breach of contract claim involved an employee benefit plan and therefore was preempted. Id. at 390. The court also held that plaintiff's claim of misrepresentation was preempted by ERISA. Id. at 390-91.
Finally, in Thurkill v. The Menninger Clinic, Inc., 72 F. Supp.2d 1232 (D.Kan. 1999), the plaintiff alleged that the defendant employer breached an employment contract. Specifically, the issue concerned the defendant's alleged representations at the time of plaintiff's hiring that the plaintiff's position would not be abolished in reorganization. The court held that the plaintiff's breach of contract claim was not preempted. In so holding, Judge Crow stated, "[Plaintiff's] case has nothing to do with the administration of [defendant's] severance pay and benefit package, with any representation regarding it, or with the approval or denial of benefits under it." Id. at 1236 (emphasis added). See also Carter v. Amax Coal Corp., 748 F. Supp. 812, 815 (D.Utah 1990) (holding that pre-employment promises of benefits "relate to" the benefit plan and that, therefore, any state claims arising out of those promises are preempted by ERISA).
Upon review of the above-mentioned cases, the court notes a distinction between those claims which were held to be preempted and those which were not. More specifically, the claims not preempted by ERISA were those which involved alleged misrepresentations by an employer that related to the plaintiff's employment, but which had nothing to do with an alleged misrepresentation regarding benefits. See Wilcott, 64 F.3d at 1463; Thurkill, 72 F. Supp. at 1236. In contrast, those cases in which the courts held that a plaintiff's claims were preempted involved alleged misrepresentations about the benefits themselves. See Wilcott, 64 F.3d at 1464; Straub, 851 F.2d at 1264; Kelso, 967 F.2d at 390.
Plaintiff in this case alleges that defendants misrepresented to her at the time she was hired that she would receive employment benefits. Thus, plaintiff's claims involve alleged misrepresentations about the benefits themselves. Accordingly, plaintiff's state law claims are preempted by ERISA. Defendants are entitled to summary judgment.
IT IS THEREFORE ORDERED that defendants' Motion for Summary Judgment (Doc. 43) is granted. This case is hereby dismissed.