United States District Court, E.D. Kentucky, Central Division
MEMORANDUM OPINION AND ORDER
C. Reeves United States District Judge.
matter is pending for consideration of Defendants'
Medi-Copy Services, Inc. and Menika Bobo's Motion for
Judgment on the Pleadings or, alternatively, for Summary
Judgment. [Record No. 1');">13] The defendants' motion will be
granted, in part, and denied, in part.
Mark Morcus was insured through his employer under policies
with The Guardian Life Insurance Company of America
(“Guardian”) for short and long-term disability.
[Record No. 1');">1-1');">1, p. 4 ¶ 1');">12] He became unable to work in
August 201');">15 due to medical conditions and initiated a
short-term disability claim with Guardian. Id. at p.
4 ¶¶ 1');">13, 1');">16. Guardian approved the claim and Morcus
began receiving short-term disability benefits. Id.
at p. 5 ¶ 1');">19. Following expiration of the short-term
disability period, Morcus submitted a claim for long-term
disability benefits, which Guardian approved on February 8,
201');">16. Id. at p. 5 ¶¶ 1');">19-23. He received
monthly payments from Guardian, during which time he received
medical treatment from Dr. Joshua Bailey at Lexington Clinic.
Id. at p. 6 ¶¶ 25, 27.
is a health information exchange that provides services to
Lexington Clinic, which include medical record request
processing. Id. at p. 4, ¶¶ 7-9. Medi-Copy
sent a 1');">15-page fax to Guardian on August 31');">1, 201');">16, which
contained medical records and three forms purporting to
contain information regarding Morcus' claim for benefits.
Id. at p. 6 ¶¶ 33-34. The first form
indicated (erroneously) that Morcus had “no
restrictions” and was able to return to work.
Id. at p. 7 ¶ 39. The form was completed and
signed by Medi-Copy's agent, Menika Bobo, without Dr.
Bailey's approval.[1');">1" name="FN1');">1" id=
"FN1');">1">1');">1] Id. at p. 7 ¶¶ 40-42.
The second form also was signed by Bobo without Dr.
Bailey's consent and incorrectly stated that Morcus was
capable of performing sedentary or light work on a full-time
basis. Id. at p. 7 ¶¶ 43-46. Bobo also
completed and signed the third form without Dr. Bailey's
consent and incorrectly indicated that Morcus was capable of
performing heavy work on a full-time basis. Id. at
p. 8 ¶¶ 51');">1-54.
continued to seek clarification from Dr. Bailey regarding
Morcus' physical limitations in the days that followed.
Id. at p. 9-1');">10 ¶¶ 65-67. Dr. Bailey sent a
message to Medi-Copy on September 1');">12, 201');">16, indicating that
Morcus should avoid heavy lifting and significant lumbar
twisting maneuvers. Bailey clarified that these were Family
Medical Leave Act restrictions, as opposed to a disability
assessment. Id. at p. 1');">10 ¶¶ 66-68. Bobo
faxed the same three forms to Guardian the following day,
which included revisions reflecting Dr. Bailey's comments
from September 1');">12, 201');">16, and indicated that Morcus was able
to return to work. Id. at p. 1');">11');">1-1');">13 ¶¶
terminated Morcus' long-term disability benefits on
September 8, 201');">16, citing items provided by Medi-Copy on
August 31');">1, 201');">16. Id. at p. 8 ¶¶ 58, 59.
Lexington Clinic's Health Information Manager, Sharon
Brown, issued a letter on September 23, 201');">16, stating that
the information submitted by Medi-Copy on August 31');">1 was not
accurate and that Medi-Copy notified Guardian accordingly on
September 1');">14, 201');">16. Id. at p. 48. Morcus alleges
that Medi-Copy did not notify Guardian regarding the
inaccuracy of the forms, nor did it retract them.
Id. at p. 9 ¶ 64.
retained an attorney and filed an administrative appeal
regarding the denial of benefits. Id. at p. 1');">13
¶ 99. Guardian informed Morcus on March 1');">14, 201');">17, that
it had reversed its decision to terminate benefits. He
subsequently filed this action against Medi-Copy and Bobo
alleging that their actions prevented him from receiving
long-term disability benefits from September 8, 201');">16, through
March 1');">14, 201');">17. Morcus does not seek lost long-term
disability benefits but, instead, he seeks damages incurred
in pursuing an appeal to recover those benefits.
