Finnegan v. Medco Health Solutions, Inc. et alMOTION for Partial Summary JudgmentD.N.J.December 23, 2016V JARDIM, MEISNER & SUSSER, P.C. 30B Vreeland Road, Suite 201 Florham Park, NJ 07932 Tel.:973-845-7640 Fax:973-845-7645 Attomeys for Plaintiff, Colleen Finnegan COLLEEN P. FINNEGAN, Plaintiff, MEDCO FIEALTH SOLUTIONS, INC., as the Plan Administrator of the Medco Health Solutions, Inc. Welfare Benefit Plan, EXPRESS SCRIPTS, INC., as the parent of, or successor to, Medco Health Solutions, Inc., and TFIE PRUDENTIAL INSURANCE COMPANY OF AMERICA as the Designated Fiduciary of the Plan, Defendants To: Cory A. Thomas, Esq. REED SMITH Three Logan Square 1717 Arch Street, Suite 3100 Philadelphia, PA 19103 Attorneys for Defendants Medco Health Solutions, Inc. and Express Scripts, Inc. Civil Action No. 2: 14-cv-07 784-MCA- MAH PLAINTIFF'S NOTICE OF MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO LIABILITY Robert Szyba, Esq. SEYFARTH SHA\M LLP 620 Eighth Avenue New York, NY 10018-1405 Attorneys for Defendant The Prudential Ins. Co. of America Case 2:14-cv-07184-MCA-MAH Document 56 Filed 12/23/16 Page 1 of 4 PageID: 759 PLEASE TAKE NOTICE that, on F ebruary 61 2017 , at 9:00 a.m. or as soon thereafter as counsel may be heard, Jardim Meisner & Susser, P.C., will move before the Hon. Madeline Cox Arleo, D.J., United States District Court for the District of New Jersey, pursuant to Local Civil Rule 56 for partial summary judgment in favor of Plaintiff and against Defendants Medco Health Solutions, Inc. and Express Scripts, Inc. on the issue of liability for breach of fiduciary duty under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. $ l00l et seq. PLEASE TAKE FURTHER NOTICE that, in support of its motion, Jardim Meisner & Susser, P.C. relies on the Declaration of Alissa Pyrich, Esq., the Declaration of Colleen Finnegan, the Statement of Undisputed Material Facts, the Brief in support of the motion and the proposed form of Order submitted herewith PLEASE TAKE FURTI{ER NOTICE that Jardim Meisner & Susser, P.C., requests oral argument on this motion. Dated: December 23, 2016 JARDIM, MEISNER & SUSSER, P.C. Attorneys for Plaintiff Lou Ann 'Woerner s/ Alissa PyrichBy: ALISSA PYRICH Case 2:14-cv-07184-MCA-MAH Document 56 Filed 12/23/16 Page 2 of 4 PageID: 760 CERTIF'ICATE OF E-FILING AND SERVICE ALISSA PYRICH, of fulI age, certifies and states as follows: 1. I am an attomey at law admitted to practice in the United States District Court for the District of New Jersey. I represent Plaintiff Colleen Finnegan. 2. On December 23,2016,I caused a copy of the foregoing Notice of Motion, Supporting Brief, Declaration of Colleen Finnegan (with Exhibits); Declaration of Alissa Pyrich, Esq. (with Exhibits), Statement of Undisputed Material Facts and Proposed Form of Order to be filed by using the Court's Electronic Case Filing System, and to be served on Defendants' counsel by first class mail atthe addresses below Cory A. Thomas, Esq. REED SMITH Three Logan Square l7I7 Arch Street, Suite 3100 Philadelphia, PA 19103 Attorneys for Defendants Medco Health Solutions, Inc. and Express Scripts, Inc. Robert Szyba, Esq. SEYFARTH SHAW LLP 620 Eigkrth Avenue New York, NY 10018-1405 Attorneys for Defendant The Prudential Ins. Co. of America 3. In addition, on this date, copies of the above documents in hard copy were, marked as "courtesy copy," were deposited for sending via first class mail to the Hon. Madeline Cox Arleo. Case 2:14-cv-07184-MCA-MAH Document 56 Filed 12/23/16 Page 3 of 4 PageID: 761 coffect. I certi$r under penalty of perjury that the foregoing statements are true and s/ Alissa Pvrich ALISSA PYRICH Dated: December 23, 2016 Case 2:14-cv-07184-MCA-MAH Document 56 Filed 12/23/16 Page 4 of 4 PageID: 762 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY V COLLEEN P. FINNEGAN, PlaintifT, MEDCO FIEALTH SOLUTIONS, INC., as the Plan Administrator of the Medco Health Solutions, Inc. Welfare Benefit Plan, EXPRE,SS SCRIPTS, INC., as the parent of, or successor to, Medco Health Solutions, Inc., and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA as the Designated Fiduciary of the Plan, Defendants Civil Action No. 2:I 4-cv -07 1 84-MCA-MAH BRIEF IN SUPPORT OF PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO LIABILITY FOR BREACH OF FIDUCIARY DUTY JARDIMO MEISNER & SUSSER' P'C' 308 Vreeland Road, Suite 201 Florham Park, NJ 07932 Tel.: (973) 845-7640 Fax: (973) 845-7645 Attorneys for Plaintiff Colleen Finnegan Of Counsel and on the Brief: ALISSA PYRICH Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 1 of 31 PageID: 763 TABLE OF CONTENTS PRELIMINARY STATEMENT.......... STATEMENT OF FACTS A. General Background............. 1 4 .4 B. Colleen's Insurance Under The Medco Plan..... C. The "Premium Waiver" Language D. Colleen's Communications With MinnesotaLife E. Colleen's Attempts To Obtain Information From Medco/Express Scripts F. Detrimental Reliance And Injury 5 5 6 8 II LEGAL ARGIJMENT I. THIS MATTER IS RIPE FOR SUMMARY JUDGMENT BASED ON THE LINDISPUTED FACTS, TIfi, COURT CAN AND SHOULD FIND THAT MEDCO/EXPRESS SCRIPTS BREACI{ED ITS FIDUCIARY DUTIES TO COLLEEN UNDER ERISA BY MATERIALLY MISLEADING FIER ABOUT HER RIGHT TO "PREMIUM WAIVER'' COVERAGE A Medco/Express Scripts Had A Fiduciary Duty To Provide Full, Complete And Accurate Information To Colleen Relating To Her Benefits B t2 13 13 15 t6 C. D. E. Medco/Express Scripts Breached Its Fiduciary Duties Through Misrepresentations (And Omissions) In Its Communications \Mith Colleen About'oPremium'Waiver" Coverage ............I7 MedcoÆxpress Scripts' Omissions And Misrepresentations Were Material .20 Colleen Detrimentally Relied On Medco/Express Scripts' Misrepresentations Concerning "Premium Waiver" Coverage ..........22 Medco/Express Scripts Should Be Held Liable For Breaching Its Fiduciary Duties To Colleen .24 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 2 of 31 PageID: 764 CONCLUSION .26 l.l Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 3 of 31 PageID: 765 TABLE OF'AUTHORITIES Cases Adams v. Brink's Co., 261F. App'* 583 (4th Cir.), cert. denied,554 U.S. 903 (2008)..... ...............20 Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).............. .........13 Bixler v. Cent. Pa. Teamsters Health & Welfare Fund, I2F.3d 1292 (3d Cir. 1993) Bocchino v. Trs. of Dist. of Council of Ironworkers Funds, Civil Action No. 07-864 (PGS), 2008 U.S. Dist. LEXIS 33315 (D.N.J. Apr.23,2008), a,ff'd,336 Fed. App". 