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Simpson v. American Electric Power Service Corp.

July 27, 2006

TERYL Y. SIMPSON, PLAINTIFF,
v.
AMERICAN ELECTRIC POWER SERVICE CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Algenon L. Marbley

Kemp Magistrate Judge

OPINION AND ORDER

I. INTRODUCTION

This matter is before the Court on a Motion to Dismiss by Defendants, American Electric Power Service Corporation ("AEP") and Kemper Insurance Company ("Kemper"), pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Defendants claim that Plaintiff is unable to prevail in this federal action because: (1) her complaint fails to state a claim under the Employee Retirement Income Security Act ("ERISA") because she failed to exhaust her administrative remedies under her employee benefits plan; and (2) her claim of infliction of emotional distress is pre-empted by ERISA. For the following reasons, Defendants' Motion to Dismiss is GRANTED.

II. FACTS

Defendant AEP hired Plaintiff, Teryl Simpson, in 1979 as a Coal Records Clerk. On July 2, 2001 Plaintiff took leave from work for severe mental depression. From July 2001 through January 2002, Plaintiff's leave was designated as a disability leave. On January 2, 2002, Plaintiff's leave status was changed from disability leave to personal leave. Plaintiff then applied for long term disability benefits. On May 8, 2002, Defendant Kemper, who administers AEP's long term disability plan, notified Plaintiff that her claim was denied. Plaintiff appealed the initial denial of her claim for disability benefits, but Kemper denied her appeal on July 19, 2002. The denial letter described the procedure for an additional, final appeal of Plaintiff's claim to AEP's Long Term Disability Plan Claims Appeal Committee. Plaintiff never made this final administrative appeal.

On September 15, 2005, Plaintiff filed a complaint in federal court (the "Complaint"), alleging that Defendants are liable to her under two legal theories: (1) a violation of 29 U.S.C. § 1132(a)(1)(B) (the "ERISA claim"); and (2) infliction of emotional distress. Defendants filed a Motion to Dismiss the Complaint to which Plaintiff timely responded. Defendants then filed a reply memorandum. Accordingly, this matter is ripe for decision.

III. STANDARD OF REVIEW

In considering a Rule 12(b)(6) motion to dismiss, this Court is limited to evaluating whether a plaintiff's complaint sets forth allegations sufficient to make out the elements of a cause of action. Windsor v. Tennessean, 719 F.2d 155, 158 (6th Cir. 1983). A complaint should not be dismissed under Rule 12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Lillard v. Shelby County Bd. Of Educ., 76 F.3d 716, 724 (6th Cir. 1996). This Court must "construe the complaint liberally in the plaintiff's favor and accept as true all factual allegations and permissible inferences therein." Lillard, 76 F.3d at 724 (quoting Gazette v. City of Pontiac, 41 F.3d 1061, 1064 (6th Cir. 1994)). While the complaint need not specify every detail of a plaintiff's claim, it must give the defendant "fair notice of what the plaintiff's claim is and the grounds upon which it rests." Gazette, 41 F.3d at 1064. Though liberal, this standard of review does require more than the bare assertion of legal conclusions. In re DeLorean Motor Co., 991 F.2d 1236, 1240 (6th Cir. 1993)(citations omitted). A complaint must contain either direct or inferential allegations with respect to all the material elements necessary to sustain a recovery under some viable legal theory. Scheld v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 437 (6th Cir. 1988).

IV. ANALYSIS

Defendants move to dismiss both of Plaintiff's claims on separate grounds. First, Defendants allege that the ERISA claim is inappropriate because Plaintiff failed to exhaust her administrative remedies under her benefits plan. Second, Defendants claim that Plaintiff's infliction of emotional distress is pre-empted by ERISA.

A. The ERISA Claim

Defendants assert that the ERISA claim fails because Plaintiff failed to exhaust her administrative remedies. While ERISA is silent as to whether exhaustion of administrative remedies is a prerequisite to bringing a civil action, the Sixth Circuit has held that "[t]he administrative scheme of ERISA requires a participant to exhaust his or her administrative remedies prior to commencing suit in a federal court." Coomer v. Bethesda Hosp., Inc., 370 F.3d 499, 504 (6th Cir. 2004) (quoting Miller v. Metro. Life Ins. Co., 925 F.2d 979, 986 (6th Cir. 1991)). The rationale underlying the exhaustion requirement is that "review or exhaustion enables plan fiduciaries to efficiently manage their funds; correct their errors; interpret plan provisions; and assemble a factual record which will assist a court in reviewing the fiduciaries' actions." Ravencraft v. UNUM Life Ins. Co. of Am., 212 F.3d 341, 343 (6th Cir. 2000) (internal quotation marks, citations, and emphasis omitted); see also Costantino v. TRW, Inc., 13 F.3d 969, 975 (6th Cir. 1994) (listing the purposes of requiring exhaustion of administrative remedies as: "(1) To help reduce the number of frivolous law-suits under ERISA. (2) To promote the consistent treatment of claims for benefits. (3) To provide a non-adversarial method of claims settlement. (4) To minimize the costs of claims settlement for all concerned. (5) To enhance the ability of trustees of benefit plans to expertly and efficiently manage their funds by preventing premature judicial intervention in their decision-making processes. (6) To enhance the ability of trustees of benefit plans to correct their errors. (7) To enhance the ability of trustees of benefit plans to interpret plan provisions. (8) To help assemble a factual record which will assist a court in reviewing the fiduciaries' actions."). In this case, it is undisputed that Plaintiff did not file a final administrative appeal with AEP's Long Term Disability Plan Claims Appeal Committee. Instead, she now claims that such an appeal would have been futile.

A party need not exhaust a benefit plan's administrative remedies before filing an ERISA claim in federal court for individual benefits when "resorting to the plan's administrative procedure would simply be futile or the remedy inadequate." Coomer, 370 F.3d at 505 (quoting Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410, 419 (6th Cir. 1998)). "The standard for adjudging the futility of resorting to the administrative remedies provided by a plan is whether a clear and positive indication of futility can be made." Id. In order to establish a finding of futility here, ...


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