Additionally, he complains that he suffered emotional and
financial distress, worry, and inconvenience as a result of
the defendants' actions. Id. at p. 1');">14 ¶
1');">102-03. Morcus asserts various claims under Kentucky state
law including violations of the Consumer Protection Act;
fraudulent and negligent misrepresentation; fraud by
omission; interference with contractual relations; negligence
and gross negligence; negligent hiring, training,
supervision, and retention; and intentional and negligent
infliction of emotional distress; and negligence per
defendants have moved for judgment on the pleadings or, in
the alternative, for summary judgment. Motions for judgment
on the pleadings under Rule 1');">12(c) are reviewed under the same
standard as motions made under Rule 1');">12(b)(6). Lindsay v.
Yates, 498 F.3d 434, 437 n.5 (6th Cir. 2007). To survive
a motion to dismiss, a plaintiff must allege sufficient
factual matter to state a claim for relief that is plausible
on its face. Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007); Peatross v. City of Memphis,
1');">18 F.3d 233');">81');">18 F.3d 233, 239-40 (6th Cir. 201');">16). A party's Rule
1');">12(c) motion is properly granted when there is no issue of
material fact and the moving party is entitled to judgment as
a matter of law. JPMorgan Chase Bank, N.A. v.
Winget, 1');">10 F.3d 577');">51');">10 F.3d 577, 582 (6th Cir. 2007). The Court
accepts as true “all well-pleaded material allegations,
” but “need not accept as true legal conclusions
or unwarranted factual inferences.” Id. at
581');">1-82 (quoting Mixon v. Ohio, 1');">193 F.3d 389');">1');">193 F.3d 389, 400
(6th Cir. 1');">1999)).
judgment is appropriate when “the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of
law.” Fed.R.Civ.P. 56(c); Celotex Corp. v.
Catrett, 1');">17');">477 U.S. 31');">17, 322-23 (1');">1986). Once the moving
party has met its burden of production, “its opponent
must do more than simply show that there is some metaphysical
doubt as to the material facts.” Keeneland
Ass'n, Inc. v. Earnes, 830 F.Supp. 974, 984 (E.D.
Ky. 1');">1993) (citing Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 586 (1');">1986)). The nonmoving
party cannot rely on the assertions in its pleadings; rather,
it must come forward with probative evidence to support its
claims. Celotex, 477 U.S. at 324. In making its
determination on the motion for summary judgment, the Court
will view all the facts and inferences from those facts in
the light most favorable to the nonmoving party.
Matsushita, 475 U.S. at 587.
defendants' motion is based largely on the argument that
Morcus' claims are completely preempted by the Employment
Retirement Income Security Act (“ERISA”), 29
U.S.C. § 1');">1001');">1, et seq. ERISA provides a uniform
regulatory regime over employee benefit plans and includes
expansive preemption provisions intended to ensure that
employee benefit plan regulation is “exclusively a
federal concern.” Alessi v. Raybestos-Manhattan,
Inc., 1');">1 U.S. 504');">451');">1 U.S. 504, 523 (1');">1981');">1). There is no dispute that
Morcus' employer-sponsored disability plan is governed by
ERISA. However, ERISA does not preempt every state-law claim
that touches the Act in some tangential way.
Supreme Court examined the scope of § 502's
preemptive force in Aetna Health Inc. v. Davila, 542
U.S. 200, 209 (2004), declaring that “any state-law
cause of action that duplicates, supplements, or supplants
the ERISA civil enforcement remedy conflicts with the clear
congressional intent to make the ERISA remedy exclusive and
is therefore pre-empted.” The Court concluded that
“Congress' intent to make the ERISA civil
enforcement mechanism exclusive would be undermined if state
causes of action that supplement the ERISA § 502(a)
remedies were permitted, even if the elements of the state
cause of action did not precisely duplicate the elements of
an ERISA claim.” Id.
§ 502(a)(1');">1)(B), codified at § 1');">11');">132(a), provides:
A civil action may be brought-(1');">1) by a participant or
beneficiary-. . . (B) to recover benefits due to him under
the terms of his plan, to enforce his rights under the terms
of the plan, or to clarify his rights to future benefits
under the terms of the plan.
Court articulated a two-part test to determine whether
state-law claims fall within the scope of this definition. A
claim falls into the category of claims that is completely
preempted when both of the following are satisfied:
“(1');">1) the plaintiff complains about the denial of
benefits to which he is entitled ‘only because of the
terms of an ERISA-regulated employee benefit plan'; and
(2) the plaintiff does not allege the violation of any
‘legal duty (state or federal) independent of ERISA or
the plan terms.'” Gardner v. Heartland Indus.
Partners, LP, 1');">15 F.3d 609');">71');">15 F.3d 609, 61');">15 (quoting
Davila, 542 U.S. at 21');">10).
Sixth Circuit recently examined ERISA's preemption of
state-law claims against third-party medical reviewers.
Violet Hogan filed an ERISA lawsuit in federal court alleging
the improper denial of disability benefits. See Hogan v.
