Thomas et al v. Graham Packaging Company LP et al

REPLY BRIEF re MOTION for Summary Judgment

M.D. Pa.August 30, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA AT HARRISBURG DOUGLAS M. THOMAS and ) CYNTHIA THOMAS, ) ) Plaintiffs, ) ) v. ) No. 1:15-cv-01500-YK ) Judge Yvette Kane ) GRAHAM PACKAGING COMPANY ) LP, PLAN ADMINISTRATOR FOR ) THE GRAHAM PACKAGING ) COMPANY HEALTH BENEFIT PLAN, ) THE GRAHAM PACKAGING ) COMPANY, LP, HEALTH BENEFIT ) PLAN, and WAGEWORKS, INC. ) THIRD PARTY ADMINISTRATOR ) FOR GRAHAM PACKAGING ) COMPANY, LP MEDICAL PLAN, ) ) Defendants. ) DEFENDANTS' REPLY TO PLAINTIFF'S RESPONSE TO DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT Pursuant to Local Rule 7.7, Defendants The Graham Packaging Company, L.P. Health Benefit Plan (the "Plan") and Graham Packaging Company, L.P. as Administrator for the Plan ("GPC") hereby file their Reply Brief to Plaintiffs' response to Defendants' Motion for Partial Summary Judgment [Doc. 43]. In their response, Plaintiffs fail to raise any genuine issues of material fact that would preclude partial summary judgment in Defendants' favor. With respect to Plaintiffs' Case 1:15-cv-01500-YK Document 46 Filed 08/30/16 Page 1 of 9 2 claim for denial of benefits (Count III), Plaintiffs improperly attempt to generate a dispute of fact by submitting a declaration that directly contradicts deposition testimony. They also conflate the facts upon which their breach of fiduciary duty claim is based with the facts upon which their denial of benefits claim is based in attempt to create a question of fact about futility, but their arguments fall short. With respect to their claim for breach of fiduciary duty (Count II), Plaintiffs seemingly abandon any claim made pursuant to 29 U.S.C. § 1132(a)(2) and they do not refute that they cannot use the breach claim to obtain denied benefits. LAW AND ARGUMENT A. Plaintiffs do not raise a genuine issue of material fact to dispute that they failed to exhaust their administrative remedies, nor do they raise a genuine issue of material fact to dispute that any such effort would have been futile. In Count III, Plaintiffs assert a claim for denial of benefits, the basis of which is that "Defendants prematurely terminat[ed] Plaintiffs' COBRA Coverage for failure to make timely payments" [Doc. 24 ¶¶ 79-83]. Defendants have asserted that Plaintiffs were required to exhaust their administrative remedies before asserting this claim, and that there is no genuine issue of material fact that they failed to do so. Indeed, in his deposition, Mr. Thomas testified that he did not appeal the decision to terminate his COBRA coverage and that the failure to exhaust his administrative remedies was the result of confusion and disagreement with the applicable deadline [See Doc. 43 ¶. 8-9]. Yet now, in response to Defendants' Case 1:15-cv-01500-YK Document 46 Filed 08/30/16 Page 2 of 9 3 motion, Mr. Thomas declares that he believed he was appealing GPC's decision to terminate COBRA coverage "through the correspondence exchanged between [his] counsel and [GPC's] counsel" [Doc. 44 p. 17]. Under the "sham affidavit doctrine," Plaintiffs cannot use this declaration to create an issue of material fact to defeat summary judgment. Jiminez v. All Am. Rathskeller, Inc., 503 F.3d 247, 251-53 (3d Cir. 2007) (citation omitted). A "sham affidavit" is one that includes testimony contradictory to earlier testimony that "explain[s] away or patch[es] up [that earlier testimony] in an attempt to create a genuine issue of material fact." In re CitX Corp., Inc., 448 F.3d 672, 679 (3d Cir. 2006). When presented with a "sham affidavit," the Court should disregard it. Id. See also Lease v. Tyler, No. 1:05-CV-618, 2008 WL 2673381, at *1 n.1 (M.D. Pa. June 30, 2008) (refusing to credit portions of an "affidavit insofar as it contradict[ed] [the plaintiff's] deposition testimony"). Mr. Thomas' declaration is a sham in that it is contradictory to his deposition testimony in which he said he did not appeal because he did not understand the timeline [See Doc. 43 pp. 8-9]. To the extent Mr. Thomas was confused or ignorant about the appeal requirement, his confusion or ignorance does not excuse his failure to exhaust his administrative remedies [See Doc. 43 pp. 9-10 (citing cases)]. Instead, to survive summary judgment, Plaintiffs must raise a genuine issue of material fact that any appeal would have been futile. Courts consider several factors in determining Case 1:15-cv-01500-YK Document 46 Filed 08/30/16 Page 3 of 9 4 whether an appeal would have been futile, but Plaintiffs focus on one: failure to comply with internal administrative procedures. See Harrow v. Prudential Ins. Co. of Am., 279 F.3d 244, 250 (3d Cir. 2002) (discussing factors courts consider in examining futility). To this end, Plaintiffs claim that GPC enrolled Plaintiffs in COBRA without their knowledge or consent, which is inconsistent with GPC's internal administrative procedures of allowing employees to elect COBRA coverage. But this has nothing to do with whether it would have been futile to appeal the later denial of that coverage for failure to pay premiums after Plaintiffs were notified that they were enrolled. Moreover, to the extent Plaintiffs now attempt to base a claim for denial of benefits on GPC's enrollment of them in COBRA without their consent, such a claim does not fit within the parameters of 29 U.S.C. § 1132(a)(1)(B), which allows for the recovery of "benefits due to [a participant or beneficiary] under the terms of his plan, to enforce the rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." As Plaintiffs highlight, GPC's enrollment of Plaintiffs in COBRA without their consent is the basis for their breach of fiduciary duty claim [See Doc. 44 p. 9 ("Count II of Thomas' Amended Complaint is primarily based on the fact that GPC enrolled Thomas in COBRA coverage without the Thomas' knowledge or consent thereby disqualifying Thomas from other affordable health care coverage options.")]. Case 1:15-cv-01500-YK Document 46 Filed 08/30/16 Page 4 of 9 5 Plaintiffs rely upon U.S. Renal Care, Inc. v. Wellspan Health, No. 1:14-cv- 2257, 2015 WL 5286638 (M.D. Pa. Sept. 10, 2015), asserting that the court determined that "by failing to provide plaintiff with information relating to the appeals process and not furnishing the documents underlying their rationale for, and calculation of the adverse benefits determinations, defendants also failed to act in accordance with their own internal administrative procedures" [Id. at 10 (internal quotation marks omitted]. But Defendants did furnish Mr. Thomas with information relating to the appeals process and the rational for the termination of coverage (i.e., failure to make payments) [See Doc. 41-1 p. 31]. Plaintiffs fail to point to any other facts in the record that even suggest Defendants did not follow their internal administrative procedures with respect to the termination of coverage. Plaintiffs further rely upon U.S. Renal Care, stating, "[t]he court determined that 'although the plaintiff may have failed to act in strict compliance with defendants' administrative procedures, it appears clear from the face of its letters that plaintiff was taking an appeal of the adverse benefit determinations" [Doc. 44 pp. 9-10]. This argument relates to the first factor in the futility analysis: whether plaintiff diligently pursued administrative relief. See Harrow, 279 F.3d at 250. But Mr. Thomas testified in his deposition that he did not appeal the denial of benefits and his declaration that he believed he was appealing through correspondence between counsel should be disregarded as a sham. Case 1:15-cv-01500-YK Document 46 Filed 08/30/16 Page 5 of 9 6 Even if the Court considers Mr. Thomas' statement that he thought he was appealing as a result of the correspondence to GPC's counsel, Plaintiffs' reliance on U.S. Renal Care is misplaced as court made its determination about pursuing relief in the context of a motion to dismiss and it was only one of several factors the court relied upon in finding that the complaint alleged sufficient facts to support a finding of exhaustion. 2015 WL 5286638, at *9. In addition, Plaintiffs have cited no authority for the proposition that correspondence from Plaintiffs' counsel is a substitute for following appeal procedures. See, e.g., Harrow, 279 F.3d at 251-52 (finding that a telephonic inquiry did not demonstrate the plaintiff diligently pursued administrative relief). Accordingly, for all these reasons, there is no genuine issue of material fact that Plaintiffs did not exhaust their administrative remedies. Nor have Plaintiffs raised any genuine issue of material fact that any attempt to exhaust their administrative remedies would have been futile. The Court should therefore grant summary judgment on Count III in Defendants' favor. B. Plaintiffs' have abandoned that they are entitled to relief pursuant to 29 U.S.C. § 1132(a)(2). In Count II, Plaintiffs seek compensatory damages against GPC for an alleged breach of fiduciary duty pursuant to 29 U.S.C. § 1132(a)(2) and (a)(3) [Doc. 24 ¶ 78]. Defendants asserted that, to the extent Plaintiffs "seek to recover benefits allegedly owed to them in their individual capacities, their action is plainly not authorized by Case 1:15-cv-01500-YK Document 46 Filed 08/30/16 Page 6 of 9 7 [§§ 1132(a)(2) and 1109]." [Doc. 43 p. 5 (quoting Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1162 n.7 (3d Cir. 1990))]. In their response, Plaintiffs seem to concede this point and argue only that they are entitled to recover under § 1132(a)(3) [See Doc. 44 p. 7 ("In their Amended Complaint, Thomas alleged they were entitled to relief under 29 U.S.C. 1132(a)(2) and (a)(3). Under 29 U.S.C. 1132(A)(3), Thomas is entitled to 'other appropriate equitable relief.'")]. The Court should therefore grant partial summary judgment and dismiss any claim for breach of fiduciary duty made pursuant to 29 U.S.C. § 1132(a)(2). See Glenn v. Raymour & Flanigan, 832 F. Supp. 2d 539, 547 (E.D. Pa. 2011) (deeming claims abandoned when the plaintiff failed to address them in response to the defendant's motion for summary judgment). C. To the extent Plaintiffs seek to obtain denied benefits as a result of the alleged breach of fiduciary duties, such claim should be dismissed. Defendants argued that, to the extent Plaintiffs' breach of fiduciary duty claim is predicated upon the alleged improper denial of benefits-which is not entirely clear from the record-the claim must fail as a matter of law [Doc. 43 p. 6]. This is because "a plaintiff cannot sue for breach of fiduciary duties to obtain denied benefits" [Id. at 5 (citing U.S. Renal Care, 2015 WL 5286638, at *10]. Plaintiffs do not dispute this proposition of law. The Court should therefore grant summary Case 1:15-cv-01500-YK Document 46 Filed 08/30/16 Page 7 of 9 8 judgment and dismiss any claim made pursuant to Count II that seeks to obtained allegedly denied benefits. CONCLUSION In light of the foregoing and as set forth in the Motion for Partial Summary Judgment, Defendants respectfully assert there are no genuine issues of material fact with respect to Plaintiffs' claims for breach of fiduciary duty and denial of benefits and that Defendants are entitled to judgment as a matter of law. DATED this 30th day of August, 2016. s/Timothy B. McConnell Timothy B. McConnell, TN 019136 (Special Admission) BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ 265 Brookview Centre Way, Suite 600 Knoxville, Tennessee 37919 Phone: (865) 549-7000 tmcconnell@bakerdonelson.com Mark D. Bradwhaw STEVENS & LEE, P.C. 17 North Second Street 16th Floor Harrisburg, PA 17101 Phone: 717-255-7357 mdb@stevenslee.com Attorney for Defendants Case 1:15-cv-01500-YK Document 46 Filed 08/30/16 Page 8 of 9 9 CERTIFICATE OF SERVICE I hereby certify that I have on August 30th, 2016, caused a copy of the foregoing to be filed electronically via ECF upon the following: Scott J. Strausbaugh Becker & Strausbaugh 544 Carlisle Street Hanover, PA 17331 Attorney for Plaintiffs s/Timothy