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Egbers v. Senior Lifestyle Corp.

United States District Court, S.D. Ohio, Western Division

September 7, 2017

KARI EGBERS AND STEPHANIE WILLIAMS, On behalf of Themselves and All Others Similarly Situated Plaintiffs,
v.
SENIOR LIFESTYLE CORPORATION, Defendant.

          OPINION AND ORDER

          Michael R. Barrett, Judge United States District Court

         This matter is before the Court on Defendant's Motion to Dismiss Plaintiffs' Amended Complaint (Doc. 6). Plaintiffs have filed a response (Doc. 19) and Defendant has filed a reply (Doc. 21).

         I. BACKGROUND

         For purposes of this Motion, the facts alleged in Plaintiffs' Amended Complaint are accepted as true. Defendant operates over 100 independent, assisted and memory communities across the United States. (Doc. 5, ¶ 8). In 2002, in order to provide health insurance coverage to its employees, Defendant established the Senior Lifestyle Corporation Employees Benefit Plan (the “Plan”). (Id. at ¶ 13). The Plan is self-funded by Defendant. (Id. at ¶ 2). To fund the Plan, Defendant collected payroll deductions from their employees, including Plaintiffs. (Id. at ¶ 14). While Defendant serves as the plan's sponsor and administrator, Key Benefits Administrators, Inc. (“KBA”) is the third-party administrator of the Plan. (Id. at ¶¶ 2-3). The Employee Contributions deducted from payroll were retained in Defendant's corporate bank account until they were remitted to KBA. (Id. at ¶ 14). In 2015, Defendant failed to remit Employee Contributions to fund the Plan. (Id. at ¶¶ 15-16). According to Plaintiffs, Defendant also failed to remit Employer Contributions to KBA. (Id. at ¶ 3).

         Plaintiffs were both pregnant during the relevant time period. (Id. at ¶¶ 18-19). Because Defendant failed to provide adequate funds to pay Plaintiffs' related medical claims, KBA did not pay the claims. (Id. at ¶ 17). As a result, Plaintiffs allege that during the relevant time period, the Plan's coverage lapsed and thus, Plaintiffs paid for health insurance coverage that was not provided and incurred medical expenses that should have been covered by the Plan. Plaintiffs allege Egbers specifically incurred approximately $2, 500 in medical expenses. (Id. at ¶ 18). Plaintiffs allege Williams incurred approximately $400, 000 in medical expenses. (Id. at ¶ 19).

         Plaintiffs further allege they were told for months by Defendant that they were working to fix the “2015 KBA claims issue” and that the 2015 claims would eventually be paid. (Id. at ¶ 24). The claims remain unpaid by Defendant. According to Plaintiffs, they are being pursued by professional debt collectors for the unpaid medical bills. (Id. at ¶ 26).

         As result, Plaintiffs filed the instant action on behalf of themselves and all others similarly situated, alleging violations under the Employment Retirement Income Security Act of 1974 (“ERISA”). Defendant filed a motion to dismiss Plaintiffs' complaint. (Doc. 2). In response, Plaintiffs filed an Amended Complaint. (Doc. 5). Defendant now moves for dismissal of the Amended Complaint. (Doc. 6).

         II. STANDARD

         When reviewing a Rule 12(b)(6) motion to dismiss for failure to state a claim, this Court must “construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff.” Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008) (internal quotations omitted). To properly state a claim, a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “[T]o survive a motion to dismiss, a complaint must contain (1) ‘enough facts to state a claim to relief that is plausible, ' (2) more than ‘a formulaic recitation of a cause of action's elements, ' and (3) allegations that suggest a ‘right to relief above a speculative level.'” Tackett v. M&G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         III. ANALYSIS

         Defendant makes two primary arguments in favor of dismissal. First, Defendant argues Plaintiffs' claims are “nothing more than a repackaged claim for benefits” and thus, Plaintiffs cannot obtain relief for their claims for breach of fiduciary duty under § 502(a)(3). Second, Defendant argues that the Amended Complaint must be dismissed because Plaintiffs fail to state a claim for denial benefits under § 502(a)(1)(B).

         The Sixth Circuit has explained that § 502(a)(3) is a “catchall provision” identical to 29 U.S.C. §1132(a)(3), which allows for relief for breach of fiduciary duty and other violations where § 1132 does not provide an adequate remedy elsewhere. Wilkins v. Baptist Healthcare System, Inc., 150 F.3d 609, 615 (6th Cir. 1998) (citing Varity Corp. v. Howe, 516 U.S. 489, 512, 116 S.Ct. 1065 (1996).

         Relevant to this case, 29 U.S.C. § 1132 provides as follows:

(a) Persons empowered to bring a civil action A civil action ...

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