Lawrence v. Randolph Hospital, Inc.

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

M.D.N.C.April 26, 2017

1 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA GREENSBORO DIVISION STACIE LAWRENCE Plaintiff v. RANDOLPH HOSPITAL, INC. Defendant Civil Action No. 1:17-cv-363 DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT AND MOTION TO STRIKE Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, Defendant Randolph Hospital, Inc. (“Randolph”) moves this Court to dismiss Plaintiff’s claims as preempted by section 514(a) of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., as amended, without leave to amend. Randolph further requests that, if Plaintiff is given leave to amend her Complaint, the Court strike Plaintiff’s claim for punitive damages and her jury demand. In this action, Plaintiff is attempting to recover medical and disability benefits, allegedly payable under the Randolph Hospital Employee Health and Welfare Plan (the “Plan”), established by her former employer, Randolph. The Complaint characterizes Plaintiff’s claims as arising under state law. However, pursuant to ERISA § 514(a), ERISA “supersede[s] any and all State laws insofar as they…relate to any employee benefit plan….” 29 U.S.C. § 1144(a). Plaintiff alleges that she was severely injured in a motor vehicle accident on March 11, 2014. She claims that Randolph did not pay her medical bills or disability benefits, which Plaintiff claims were payable under the Plan. Each of Plaintiff’s claims Case 1:17-cv-00363-NCT-LPA Document 8 Filed 04/26/17 Page 1 of 5 2 relate to the Plan because they are all based on Plaintiff’s contention that she had medical and disability coverage under the Plan and that she is entitled to payment of Plan benefits. Plaintiff claims that Randolph improperly denied her benefits, and she has sued to obtain payment of those benefits. To the extent Plaintiff also asserts claims for relief beyond the payment of benefits, those claims are premised on the existence of the Plan, and they are likewise preempted. Claims that are expressly preempted by federal law are subject to dismissal. Plaintiffs asserting ERISA-preempted state-law claims are often given leave to amend their complaints to assert only causes of action under ERISA. Here, however, Plaintiff should not be given leave to amend because, based on her own allegations, she does not have a claim against Randolph under ERISA. Thus, amendment would be futile. First, based on her allegations, Plaintiff’s claim for medical benefits fails. Plaintiff alleges that she did not have coverage for medical benefits at the time of her injury, but she claims that coverage was effective two days after her injury, when she was not actively at work due to her health-related condition. Based on the Complaint, however, her coverage would not have been effective as alleged because the Plan required employees to be actively at work on the effective date of coverage. Second, Plaintiff’s claim for disability benefits fails. As an initial matter, Plaintiff does not allege that she ever submitted a claim for disability benefits. Even if she had, however, Randolph is not the proper defendant to Plaintiff’s claim for disability benefits. Although medical benefits were self-funded under the Plan, disability benefits were funded by an insurance policy issued by Sun Life Assurance Company of Canada (“Sun Case 1:17-cv-00363-NCT-LPA Document 8 Filed 04/26/17 Page 2 of 5 3 Life”). Sun Life had exclusive discretion for deciding disability benefit claims, and the exclusive responsibility for paying such claims. Because Randolph did not have any control or discretion over the payment of disability claims, it is not a proper party to an action for disability benefits under ERISA. Because Plaintiff cannot amend the Complaint to state a claim against Randolph, she should not be given leave to amend. Thus, the Complaint should be dismissed in its entirety. However, if Plaintiff is allowed to amend the Complaint, her request for punitive damages and her jury demand should be stricken from the record. It is well-settled in the Fourth Circuit that plaintiffs are not entitled to punitive damages or jury trials related to their claims for ERISA benefits. Accordingly, if Plaintiff’s claims are allowed to proceed, Randolph asks the Court to issue an order striking Plaintiff’s requests for punitive damages and a jury trial. A brief and exhibits in support of this motion are filed and served contemporaneously herewith, and incorporated by reference as if fully set forth herein. WHEREFORE, Randolph prays that its motion to dismiss be granted. This the 26th day of April, 2017. SMITH MOORE LEATHERWOOD LLP /s/ Maureen Demarest Murray Maureen Demarest Murray N.C. State Bar No. 9195 maureen.murray@smithmoorelaw.com 300 N. Greene Street, Suite 1400 Greensboro, NC 27401 Telephone: (336) 378-5258 Case 1:17-cv-00363-NCT-LPA Document 8 Filed 04/26/17 Page 3 of 5 4 Facsimile: (336) 433-7468 Dorothy H. Cornwell Georgia Bar No. 552635 dorothy.cornwell@smithmoorelaw.com SMITH MOORE LEATHERWOOD LLP 2300 Regions Center Plaza 1180 West Peachtree Street NW Atlanta, Georgia 30345 Telephone: (404) 962-1000 Facsimile: (404) 962-1200 Attorneys for Defendant Randolph Hospital, Inc. Case 1:17-cv-00363-NCT-LPA Document 8 Filed 04/26/17 Page 4 of 5 5 CERTIFICATE OF SERVICE The undersigned hereby certifies that this 26th day of April, 2017, the foregoing DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT AND MOTION TO STRIKE was served on the parties of record by the Court’s ECF Notification system to the following attorney of record: Douglas S. Harris 1698 Natchez Trace Greensboro, NC 27455 /s/ Maureen Demarest Murray Maureen Demarest Murray SMITH MOORE LEATHERWOOD LLP maureen.murray@smithmoorelaw.com 300 N. Greene Street, Suite 1400 Greensboro, NC 27401 Telephone: (336) 378-5258 Facsimile: (336) 433-7468 Case 1:17-cv-00363-NCT-LPA Document 8 Filed 04/26/17 Page 5 of 5