B. McConnell Attorney for Defendants Case 1:15-cv-01500-YK Document 46 Filed 08/30/16 Page 9 of 9 Lease v. Tyler, Not Reported in F.Supp.2d (2008) 2008 WL 2673381 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 2008 WL 2673381 Only the Westlaw citation is currently available. United States District Court, M.D. Pennsylvania. David R. LEASE, Plaintiff v. Kevin TYLER, et al., Defendants. Civil Action No. 1:05-CV-618. | June 30, 2008. Attorneys and Law Firms Don Bailey, Andrew J. Ostrowski, Sheri D. Coover, Bailey, Stretton & Ostrowski, Harrisburg, PA, for Plaintiff. Christopher P. Gerber, Siana, Bellwoar & McAndrew, LLP, Exton, PA, Devon M. Jacob, Frank J. Lavery, Jr., Robert G. Hanna, Jr., Lavery, Faherty, Young & Patterson, P.C., Harrisburg, PA, Sean E. Summers, Barley Snyder Senft & Cohen, LLC, York, PA, for Defendants. MEMORANDUM YVETTE KANE, Chief Judge. *1 Before the Court are motions for summary judgment filed by Defendants Kevin Tyler (Doc. No. 65), Douglas Fishel (Doc. No. 60), Ronald Plank, and Adams Electric Cooperative (Doc. No. 61). The motions have been briefed (Doc. Nos.62, 66-67, 73, 75-76) and are ripe for disposition. In their motions, Defendants assert that Plaintiff David Lease has presented insufficient evidence of a deprivation of constitutional rights. For the reasons that follow, the Court agrees and will grant the motions for summary judgment. I. BACKGROUND Plaintiff David Lease initiated this civil action by filing a complaint in this Court on March 28, 2005. (Doc. No. 1.) On May 5, 2005, Plaintiff filed his first amended complaint, in which he alleged that Defendants conducted an unlawful search of his property in March 2004 in violation of his Fourth and First Amendment rights. (Doc. No. 6.) Specifically, Lease contends that on March 17, 2004, Defendants improperly entered onto his property, “removed the face of and otherwise damaged meters belonging to the plaintiff which were on his property,” and otherwise engaged in a “fishing expedition ... [to] carr[y] out the retaliatory interests of Hamilton Township.” (Id. ¶ 14-15.) Hamilton Township's alleged desire to retaliate against Lease stems from a long- standing dispute between the two that includes, inter alia, lawsuits filed in 1996, 1999, and 2000. (Id. ¶ 16); (Doc. No. 63, ¶¶ 110-12) (hereinafter “statement of material facts” or “SMF”); (Doc. No. 72, ¶¶ 110-12) (hereinafter “counter- statement of material facts” or “CSMF”). The apartment building and its meters 1 Plaintiff David Lease is a gentleman in his sixties who owns certain property in New Oxford, Adams County, Pennsylvania, including the six-unit apartment building located at 160 Gun Club Road that is the site of the alleged constitutional violations in this case. (SMF ¶¶ 1, 9, 11.) The apartments at 160 Gun Club Road receive electricity from Defendant Adams Electric Cooperative, of which Lease is a member. (SMF ¶ 16.) As a member, Lease is “bound by the Cooperative's articles of Incorporation, Bylaws, policies, rules and regulations,” and as a condition of his membership in the cooperative, Lease agreed that Adams Electric would have an “easement for the inspection, construction, operation, repair, maintenance, relocation and removal of electric distribution lines, meters, or other facilities to serve the Applicant's premises.” (SMF ¶¶ 17-19.) In the mid-1990's, Adams Electric installed a single meter on a pole on Gun Club Road to monitor the total use of electricity for the apartment building. (SMF ¶ 21.) Previously, the electricity consumption for the apartments had been measured by several individual meters in a meter base adjacent to the apartment building. (Id.) After Adams Electric installed the street-side meter, meters had remained in the meter base adjacent to the building, allowing Lease to track the electricity usage per apartment, until sometime around 2001, when Adams Electric removed those meters, “plugged all of the meters with bars,” and sealed the openings where the meters had been with “pie plate” covers. 2 (Doc. No. 74-5, Lease Aff. ¶ 4.) Even in the absence of the meters, electrical current continued to flow through the meter base to the apartments. (Id.) Case 1:15-cv-01500-YK Document 46-1 Filed 08/30/16 Page 1 of 9 Lease v. Tyler, Not Reported in F.Supp.2d (2008) 2008 WL 2673381 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 2 Events leading up to the March 17, 2004, visit to Lease's property *2 Beginning in the summer of 2003, Defendant Kevin Tyler served as a Zoning and Code Enforcement Officer for Hamilton Township. (SMF ¶ 2; Doc. No. 64-2, Tyler Dep. 8). In this capacity, he received numerous complaints-Tyler estimated the number to be over a hundred-from township residents about Lease's property. (SMF ¶ 28.) Many of the complaints concerned sewage and runoff from the property and excessive smoke believed to be coming from an incinerator operated on the property. (SMF ¶ 29.) Because of the significant number of complaints and his uncertainty how to handle the situation as a relatively new code enforcement officer, Tyler sought guidance from the Adams County District Attorney's Office. (SMF ¶¶ 32-35.) On his own initiative, Tyler discussed the situation with Assistant District Attorney Brian Coffey and expressed concern about how he was to “specifically write” the proper citations. (SMF ¶¶ 36-38.) Following a public meeting during which residents complained about the property (SMF ¶ 42), Coffey asked to view the property to better understand the situation (SMF ¶ 39), and Tyler agreed to drive him there (SMF ¶ 40). Coffey suggested that Defendant Douglas Fishel, an Abbottstown-Hamilton Township police officer, accompany them. (SMF ¶¶ 3, 41.) The township's chief of police instructed Fishel to ride with the two gentlemen to Lease's apartment building to provide security while Tyler and Coffey spoke to Lease and/or local residents about the complaints. (SMF ¶¶ 43-44.) March 17, 2004, visit to Lease's property On March 17, 2004, the three men traveled to Lease's apartment building at 160 Gun Club Road, and pulled into a large parking lot in front of the building used by the tenants and their guests. (SMF ¶¶ 46, 50.) Tyler drove to a location near where Lease was standing outside, the men spoke briefly, and then Tyler began to drive away from the property. (SMF ¶¶ 50-51.) When they were on the main road near the property, Tyler observed electrical wires sticking up through the apartment building's roof (SMF ¶ 46, 50), and the three men returned to the apartment to check out the situation (SMF ¶¶ 55-56). Tyler pulled into the large parking lot in front of the apartment building for a second time. (SMF ¶ 56.) Tyler and Fishel alighted from the vehicle and walked toward the side common entrance to the apartment building. (SMF ¶¶ 56-58.) From his vantage point outside of the apartments, Lease saw Tyler, Fishel, and Coffey return to the property, and he watched as they walked toward the side entrance of the building. (SMF ¶¶ 91-93.) Lease voiced no objections to their presence at this time. (SMF ¶ 98.) As Fishel approached the side entrance and alcove to the building, he looked to his right and observed the meter base for the apartment units. (SMF ¶ 58.) Defendants describe the meter base adjacent the apartment building as being housed in a recessed area that was open to their view (SMF ¶ 57); Lease, on the other hand, describes the meter base as being inside a fully enclosed room with a door (CSMF ¶ 57) containing transparent glass panes through which the inside of the room, including the meter base, is visible (id.); (see Doc. No. 74-3, Zamboni Dep. 75-76, 106-109); (see also Lease Aff. ¶ 5). Lease further testified in his deposition that the door to the “meter room” may have been locked, may have been unlocked, or may have even been open. (SMF ¶¶ 108-09.) Lease admits that he did not see either man open the door, and he acknowledges that he is not claiming that the men broke into the room. (SMF ¶¶ 106-07.) *3 Fishel observed that one of the pie plate covers was missing and electrical components within the meter base were exposed to the air (SMF ¶ 60), and Tyler noticed that some of the seals on the pie plate covers had been broken (SMF ¶ 59). 3 From where he stood viewing the Defendants' actions, Lease observed Fishel and Tyler enter the meter room, and purportedly viewed Fishel remove the cover from a meter base and place it on the floor. (SMF ¶¶ 94-95.) Lease admits, however, that he has no evidence to contradict Fishel's testimony that before he entered the area where the meter bases were located, Fishel saw what he believed to be a dangerous condition. (SMF ¶ 102.) Concerned about the potential safety hazard posed by the improperly sealed meter base and exposed electrical components (SMF ¶¶ 61, 64), Tyler, Fishel, and Coffey left the apartment building and spoke to an electrical lineman Fishel had observed working further along the road and asked him to return to the property with them and make sure the situation was safe (SMF ¶¶ 65-66). 4 Case 1:15-cv-01500-YK Document 46-1 Filed 08/30/16 Page 2 of 9 Lease v. Tyler, Not Reported in F.Supp.2d (2008) 2008 WL 2673381 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 3 At some point Lease approached Tyler and Fishel to inquire about their presence on his property. (SMF ¶ 100.) Fishel advised Lease of the perceived problem with the meter base and pie plate covers and explained that the electric company would be arriving to make sure it was safe. (SMF ¶ 101.) Lease testified in his deposition that the electric company arrived while Lease and Fishel were conversing. (SMF ¶ 103.) The electricians arrive Craig Mummert, the Adams Electric apprentice lineman approached by Tyler, Fishel, and/or Coffey, agreed to check out the situation, since it was the cooperative's policy to respond to safety concerns such as this, even if the cooperative may not be the electricity provider. 5 (SMF ¶¶ 7, 72-74.) When Mummert arrived at Lease's apartments and viewed the meter base, he observed that three of the covers were missing. (SMF ¶¶ 78, 83.) As per company procedure, Mummert contacted his supervisor, Rich Redding, to inform Redding that Mummert had left his assigned post to inspect a potential safety hazard. (SMF ¶¶ 83-84.) Redding instructed Mummert to keep everyone away from the meter bases and await his arrival. (SMF ¶ 85.) When Redding arrived at the apartment building, he, too, confirmed that the meter bases were open and unsafe, and then called his supervisor, Defendant Ronald Plank, to advise him of the situation. (SMF ¶¶ 86-87.) Plank arrived shortly thereafter to survey the scene, and he instructed Mummert and Redding to replace the pie plates, seal the meters, and then return to their typical business. (SMF ¶¶ 88-89.) While the repairs were ongoing, Lease argued with the Defendants about the reason for their being on his property, asked them to leave, and then left himself. (SMF ¶¶ 103-104); (Doc. No. 64-2, Lease Dep. 302). As soon as Mummert's repairs were complete, all of the Defendants exited the premises. (SMF ¶ 105.) *4 Tyler did not cite Lease for any code violations that day; in fact, Tyler issued no citations or violations against Lease during his brief service as a Zoning and Code Enforcement Officer. (SMF ¶¶ 30-31.) II. STANDARD OF REVIEW Federal Rule of Civil Procedure 56(c) provides, in relevant part, that summary judgment is appropriate “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” A factual dispute is material if it might affect the outcome of the suit under the applicable law, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see Horvath v. Keyston Health Plan East, Inc., 333 F.3d 450, 454 (3d Cir.2003), and it is “genuine” only if there is a sufficient evidentiary basis that would allow a reasonable fact finder to return a verdict for the non- moving party, Anderson, 477 U.S. at 249. At summary judgment, the inquiry is whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law. Anderson, 477 U.S. at 251-52. In making this determination, the Court must “consider all evidence in the light most favorable to the party opposing the motion.” A.W. v. Jersey City Public Schs., 486 F.3d 791, 794 (3d Cir.2007). The moving party has the initial burden of identifying evidence that it believes shows an absence of a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 145-46 (3d Cir.2004). Once the moving party has shown that there is an absence of evidence to support the non-moving party's claims, it essentially becomes “ ‘put up or shut up’ time for the non-moving party: the non-moving party must rebut the motion with facts in the record and cannot rest solely on assertions made in the pleadings, legal memoranda, or oral argument.” Berckeley Inv. Group, Ltd. v. Colkitt, 455 F.3d 195, 201 (3d Cir.2006); accord Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the nonmoving party “fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial,” summary judgment is appropriate. Celotex, 477 U.S. at 322. With respect to the sufficiency of the evidence that the nonmoving party must provide, a court should grant summary judgment where the nonmovant's evidence is merely colorable, conclusory, or speculative. Anderson, 477 U.S. at 249-50. There must be more than a scintilla of evidence supporting the nonmoving party and more than some metaphysical doubt as to the material facts. Id. at 252; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Case 1:15-cv-01500-YK Document 46-1 Filed 08/30/16 Page 3 of 9 Lease v. Tyler, Not Reported in F.Supp.2d (2008) 2008 WL 2673381 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 4 III. DISCUSSION Section 1983 of Title 42 of the United States Code offers private citizens a means to redress violations of federal law by state actors. 