197 (3dCir.2009)................22 Celotex Corp. v. Catrett, 477 U.5.317 (1986).............. .........13 Daniels v. Thomas & Betts Corp., 263 F.3d 66 (3d Cir. 2001) ............. .. 16,17,21 Fischer v. Philadelphia Elec. Co., 994F.2d 130 (3d Cir.), cert. denied,5I0 U.S. 1020 (1993) Int'l Union of Elec., Elec., Salaried, Mach. & Furniture Workers, AFL-CIO v. Murata Erie N. Am., Inc., 980 F.2d 889 (3d Cir. t992)............. .............24 James v. Pirelli Armstrong Tire Corp., 305 F.3d 439 (6thCir.2002) 17,20 15, 16 Kaucher v. County of Buclcs, 4ss F.3d 418 (3d Cir. 2006) Krohn v. Huron Mem. Hosp., 173 F.3d s42 (6thCir. 1999) 20,22 O'Meara v. CIT Grp., Inc., Civil Action No. 07-CV-4429 (DMC), 2008 U.S. Dist. LEXIS 28146 (D.N.J. Mar. 24,2008) ...................20 20 13 111 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 4 of 31 PageID: 766 Peoria Union Stock Yards Co. v. Penn Mut. Life Ins. Co., 698F.2d320 (7th Cir. 1983) Romero v. Allstate Corp., 404 F.3d 2t2 (3dCir. 2005) Shaw v. Delta Air Lines, Inc., Smith v. Hartþrd Ins. Grp., 6 F.3d 131 (3d Cir. 1993) In re Unßys Corp. Retiree Medical Benefit ERISA Litig., s7 F.3d r2ss (3d Cir. 199s) Unßys Corp. Retiree Med. Benefits ENSA Litig. v. (Jnisys Corp., 579 F.3d220 (3d Cir.2009), cert. denied,559 U.S. 940 (2010) Varity Corp. v. Howe, s16 U.S. 48e (ree6).............. .24 463 U.S. 8s (1983) .........1s t6 t6 15,76,27,22 16,22 ..................24 Rules ted. R. Civ. P. I t3 Statutes 2e U.S.C. $ 110a(a)(1) 15,24 1V Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 5 of 31 PageID: 767 PRELIMINARY STATEMENT Despite efforts by Defendants Medco Health Solutions, Inc. and Express Scripts, Inc. (collectively, "Medco/Express Scripts") to complicate it, this case is actually quite simple and straight forward. The right of a participant to have full, complete and accurate information about her benefits is one ofthe bedrock principles of the Employee Retirement Income Security Act of 1974, as amended,2g U.S.C. $ l00I et seq. ("ERISA"). Likewise, the fiduciary obligation of an employer acting as a plan administrator to avoid misleading employee participants about their benefits or misrepresenting the terms of the benefit plan is well established under the law. Nevertheless, over the course of more than a year) Plaintiff Colleen Finnegan ("Colleen"), utr employee of Medco/Express Scripts and a participant in the MedcoÆxpress Scripts benefits plan was misled about the existence of and her eligibility for a 'opremium waiver." For this breach of MedcoÆxpress Scripts' fiduciary duty as plan administrator, Medco/Express Scripts should be held liable under ERISA. Starting in January 2012, Colleen was on disability leave from her employment at Medco Health Solutions, Inc. ("Medco"). The Summary Plan Description ("SPD") for the Medco Health Solutions, Inc. Welfare Benefit Plan (the "Medco Plan") in effect for 2012 contained language providing "premium waiver" coverage - in other words, language providing that, when a participant employee Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 6 of 31 PageID: 768 was on Long Term Disability Leave, the employee's life insurance coverage would continue at no cost to the employee. Despite this language, Medco/Express Scripts now takes the position that no such "premium waiver" coverage exists now (or existed at the time that Colleen began her disability leave). Even assuming, arguendo, that MedcoÆxpress Scripts is correct in its position, the existence of "premium waiver" coverage is not the key issue here. Instead, the key issue is Medco/Express Script's breach of fiduciary duties by failing to inform Colleen that the "premium waiver" coverage did not exist. Over the course of 2013 and20l4, Colleen had numerous conversations with MedcoÆxpress Scripts Human Resources in an effort to take advantage of the "premium waiver" coverage she believed existed, based on the language of the Medco Plans' 2012 SPD. In fact, in late 2013, Medco/Express Scripts personnel helped Colleen prepare an application to Prudential Insurance Co. of America ("Prudential") for "premium waiver" coverage. Despite clearly knowing that Colleen wanted to take advantage of the "premium waiver," no one from Medco/Express Scripts informed Collen that the benefit she was seeking did not exist (according to Medco/Express Scripts). Likewise, no one from MedcoÆxpress Scripts could be bothered to inform Colleen of its position that she would not be eligible for a "premium waiver" coverage even if it did exist. 