Life Ins. Co. of N. Am. (“Hogan
I”), 521');">1 F. App'x 41');">10 (6th Cir. 201');">13).
Following an adverse ruling in Hogan I, Hogan sued
two nurses who worked for Life Insurance Company of North
America and who had provided opinions regarding Hogan's
eligibility for disability benefits under an ERISA plan.
Hogan v. Jacobson, 823 F.3d 872 (6th Cir. 201');">16).
Hogan's complaint made no reference to ERISA or the Life
Insurance Company of North America and alleged only that the
nurses had committed negligence per se by giving
medical advice without being licensed under Kentucky state
argued that her claim was not preempted because the nurses
were not plan administrators and thus were not proper
defendants to a § 1');">11');">132 claim. The Court explained that a
plaintiff may not evade complete preemption merely by suing
the wrong party. Id. at 880. Determining whether a
cause of action falls within § 1');">11');">132(a)(1');">1)(B) requires
the Court to examine the complaint, the state laws upon which
the plaintiff's claims are based, and, when necessary,
the various plan documents. Id. (citing
Davila, 542 U.S. at 21');">11');">1). Claims likely fall within
the scope of § 1');">11');">132 when “the only action
complained of” is the refusal to provide benefits under
an ERISA plan and “the only relationship” between
the parties is based in the plan. Id. (quoting
Davila, 542 U.S. at 21');">11');">1).
Court emphasized that Hogan's relationship with the
defendants was based solely on the existence of Hogan's
ERISA plan. “[C]laims purporting to challenge the
actions of medical providers are nonetheless claims for ERISA
benefits when the medical determinations were made solely in
the course of an ERISA-benefits determination and the damages
alleged arise from the denial of benefits.”
Id. at 880 (citing Gibson v. Prudential Ins. Co.
of Am., 1');">15 F.2d 41');">14');">91');">15 F.2d 41');">14, 41');">17 (9th Cir. 1');">1990) (claims of
fraud against a claim-processing company and doctors were
preempted because the “complaint alleges violations of
duties created by the administration of the disability
benefit plan” and “[t]here would be no
relationship or cause of action . . . without the
plan”). Further, in addressing the first
Davila factor, the Court explained that Hogan's
alleged damages arose from the ultimate denial of disability
benefits. Id. at 881');">1.
respect to the second part of the Davila test, the
Court looked to the origin of the parties' relationship.
“Whether a duty is ‘independent' of an ERISA
plan does not depend merely on whether the duty nominally
arises from a source other than the plan's terms.”
Id. (quoting Gardner, 71');">15 F.3d at 61');">13).
Instead, courts must determine whether the defendant's
duty arose “solely because of and within the context of
the benefits review required by the plan.” Id.
at 882. The Sixth Circuit compared Hogan's claim to
“truly independent” state-law tort claims and
determined that the defendant nurses had no legal duty
independent of ERISA. Id. at 882-83 (citing
Gardner, 71');">15 F.3d at 61');">14-1');">15) (claim for tortious
interference with a contract against company executives and
investor who allegedly induced company to cancel an executive
retirement plan in connection with sale of investor's
share); Dishman v. UNUM Life Ins. Co. of
Am., 269 F.3d 974, 984 (9th Cir. 2001');">1) (claim that
insurance agency was liable for tortious invasion of privacy
in connection with actions of investigators tasked with
uncovering information regarding plaintiff's alleged
return to other work).
Sixth Circuit expanded this holding in Milby v. MCMC
LLC, 844 F.3d 605 (6th Cir. 201');">16). Milby was covered by
a long-term disability insurance policy through her employer.
She became unable to work in April 201');">11');">1 and received
disability benefits for approximately seventeen months.
Id. at 608. As part of an eligibility review, her
ERISA plan engaged MCMC, a third-party reviewer, to provide
an opinion regarding Milby's work restrictions. MCMC and
its agent, Jamie Lewis, opined that Milby was able to return
to work. The plan terminated Milby's benefits based, in
part, on MCMC's recommendation.
filed an ERISA suit against her disability provider and a
separate state-court action alleging negligence per
se against MCMC for practicing medicine in Kentucky
without a license. The court noted that “[b]ecause a
third-party reviewer is not acting as the plan administrator
nor making the benefits determination . . . the type of claim
here may edge toward the category of those not
preempted.” Milby, 844 F.3d at 61');">11');">1. However,
Hogan determined the outcome for the first prong of
the Davila test because MCM's conduct was
“indisputably part of the process used to assess a
participant's claim for a benefit payment under the plan,
making [the state-law claim] an alternative enforcement
mechanism to ERISA's civil enforcement ...