42 U.S.C. § 1983. The statute provides, in relevant part, that: *5 Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress .... Id. Section 1983 is not a source of substantive rights; rather, it is a method to vindicate violations of federal law committed by state actors. See, e.g., Neumeyer v. Beard, 421 F.3d 210, 213 (3d Cir.2005); Gruenke v. Seip, 225 F.3d 290, 298 (3d Cir.2000). To establish a claim under this section, a plaintiff must show a deprivation of a “right secured by the Constitution and the laws of the United States ... by a person acting under color of state law.” 42 U.S.C. § 1983. The satisfaction of these elements does not, in all circumstances, guarantee recovery. The doctrine of qualified immunity provides that state actors who perform discretionary functions are “shielded from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person should have known.” Hill v. Borough of Kutztown, 455 F.3d 225, 244 (3d Cir.2006) (quoting Wilson v. Layne, 526 U.S. 603, 609, 119 S.Ct. 1692, 143 L.Ed.2d 818 (1999)). To gain the protection of this doctrine, the defendant must show that (1) the plaintiff has not demonstrated “a deprivation of an actual constitutional right” or (2) that the right at issue was not “clearly established at the time of the alleged violation.” Conn v. Gabbert, 526 U.S. 286, 290, 119 S.Ct. 1292, 143 L.Ed.2d 399 (1999). “When immunity is raised at the summary judgment stage, the court's analysis of the merits of the claim for purposes of summary judgment essentially merges with its analysis of the existence of a deprivation of federal rights for the purposes of immunity.” Barshinger v. Buffington, No. 1:03-CV-0506, 2004 U.S. Dist. LEXIS 28929, at *17-18 (M.D. Pa. June 10, 2004) (citing cases). With this framework in mind, the Court will turn to the claims asserted by Lease to determine, first, whether he has offered sufficient evidence of a deprivation of a constitutional right by a state actor, and second, whether the right at issue was clearly established at the time of the alleged violation. A. Defendants Tyler and Fishel 1. Search Lease asserts that Tyler and Fishel violated his Fourth Amendment rights by improperly entering upon his property, searching his “meter room,” and allegedly damaging a certain meter base located therein. (Doc. No. 6, ¶¶ 1, 14.) Defendants Tyler and Fishel contend that this claim is baseless on the grounds that they “lawfully observed a potentially dangerous condition alongside Plaintiff's apartment building, which was open to the public and where Plaintiff lacked an expectation of privacy. Plaintiff does not dispute that the meters could be seen in plain view from outside of the building.” (Doc. No. 66, at 5); (see also Doc. No. 76, at 4) (“Plaintiff failed to establish that a ‘search’ occurred; to the contrary, the evidence of record establishes that Defendants observed a dangerous condition while standing in a common area.”). *6 The Fourth Amendment provides: The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. U.S. Const. Amend. IV. This amendment limits government action in two ways: “First, it requires that searches and seizures be reasonable, and second, it states that when a warrant is required ... it must have certain Case 1:15-cv-01500-YK Document 46-1 Filed 08/30/16 Page 4 of 9 Lease v. Tyler, Not Reported in F.Supp.2d (2008) 2008 WL 2673381 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 5 characteristics.” United States v. Hartwell, 436 F.3d 174, 177 (3d Cir.2006). The threshold inquiry for a Fourth Amendment claim such as Lease's is whether the government's conduct amounted to a “search.” Hartwell, 436 F.3d at 177. “A Fourth Amendment search occurs when the government violates a subjective expectation of privacy that society recognizes as reasonable.” Kyllo v. United States, 533 U.S. 27, 33, 121 S.Ct. 2038, 150 L.Ed.2d 94 (2001) (citing Katz v. United States, 389 U.S. 347, 361, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967) (Harlan, J., concurring)); see also Hartwell, 436 F.3d at 177, 178 n. 4. Having reviewed the facts of this case, the Court concludes that Lease has failed to establish that Defendants Tyler and Fishel engaged in a search as contemplated by the Fourth Amendment. While it is true that “[a]n individual's Fourth Amendment interest in the curtilage of his home has been well settled for over a century,” Estate of Smith v. Marasco, 318 F.3d 497, 521 n. 13 (3d Cir.2003), “[t]he concept of curtilage has been significantly modified when applied to a multiple dwelling,” United States v. Romano, 388 F.Supp. 101, 104 (E.D.Pa.1975); see also LaFave, 1 Search & Seizure § 2.3(f) (4th ed.) (“[I]t is a fair generalization that the lands adjoining a multiple-occupancy residence are less likely to receive Fourth Amendment protection than the yard of a single family residence.”). Because of the number of residents and guests visiting a multiple-occupancy residence, some courts have reasoned that there is “no justified expectation of privacy as to a portion of the home which all residents and visitors must use to enter, the common yard open to the public, or the parking lot open to all users of the apartment building.” LaFave, 1 Search & Seizure § 2.3(f) (citations and internal quotation marks omitted). In the instant case, when Tyler and Fishel observed unusual wires sticking up from the six-unit apartment building owned by Lease, they pulled their car into the parking lot used by tenants and their guests, exited the vehicle, and began walking toward a side common entrance of the apartment building (SMF ¶¶ 54-56; CSMF ¶¶ 54-56), ostensibly to inquire about the unusual wires or obtain a better view of the situation and ascertain whether it conformed with all building codes. When they were standing outside of the apartment building in a common area utilized by those entering and exiting the building, they observed in plain view a meter base with electrical components that were exposed and/or improperly sealed. (SMF ¶¶ 57-60.) 6 Their observation of this hazard from a common area does not amount to the intrusive search Lease believes it to be. See Marasco, 318 F.3d at 519 (“[W]hen the police come onto private property to conduct an investigation or for some legitimate purpose and restrict their movements to places where visitors would be expected to go (e.g.walkways, driveways, porches), observations made from such vantage points are not covered by the Fourth Amendment.”) (quoting LaFave 1 Search & Seizure § 2.3(3)); see also New Jersey v. Domicz, 188 N.J. 285, 907 A.2d 395, 405 (N.J.2006) (“An area within the curtilage to which the public is welcome, such as a walkway leading to an entrance to a home, is not afforded Fourth Amendment protection because the resident has given implicit consent to visitors that approach the home that way. In other words, when a law enforcement officer walks to a front door or the back door for the purpose of making contact with a resident and reasonably believes that the door is used by visitors, he is not unconstitutionally trespassing on the property.”) (citations omitted). *7 Insofar as Lease relies upon their actual entry into the “meter room” to form the basis of his claim (assuming that there was, in fact, such a room), Tyler and Fishel's actions were reasonable and, hence, constitutional under the circumstances. The touchstone of Fourth Amendment analysis is reasonableness. United States v. Pollard, 326 F.3d 397, 410 (3d Cir.2003) (citing Michigan Dep't of State Police v. Sitz, 496 U.S. 444, 450, 110 S.Ct. 2481, 110 L.Ed.2d 412 (1990)). What is “reasonable” depends upon all of the circumstances surrounding the search and the nature of the search itself, United States v. Montoya de Hernandez, 473 U.S. 531, 537, 105 S.Ct. 3304, 87 L.Ed.2d 381 (1985) (citations omitted); it is an inquiry that calls for the consideration of, “on the one hand, the degree to which [the search] intrudes upon an individual's privacy and, on the other, the degree to which it is needed for the promotion of legitimate government interests,” United States v. Williams, 417 U.S. 373, 376 (3d Cir.2005) (quoting United States v. Knights, 534 U.S. 112, 118-19, 122 S.Ct. 587, 151 L.Ed.2d 497 (2001)). This balancing generally requires that a warrant be obtained upon a showing of probable cause, Pollard, 326 F.3d at 411, see also U.S. Const. Amend. IV; however, various exceptions to this general rule exist, such as when the circumstances demand immediate action, Camara v. Mun. Court of City Case 1:15-cv-01500-YK Document 46-1 Filed 08/30/16 Page 5 of 9 Lease v. Tyler, Not Reported in F.Supp.2d (2008) 2008 WL 2673381 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 6 and County of San Francisco, 387 U.S. 523, 540-41, 87 S.Ct. 1727, 18 L.Ed.2d 930 (1967). Here, Lease admits that he has no evidence to contradict Fishel's testimony that before Fishel entered the area where the meter base was located, he saw what he believed to be a dangerous condition. The record reflects that any intrusion into the “meter room” was limited to a closer inspection of the meter base that Tyler and Fishel believed to pose a danger to the physical safety of inquisitive individuals who might touch the electrical components and to nearby property should something come into contact with the meter base and start a fire. Further, any such entry occurred before Lease approached them and asked them to leave. See Camara, 387 U.S. at 539-40 (noting that “it seems likely that warrants should normally be sought only after entry is refused unless there has been a citizen complaint or there is other satisfactory reason for securing immediate entry”). 7 There is nothing in the record to suggest that Tyler and Fishel acted unreasonably to the perceived dangers of the meter base or with “pretext” in assuming that electrical current flowed through the meter base, see New York v. Burger, 482 U.S. 691, 716 n. 27, 107 S.Ct. 2636, 96 L.Ed.2d 601 (explaining in the context of administrative searches that evidence of pretext may establish unreasonableness). Rather, Defendants Tyler and Fishel acted within the Fourth Amendment's boundaries of “reasonableness” by responding in an appropriate manner to what they perceived to be a very real danger to the public. Thus, no violation of Plaintiff's constitutional rights occurred, Defendants Tyler and Fishel are entitled to qualified immunity, and Lease's unlawful search claim cannot proceed. 