2 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 7 of 31 PageID: 769 MedcoÆxpress Scripts' lack of candor with Colleen materially misled her into believing that she had the right to continued life insurance at no cost to her, as long as she was on Long Term Disability Leave. She was led to believe that she was eligible for 'opremium waiver" coverage and needed only to apply to the correct insurance company in order to obtain that coverage. In short, Colleen relied on Medco/Express Scripts' omissions and misstatements to her detriment. By misleading Colleen about the benefits available to her, Medco/Express Scripts breached its fiduciary duties under ERISA. As the facts demonstrating MedcoÆxpress Scripts' breaches are not in dispute, and the law governing its fiduciary obligations to plan participants are clear, the Court can and should grant parlial summary judgment to Colleen on the issue of MedcoÆxpress Scripts' liability.l I Upon the Court's grant of partial summary judgment on the issue of liability, Colleen will seek a hearing and fuither briefing conceming the appropriate remedy, as it appears that factual disputes exist on this issue. J Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 8 of 31 PageID: 770 STATEMENT OF FACTS A. General Background Colleen Finnegan2 was employed as a pharmacist by Medco starting on or about October I,2007. fDeclaration of Colleen Finnegan ("Colleen Dec."), fl 2; Declaration of Alissa Pyrich ("Pyrich Dec."), Ex. 4 (411912016 Deposition of Colleen Finnegan) at 41 : I 0- 1 I ]. She worked regularly until Janu ary 26,2012, when she suffered an injury to her shoulder and scapula related to a prior cancer surgery. [Colleen Dec., tTT 7, 8]. As a result of this injury, Colleen took on disability leave starting January 27,2012. lld., l71. On April 70,2013, while she was still on disability leave, Colleen's employment was terminated. lId.., 1ll 2, l3l. On April 2,2012, pursuant to the Agreement and Plan of Merger dated July 20,20I l, and amended on November 7,2011, by and among Express Scripts, Inc., Medco, Express Scripts Holding Company (formerly Aristotle Holding, Inc.), Aristotle Merger Sub, Inc., and Plato Merger Sub, Inc., a series of transactions were consummated. fPyrich Dec., Ex.2,1120)]. As a result of those transactions, Express Scripts, Inc. and Medco became wholly-owned subsidiaries of Express Scripts Holding Company. lld.l 2 Plaintiff s maiden name was Colleen Karjane, and her work e-mail address with Medco remained in that name even after she married. fColleen Dec., fl 3]. 4 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 9 of 31 PageID: 771 B. Colleents Life fnsuran Under the Medco Plan Colleen was a participant in the Medco Plan. fColleen Dec., TtT4, 5]. Medco has admitted that it was the "plan sponsor" of the Medco Plan. [Pyrich Dec., F.,x.2, 112ll. Medco likewise admits that it was "plan administratof' of the Medco Plan lrd.,n2q. l[hile employed by Medco, Colleen elected and paid for benefits through the Medco Plan. fColleen Dec., T 4]. Among other things, she always elected to purchase life insurance. fld.,fl 5]. Because she has young children, Colleen tried to buy additional life insurance above and beyond the amount of her salary. Vd.,l1l5, 61. Under the Medco Plan, she could purchase up to four times her salary without being required to take a physical; Colleen bought this increased life insurance coverage every year, up to the maximum that she was allowed. [Pyrich Dec., Ex. 4 (41 19 Dep.) at 64:7 -17, 73 :12-221. C. The ú6Premium Waiver'o Language The SPD for the Medco Plan in effect from January 1,2012 through January 1,2013 contains the following provision: If You Are Receiving LTD Benefits If you begin receiving LTD benefits, Basic Life and Basic AD&D fnsurønce coverøges in effect on lhe dale you become (or becøme) eligiblefor LTD benetits will continue ut no cost lo you. Any Optional Life or Optional AD&D Insurance coverages for you or your dependents in effect on the date you become (or became) eligible 5 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 10 of 31 PageID: 772 for LTD benefits will continue at your same employee contribution rate. You will not be eligible to increase your Optional Insurance coverages while you are receiving LTD benefits. You must also provide proof to Prudentialthatyou have become totally disabled and have remained totally disabled for six months, provided that the total disability commenced while you were insured and before age 65. Your coverage will continue unintemrpted while you remain totally disabled up to age 70, provided you provide proof of your continued disability annually to Prudential. fPyrich Dec., Ex. 6, p. 9 (emphasis added)]. Colleen understood the above language to be a'opremium waiver" provision, whereby she continued to receive life insurance benefrts while on approved disability leave, without having to continue to pay premiums. fColleen Dec.,'lT 16]. Colleen relied on the above statement in the 2012 SPD and expected that, while she was on disability leave, her life insurance premiums were being paid by her employer andlor waived entirely. Vd.l Prudential now takes the position that, despite the language found in the 2012 SPD, the Waiver of Premium Coverage was removed from the Medco Plan in2004. [Pyrich Dec., Ex. 9]. MedcoÆxpress Scripts likewise takes the position that no 'opremium waiver" coverage existed after2004, despite the language in the2012 SPD. fPyrich Dec., Ex. 10, pp. 3-4]. D. Colleent s Communications With Minnesota Life Following her termination by Medco/Express Scripts in, Colleen received a letter from MinnesotaLife Insurance Co. ("Minnesota Life") dated May I0,2013 6 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 11 of 31 PageID: 773 ("the May 10,2013 Letter"). fColleen Dec., fl 18 and Ex. A]. The May 10,2013 Letter offered Colleen the option of converting her existing life insurance coverage through the Medco Plan to private insurance coverage from Minnesota Life that would continue past the end of her employment. Vd.,1119 and Ex. A] Due to the side effects from her medical treatments, Colleen did not fully understand the May 10,2013 Letter.3 fPyrich Dec., Ex. 3, p. 8; Colleen Dec., lT 20]. Even so, the May I0,2013 Letter made no sense to Colleen at the time because she understood that, having become disabled in20l2, she had the right to the "premium waiver" spelled out in the 2012 SPD, which permitted her to continue her life insurance at no cost as long as she could prove that she remained disabled. [Pyrich Dec., Ex. 3, p. 8; Colleen Dec., l2Il. Colleen attempted to contact various people within Medco/Express Scripts, including Human Resources personnel, to help her understand the May I0,2013 Letter, but she never received any responses to her calls. fColleen Dec., ]221. On or about June L0, 2013, Colleen contacted Minnesota Life directly. [Colleen Dec., l[23; Pyrich Dec., Ex. 4 (4119 Dep.) at 142:17-20]. Colleen was told that it would cost her over S3000 per quarter to convert her existing life insurance 3 Medco/Express Scripts' Human Resources Department had been made aware of Colleen's mental processing defects over the course of her disability leave. Nevertheless, Medco/Express Scripts did not offer Colleen any assistance in understanding her termination, her benefits rights, or any of the information sent to her. [Colleen Dec., tT20]. 