Opinion
CIVIL ACTION NO: 3:00-CV-0432-P
March 23, 2001
MEMORANDUM OPINION ORDER
Now before the Court is Defendants' Motion for Partial Summary Judgment, filed January 8, 2001, Plaintiff's Response to Defendants' Motion for Partial Summary Judgment, filed January 29, 2001, Defendants' Reply Brief Supporting Their Motion for Partial Summary Judgment, filed February 13, 2001, as well as Defendants' Objections to the Declarations filed in Support of Plaintiff's Response to Defendants' Motion for Partial Summary Judgment. After considering the parties' arguments and evidence, the Court DENIES Defendants' Motion for Partial Summary Judgment.
A. BACKGROUND
The bulk of the facts are undisputed for the purposes of this Motion. This case arises under the Consolidated Omnibus Reconciliation Act of 1988, 29 U.S.C. § 1161 (COBRA) of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq. Plaintiff claims he is entitled to retroactive medical benefits under the Group Life Health Benefits Plan for Employees of Participating AMR Corporation Subsidiaries (the "Plan"); Defendants are the Plan and its administrator, American Airlines, Inc. Plaintiff V. Wayne Wooderson received health coverage under the Plan prior to February 26, 1998, and was qualified for medical coverage because his wife was employed by an AMR Corporation participating subsidiary. Wooderson and his wife, Christa Conner, divorced on February 26, 1998. Ms. Conner completed a "Life Event Change" form, a portion of which requested that Defendants send Wooderson a COBRA continuation package, and delivered the form to Defendants' Employee Service Center on March 13, 1998. Defendants filed the form in Ms. Connor's benefits file rather than forwarding it to the appropriate personnel for COBRA notification. On June 1, 1998 Wooderson called the Employee Service Center requesting information on COBRA coverage; subsequently, Defendants searched for and found Ms. Conner's Life Event Change Form, and forwarded it to personnel who purportedly sent a COBRA notice to Wooderson. Defendants' COBRA administrator sent Plaintiff a COBRA notification packet on June 8, 1998 at his correct current address and the last known address available to Defendant. Plaintiff's claimed medical expenses do not fall before this date. Defendants' employee followed her normal business procedure for mail to be delivered by the U.S. Postal Service by first class mail. During the time period at issue (February 26, 1998 through August 1, 1998), other qualified beneficiaries notified Defendants that they had not received their COBRA election forms, and a second mailing was sent to them. Plaintiff alleges he called Defendants on March 10, 1998, May 12, 1998, June 11, 1998, August 5, 1998 and several times after in order to express his desire for coverage and request Defendants send him his premium information. Defendants required the COBRA election form to be returned by August 7, 1998. Plaintiff never returned a COBRA election form to Defendant, nor paid any related premiums. Defendants' administrative COBRA responsibilities were transferred to a third party service provider on August 1, 1998.
Def's App. at 10-11.
Def's App. at 6 (Declaration of Sartain).
Id.
Def's App. at 7.
Def's App. at 6-9; Def's App. at 15 (electronic record); Def's App. at 31 (Pl's Resp. to Interrogatories).
Def's App. at 7-8; Def's App. at 21-23 (Decl. of Muise); Def's App. at 25-26 (Decl. of Brausch).
Pl's App. at 23, last paragraph.
Pl's App. at 34-36 (Wooderson Declaration)
Pl's App. at 4 (letter from American Airlines).
Def's App. at 8-9, 15.
Def's Reply Brief at 1 (Declaration of Sartain); Def's Brief at 3 n.l; Def's App. at 6-7, para. 9.
In approximately June or July 1999, Plaintiff required surgery for a heart condition resulting in medical bills of about $250,000. Defendants refused to pay these bills and claimed Plaintiff had no COBRA coverage.
Pl's App. at 35-36.
Pl's App. at 36.
B. SUMMARY JUDGMENT STANDARD
Summary Judgment shall be rendered when the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). All evidence and the reasonable inferences to be drawn therefrom must be viewed in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). The moving party bears the burden of informing the district court of the basis for its belief that there is an absence of a genuine issue for trial, and of identifying those portions of the record that demonstrate such an absence. Celotex, 477 U.S. at 323.