2. Retaliation *8 Lease also asserts that Tyler and Fishel retaliated against him in violation of his First Amendment rights. To establish a claim under § 1983 predicated on the First Amendment, a plaintiff must show “(1) that [he] engaged in a protected activity, (2) that defendants' retaliatory action was sufficient to deter a person of ordinary firmness from exercising his or her rights, and (3) that there was a causal connection between the protected activity and the retaliatory action.” Lauren W. ex rel. Jean W. v. Deflaminis, 480 F.3d 259, 267 (3d Cir.2007). To establish a causal connection, a plaintiff usually must prove either “(1) an unusually suggestive temporal proximity between the protected activity and the allegedly retaliatory action, or (2) a pattern of antagonism coupled with timing to establish a causal link.” Id. In the absence of the above, a plaintiff must show, “from the evidence gleaned from the record as a whole,” that the trier of fact should infer causation. Id. (quoting Farrell v. Planters Lifesavers Co., 206 F.3d 271, 281 (3d Cir.2000). The Third Circuit has urged district courts to “be diligent in enforcing these causation requirements because otherwise a public actor cognizant of the possibility that litigation might be filed against him, particularly in his individual capacity, could be chilled from taking action that he deemed appropriate and, in fact, was appropriate.” Id. Here, Lease maintains that the events of March 17, 2004, were retaliation for his protected activity of petitioning the government for redress of grievances. With respect to establishing the requisite causal connection between his protected court filings and the allegedly retaliatory actions, Lease has not argued that temporal proximity between the two would, in and of itself, establish the requisite causal link. Nor has Lease developed evidence of a pattern of antagonism coupled with questionable timing; rather, Lease seems to believe that the record as a whole is sufficient to establish a causal connection between the protected activity and the alleged retaliatory conduct. According to Lease, Hamilton Township's alleged desire to retaliate against him stems from a long-standing dispute between the two that includes, inter alia, lawsuits filed by Lease in 1996, 1999, and 2000 (Doc. No. 6, ¶ 16; SMF ¶¶ 110-12; CSMF ¶¶ 110-12), at least one of which was pending on appeal in March 2004 (Doc. No.73-1, at 14). In support of his argument that Defendants Tyler and Fishel engaged in retaliation because of these lawsuits, Lease relies upon the following: (1) Tyler and Fishel's positions as township employees; (2) their presence at a public meeting where Lease's property was discussed; (3) their failure to obtain a warrant before arriving at the apartment building; (4) Fishel's presence at the property to provide security and (5) the fact that at least one appeal was pending on March 17, 2004, the date of the events in question. (See Doc. No 73-1, at 13-14.) Lease also speculates that Fishel hoped to get a promotion by retaliating against him. (CSMF ¶ 116.) *9 Contrary to Lease's opinion, he has presented insufficient evidence of a retaliatory motive to support a finding of causation. His arguments lack support in Case 1:15-cv-01500-YK Document 46-1 Filed 08/30/16 Page 6 of 9 Lease v. Tyler, Not Reported in F.Supp.2d (2008) 2008 WL 2673381 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 7 the record and are otherwise conclusory and speculative. Indeed, based upon Lease's causation evidence, it would seem that any township employee remotely aware of Lease's lawsuits who took action Lease perceived as objectionable would potentially be liable for retaliation. Lease had ample opportunity during the course of discovery to develop the bases for his First Amendment claim against Defendants Tyler and Fishel, but Lease has failed to adduce anything beyond the fact that he was engaged in litigation against the township that employed Tyler and Lease when they appeared on his property on March 17, 2004, and engaged in conduct Lease found objectionable, but which this Court has determined was reasonable under the circumstances. This and Lease's own speculation about the motives of these men form the basis of his First Amendment claim. The Court has reviewed the record, and this is simply not a case where the record considered as a whole would support a finding of causation. Accordingly, Defendants Tyler and Fishel are entitled to summary judgment on Lease's First Amendment retaliation claim. B. Defendants Plank and Adams Electric Lease's claims against Defendants Plank and Adams Electric likewise fail for a number of reasons. The most obvious defect with Lease's § 1983 claims against them is that neither Plank nor Adams Electric are state actors, nor were they “willful participant[s] in joint activity with the State or its agents.” Adickes v. S.H. Kress & Company, 398 U.S. 144, 152, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). Although Lease claims that a civil conspiracy amongst the Defendants was afoot, the only evidence that he has introduced in support of this contention as to the non-governmental defendants is the fact that Plank arrived at Lease's property after Richard Redding informed him-pursuant to Adams Electric's policy-that Redding and Mummert had left their regular duties to respond to concerns of a potential electrical hazard at Lease's apartment building. Lease simply speculates that Defendants Tyler, Fishel, and Plank reached some kind of tacit understanding upon Plank's arrival that they would deprive Lease of federally guaranteed rights; he points to nothing in the record that supports such an assertion. Even if Plank and Adams Electric were state actors, their conduct did not violate any of Lease's constitutionally protected rights. With respect to Lease's claim that Plank and Adams Electric violated his Fourth Amendment rights by engaging in an improper search of his premises, it bears noting that Lease explicitly provided Adams Electric an “easement for the inspection, construction, operation, repair, maintenance, relocation and removal of electric distribution lines, meters, or other facilities to serve [Lease's] premises.” (SMF ¶¶ 17-19.) Thus, Lease had consented to the presence of Adams Electric and its employees on his property for the very purpose for which they were there-for the repair and maintenance of the improperly sealed meter base. That Lease believes Mummert should have been able to complete the repair himself is of no relevance. The record reflects that Mummert was a lesser experienced apprentice lineman who, in accordance with company policy, contacted his supervisor, Redding, who in turn contacted his supervisor, Defendant Plank. The Adams Electric employees arrived at the apartment building, confirmed that the meter base posed a hazardous condition, performed (or supervised) the repairs that were required to abate that danger, and then promptly left the premises. Rather than engaging in an unconstitutional search, Plank and Adams Electric simply repaired a safety hazard brought to their attention by concerned township officials and promptly returned to their business. *10 With respect to his First Amendment claim against Plank and Adams Electric, Lease offers little more than his speculation that Plank and Adams Electric were retaliating against him. 8 Indeed, Lease has not even pointed to evidence of record that Plank and Adams Electric were aware of Lease's protected activity, the filing of the lawsuits against the township. (SMF ¶ 126); (see also CSMF ¶ 126) (the evidence cited by Lease does not controvert Defendants' factual statement). As with Defendants Tyler and Fishel, Lease simply cannot establish a causal connection between Lease's protected activity and the purported retaliation of Plank and Adams Electric. Accordingly, Plank and Adams Electric are entitled to summary judgment on all claims brought against them because they are not state actors, and even if they were, Lease has not presented sufficient evidence which, if believed by the trier of fact, would establish that they violated his constitutional rights. IV. CONCLUSION Lease has presented insufficient evidence to support his claims under 42 U.S.C. § 1983. Thus, summary judgment Case 1:15-cv-01500-YK Document 46-1 Filed 08/30/16 Page 7 of 9 Lease v. Tyler, Not Reported in F.Supp.2d (2008) 2008 WL 2673381 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 8 will be granted in favor of Defendants with respect to all of Lease's claims. An appropriate order follows. ORDER AND NOW, this 30th day of June, 2008, upon consideration of Defendants' motions for summary judgment (Doc. Nos.60, 61, 65), and for the reasons set forth in the accompanying memorandum, IT IS HEREBY ORDERED that the motions for summary judgment are GRANTED. The Clerk of Court is directed to enter judgment in favor of Defendants and to close this case file. All Citations Not Reported in F.Supp.2d, 2008 WL 2673381 Footnotes 1 In accordance with the standard of review for a motion for summary judgment, the Court will present the facts in the light most favorable to Lease, as the non-moving party. Constructing the facts was rendered more difficult by the manner in which Lease crafted his responsive statement of facts. There are numerous instances in which Lease failed to provide appropriate citations to the record to support his denials of Defendants' properly supported factual statements. Additionally, many of Lease's denials challenge relevancy as opposed to factual accuracy. Plaintiff's counsel has previously been advised that “this is an improper use of the statement of facts, which is not intended to serve as a legal brief.” Barshinger v. Buffington, No. 1:03-CV-0506, 2004 U.S. Dist. LEXIS 28929, at *2 n. 1 (M.D. Pa. June 10, 2004). The Court notes that it has engaged in an independent review of the record, and has not relied upon alleged facts to which Lease made properly supported objections, see M.D. Pa. L.R. 56.1. Also complicating the statement of facts is Lease's reliance upon an affidavit that contradicts, in certain respects, his earlier deposition testimony and offers no explanation for the apparent inconsistencies. (Doc. No. 74-5) (Lease Affidavit); (see, e.g., Doc. No. 76) (detailing some of the statements in the affidavit and demonstrating how they contradict Lease's earlier sworn testimony). The Court will not credit Lease's affidavit insofar as it contradicts his deposition testimony. See In re CitX Corp., Inc., 448 F.3d 672, 679 (3d Cir.2006) (noting that a “sham affidavit” is one that attempts to “explain away or patch up an earlier deposition in an attempt to create a genuine issue of material fact,” and explaining that the “sham affidavit doctrine” generally “refers to the trial courts' practice of disregarding an offsetting affidavit that is submitted in opposition to a motion for summary judgment when the affidavit contradicts the affiant's prior deposition testimony”) (citation omitted); see also Jiminez v. All American Rathskeller, Inc., 503 F.3d 247, 253 (3d Cir.2007) (“[I]f it is clear that an affidavit is offered solely for the purpose of defeating summary judgment, it is proper for the trial judge to conclude that no reasonable jury could accord that affidavit evidentiary weight and that summary judgment is appropriate.”). 2 “Pie plate covers” are protective covers over the open spaces where meters are normally placed that prevent members of the “public from reaching into the meter base and getting ... electrocuted or harmed in any way.” (SMF ¶ 80.) The pie plate covers are held in place by a metal ring that is closed with a hard plastic seal. (SMF ¶ 81.) Typically, a tool is required to remove the seal and ring. (SMF ¶ 82.) 