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Damiano v. Institute for in Vitro Sciences

United States District Court, D. Maryland

December 29, 2016



          Paula Xinis United States District Judge

         Plaintiff Michele Damiano (“Plaintiff” or “Damiano”) filed a Complaint against Defendants Institute for In Vitro Sciences, Inc., (“IIVS”) and Paychex Insurance Agency, Inc. (“Paychex” and collectively, “Defendants”). ECF No. 1. Plaintiff brings this action against Defendants for violations of the Employee Retirement Income Security Act, (“ERISA”) and Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) in connection with alleged material misrepresentations regarding her coverage under welfare benefit plans covered by ERISA and improper notice of her rights to continuation coverage as required by COBRA.

         Currently pending before the Court is Defendants' Joint Motion to Dismiss or in the Alternative for Summary Judgment. ECF No. 15. The relevant issues have been fully briefed and the Court now rules pursuant to Local Rule 105.6 because no hearing is necessary. For the reasons set forth below, the Court will GRANT IN PART and DENY IN PART Defendants' Motion to Dismiss.

         I. BACKGROUND[1]

         Damiano was employed by IIVS as an Accounting Assistant/HR Coordinator. ECF No. 1 at 3. IIVS maintained a group health plan, which included dental benefits (hereafter, “Dental Plan”) and Group Long-Term (“LTD”) and Short-Term Disability Insurance Plans (“STD, ” and collectively “Disability Plans”) for the benefit of its employees. ECF No. 1 at 3. The health plan and Disability Plans are governed by ERISA. Id. The Complaint alleges that Defendant Paychex Insurance Agency, Inc. is a service provider and, as agent for Paychex, Inc., administered the insurance benefits of the IIVS health plan and Disability Plans. ECF No. 1 at 3-4.[2]

         On September 9, 2015, IIVS presented Damiano with a letter terminating her employment effective immediately and the terms of such termination (the “Termination Letter”). ECF No. 1 at 4. The Termination Letter states that the severance package includes “[c]ontinuation of current health and disability insurance benefits paid in full by IIVS, through October 31, 2015.” ECF No. 15-3 at 5; see also ECF No. 1 at 4. Defendant IIVS consulted with Defendant Paychex and received written confirmation that coverage could be continued as described in Plaintiff's Termination Letter under the terms of the Disability Plans in existence at the time the promise was made to Plaintiff. ECF No. 1 at 4.

         On September 16, 2015 and September 28, 2015, Damiano scheduled and received treatment from her dentist. Damiano was initially approved for coverage associated with her September 16, 2015 dental work although that approval was subsequently rescinded. ECF No. 1 at 4. Damiano was then denied coverage outright for her September 28, 2015 dental work, rendering her cumulatively liable for approximately $4, 900 in dental expenses for both procedures. ECF No. 1 at 4.

         On October 3, 2015, Plaintiff was hospitalized and underwent emergency brain surgery. ECF No. 1 at 5. Then, on October 8, 2015, Paychex issued a COBRA correspondence to Damiano notifying her that her coverage under IIVS' group health plan would end on October 31, 2015, confirming the end date from Damiano's Termination Letter. ECF No. 15-2 at 5. Paychex sent a second COBRA notice, dated October 23, 2015. ECF No. 15-2 at 15. The October 23rd COBRA notice states that Plaintiff's “coverage under the [group health] Plan will end on 09/09/2015.” ECF No. 15-2 at 15. Plaintiff alleges that she did not receive this second COBRA election notice until after October 23, 2015, more than 44 days after her termination on September 9, 2015. ECF No. 1 at 7.

         After her surgery but prior to October 31, 2015, Plaintiff contacted IIVS to seek STD and LTD benefits under the Disability Plans. ECF No. 1 at 5. Damiano was then informed by IIVS that she would not be able to access disability benefits under its plans because-contrary to the terms of the Termination Letter and the October 8, 2015 COBRA notice-she was ineligible by virtue of her termination. ECF No. 1 at 5.

         On March 28, 2016, Plaintiff filed the present action. Plaintiff asserts three claims: (1) equitable relief under ERISA § 502(a)(3) (Count I); statutory remedies for violation of COBRA (Count II); and breach of contract (Count III). As relief, Plaintiff requests: (1) payment of the $110 a day penalty for failure to comply with the COBRA notice requirements under ERISA § 502(c)(1)(A), 29 U.S.C. § 1132(c)(1)(A); (2) payment of the promised dental and disability benefits; or (3) such other equitable remedies under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3) as the Court may deem appropriate. ECF No. 1 at 1.


         Defendants' motion is styled as a motion to dismiss under Federal Rule of Civil Procedure Rule 12(b)(6) or, in the alternative, for summary judgment under Rule 56. A motion styled in the alternative implicates the court's discretion under Rule 12(d) of the Federal Rules of Civil Procedure to convert a Rule 12(b)(6) motion to dismiss into a Rule 56 motion for summary judgment. See Bosiger v. U.S. Airways, 510 F.3d 442, 450 (4th Cir. 2007); Kensington Vol. Fire Dept., Inc. v. Montgomery County, 788 F.Supp.2d 431, 436-37 (D. Md. 2011). In this case, the Court declines to consider this motion as one for summary judgment and instead will treat it as a motion to dismiss under Rule 12(b)(6).

         The purpose of a motion to dismiss under Rule 12(b)(6) is to test the sufficiency of the complaint. Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006) (citation and internal quotation marks omitted). When ruling on a motion under Rule 12(b)(6), the court must “accept the well-pled allegations of the complaint as true, ” and “construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff.” Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). “The mere recital of elements of a cause of action, supported only by conclusory statements, is not sufficient to survive a motion made pursuant to Rule 12(b)(6).” Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). To survive a motion to dismiss, a complaint's factual allegations “must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). “To satisfy this standard, a plaintiff need not ‘forecast' evidence sufficient to prove the elements of the claim. However, the complaint must allege sufficient facts to establish those elements.” Walters, 684 F.3d at 439 (citation omitted). “Thus, while a plaintiff does not need to demonstrate in a complaint that the right to relief is ‘probable, ' the complaint must advance the plaintiff's claim ‘across the line from conceivable to plausible.'” Id. (quoting Twombly, 550 U.S. at 570).

         Ordinarily, a court “is not to consider matters outside the pleadings or resolve factual disputes when ruling on a motion to dismiss.” Bosiger v. U.S. Airways, Inc., 510 F.3d 442, 450 (4th Cir. 2007). However, “[t]he court may consider documents attached to the complaint, as well as documents attached to the motion to dismiss, if they are integral to the complaint and their authenticity is not disputed.” Sposato v. First Mariner Bank, No. CCB-12-1569, 2013 WL 1308582, at *2 (D. Md. Mar. 28, 2013); see e.g., Darcangelo v. Verizon Commc'ns, Inc., 292 F.3d 181, 195 n.5 (4th Cir. 2002) (stating that district court correctly considered ERISA plan agreement because plaintiff referred to and relied on the existence of “an agreement for medical-related services” between herself and defendants); Fed.R.Civ.P. 10(c) (“A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”). To be “integral, ” a document must be one ...

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