7 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 12 of 31 PageID: 774 coverage to a personal policy. [Colleen Dec., 12a; Pyrich Dec., Ex. 4 (4119 Dep.) at 142:17 to 143:l; Ex 8]. This amount was more than she could afford, but Colleen was not worried. She believed that her employer-paid life insurance continued as long as she was disabled, due to the "premium waiver" provision in the 2012 SPD. fColleen Dec., 1125; Pyrich Dec., Ex. 3, p. 8; Ex. 4 (4119 Dep.) at 144:10-16]. As a result, Colleen did not elect to convert her life insurance through Minnesota Life. Instead, she opted to pursue the possibility of ut\lizingthe "premium waiver" found in the 2012 SPD. [See Pyrich Dec., Ex. 8]. When Colleen inquired of Minnesota Life whether a "premium waiver" existed on its life insurance policies in the Medco Plan, she was directed to contact MedcoÆxpress Scripts Human Resources. fPyrich Dec., Ex. 8] E. Colleenos Attemnts To Obtain Information From MedcoÆxnress Scrints After Colleen was terminated, she had numerous conversations with representatives of MedcoÆxpress Scripts concerning the "premium waiver" provision of the 2012 SPD. [Colleen Dec., n 26]. Despite the obligation of Medco/Express Scripts to provide plan participants with accurate information, Colleen consistently received inaccurate and misleading information about her benefits and rights. Vd., 11 271. Instead of providing clear and understandable explanations about whether Colleen could take advantage of the'opremium waiver" 8 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 13 of 31 PageID: 775 provision of the 2012 SPD, Medco/Express Scripts created confusion and uncertainty for Colleen, to her detriment. IId.]. No one from MedcoÆxpress Scripts ever told Colleen that (according to Defendants) she ceased to have any rights under the Medco Plan when she was terminated. [Colleen Dec., tT 28; see also Pyrich Dec., Ex. 10, p. 5 (setting out Medco/Express Scripts' position)]. Likewise, Colleen was never told by anyone in Medco/Express Scripts that (according to Defendants) there is "premium waiver," despite the language in the2012 SPD. 11d.,1291. Instead, Colleen was led to believe that such a benefit did exist, and she only needed to apply to the correct insurance company in order to take advantage of it. lld.]. Colleen also was not given accurate information by Medco/Express Scripts about which insurance policy governed her benefits. Initially, Colleen was sent a copy of the 2013 Minnesota Life policy.a fPyrich Dec., Ex.4 (4119 Dep.) at 127:4- 15, 155:3-12; Colleen Dec., T 31]. However, when she then spoke with representatives of Minnesota Life, Colleen was told that its policy was the "wrong a Medco/Express Scripts Human Resources directed Colleen to the Minnesota Life policy, despite the fact that Colleen could not have qualified for coverage under that policy because she had not been 'oactively at work" at any time during 2073. lSee Pyrich Dec., Ex.7 at ESI_0029]. This is yet another example of the misinformation and misleading communications that characteÅzed Colleen's dealings with Medco/Express Scripts relating to her benefits. 9 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 14 of 31 PageID: 776 policy" and did not provide her with life insurance coverage. fPyrich Dec., Ex. 3 p. 13; Ex. 8; Colleen Dec.,'l|T311. Returning to MedcoÆxpress Scripts to try to get correct information, Colleen once again exchanged e-mails with Jaimee Conley of Human Resources, and once again did not get a straight answer. fColleen Dec., !l 7; Pyrich Dec., Ex. 15 (CPFO129)]. This time, Colleen was directed towards Prudential, the insurer who had issued the life insurance policy for the 2012 benefits period, when Colleen first went out on disability. fColleen Dec., ]134 andEx. B; Pyrich Dec., Ex. 4 (4119 Dep.) aL 127:16-128:101. The direction to Prudential came from the head of Human Resources. [Pyrich Dec., Ex.4 (4119 Dep.) at 127:16-128:10]. Jaimee Conley of Medco/Express Scripts told Colleen that she needed to submit an application for a "premium waiver" to Prudential. [Colleen Dec., 11 35; Pyrich Dec., Ex. 4 (4119 Dep.) at 175:1-81. Colleen filled out a portion of the application to Prudential, then send the forms on to Jaimee Conley for additional information to be filled in. lld., at" Il7:4-12; Colleen Dec., ,lT 36 and Ex. Dl Colleen's application was forwarded to Jayne Hensley of Medco/Express Scripts, who completed the employer portion of the application and signed the form. [Colleen Dec., ]137 and,Ex. El. MedcoÆxpress Scripts did not render even this minimal assistance in a timely Colleen sent her portion of the premium waiver application to Jaimeemanner 10 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 15 of 31 PageID: 777 Conley in early September 2013, but did not receive it back for filing (or receive any response to her inquiries) until late November 2013. fColleen Dec., fl 38 and Ex. F]. Notably, at no point during the process of assisting Colleen in applying to Prudential did anyone from