3 In his affidavit, Lease claims that the meter base and pie plates were properly affixed and sealed on the morning at issue. (Lease Aff. ¶ 13.) The Court Case 1:15-cv-01500-YK Document 46-1 Filed 08/30/16 Page 8 of 9 Lease v. Tyler, Not Reported in F.Supp.2d (2008) 2008 WL 2673381 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 9 notes, however, that Lease was unable to detail their condition during his earlier deposition testimony. (See Lease Dep. 327) (admitting to having no recollection whether the meter bases were damaged on March 17, 2004). Moreover, the other evidence upon which Lease relies fails to support his claim that the meter bases were in proper condition on the morning of March 17, 2004. For example, Lease directs the Court to Defendant Coffey's deposition, during which Coffey testified that he did not recall the reason Tyler and Fishel were concerned about the meter bases and was himself unable to appreciate the alleged problem (Doc. No. 74-2, Coffey Dep. 55-56, 104-105); however, considered in context, Coffey's testimony simply demonstrated his lack of familiarity with these types of electrical components (id. at 53-54) (For example, Coffey explained that he “d[id]n't know anything about electrical” and asked, “What's a seal?”). Lease also relies upon the deposition of Barbara Zamboni, a tenant at 160 Gun Club Road, who indicated that at some undefined time in 2003 or 2004 she observed the meter bases while sweeping out the alcove at the side entrance, and that they appeared to be properly covered and sealed. (Zamboni Dep. 27-29, 45, 68-69, 75-76.) The testimony of these two individuals does not, as Lease suggests, controvert Fishel's and Tyler's sworn statements that the meter bases were not properly sealed and/ or covered on March 17, 2004. 4 The Court notes that the record is not entirely clear about when, how, and by whom, the electrician was contacted. Fishel informed Lease that he had called the electric company (SMF ¶ 101), but there is also testimony in the record that the gentlemen drove to where the lineman was working nearby (SMF ¶¶ 68-72). The chronology of when Lease approached Tyler and Fishel-whether before or after the linesman was contacted-is also somewhat unclear. (See, e.g., SMF ¶¶ 68-71, 101-03; Lease Dep. 358-60). Any uncertainty about these factual points is insufficient to preclude the entry of summary judgment. 5 At the time, it appears that Mummert was unaware Adams Electric supplied electricity to the property at issue. 6 While the parties disagree whether there was, in fact, a “meter room,” Lease testified during his deposition that the door to that area might have been open (SMF ¶¶ 108-109), allowing Defendants to view the room's contents from their vantage point. To the extent that such a door might have been closed, Mrs. Zamboni's deposition testimony demonstrates that the meter bases were would still be visible through the glass panels of the door. (Zamboni Dep. 75-76) (“Answer: The door has glass in it. You can see right in the room. Question: There's glass in the door? Answer: That you could see into the room-yeah. At the time.”); (see also Lease Aff. ¶ 5) (“On March 17, 2004, there was a door with glass panels on it that could be seen through.”). 7 See also Barshinger, 2004 U.S. Dist. LEXIS 28929, at * 21 (referring to Camara, and stating in the context of a qualified immunity analysis: “Officials could reasonably interpret this statement to permit them to search and seize private property when they had received a citizen complaint about the property, had attempted to notify the owner about the problems, and believed that further delay would create a public safety hazard.”). 8 For example, Lease opines that Plank approached Fishel in an effort to have Lease criminally charged with theft of electricity. (CSMF ¶¶ 117-118.) End of Document © 2016 Thomson Reuters. No claim to original U.S. Government Works. Case 1:15-cv-01500-YK Document 46-1 Filed 08/30/16 Page 9 of 9 U.S. Renal Care, Inc. v. Wellspan Health, Not Reported in F.Supp.3d (2015) 2015 WL 5286638, 60 Employee Benefits Cas. 2506 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 2015 WL 5286638 United States District Court, M.D. Pennsylvania. U.S. RENAL CARE, INC. d/b/a U.S. Renalcare Central York, Dialysis individually and as Assignee of Patient, WW, Plaintiff/Counter-Defendant v. WELLSPAN HEALTH, Wellspan Medical Plan, the Plan Administrator of Wellspan Medical Plan, and South Central Preferred, Inc., Defendants/Counter-Plaintiffs. Civil No. 1:14-CV-2257. | Signed Sept. 10, 2015. Attorneys and Law Firms Douglas T. Gibson, The Gibson Firm LLC, Woodstock, GA, Matthew A. Thomsen, Thomsen Law, P.C., Harrisburg, PA, for Plaintiff/Counter-Defendant. Jonathan R. Cavalier, Mark H. Gallant, Aaron Krauss, Cozen O'Connor, Philadelphia, PA, for Defendants/ Counter-Plaintiffs. MEMORANDUM SYLVIA H. RAMBO, District Judge. *1 This action is a dispute between a healthcare provider and an employee welfare benefit plan regarding alleged overpayments to the healthcare provider made pursuant to the plan, which is governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). Plaintiff brings claims pursuant to ERISA, as well as other state law and federal claims, regarding Defendants' recoupment of the alleged overpayments. Presently before the court is Defendants' motion to dismiss Plaintiff's complaint, as well as Plaintiff's motion to dismiss Defendants' counterclaims. For the reasons stated herein, the court will grant in part and deny in part Defendants' motion to dismiss the complaint, and deny in its entirety Plaintiff's motion to dismiss the counterclaims. I. Background A court deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) may consider “the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim.” Lum v. Bank of Am., 361 F.3d 217, 221 n. 3 (3d Cir.2004) (citations omitted). “A document forms the basis of a claim if the document is ‘integral to or explicitly relied upon in the complaint.’ “ Id . (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir.1997)). Thus, for the purposes of the motion subjudice, the court considers and accepts as true all well-pleaded allegations contained in the complaint (Doc. 1), see Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts, Inc., 140 F.3d 478, 483 (3d Cir.1998) (citing Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)), as well as exhibits attached to, and documents relied upon in, the complaint, and such consideration does not convert the motion to dismiss into a motion for summary judgment. Burlington Coat Factory, 114 F.3d at 1426 (quoting Shaw v. Dig. Equip. Corp., 82 F.3d 1194, 1220 (1st Cir.1996); see also Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir.1993) (“a court may consider an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document.”). A. Facts Plaintiff U.S. Renal Care, Inc. d/b/a U.S. Renal Care Central York Dialysis (“Plaintiff”) is a medical services provider that offers dialysis services. (Doc. 1, ¶¶ 20- 21.) Defendant Wellspan Health (“Wellspan”) is the parent organization of Defendant Wellspan Medical Plan (the “Plan”), which is a self-funded employee welfare benefit plan within the meaning of § 3(1) of ERISA, 29 U.S.C. § 1002(1), that provides medical benefits to eligible employees and their eligible dependents. (Id., ¶¶ 6- 8.) Defendant South Central Preferred, Inc. (“SCP” and, collectively with Wellspan and the Plan “Defendants”), which is also owned by Wellspan, acts as the claims administrator, Preferred Provider Organization, and Third Party Administrator (“TPA”) for the Plan, and performs the fiduciary duties of plan administration, including making initial benefits determinations. (Id., ¶¶ 10, 25.) Defendants work with Pennsylvania Preferred Health Network (“PPHN”) as their healthcare network to provide benefits to beneficiaries under the Plan. (Id., ¶ 12.) Case 1:15-cv-01500-YK Document 46-2 Filed 08/30/16 Page 1 of 10 U.S. Renal Care, Inc. v. Wellspan Health, Not Reported in F.Supp.3d (2015) 2015 WL 5286638, 60 Employee Benefits Cas. 2506 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 2 *2 According to the Plan Document and Summary Plan Description (“SPD”), 1 the Plan provides four tiers of benefits: Tier 1 applies to beneficiaries who elect to be treated at a Wellspan provider or facility, and benefits are generally paid at 100%; Tier 2 applies to beneficiaries who elect to be treated at a “Select” facility or provider from SCP, and benefits are generally paid at 90%; Tier 3 applies to beneficiaries who elect to receive treatment from an out-of-network provider that is outside the PPHN service area, and benefits are generally paid at 80% of the Usual Customary and Reasonable Charge (“UCR”), which is based on a calculation of average costs for medical services in that area; and Tier 4 applies to beneficiaries who elect to receive care from an out-of-network provider that is inside the PPHN service area, and benefits are generally paid at 50% of UCR. (Id., ¶¶ 30, 32-36.) In the event of an adverse benefit determination, the Plan states that the administrator must provide written notice of the denial, which includes: the reasons for the denial; a reference to the plan provisions upon which the denial was based; a description of any additional information needed from the beneficiary to perfect the claim; notice that the beneficiary is entitled to request a review of the claim denial and a description of the appeal process, and; a statement that the beneficiary has a right to bring a civil action under ERISA following any denial or appeal. (Id., ¶¶ 42-43.) The Plan defines an adverse benefit determination as “any claim that is not paid at 100% ... includ [ing] any amounts applied to your deductible or co-insurance as well as any amount that exceeds a Plan limit.” (Id.) Beginning on December 7, 2012 and continuing up to the present, Plaintiff has provided life-sustaining dialysis services to patient WW, who is a beneficiary of the Plan through his spouse. (Id., ¶¶ 11, 20-21.) In return for medical services, WW assigned all of his benefits and rights under the Plan to Plaintiff pursuant to an Assignment of Benefits (“AOB”), which included the assignment of any legal or administrative claims arising under any ERISA or non-ERISA group health plan, and directed the Plan and its administrators, fiduciaries, and attorneys to release all plan documents, summary benefit descriptions, and insurance policies for the Plan to Plaintiff upon request. (Id., ¶¶ 27-29.) Throughout the course of WW's treatment, the Plan was responsible for primary payment of WW's dialysis treatments pursuant to the terms of the Plan Document and SPD, as well as the Medicare Secondary Payer Provisions of the Social Security Act (“MSP”), and Medicare was responsible for secondary payment. (Id., ¶ 22.) Because there was no participating provider agreement or other contract between the Plan and Plaintiff, Plaintiff was considered an “out-of-network” provider under the terms of the Plan. (Id., 126.) *3 Prior to treating WW, and then again for each new benefit year, Plaintiff verified benefits with SCP, which represented that Plaintiff was an out-of-network provider and benefits would be paid at 50% of UCR until WW's out-of-pocket maximum for each benefit year had been met, and then at 100% of UCR. (Id., ¶ 54-56.) On March 27, 2013, Plaintiff spoke with a representative of SCP regarding a payment Plaintiff had received that was much lower than previous payments for similar claims, and the representative advised that SCP would review payment of the claims. (Id., ¶ 58.) On April 1, 2013, SCP notified Plaintiff that all of WW's claims from December 7, 2012 through January 14, 2013 had been incorrectly paid at above UCR, and refund requests had been mailed to Plaintiff. (Id., ¶ 59.) Those refund requests were made in varying amounts and stated that overpayment occurred due to an “incorrect benefit/network level” and demanded repayment within thirty days. (Id., ¶ 62-66, 68, 84-85.) On April 26, 2013, Plaintiff appealed the refund demands and requested explanations of the overpayments, as well as a revised and itemized explanation of benefits. (Id., ¶ 67.) On July 3, 2013, SCP notified Plaintiff