Once the moving party has made an initial showing, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The party defending against the motion for summary judgment cannot defeat the motion unless he provides specific facts that show the case presents a genuine issue of material fact, such that a reasonable jury might return a verdict in his favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Mere assertions of a factual dispute unsupported by probative evidence will not prevent summary judgment. Id. at 248-50; Abbot v. Equity Group, Inc., 2 F.3d 613, 619 (5th Cir. 1993). In other words, conclusory statements, speculation and unsubstantiated assertions will not suffice to defeat a motion for summary judgment. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1429 (5th Cir. 1996) (en banc). If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case, and on which he bears the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.
Finally, the Court has no duty to search the record for triable issues. Guarino v. Brookfield Township Trustees, 980 F.2d 399, 403 (6th Cir. 1992). The Court need only rely on the portions of submitted documents to which the nonmoving party directs. Id.
C. DISCUSSION
There is no dispute in this motion that Plaintiff's divorce is a qualifying life event under COBRA permitting Plaintiff to continue his insurance. Defendants' partial summary judgment motion argues that as a matter of law Defendants fulfilled their notice requirements by sending Plaintiff his COBRA enrollment information. COBRA was enacted in order to provide employees with an opportunity to continue to receive group health insurance after the occurrence of a qualifying event. Myers v. King's Daughters Clinic, 912 F. Supp. 233, 237 (W.D. Tex. 1996). Section 1166(a)(2) does not set forth the manner in which a health benefit plan administrator must provide notice to the individual, other than that the notice must be in writing. Meyers, 912 F. Supp. at 236. Defendants rely on case law ruling that even if the beneficiary does not receive the notice of benefits and enrollment form, sending the beneficiary a notice by first class mail to his last known address constitutes sufficient notice. See Myers v. King's Daughters Clinic, 912 F. Supp. 233, 236 (W.D. Tex. 1996); Degruise v. Sprint Corp., 1999 WL 486887 at *2 (E.D. La. 1999); Roberts v. National Health Corp., 963 F. Supp. 512, 514 (D. S.C. 1997); Jachim v. KUTV Inc., 783 F. Supp. 1328, 1333 (D. Utah 1992); Truesdale v. Pacific Holding Co/Hay Adams Div., 778 F. Supp. 77, 81-82 (D. D.C. 1991); Vanderhoof v. Life Extension Institute, 988 F. Supp. 507, 518 (D. N.J. 1997). See also Dehner v. Kansas City Southern Industries, Inc., 713 F. Supp. 1397, 1400 (D. Kan. 1989) (considering hand delivery). Such notice is reasonably calculated to apprise the beneficiary of his rights. See Myers, 912 F. Supp. at 236; Jachim, 783 F. Supp. at 1333; Dehner, 713 F. Supp. at 1400. Yet the core question in all these cases is whether the insurance provider acted with good faith to comply with a reasonable interpretation of the statute's requirement to notify Plaintiff of his rights; evidence of Defendants' mailing procedures is only relevant as to the question of good faith, and does not ipso facto satisfy the statute. None of these cases address the facts of the case before the Court, where Defendants allegedly had actual knowledge that their method of service had failed.
Indeed, several of the cases suggest that their result might differ depending on the defendant's knowledge regarding the beneficiary's receipt of the notice. In Truesdale, the plaintiff never received her notice because she failed to provide a complete address. 778 F. Supp. at 81. When the plaintiff protested that she never received the notice, the Court stated, "the plaintiff is seeking to benefit from her own error"; yet Wooderson made no such error. Id. The Truesdale defendant had no reason to believe the address was incomplete. Id. at 82 n. 7. The court explicitly found that the presumption that the plaintiff received the notice sent by the defendant "is merely evidence that defendant . . . fulfilled, in good faith, its notice obligations under 1166(a)(4)." Id. In Degruise, the U.S. Postal Service lost the benefits package which was sent by certified mail; the defendant knew only that the package was not delivered, but had no idea why. 1999 WL 486887. But the defendant could reasonably have assumed that the failure to deliver the package was Plaintiff's fault, not the postal service's, and thus its good faith was preserved. See id. The court specifically noted that nothing in the record suggested that the defendant knew that the post office had lost the COBRA package when the plaintiff tried to retrieve it. Id. In the case now before the Court, Plaintiff asserts that Defendants had actual notice that their method of service had failed, belying a claim of good faith.