Medco/Express Scripts mention that the "premium waiver" had been eliminated years earlier, as Defendants now claim. [Colleen Dec., T a0; Pyrich Dec., Ex. 5 (5112 Dep.) at 20:12-20:20, 33:22-34:51. Instead, Medco/Express Scripts employees gave Colleen every reason to believe that "premium waiver" coverage was available to her. [Pyrich Dec., Ex. 5 (511212016 Deposition of Colleen Finnegan) at l2:7-101. Colleen's conversations were not limited to only low-level functionaries within MedcoÆxpress Scripts. At various times, Colleen communicated with a variety of Human Resources employees, up to and including Karen Mattzzi, the Vice President of Medco/Express Scripts Human Resources. fColleen Dec., fl 41 and Ex. H]. Yet, no one from Medco/Express Scripts could be bothered to Colleen that no *premium waiver" existed, regardless of the language of the 2012 SPD. Ultimately, Prudential sent Colleen a letter dated June 23,2014, denying her claim on the ground that Prudential had ceased to be under contract with Medco for life insurance effectively January 1,2013. fColleen Dec., Ex. G]. 11 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 16 of 31 PageID: 778 F. Detrimental Reliance And Iniury Colleen relied on the contents of the 2012 SPD and the information provided to her by MedcoÆxpress Scripts Human Resources. This reliance was detrimental to Colleen because - believing that she could take advantage of the "premium waiver" provision to have her life insurance continued free of charge as long as she could prove disability - Colleen rejected out of hand the expensive option of converting her existing insurance to Minnesota Life. [Colleen Dec.,lTtT2l ,24,251. Rather than immediately investigating her options for replacing her life insurance coverage at the time of her termination, or giving consideration to the very expensive option offered by Minnesota Life, Colleen pursued a fruitless series of discussions with Medco/Express Scripts in an attempt to utilize the "premium waiver" that she believed existed. Had anyone from MedcoÆxpress Scripts told Colleen that the "premium waiver" she believed she had did not exist (or did not apply), as Defendants now contend, Colleen could have explored other options. Since her termination from Medco/Express Scripts, Colleen has been unable to obtain adequate replacement life insurance. [Colleen Dec., n a2; Pyrich Dec., Ex. 5 (5112 Dep.) at42:18-201. When employed by Medco, Colleen regularly purchased up to $750,000 in life insurance. fColleen Dec., \ 46]. She has been able to replace only $400,000 of that past coverage, at a substantial cost to her. lld.,flfll43-481. t2 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 17 of 31 PageID: 779 LEGAL ARGUMENT POINT I THIS M,A IS RIPE FOR SUMMARY JUDGMENT The summary judgment procedures ate "an integral part of the Federal Rules as a whole, which are designed 'to secure the just, speedy, and inexpensive determination of every action."' Celotex Corp. v. Catrett,477 U.S. 317,327 (1936) (citing Fed. R. Civ. P. 1). A case is ripe for summary judgment disposition in accord with Fed. R. Civ. P. 56(c), when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits,if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Anderson v. Liberty Lobby, Inc., 477 IJ.S. 242, 247 (1986); Celotex,477 U.S. at322. An issue will only be considered as "genuine" when evidence can show a real possibility of a reasonable jury verdict in favor of the non-movant. Anderson, 477 U.S. at 248; Celotex, 477 U.S. at 322-26; Kaucher v. County of Bucks,455 F.3d 418, 423 (3d Cir. 2006). Similarly, a fact may only be considered material when it has the ability to "affect the outcome of the suit under governing law." Kaucher,455 F.3d at 423. Accordingly, irrelevant or unnecessary facts, even if disputed, do not provide grounds for defeating summary judgment. Here, the relevant facts are not in genuine dispute. The documents speak for themselves. Colleen's Declaration is consistent with her deposition testimony and t3 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 18 of 31 PageID: 780 with the documents. Medco/Express Scripts has no witnesses who can or will dispute Colleen's version of events. Jaimee Conley, the person at Medco/Express Scripts who dealt the most with Colleen following her termination, had only the vaguest memory of those dealings. lSee Pyrich Dec., Ex. 1 | at 28:lI-29:15, 65:2- 22,73:4-70,86:20-87:17. 88:2-91:10, 92:7-93:241. Most importantly, no witness has been identified who can or will refute Colleen's sworn statements that she was given inaccurate and misleading information by Medco/Express Scripts, in breach of fiduciary duties under ERISA. All that remains is to apply the law to the facts, an exercise ideally suited for summary judgment. T4 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 19 of 31 PageID: 781 POINT II BASED ON THE UNDISPUTED FACTS, THE COURT CAN AND SHOULD FIND THAT MEDCO/EXPRESS SCRIPTS BREACHED ITS FIDUCIARY DUTIES TO COLLEEN UNDER ERISA BY MATERIALLY MISLEADING HER ABOUT HER RIGHT TO WAIVER" COVERAGE ERISA is a comprehensive framework enacted "to promote the interests of employees and their beneficiaries in employee benefit plans." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90 (1983). Among the protections created by the statute, ERISA $ a0a(a) requires the fiduciary of a plan governed by ERISA to "discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries ... [and] with the care, skill, prudence, and diligence ... that a prudent man actingina like capacity... would use." 29 U.S.C. g 1104(aX1). Failure to conform to this standard in any of a variety of ways gives rise to a cause of action for breach of fiduciary duty. It is well-settled that a fiduciary breaches its ERISA obligations if it makes affirmative material misrepresentations to plan participants or beneficiaries about the terms of the plan. See, e.g.,In re Unisys Corp. Retiree Medical Benefit ENSA Litig. (*Unisys l'),57 F.3d 1255, 1264 (3d Cir. 1995); Fischer v. Philadelphia Elec. Co., 994 F.2d 130, 135 (3d Cir.), cert. denied, 510 U.S. 1020 (1993). In order to make out a claim for breach of fiduciary duty under ERISA based on misrepresentations, a plaintiff must establish the following elements: (1) that the l5 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 20 of 31 PageID: 782 defendant was an ERISA fiduciary; Q) amisrepresentation or omission on the part of the defendant; (3) the materiality of that misrepresentation or omission; and (4) detrimental reliance on the misrepresentation or omission by the plaintiff. Unisys Corp. Retiree Med. Benefits ENSA Litig. v. Unisys Corp. ("Unisys Il'), 579 F.3d 220,228 (3d Cir. 2009), cert. denied,559 U.S. 940 (2010); Romero v. Allstate Corp., 404 F.3d 212, 226-27 (3d Cir. 2005); Daniels v. Thomas & Betts Corp., 263 F .3d 66,73 (3d Cir. 2001). Here, the undisputed facts amply demonstrate all four of the required elements, leading logically to partial summary judgment on the issue of liability in Colleen's favor. A. MedcoÆxpress Scripts Had A Fiduciary Duty To Provide Full, Complete And Accurate I rmation To Colleen Relatins To Benefits With respect to the first element of a breach of fiduciary duty claim, it is undisputed that Medco was the plan administrator ofthe Medco Plan. In fact, Medco admits as much in its Answer. fPyrich Dec., Ex.2,ll24]. An employer that acts as the plan administrator has a fiduciary duty not to "materially mislead those to whom the duty of loyalty and prudence are owed." Unßys I, 57 F.3d at 1261. In particular, "[w]hen a plan administrator explains plan benefits to its employees, it acts in a fiduciary capacify." Unßys I, 57 F.3d at 1261 n.l0; seealsoSmithv. HartfurdIns. Grp.,6F.3d l3l,l4l n. 13 (3dCir. 1993). "Put simply, when a plan administrator speaks, it must speak truthfully." Fischer,994 F.2d at 135. l6 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 21 of 31 PageID: 783 A plan administrator's fiduciary duty entails "not only a negative duty not to misinform, but also an affirmative duty to inform" when silence would be harmful to the plan participant. Bixler v. Cent. Pa. Teamsters Health & Welfure Fund, 12 F.3d 1292, 1300 (3d Cir. 1993); see also Daniels,263 F.3d at 76. Thus, when Colleen began inquiring about the possibility that she had "premium waiver" coverage under the2012 SPD, Medco/Express Scripts had an affirmative duty under ERISA to supply her not just with the specific information she requested, but with fully complete and accurate information material to her circumstances. "[O]nce an ERISA benef,rciary has requested information from an ERISA fiduciary who is aware of the benefìciary's status and situation, the fiduciary has an obligation to convey complete and accurate information material to the beneficiary's circumstance. This is so even if that information comprises elements about which the beneficiary has not specifically inquired." Bixler,12 F.3d at 1300. Accordingly, the first requirement for a breach of fiduciary duty claim - namely, the existence of such a duty - is satisfied. Medco/Express Scripts Breached lts Fiduciary Duties Through Misrepresentations (And Omissions) In lts Communications With Colleen About ttPremium'Waiver'o Turning to the second element of Colleen's claim, the undisputed evidence shows multiple types of omissions and misrepresentations by Medco/Express Scripts. Medco/Express Scripts misled Colleen to believe that "premium waiver" B. l7 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 22 of 31 PageID: 784 coverage existed, and that she was eligible for it upon application to the right insurer. It is undisputed that Medco/Express Scripts never disclosed to Colleen that the "premium waiver" coverage had been removed from the Medco Plan years earlier, as both Medco/Express Scripts and Prudential now assert. lSee, e.g.,Pyrich Dec., Exs. 9, 10]. Rather than tell Colleen that there was no oopremium waiver" coverage or she was not eligible for it, Medco/Express Scripts assisted Colleen in applying for "premium waiver" coverage from Prudential. Through its conduct and failure to disclose, Medco/Express Scripts led Colleen to believe not only that 'opremium waiver" coverage existed, but also that she was eligible for it. Any reasonable person in the same situation as Colleen would have reached the same conclusion. Additionally, assuming arguendo that Medco/Express Scripts is correct that it removed the "premium waiver" coverage from its benefits plan, then Medco materially misled Colleen when it included the following language in the 2012 SPD for the Medco Plan: If You Are Receiving LTD Benefits If you begin receiving LTD benefits, Basic Life and Basic AD&D fnsurance coverages in effect on the døte you become (or becøme) eligiblefor LTD benefits will continue at no cost to you. Any Optional Life or Optional AD&D Insurance coverages for you or your dependents in effect on the date you become (or became) eligible for LTD benefits will continue at your same employee contribution rate. You will not be eligible to increase your Optional Insurance coverages while you are receiving LTD benefits. 