that due to the retirement of WW's spouse on May 1, 2013, Medicare was the primary payer on all claims submitted after that date, and a review of claims was pending the Medicare explanation of benefits. (Id., ¶¶ 60, 70.) On August 29, 2013, SCP advised Plaintiff that Medicare rates for out-of-network services provided the appropriate level of benefits under the terms of the Plan, and that all claims from January 2013 up to that date had been referred to the claims department for payment review. (Id., ¶ 71.) Between December 23, 2013 and February 27, 2014, Plaintiff engaged in several conversations with representatives at SCP regarding missing or late payments on claims that had been submitted. (Id., ¶¶ 72-75.) By letter dated February 21, 2014, Defendants' attorneys notified Plaintiff that two categories of overpayments had been made to Plaintiff: Category One overpayments resulted from a clerical error on behalf of an employee Case 1:15-cv-01500-YK Document 46-2 Filed 08/30/16 Page 2 of 10 U.S. Renal Care, Inc. v. Wellspan Health, Not Reported in F.Supp.3d (2015) 2015 WL 5286638, 60 Employee Benefits Cas. 2506 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 3 of SCP, covered dates of service from December 7, 2012 through January 13, 2013, and totaled $59, 752.16; and Category Two overpayments resulted from a mathematical error on behalf of another SCP employee, covered dates of service from January 16, 2013 through October 30, 2013, and totaled $145,920.31. (Id., ¶¶ 78-80.) The letter further stated that if Plaintiff did not voluntarily refund the total $205,672.47 of Category One and Two overpayments within ten days, Defendants would recoup the overpayments by withholding then-current and future allowable payments and possibly filing litigation. (Id., ¶ 81 .) The letter did not include any information related to Plaintiff's right to a review of the adverse benefits determination or the appeals process in general. (Id., ¶ 93.) *4 Plaintiff responded via counsel in a letter letter dated March 5, 2014, wherein it disputed the alleged overpayments and Defendants' right to recoup them, and requested the methodology used to calculate the overpayment, any documents relied on in making such calculation, and a complete fee schedule for dialysis services charged by Defendants' non-contracted payers. (Id., ¶¶ 94-96 .) Plaintiff sent additional letters on April 15, 2014, May 27, 2014, and August 27, 2014, repeating the sentiments of its March 5, 2014 letter and further requesting the underlying documents it was purportedly entitled to under ERISA, such as the adverse benefit determination. (Id., ¶¶ 104-111, 118.) None of Defendants “responses included any information regarding fee schedules, the methodology used to calculate the alleged overpayments, or any underlying documentation relied upon in calculating the overpayments, but rather reiterated Defendants” intention to recoup the overpayments. (Id., ¶ 99-103, 112-117.) According to the complaint, Defendants have in fact proceeded to recoup the alleged overpayments, withholding nearly $35,000 of payments to Plaintiff for services provided to WW between September 9, 2013 and the initiation of this action. (Id., ¶ 83.) B. Procedural History Plaintiff initiated this action by filing a complaint on November 25, 2014, wherein it asserted claims under both ERISA and Pennsylvania state law due to Defendants “recoupment of its purported overpayments. (Doc. 1.) Defendants filed a motion to dismiss the complaint on February 18, 2015 (Doc. 19), along with a brief in support thereof on February 23, 2015 (Doc. 20). On February 24, 2015, Defendants filed their own complaint against Plaintiff containing related claims in a separate action, (Civ. No. 1:15-cv-0400, Compl., Doc. 1) (hereinafter “counterclaims”), which the court consolidated into the instant matter on March 16, 2015 (see Doc. 25). In their counterclaims, Defendants asserted equitable claims under ERISA relating to the alleged overpayments as well as an unjust enrichment claim under Pennsylvania state law. (Id., ¶¶ 104, 107-110.) On April 6, 2015, Plaintiff filed a motion to dismiss Defendants' counterclaims. (Doc. 30.) Both motions to dismiss have been fully briefed and are thus ripe for disposition. II. Legal Standard Both of the motions to dismiss presently before the court challenge the opposing party's claims pursuant to Federal Rule of Civil Procedure 12(b)(6). A Rule 12(b)(6) motion tests the sufficiency of a complaint against the pleading requirements of Rule 8(a), which requires that a complaint contain a short and plain statement of the claim showing that the pleader is entitled to relief “in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.’ “ Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). While a complaint need not contain detailed factual allegations, it “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ “ Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570). *5 Thus, when adjudicating a motion to dismiss for failure to state a claim, the court must view all of the allegations and facts in the complaint in the light most favorable to the plaintiff, and must grant the plaintiff the benefit of all reasonable inferences that can be derived therefrom. Kanter v. Barella, 489 F.3d 170, 177 (3d Cir.2007) (quoting Evancho v. Fisher, 423 F.3d 347, 350 (3d Cir.2005)). However, the court need not accept inferences or conclusory allegations that are unsupported by the facts set forth in the complaint. See Reuben v. U.S. Airways, Inc., 500 F. App'x 103, 104 (3d Cir.2012) (quoting Iqbal, 556 U.S. at 678); Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir.2009) (stating that district courts “must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions”). Case 1:15-cv-01500-YK Document 46-2 Filed 08/30/16 Page 3 of 10 U.S. Renal Care, Inc. v. Wellspan Health, Not Reported in F.Supp.3d (2015) 2015 WL 5286638, 60 Employee Benefits Cas. 2506 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 4 Ultimately, the court must determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a “plausible claim for relief.” Iqbal, 556 U.S. at 679; see also Pension Benefit Guar. Corp., 998 F.2d at 1196. The “plausibility standard” requires “more than a sheer possibility” that a defendant is liable for the alleged misconduct. Reuben, 500 F. App'x at 104 (citing Iqbal, 556 U.S. at 678). Rather, the complaint must show the plaintiff's entitlement to relief with its facts. Steedley v. McBride, 446 F. App'x 424, 425 (3d Cir.2011) (citing Fowler, 578 F.3d at 211). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged- but it has not ‘show [n]” “that the pleader is entitled to relief.” Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)) (alterations in original). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 678 (citing Twombly, 550 U.S. at 555). To evaluate whether allegations in a complaint survive a Rule 12(b)(6) motion, the district court must initially “take note of the elements a plaintiff must plead to state a claim.” Connelly v. Steel Valley Sch. Dist., 706 F.3d 209, 212 (3d Cir.2013) (citations omitted). Next, the court should identify allegations that “are no more than conclusions” and thus, “not entitled to the assumption of truth.” Id. Lastly, “where there are well-pleaded factual allegations, the court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief.” Id. A complaint “may not be dismissed merely because it appears unlikely that the plaintiff can prove those facts or will ultimately prevail on the merits.” Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir.2008) (citing Twombly, 550 U.S. at 588 n. 8). Rule 8 “does not impose a probability requirement at the pleading stage,' but instead ‘simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of’ the necessary elements].” Id. at 234 (quoting Twombly, 550 U.S. at 545). *6 “Courts use the same standard in ruling on a motion to dismiss a counterclaim under Federal Rule of Procedure 12(b)(6) as they do for a complaint.” PPG Indus., Inc. v. Generon IGS, Inc., 760 F.Supp.2d 520, 524 (W.D.Pa.2011) (citing United States v. Union Gas Co., 743 F.Supp. 1144, 1150 (E.D.Pa.1990)). Therefore, the court must “ ‘accept as true all of the allegations in the [Defendant's counterclaims] and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non-moving party.’ “ Wawrzynski v. H.J. Heinz Co., Civ. No. 11-cv-1098, 2012 WL 726500, *2 (W.D.Pa. Mar.6, 2012) (quoting Rocks v. City of Phila., 868 F.2d 644, 645 (3d Cir.1989) (alterations in original). III. Discussion A. Defendants' Motion to Dismiss the Complaint In their motion to dismiss the complaint, Defendants argue that Plaintiff's state law claim for conversion in Count I is preempted under §§ 502(a) and 514 of ERISA. (Doc. 20, pp. 6-10.) Specifically, Defendants argue that Plaintiff's conversion claim is preempted by § 502(a) of ERISA because the claim is nothing more than a disguised claim for Plan benefits which is not supported by any legal duty independent of the Plan. (Id., pp. 8-10.) Defendants further argue that § 514(a) of ERISA preempts Plaintiff's conversion claim because it “relates to” the Plan. (Id., pp. 6-8.) The court will address each argument in turn. 1. ERISA Preemption of State Law Conversion Claim ERISA provides for uniform federal regulation of welfare benefit plans. 29 U.S.C. § 1002(3). “Congress enacted ERISA to ensure that benefit plan administration was subject to a single set of regulations and to avoid subjecting regulated entities to conflicting sources of substantive law.” N.J. Carpenters & Trustees v. Tishman Constr. Corp. of N.J., 760 F.3d 297, 303 (3d Cir.2014) (citing N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 657, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995)). As such, state law claims are often preempted by ERISA. ERISA preemption comes in two forms: complete preemption under § 502(a), and defensive or conflict preemption under § 514(a). A state law claim is completely preempted under § 502(a) of ERISA where “(1) the plaintiff could have brought the claim under § 502(a); and (2) no other independent legal duty supports the plaintiff's claim. Id. (citing Pascack Valley Hosp. Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393, 400 (3d Cir.2004)). Here, the first prong of this test is clearly met because Plaintiff not only could have brought a claim for plan benefits under § 502(a), but, in fact, did bring such a claim. Although Plaintiff does not specifically cite to § Case 1:15-cv-01500-YK Document 46-2 Filed 08/30/16 Page 4 of 10 U.S. Renal Care, Inc. v. Wellspan Health, Not Reported in F.Supp.3d (2015) 2015 WL 5286638, 60 Employee Benefits Cas. 2506 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 5 502(a) in its complaint, the court easily construes Count II of the complaint, titled “ERISA Claim for Plan Benefits,” as one brought pursuant to § 502(a)(1)(B). (Doc. 1, ¶¶ 128- 29.) Therefore, the court must determine whether a legal duty independent of ERISA supports Plaintiff's state law conversion claim brought in Count I. *7 An independent legal duty exists for purposes of ERISA preemption where the legal duty “would exist whether or not an ERISA plan existed,” Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 950 (9th Cir.2009), or where there is no need “to interpret the plan to determine whether that duty exists,” Gardner v. Heartland Indus. Partners, LP, 715 F.3d 609, 614 (6th Cir.2013). Here, Plaintiff's claim for conversion is simply the flipside of the coin to its claim for benefits under ERISA. The funds Plaintiff claims Defendants have converted in Count I of the complaint are the same funds Plaintiff claims are owed for dialysis services it rendered to WW pursuant to the terms of the Plan in Count II. Thus, rather than being independent of the Plan, the question of whether Defendants had the right to recoup alleged overpayments for past services provided to WW from current and future claims for the same patient is entirely dependent upon the terms of the Plan. See Shatzer v. Conn. Gen. Life Ins. Co., Civ. No. 06-cv-2296, 2007 WL 1227693, *3 (M.D.Pa. Apr.25, 2007); see also Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 62-63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987) (“[A] suit by a beneficiary to recover benefits from a covered plan ... falls directly under § 502(a) (1)(B) of ERISA, which provides an exclusive federal cause of action for resolution of such disputes.”) (citation omitted). Stated more plainly, Plaintiff's conversion claim is actually a claim for benefits pursuant to the Plan. See Levine v. United Healthcare Corp., 402 F.3d 156, 163 (3d Cir.2005) (“Where, as here, plaintiffs claim that their ERISA plan wrongfully sought reimbursement of previously paid health benefits, the claim is for ‘benefits due’ and federal jurisdiction under [§ ] 502(a) of ERISA is appropriate.”). Because no legal duty independent of ERISA or the Plan supports Plaintiff's state law claim for conversion, the court finds that it is completely preempted by § 502(a) of ERISA. Likewise, Plaintiff's state law claim is also preempted by § 514(a) of ERISA, which preempts “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan” governed by ERISA. 