The remainder of Defendants' cases are also distinguishable. See, e.g., Dehner, 713 F. Supp. at 1399-1400 (hand delivery of notice to plaintiff). In Myers., the beneficiary changed her residence address twice during her employment, including just before termination, and failed to notify the defendant of her last known address; further, the COBRA notice mailed to her was not returned undeliverable. 912 F. Supp. at 235-36. Thus, the notice in Myers evidently failed to reach the plaintiff because of the plaintiff's own neglect, and the defendant had no notice that its mailing had failed to reach the plaintiff. Id. In Roberts, the Court noted, "Like the plaintiff in Myers, Roberts' only means of rebuttal is to argue that she did not receive the letter." 963 F. Supp. at 515. But Wooderson alleges much more: his repeated calls to Defendants within the Defendants' specified time period for election giving Defendants notice that he did not receive the package, as well as evidence that Defendants knew their notification system had failed in the past. See Jachim, 783 F. Supp. at 1333-34; Vanderhoof, 988 F. Supp. at 518.
Defendants also cite Kidder v. H B Marine, Inc., 734 F. Supp. 724 (E.D. La. 1990), reversed in part, 932 F.2d 347 (5th Cir. 1991), but provides no specific citation within the case. The Court does not see any relevant contributions from the case.
Defendants' singular attempt to contact Plaintiff does not merit a grant of summary judgment. This Court finds that under the facts of this case as alleged by Plaintiff, where Plaintiff promptly and timely notified Defendants that he had not received his COBRA forms, Defendants' failure to send Plaintiff a second mailing constitutes a lack of good faith in notifying Plaintiff of his COBRA rights.
Second, even if mailing the forms to Plaintiff constituted good faith by Defendants as a matter of law, the Court cannot conclude that Defendants actually mailed the forms to Plaintiff. Assuming Plaintiff's alleged facts as true, as we must, the evidence that other beneficiaries did not receive their first mailings from Defendants raises a fact issue as to whether Defendants actually mailed an election form to Plaintiff.
The Court considers Defendants' objections to Plaintiff's summary judgment evidence. Since the Court does not rely on the Corona declaration in rendering this motion, objections to it are moot. The Court similarly does not rely on Conner's speculation as to Defendants' employee's state of mind, or to the alleged hearsay statements in order to prove the truth of the matter asserted, or to her legal conclusions. Turning to the Wooderson Declaration, Defendants' objection to "all self-serving and conclusory statements" is too general for the Court to sustain the objection as to any particular statement. The Court does not rely on any of Mr. Wooderson's legal conclusions in his declaration. Nor does the Court rely on Plaintiff's statements concerning Ms. Corona, nor on his claims of "extreme frustration," "trouble," or "stress," nor on the amount of Mr. Wooderson's medical bills.
Genuine issues of material fact exist as to whether Defendants acted in good faith to notify Plaintiff of his COBRA rights. Partial summary judgment is DENIED. The Court need not reach Defendants' procedural argument that Plaintiff failed to assert in his Complaint that the telephone calls served as notice of his election of benefits. Nor must the Court resolve at this stage Defendants' substantive rejoinder that Plaintiff's notification by telephone was inadequate to constitute a COBRA election. The Court also does not need to decide whether Plaintiff's nonpayment of premiums negated his COBRA eligibility since there are questions of whether he received proper notice. Additionally, since summary judgment as to Defendants' notice is denied and this matter must be resolved by trial, the Court declines to grant summary judgment on the issue of whether Plaintiff lost an opportunity to convert his group coverage to individual coverage. For the same reason, Plaintiff's objections to Defendants' summary judgment evidence are moot. Lastly, the Court will not consider Defendants' motion for summary judgment as to the issue of attorney's fees until after the trial.
D. CONCLUSION
For the reasons stated above, Defendants' Motion for Partial Summary Judgment is DENIED.
So Ordered.