18 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 23 of 31 PageID: 785 You must also provide proof to Prudential that you have become totally disabled and have remained totally disabled for six months, provided that the total disability commenced while you were insured and before age 65. Your coverage will continue unintemrpted while you remain totally disabled up to age 70, provided you provide proof of your continued disability annually to Prudential. flPyrich Dec., Ex. 6, p. 9 (emphasis added)]. A reasonable person reading the above language would interpret it to mean precisely what it says: "If you begin receiving LTD benefits, Busic Lìfe ønd Basic AD&,D Insurance coverages in effect on the date you become (or became) eligible for LTD benefits will continue at no cosl to yott." lld. (emphasis added)]. Medco/Express Scripts never informed Colleen that the 2012 SPD language meant something else. Indeed, MedcoÆxpress Scripts has never adequately reconciled this language with its insistence that no "premium waiver" coverage existed in the Medco Plan after 2004. MedcolExpress Scripts also misled Colleen as to which insurance policy (Minnesota Life's 2013 policy or Prudential's2012 policy) governed her rights. The undisputed facts show that Human Resources initially directed Colleen first to MinnesotaLife, referring her to Prudential only after Minnesota Life told her that she had the "wrong policy." Medco/Express Scripts may claim tha! despite the clear record of misinformation and omissions, it could not have breached its fiduciary duty because its acted accidentally or negligently, rather than deliberately. ERISA law is clear, however, that "lal f,rduciary breaches his duty by providing plan participants with t9 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 24 of 31 PageID: 786 materially misleading information, 'regardless of whether the fiduciary's statements or omissions were made negligently or intentionally."' James v. Pirelli Armstrong Tire Corp., 305 F.3d 439,449 (6th Cir. 2002), quoting Krohnv. Huron Mem. Hosp., 173 F .3d 542, 547 (6th Cir. 1999); see also Adams v. Brink's Co., 26l F. App'x 583, 595 (4th Cir.), cert. deníed,554 U.S. 903 (2008); O'Mearav. CIT Grp., Inc.,Civil Action No. 07-CV-4429 (DMC), 2008 U.S. Dist. LEXIS 28146, at *9 (D.N.J. Mar. 24,2008). Moreover, neither Medco/Express Scripts' omissions nor its misleading conduct can be excused by the fact that Colleen may not have asked "the right questions" about her benefits. As a matter of law, a fiduciary's obligation to provide complete and accurate information to a plan participant "will not be excused merely because fthe participant] failed to comprehend or ask about a technical aspect of the plan." Bixler, I2F.3d at 1300; see also Krohn,173 F.3d at 539. In short, the evidence is clear and undisputed that Medco/Express Scripts omitted key information and misled Colleen about the existence of "premium waiver" coverage and other aspects of her benefits. From this evidence, the second element of a breach of fiduciary duty claim is satisfied. C Medco/Express Scripts' Material Omissions And Misrepresentations Were As the third element of a breach of fiduciary duty claim, a plaintiff must show that the misrepresentations or misinformation received from the plan fiduciary were 20 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 25 of 31 PageID: 787 material. A misrepresentation is material if there is a substanlial likelihood that it would mislead a reasonable employee in making informed decisions about benefits Daniels, 263 F .3d at 73,75-76; (Jnisys I, 57 F.3d at 1264. Applying this standard, the misinformation supplied to Colleen about the "premium waiver" coverage was clearly material. A reasonable person reading the 2012 SPD could fairly believe that some sort of benefit or coverage was available with respect to life insurance when aparticipant" is also receiving Long Term Disability Benefits. Logically, the provision found on page 9 of the 2012 SPD would not have been included in the document if no such benefit or coverage existed. If in fact, no such benefit or coverage exists (as MedcoÆxpress Scripts contends), then the language of the 2012 SPD must be considered a material misrepresentation Moreover, Medco/Express Scripts utter failure to disclose to Colleen that the "premium waiver" coverage she was seeking did not exist (or that she was not eligible for it) was material. A reasonable person, when being assisted in filling out an application for "premium waiver" coverage, would logically assume that such coverage actually exists and is potentially available to her. Flowever, Medco/Express Scripts now insists at great length that this was never the case, as the "premium waiver" had been eliminated from the Medco Plan years earlier. 2l Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 26 of 31 PageID: 788 In short, representing to a plan participant, to whom fiduciary duties are owed, that a benefit or coverage exists when in fact it does not is the very definition of a material misrepresentation. It should not be surprising that misrepresenting the terms of a plan is the axiomatic example of breach of fiduciary duty invoked by the federal courts. See, e.g., Krohn,173 F.3d at 547; Unßys I, 57 F .3d at 1264; Bocchino v. Trs. of Dist. of Council of lronworkers Funds, Civil Action No. 07-864 (PGS), 2008 U.S. Dist. LEXIS 33315, at *11-12 (D.N.J. Apr. 23,2008), aff'd,336 Fed. App". 197 (3d Cir. 2009). The third element of Colleen's claim, therefore, is satisfied. D. Colleen Detrimentally Relied On Medco/Express Scripts' Misrenresentations Concernins r6Premium Waivert' Coverage For the pu{pose of the fourth and final factor - detrimental reliance on the omissions or misrepresentations - the concept of detrimental reliance is defined broadly. Unisys II, 579 F.3d at 229. Detrimental reliance sufficient to prove a breach of fiduciary duty claim "may encompass decisions to decline other employment opportunities, to forego the opportunity to purchase supplemental health insurance, or other important financial decisions." Id. The undisputed facts in the record demonstrate tha| this fourth and final element of a breach of fiduciary duty claim is satisfied here. There is no dispute here that Colleen believed what she read in the 2012 SPD, or that she believed she potentially entitled to "premium waiver" coverage. She contactedwas 22 