29 U.S.C. § 1144(a). “Its broad preemptive scope reflects Congress's intent to lodge regulation of employee benefit plans firmly in the federal domain.” Nat'l Sec. Sys., Inc. v. Iola, 700 F.3d 65, 83 (3d Cir.2012) (citing N.Y. State Conference of Blue Cross & Blue Shield Plans, 514 U.S. at 656- 57); see also IngersollRand Co. v. McClendon, 498 U.S. 133, 138, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990). “The structure and legislative history indicate that the words ‘relate to’ are intended to apply in their broadest sense.” Cent. States, Se. & Sw. Areas Health & Welfare Fund v. Neurobehavioral Assocs., P.A., 53 F.3d 172, 174 (7th Cir.1995) (citing Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 98, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). “A law ‘relates to’ an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan.” Delta Air Lines, 463 U.S. at 96-97. As stated above, Plaintiff's state law conversion claim is in actuality a claim for benefits under an ERISA plan. As such, the claim clearly “relates to” an ERISA plan and is preempted by § 514(a) of ERISA. See Dorn v. Int'l Bhd. of Elec. Workers, 211 F.3d 938, 948 (5th Cir.2000) (“A state law claim, such as [plaintiff]'s claim for conversion, addressing the right to receive benefits under the terms of an ERISA plan necessarily ‘relates to’ an ERISA plan and is thus preempted.”) (citations omitted); see also Minnis v. Baldwin Bros. ., 150 F. App'x 118, 120 n. 1 (3d. Cir.2005) (citing § 514(a) and stating that “because [Plaintiff] alleged an ERISA plan in his complaint, any state law claims contained therein were preempted by ERISA.”); Ferry v. Mut. Life Ins. Co., 868 F.Supp. 764, 770 (W.D.Pa.1994) (stating that state law tort claims such as conversion fall under “the broad sweep of ERISA preemption.”). *8 Accordingly, Plaintiff's state law conversion claim in Count I of the complaint is preempted by both § 502(a) and § 514(a) of ERISA and will be dismissed. 2. ERISA Claims Counts II to IV of Plaintiff's complaint assert claims under ERISA for plan benefits, failure to provide proper notice of an adverse benefits determination, and breach of fiduciary duty. (Doc. 1, ¶¶ 127-37.) Defendants argue that those counts should be dismissed because Plaintiff failed to exhaust its administrative remedies before filing suit, and, additionally, Counts III and IV fail as a matter of law. (Doc. 20, pp. 10-23.) In response, Plaintiff argues that exhaustion of administrative remedies was futile and that it has properly pleaded its claims in Counts III and IV. (Doc. 24.) Case 1:15-cv-01500-YK Document 46-2 Filed 08/30/16 Page 5 of 10 U.S. Renal Care, Inc. v. Wellspan Health, Not Reported in F.Supp.3d (2015) 2015 WL 5286638, 60 Employee Benefits Cas. 2506 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 6 a. Futility Exception to Exhaustion Generally, a plaintiff may only bring a civil action to recover benefits under an ERISA plan after the plaintiff has “exhausted the remedies available under the plan.” Bennett v. Prudential Ins. Co., 192 F. App'x 153, 155 (3d Cir.2006) (citing Weldon v. Kraft, 896 F.2d 793, 800 (3d Cir.1990)). “The exhaustion requirement is waived, however, where resort to the plan remedies would be futile.” Id. (citing Berger v. Edgewater Steel Co., 911 F.2d 911, 916 (3d Cir.1990)). Because futility is an exception to the exhaustion requirement, “[the] party invoking this exception must provide a clear and positive showing of futility before the District Court.” D'Amico v. CBS Corp., 297 F.3d 287, 290 (3d Cir.2002). As the Third Circuit has explained: “Whether to excuse exhaustion on futility grounds rests upon weighing several factors, including: (1) whether plaintiff diligently pursued administrative relief; (2) whether plaintiff acted reasonably in seeking immediate judicial review under the circumstances; (3) existence of a fixed policy denying benefits; (4) failure of the [defendant] to comply with its own internal administrative procedures; and (5) testimony of plan administrators that any administrative appeal was futile. Of course, all factors may not weigh equally.” Cottillion v. United Ref. Co., 781 F.3d 47, 54 (3d Cir.2015) (quoting Harrow v. Prudential Ins. Co. of Am., 279 F.3d 244, 250 (3d Cir.2002)). Here, Plaintiff received notice of the initial adverse benefits determination, i.e., Defendants' assertion that it had overpaid on previous claims for patient WW and demand for reimbursement, by letter in March 2013. (Doc. 1, ¶ 62.) That letter from SCP, as well as several others relating to additional payments for services provided to patient WW, provided that the overpayments occurred because the claims were “paid at the incorrect benefit/ network level” and demanded that Plaintiff refund the alleged overpayments within thirty days. (Id., ¶¶ 62-66, 68, 84-85.) Plaintiff initially responded to the adverse benefits determination by letter dated April 26, 2013, wherein it refused to refund the purported overpayments and requested, inter alia, the underlying documentation relied upon by Defendants in arriving at their decision. (Id., Ex. 5.) Plaintiffs allege that they received no response. Instead, nearly a year later, Defendants sent a letter dated February 21, 2014, wherein they again demanded a refund of the overpayments and included a second adverse benefits determination relating to an additional set of purported overpayments. (Id., ¶¶ 89-90.) The letter also included summary plan descriptions for 2012 and 2013. 2 (Id., ¶¶ 89-90.) Plaintiff alleges that, in response, it sent multiple requests for the documents underlying Defendants' calculations, but again never received them. (Doc. 24, p. 7 of 15.) *9 Turning to the factors used to determine futility, it appears from the complaint that Plaintiff pursued administrative relief through letters to Defendants disputing the purported overpayments and requesting the documents relied upon by Defendants in calculating the overpayments. (Doc. 1, ¶¶ 58-59, 61, 67-77, 84- 118.) Although Plaintiff may have failed to act in strict compliance with Defendants' administrative procedures, it appears clear from the face of its letters that Plaintiff was taking an appeal of the adverse benefits determinations. By failing to provide Plaintiff with information relating to the appeals process and not furnishing the documents underlying their rationale for, and calculation of, the adverse benefits determinations, Defendants also failed to act in accordance with their own internal administrative procedures. As such, further pursuit of administrative remedies may have been futile. Furthermore, because it appears that Defendants had no policy in place for denying present and future benefits to recoup prior overpayments, the court cannot find that Plaintiff acted unreasonably in seeking judicial review in the present circumstances in light of Defendants withholding payments for claims to which Plaintiff would otherwise be entitled, in excess of $34,000. (Doc. 1, ¶ 83.) Therefore, the court finds that Plaintiff has alleged sufficient facts in the complaint to support a finding that exhaustion of administrative remedies prior to filing a claim for benefits under ERISA would have been futile, and, accordingly, the court will not dismiss Count II of the complaint. b. Violation of § 502(c)(1) of ERISA Case 1:15-cv-01500-YK Document 46-2 Filed 08/30/16 Page 6 of 10 U.S. Renal Care, Inc. v. Wellspan Health, Not Reported in F.Supp.3d (2015) 2015 WL 5286638, 60 Employee Benefits Cas. 2506 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 7 Plaintiff also asserts a claim for failure to produce required documents pursuant to § 502(c)(1) of ERISA. (Doc. 1, ¶¶ 131-32 .) Under § 502(c)(1), a plan administrator: ... who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish to a participant or beneficiary ... within 30 days after such request may in the court's discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal, and the court may in its discretion order such other relief as it deems proper. 29 U.S.C. § 1132(c)(1). The information that a plan administrator must furnish to a plan participant or beneficiary upon request includes “a copy of the latest updated summary plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated.” 29 U.S.C. § 1024(b)(4). Case l:14-cv-02257-SHR Document 46 Filed 09/10/15 Page 19 of 26 In the complaint, Plaintiff alleged that by letter dated April 26, 2013, it requested, inter alia, copies of the explanation of benefits for each claim related to the alleged overpayments and did not receive a written response until February 21, 2014. (Doc. 1, ¶¶ 67, 78; see also Doc. 24, p. 6 of 15.) Because a plan administrator must furnish summary plan descriptions, which include explanations of benefits, within thirty days of a written request for such information under § 502(c) (1) of ERISA, and Plaintiff alleges that it did not receive such information within thirty days, Plaintiff has properly pleaded a plausible claim for relief. Accordingly, the court will not dismiss Count III. c. Breach of Fiduciary Duty Under § 502(a)(3) of ERISA *10 Plaintiff's final claim, contained in Count IV of the complaint, alleges that Defendants breached their fiduciary duty in violation of § 502(a)(3) of ERISA. (Doc. 1, ¶¶ 133-36.) In Count IV, Plaintiff alleges that Defendants failed to act solely in the interests of participants and beneficiaries of the Plan for the exclusive purpose of providing benefits, failed to comply with the terms of the Plan, failed to properly pay claims made under the Plan, improperly calculated the rate at which claims were paid, and failed to notify Plaintiff that claims for benefits under the Plan had been denied. (Id., ¶ 136.) Defendants contend that Plaintiff's purported breach of fiduciary duty claim is simply an impermissible repleading of its claim for benefits under Count II, and must therefore be dismissed. (Doc. 20, pp. 19-21 of 24.) The court agrees. Section 502(a) (3) of ERISA allows plaintiffs in civil actions to “obtain other appropriate equitable relief for violations of ERISA. 29 U.S.C. § 1132(a)(3). An equitable claim for breach of fiduciary duty, however, is generally not available where another section of ERISA provides an adequate remedy for a plan beneficiary's injury. Varity Corp. v. Howe, 516 U.S. 489, 515, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996) (“[I]n which case such relief normally would not be ‘appropriate’ ”). The “great majority of circuit courts have interpreted Varity to hold that a claimant whose injury creates a cause of action under § [502](a)(l)(B) may not proceed with a claim under § [502] (a)(3).” Korotynska v. Metro. Life Ins. Co ., 474 F.3d 101, 106 (4th Cir.2006) (citing decisions from the Fifth, Sixth, Eighth, Ninth, and Eleventh Circuits); cf. Devlin v. Empire Blue Cross & Blue Shield, 274 F.3d 76, 89-90 (2d Cir.2001) (holding that plaintiffs may simultaneously seek relief under § [502](a)(1)(B) and § [502](a)(3)). As this court has stated, “[c]ourts have interpreted ERISA to mean that a plaintiff cannot sue for breach of fiduciary duties to obtain denied benefits.” Hartman v. Wilkes-Barre Gen. Hosp., 237 F.Supp.2d 552, 557 (M.D.Pa.2002); see also Harrow, 279 F.3d at 254 (finding that breach of fiduciary duty claim was merely a disguised claim for benefits); D'Amico, 297 F.3d at 292 (same). Furthermore, the United States Supreme Court has held that a claim for money due and owing does not constitute equitable relief and is not available under § 502(a)(3). Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210-11, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002). Here, Plaintiff's breach of fiduciary duty claim seeks the same relief as its claim for benefits in Count II. Specifically, Plaintiff seeks, inter alia, money damages from Defendants for the services Plaintiff provided to patient WW pursuant to the Plan, money which Defendants have not paid in order to recoup the alleged Case 1:15-cv-01500-YK Document 46-2 Filed 08/30/16 Page 7 of 10 U.S. Renal Care, Inc. v. Wellspan Health, Not Reported in F.Supp.3d (2015) 2015 WL 5286638, 60 Employee Benefits Cas. 2506 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 8 overpayments previously made pursuant to the Plan. Plaintiff alleges in Count IV that Defendants breached their fiduciary duties by “fail [ing] to pay proper reimbursement for WW's medical expenses per [the] Plan's clear and unambiguous language.” (Doc. 1, ¶ 136a.) As the Third Circuit has held, however, “[a] claim for breach of fiduciary duty is ‘actually a claim for benefits where the resolution of the claim rests upon an interpretation and application of an ERISA-regulated plan rather than upon an interpretation and application of ERISA.’ “ Harrow, 279 F.3d at 254 (quoting Smith v. Sydnor, 184 F.3d 356, 362 (4th Cir.1999)). Plaintiff's claim for breach of fiduciary duty is simply a disguised benefits claim as it relies on the terms of the Plan and rests on the same set of facts and seeks the same relief as its claim for benefits. Accordingly, Count IV will be dismissed because Plaintiff is provided adequate relief through its claim for benefits under § 502(a)(1)(B) of ERISA. B. Counterclaims *11 Defendants assert two equitable counterclaims arising out of the alleged overpayments to Plaintiff, one under § 502(a)(3) of ERISA for “other equitable relief in the form of an equitable lien by agreement, and one under common law for unjust enrichment. (Counterclaims.) Plaintiff responded with a motion to dismiss both counterclaims, contending that the first counterclaim is legal, rather than equitable, in nature, and therefore not proper under § 502(a)(3), and that Defendants failed to properly plead the elements of unjust enrichment for the second counterclaim. (Doc. 31 .) 3 The court will address these arguments in turn. 1. Equitable Lien by Agreement Under § 502(a)(3) of ERISA In Count I of their counterclaims, Defendants assert that the terms of the Plan created an equitable lien by agreement, mandating that Plaintiff return to Defendants any overpayment of benefits pursuant to the Plan. (Counterclaims, ¶¶ 103-04.) The terms of the Plan state, in relevant part: If, due to a clerical error [by the Plan Administrator or an agent of the Plan Administrator], an overpayment occurs in a Plan reimbursement amount, the Plan retains a contractual right to the overpayment. The person or institution receiving the overpayment will be required to return the incorrect amount of money. (Id., ¶ 19.) Defendants argue that this language created an equitable right to the overpayment itself, rather than just a legal claim for monetary damages. (Doc. 39, pp. 8- 9 of 18.) Plaintiff argues that the claim is not equitable because the actual funds representing the overpayment are not traceable and have been exhausted. (Doc. 41, pp. 4-5 of 10.) The court agrees with Defendants. The United States Supreme Court held in Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356, 126 S.Ct. 1869, 164 L.Ed.2d 612 (2006), that there is no “tracing requirement” for an equitable lien by agreement. Id. at 365. Rather, an equitable lien by agreement attaches to the specified property changing hands, and that property may be converted into other property without invalidating the lien. Id. at 364-65. The Court's decision in Sereboff distinguished its prior holding in Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002), that the relief sought was not equitable where an insurer attempted to impose a lien over funds which were not in the insured's possession and effectively sought recovery from the insured's general assets. Id . at 213-14. In Funk v. Cigna Group Insurance, 648 F.3d 182 (3d Cir.2011), the Third Circuit applied the holding in Sereboff to facts very similar to the instant action. In Funk, the plaintiff filed an ERISA action for benefits pursuant to a long term disability plan, and defendants counterclaimed for an overpayment that was discovered when the plaintiff received a retroactive award of Social Security benefits. Id. at 189-90. Relying on Sereboff the Third Circuit held that the relevant language of the agreement between the parties, which stated the plaintiff would be responsible for “ ‘reimburse[ment of] the full amount of any overpayment,’ “ was sufficient to create an equitable lien by agreement and ordered plaintiff to reimburse the overpayment to defendants, even though plaintiff no longer had the funds in his possession. Id. at 194-95 (alterations in original). Significantly, the Plan's language analyzed by the Funk court is nearly identical to the language contained here in the terms of the Plan. Therefore, the court finds that whether Plaintiff exhausted the exact funds is “immaterial,” and that Defendants have Case 1:15-cv-01500-YK Document 46-2 Filed 08/30/16 Page 8 of 10 U.S. Renal Care, Inc. v. Wellspan Health, Not Reported in F.Supp.3d (2015) 2015 WL 5286638, 60 Employee Benefits Cas. 2506 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 9 sufficiently pleaded that the language of the Plan created an equitable lien by agreement. Id. at 194. Accordingly, the court will not dismiss Count I of the counterclaims. 2. Unjust Enrichment *12 Defendants plead an alternative basis for relief in Count II of their counterclaims under a common law theory of unjust enrichment pursuant to Pennsylvania law. (Counterclaims, ¶ 106-10.) Plaintiff argues that Defendants have failed to properly plead a claim for unjust enrichment because they do not allege that Plaintiff was paid more than its billed fees for the medical services to WW, and therefore Plaintiff did not receive a benefit for which it did not provide value. (Doc. 41, p. 8 of 10.) Under Pennsylvania law, a claim for unjust enrichment is made up of the following elements: “ ‘(1) benefits conferred on defendant by plaintiff; (2) appreciation of such benefits by defendant; and (3) acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value.’ “ Sovereign Bank v. BJ's Wholesale Club, Inc., 533 F.3d 162, 180 (3d Cir.2008) (quoting Limbach Co. LLC v. City of Phila., 905 A.2d 567, 575 (Pa.Commw.Ct.2006)). A party asserting a claim for unjust enrichment “must show that the party against whom recovery is sought either ‘wrongfully secured or passively received a benefit that it would be unconscionable for her to retain.’ “ Torchia v. Torchia, 346 Pa.Super. 229, 499 A.2d 581, 582 (Pa.Super.Ct.1985) (quoting Roman Mosaic & Tile Co., Inc. v. Vollrath, 226 Pa.Super. 215, 313 A.2d 305, 307 (Pa.Super.Ct.1973)). A claim for unjust enrichment is not supported, however, merely because the party against whom recovery is sought may have received some benefit from the claimant. Walter v. Magee-Womens Hosp. of UPMC Health Sys., 876 A.2d 400, 407 (Pa.Super.Ct.2005). Here, Defendants have alleged that Plaintiff received and appreciated a benefit in the form of the overpayment of claims and that retention of the overpayment would be inequitable or unconscionable. (Counterclaims, ¶¶ 107- 10.) Defendants further allege that Plaintiff's possession of the Plan Document and SPD as well as the multiple phone conversations by which Plaintiff verified with SCP the rate of payment it would receive pursuant to the Plan establishes that Plaintiff knew Defendants' had overpaid and that Plaintiff was not entitled to keep the full amount of the payments. (Counterclaims, ¶¶ 14, 17, 48-49, 58-61.) Although Plaintiff did provide services in exchange for the benefit it received from Defendants, Defendants have pleaded that Plaintiff's knowing receipt and retention of an amount far in excess of what Plaintiff was entitled to under the Plan Document and SPD could be inequitable. At this stage of the litigation, Defendants have met their pleading burden and shown that they have a plausible claim for relief. Iqbal, 556 U.S. at 679. As such, the court will not dismiss Count II of Defendants' counterclaims. IV. Conclusion In conclusion, Plaintiff's state law conversion claim in Count I of the complaint is preempted by §§ 502(a) and 514(a) of ERISA and will be dismissed. Plaintiff's claim for breach of fiduciary duty under ERISA in Count IV of the complaint will likewise be dismissed because the court finds it is an improper repleading of Plaintiff's claim for plan benefits found in Count II of the complaint. However, Plaintiff has properly stated claims for benefits under an employee benefit plan governed by ERISA in Count II, as well as an inadequate notice claim under ERISA in Count III, and those claims will not be dismissed. As to Defendants' counterclaims, both counts have been properly pleaded and neither will be dismissed. *13 An appropriate order will issue. All Citations Not Reported in F.Supp.3d, 2015 WL 5286638, 60 Employee Benefits Cas. 2506 Footnotes 1 While there are three versions of the SPD relevant to the instant dispute, one for each year of coverage in 2012, 2013, and 2014 (id., ¶ 30 n. 2), the terms of the SPDs are substantially similar and therefore will be referred to as a single SPD for convenience. 2 In their reply, Defendants allege that they responded with the required information via letter dated May 20, 2013, and include the letter as an Case 1:15-cv-01500-YK Document 46-2 Filed 08/30/16 Page 9 of 10 U.S. Renal Care, Inc. v. Wellspan Health, Not Reported in F.Supp.3d (2015) 2015 WL 5286638, 60 Employee Benefits Cas. 2506 © 2016 Thomson Reuters. No claim to original U.S. Government Works. 10 attachment to their brief. (Doc. 29, p. 5 of 15.) However, Plaintiff did not include any mention of a May 20, 2013 letter in the complaint. Rather, Plaintiff alleges that the February 21, 2014 letter from Defendants was the first response Plaintiff received to its letter of April 2013. (Doc. 24, p. 6 of 15.) Because there is an apparent dispute as to the authenticity of the May 20, 2013 letter, and taking into account “the Third Circuit's reluctance to convert motions to dismiss into motions for summary judgment,” the court will not consider the May 20, 2013 letter at this stage in the litigation. In re Shop-Vac Mktg. & Sales Practices Litig., Civ. No. 12-md-2380, 2014 WL 3557189, *3 (M.D.Pa. July 17, 2014) (citing Pryor v. NCAA, 288 F.3d 548, 559-60 (3d Cir.2007)). 3 Plaintiff also disputes the fact that it received timely notice of the Plan Document and SPD, and therefore did not have actual knowledge of the rate of payment to which it was entitled pursuant to the Plan. However, Defendants allege in their counterclaims that they did provide such notice via letter dated May 20, 2013. (Counterclaims, ¶ 71.) At this stage of the litigation, the court accepts as true all factual allegations contained in a complaint or counterclaim, PPG Indus., 760 F.Supp.2d at 524, and declines to convert Plaintiff's motion to dismiss into a motion for summary judgment. End of Document © 2016 Thomson Reuters. No claim to original U.S. Government Works. Case 1:15-cv-01500-YK Document 46-2 Filed 08/30/16 Page 10 of 10