United States District Court, D. Maryland
K. Bredar United States District Judge.
case arises from Plaintiff Jennifer Nardello's four-count
complaint against her employer, Boehringer Ingelheim
Pharmaceuticals, Inc. (“BIPI”),  and against the
claims administrator of its short-term disability program,
Aetna Life Insurance Company (“Aetna”), alleging
wrongful denial of short- and long-term disability benefits.
(Complaint, ECF No. 1.) Previously, the Court dismissed
without prejudice Counts I and II, which alleged violations
of the Americans with Disabilities Act, after the parties
stipulated that those counts were subject to an arbitration
agreement between Plaintiff and BIPI. (Order Approving Joint
Stipulation of Dismissal, ECF No. 14.) Count III alleges that
BIPI and Aetna wrongly denied Plaintiff benefits to which she
was entitled by BIPI's short-term disability
(“STD”) plan, and seeks redress under the
Employee Retirement Income Security Act of 1974
(“ERISA”) or, alternatively, under contract law.
(Complaint ¶ 89.) Count IV alleges that that BIPI and
Aetna's administration of BIPI's long-term disability
(“LTD”) plan violates both Defendants'
fiduciary duties under ERISA. (Id. at ¶ 93.)
before the Court are Defendant Aetna's motion to dismiss
or, in the alternative, motion for summary judgment (ECF No.
17) and Defendant BIPI's motion to compel arbitration and
to stay or dismiss further litigation (ECF No. 16). Both
motions have been fully briefed and no hearing is necessary.
See Local Rule 105.6 (D. Md. 2016). For the reasons
detailed below, the Court will grant Aetna's motion in
part as a motion to dismiss and grant it in part as a motion
for summary judgment. The Court will grant BIPI's motion
to compel arbitration, and will stay the case.
Standard for Dismissal for Failure to State a
complaint 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 (2009) (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Facial plausibility exists “when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678. An inference
of a mere possibility of misconduct is not sufficient to
support a plausible claim. Id. at 679. As the
Twombly opinion stated, “Factual allegations
must be enough to raise a right to relief above the
speculative level.” 550 U.S. at 555. “A pleading
that offers ‘labels and conclusions' or ‘a
formulaic recitation of the elements of a cause of action
will not do.' . . . Nor does a complaint suffice if it
tenders ‘naked assertion[s]' devoid of
‘further factual enhancement.'”
Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 555, 557). Although when considering a motion to
dismiss a court must accept as true all factual allegations
in the complaint, this principle does not apply to legal
conclusions couched as factual allegations. Twombly,
550 U.S. at 555.
Standard for Summary Judgment
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986) (citing predecessor to current Rule
56(a)). The burden is on the moving party to demonstrate the
absence of any genuine dispute of material fact. Adickes
v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). If
sufficient evidence exists for a reasonable jury to render a
verdict in favor of the party opposing the motion, then a
genuine dispute of material fact is presented and summary
judgment should be denied. See Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). However, the “mere
existence of a scintilla of evidence in support of the
[opposing party's] position” is insufficient to
defeat a motion for summary judgment. Id. at 252.
The facts themselves, and the inferences to be drawn from the
underlying facts, must be viewed in the light most favorable
to the opposing party, Scott v. Harris, 550 U.S.
372, 378 (2007); Iko v. Shreve, 535 F.3d 225, 230
(4th Cir. 2008), who may not rest upon the mere allegations
or denials of his pleading but instead must, by affidavit or
other evidentiary showing, set out specific facts showing a
genuine dispute for trial, Fed.R.Civ.P. 56(c). Supporting and
opposing affidavits are to be made on personal knowledge,
contain such facts as would be admissible in evidence, and
show affirmatively the competence of the affiant to testify
to the matters stated in the affidavit. Id.
Allegations of the Complaint
is employed by BIPI as a primary care sales representative.
(Complaint ¶ 24.) Plaintiff alleges that Aetna is the
plan administrator of BIPI's STD plan (Id. at
¶ 6.) Beginning in March of 2015, Plaintiff began
experiencing symptoms of severe gastro-intestinal discomfort,
nausea, and dizziness, resulting in a significant amount of
time in which she was unable to work. (Id. at
¶¶ 25-30, 59.) It took several months for doctors
to diagnose these symptoms as stemming from endometriosis, to
perform surgery and other corrective treatments, and for
Plaintiff to recover sufficiently so as to resume a normal
work schedule. (Id. at ¶¶ 27, 33, 53, 56.)
In April of 2015, Plaintiff exhausted her paid leave and
applied for BIPI's STD plan. (Id. at
¶¶ 34-35.) Aetna, the plan's claims
administrator, denied this application on April 21
(Id. at ¶ 38), Plaintiff appealed this decision
on April 24 (Id. at ¶ 41), and her appeal was
denied on June 5 (Id. at ¶ 50). Plaintiff was
ultimately approved for STD coverage from June 19 through
July 2 (Id. at ¶ 52), but was denied coverage
from July 3 forward (Id. at ¶ 57). Plaintiff
also alleges that she was only paid for six of the thirteen
days for which she was approved for STD coverage.
(Id. at ¶ 54.)
Aetna's Motion to Dismiss / Motion for Summary
claims against Aetna include separate arguments and theories
justifying the payment of benefits, first, under the STD plan
pursuant to ERISA and, second, pursuant to contract law
(Count III), as well as for benefits under the LTD plan
pursuant to ERISA (Count IV). (Complaint ¶¶ 82-93.)
Aetna has moved to dismiss all of Plaintiff's claims
against it or, alternatively, for summary judgment.
(Aetna's Mot. to Dismiss.) Accordingly, the Court will
address Aetna's motion with respect to each of
Plaintiff's theories, in turn.
The Applicability of ERISA to the Short-Term Disability
primary argument under Count III is based on the premise that
the STD plan is an “employee welfare benefit
plan” as defined by ERISA and that the statute imposes
a fiduciary obligation on Aetna with respect to Plaintiff.
(Complaint ¶¶ 82-89.) However, the STD plan
properly falls under the “payroll practice”
exception to ERISA, rendering Plaintiff's arguments
passed ERISA in 1974 in order to protect employees from
mismanagement of funds created by employers to support
employee benefit programs. Massachusetts v. Morash,
490 U.S. 107, 112 (1989). ERISA defines an “employee
welfare benefit plan” or “welfare plan” to
include any plan, fund, or program “established or
maintained by an employer . . . for the purpose of providing
for its participants or their beneficiaries, through the
purchase of insurance or otherwise, . . . benefits in the
event of sickness, accident, disability, death or
unemployment, ” among other things. 29 U.S.C. §
1002(1). However, the Department of Labor has
published a regulation excluding what it calls “payroll
practices” from consideration as employee welfare
benefit programs. 29 C.F.R. § 2510.3-1(b). It defines
payroll practices to include, among other things, programs
involving “payment of an employee's normal
compensation, out of the employer's general
assets, on account of periods of time during which the
employee is physically or mentally unable to perform his or
her duties or is otherwise absent for medical reasons.”
§ 2510.3-1(b)(2) (emphasis added). This
regulation has been consistently upheld in the courts.
See Stern v. Int'l Bus. Machines Corp., 326 F.3d
1367, 1372 (11th ...