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 27 of 31 PageID: 789 MedcoÆxpress Scripts Human Resources with questions for precisely that reason, little suspecting that the information she was going to get would be inaccurate and misleading. Under these circumstances, Colleen's reliance is clear. Colleen's faith that she was receiving full and complete information from MedcoÆxpress Scripts was unfounded, however, and ultimately detrimental to her interests. Colleen rejected the possibility of converting her existing life insurance under the Medco Plan to a personal policy with Minnesota Life because doing so was very expensive and she believed that she hød the right to conÍínuingfree life insurance for us long as she was disubled under the "premium waiver" coverage in the 2012 SPD. fColleen Dec., Í125; Pyrich Dec., Ex. 3, p. 8; Ex. 4 (4119 Dep.) at 144:10-16; Ex. 81. Because she believed (and had been led to believe) that the "premium waiver" coverage existed, and received no contrary information from Medco/Express scripts over the course of more than a year of discussions, Colleen ultimately ended up scrambling for other options to replace the nearly $750,000 in life insurance she had previously had under the Medco Plan. She has not been able to do so. Instead, she has managed only a partial replacement, at significant cost to her These facts, none of which are in dispute, establish the final necessary element of detrimental reliance on Medco/Express Scripts' misrepresentations and omtsslons. ZJ Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 28 of 31 PageID: 790 E. Medco/Express Scripts Should Be Held Liable For Breaching Its Fiduciary Duties To Colleen One of the key protections afforded by ERISA is the right of plan participants to have full, clear and accurate information about available benefits. See, e.g.,Int'l Union of Elec., Elec., Salaried, Mach. & Furniture Workers, AFL-CIO v. Murqta Erie N. Am., Inc., 980 F.2d 889, 907 (3dCir. 1992) ("One statutory goal of ERISA is to insure that 'every employee frày, on examining the plan documents, determine exactly what his rights and obligations are under the plan."') (quoting H. Rep. No 1280, 93rd Cong.,2d Sess. 297,reprinted in 1974 U.S. Code Cong. & Admin. News 5038, 5077-78). Medco/Express Scripts, by its omissions and misrepresentations to Colleen, deprived her of that right. Instead of knowing precisely where she stood with respect to her life insurance benefits and the possibility of "premium waiver" coverage while she was on disability, Colleen was not given essential information, such as the fact that neither Medco/Express Scripts nor Prudential believed that the coverage she sought actually existed The law is clear that lying to plan participants about benefits - whether through affirmative misstatements or through material omissions, as here - "is inconsistent with the duty of loyalty owed by all fiduciaries and codified in section aÙa@)Q) of ERISA, 29 U.S.C. 1104(a)(1)." VariQ Corp. v. Howe,s16 U.S. 489, 506 (1996), quoting Peoria Union Stock Yqrds Co. v. Penn Mut. Life Ins. Co.,698 F .2d 320,326 (7th Cir. 1983). This Court should apply that law to the undisputed 24 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 29 of 31 PageID: 791 facts before it, and find that MedcoÆxpress Scripts breached its fiduciary duty to Colleen. 25 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 30 of 31 PageID: 792 CONCLUSION For the foregoing reasons, Plaintiff Colleen Finnegan respectfully requests that the Court grant summary judgment on the question of liability, finding that Medco/Express Scripts breached its fiduciary duties to her. Respectfully submitted, JARDIM, MEISNER & SUSSER, P.C. Attorneys for Plaintiff Lou Ann Woerner By: s/ Afissø Ayricfi ALISSA PYRICH Dated: December 23, 2016 26 Case 2:14-cv-07184-MCA-MAH Document 56-1 Filed 12/23/16 Page 31 of 31 PageID: 793 JARDIM, MEISNER & SUSSER, P.C. 308 Vreeland Road, Suite 201 Florham Park, NJ 07932 Tel.: (973) 845-7640 Fax: (973) 845-7645 Attorneys for Plaintiff Colleen Finnegan COLLEEN P. FINNEGAN, Plaintiff, MEDCO I{EALTH SOLUTIONS, INC., as the Plan Administrator of the Medco Health Solutions, Inc. Welfare Benefit Plan, EXPRESS SCRIPTS, INC., as the parent of, or successor to, Medco Health Solutions, Inc., and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA as the Designated Fiduciary of the Plan, UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NE\ry JERSEY V Civil Action No. 2 :l 4 - cv -07 1 84-MCA-MAH ORDER GRANTING PARTIAL SUMMARY JUDGMENT AS TO LIABILITY Defendants THIS MATTER having been opened to the Court upon motion of Plaintiff Colleen Finnegan, by and through her attorneys, Jardim, Meisner & Susser, P.C., for an Order pursuant to Fed. R. Civ. P. 56 granting partial summary judgment in her favor and against Defendants Medco Health Solutions, Inc., and Express Scripts, Inc. on the question of liability for breach of fiduciary duty under the Employee 1 Case 2:14-cv-07184-MCA-MAH Document 56-2 Filed 12/23/16 Page 1 of 2 PageID: 794 Retirement Income Security Act of 1974, as amended, 29 U.S.C. $1001 , et seq. ("ERISA"); and the Court having considered the papers submitted; andhaving heard the arguments of counsel; and for good cause having been shown, IT IS on this day of ,2017 , hereby DECLARED that Defendants Medco Health Solutions, Inc., and Express Scripts, Inc. breached their fiduciary duties owed to Plaintiff Colleen Finnegan under ERISA by failing to provide full and accurate information about benefits under a employee benefit plan; and ORDERED that partial summary judgment on the issue of liability be and hereby is GRANTED in favor of Plaintiff and against Defendants Medco Health Solutions, Inc., and Express Scripts, Inc. HON. MADELINE COX ARLOE, U.S.D.J. 2 Case 2:14-cv-07184-MCA-MAH Document 56-2 Filed 12/23/16 Page 2 of 2 PageID: 795
