Kolenich v. Highmark West Virginia, Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF WEST VIRGINIA

ELKINS

KARL J. KOLENICH and

ERIKA KOLENICH,

Plaintiffs,

Vv. CIVIL ACTION NO. 2:19-CV-38

(BAILEY)

HIGHMARK WEST VIRGINIA, INC.,

d/b/a Highmark Blue Cross Blue Shield

West Virginia,

Defendant.

ORDER GRANTING MOTION TO DISMISS NON-ERISA CLAIMS AND DAMAGES

Currently pending before this Court is defendant's Motion to Dismiss Non-ERISA

Claims and Damages [Doc. 8], filed November 1, 2019. Having been fully briefed, this

matter is now ripe for decision. For the reasons set forth below, the Motion will be granted.

BACKGROUND

Plaintiff, Karl Kolenich, is enrolled in a Health Benefit Plan (“the Plan”) provided by

his employer, Klie Law Offices, PLLC [Doc. 7 at 2]. Defendant is the administrator of the

Plan [Id.]. On September 24, 2018, Mr. Kolenich was transported via helicopter from St.

Joseph’s Hospital in Buckhannon, West Virginia, to J.W. Ruby Memorial Hospital in

Morgantown, West Virginia, after being diagnosed with an aortic dissection [Id.J. On or

about October 28, 2018, approximately three weeks post open-heart surgery, Mr. Kolenich

reported to St. Joseph's Hospital with complaints of lightheadedness, shortness of breath,

and heart palpitations [Id. at 7]. The next morning, Mr. Kolenich was transported to the

Cleveland Clinic in Cleveland, Ohio, via fixed wing aircraft fld. at 8). Mr. Kolenich submitted

bills for these air transportation services to defendant under the Plan, but alleges that his

claims were denied [Id. at 2-14]. Defendant states that “[nJeither air ambulance service

that Mr. Kolenich used was in [defendant's] provider network. [Defendant] paid the Plan

Allowance for Mr. Kolenich’s air transportation bills, but those payments were not the entire

amounts billed by the air ambulance services.” [Doc. 9 at 2].

On July 10, 2019, Mr. Kolenich brought this action against defendant under the

private action provisions included in the Employee Retirement Income Security Act of

1974, 29 U.S.C. § 1001 ef seq. (“ERISA”), claiming that defendant “failled] to provide

coverage and benefits,” “failed to comply with each and every request for information,” and

seeking an award of attorneys’ fees and costs (“the ERISA claims”) [Docs. 1 at 14-16; 7

at 14-17]. On October 1, 2019, Mr. Kolenich amended his Complaint to add non-ERISA

claims [Doc. 7]. Specifically, causes of action titled “Common Law Claim Misconduct and

Violations of the Unfair Settlement Practices Act” and “Breach of Implied Covenant of Good

Faith and Fair Dealing” were added [Id. at 17-19}. Mr. Kolenich now seeks a host of tort

damages, including damages for “sustained aggravation and inconvenience, emotional

distress, anger, anguish, chagrin, depression, disappointment, embarrassment, fear,

frights, grief, horror, loss of use of insurance benefits, annoyance, inconvenience and/or

humiliation,” and also punitive damages [Id. at 20]. Furthermore, although not set out as

its own claim, Mr. Kolenich appears to add a claim for his wife’s loss of consortium □□□□□□

Accordingly, Mr. Kolenich's wife, Erika Kolenich, is now also a plaintiff in this action.

On November 1, 2019, defendant brought the instant Motion, arguing that the “newly

added State Law Claims are not viable and should be dismissed, because they are

completely pre-empted by the terms of ERISA itself [Doc. 9 at 3]. Specifically, defendant

argues the state law claims asserted by plaintiffs are subject to the 29 U.S.C. § 1144(a)

pre-emption clause because they “relate to” the Plan. See [Id. at 4-7]. In response,

plaintiffs argue that “[djefendant improperly asserts a blanketed immunity under...

[ERISA] for Plaintiffs’ newly added claims in the Amended Complaint although the same

are not related to Defendant's duties under the administration of the ERISA plan at issue

in this case” (Doc. 14 at 1]. Further, plaintiffs argue that “the Defendant's motion is not ripe

until the end of discovery, at the summary judgment phase. Therefore, the Defendant's

motion is also premature and should be denied.” [Id.]. In reply, defendant argues that

“Plaintiffs' response argument amounts to a post hoc attempt to distance themselves from

their own allegations in their First Amended Complaini. The allegations of the First

Amended Complaint leave no doubt that each and every act by [defendant] about which

Plaintiffs complain relates to [defendant's] administration of the Plan.” [Doc. 16 at 2].

LEGAL STANDARD

A complaint must be dismissed if it does not allege “enough facts to state a claim

to relief that is plausible on its face.” Bell Ati. Corp. v. Twombly, 550 U.S. 544, 570

(2007); see also Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (applying the

Twombly standard and emphasizing the necessity of plausibility). When reviewing a

motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the

Court must assume all of the allegations to be true, must resolve all doubts and inferences

in favor of the plaintiff, and must view the allegations in a light most favorable to the

plaintiff. Edwards v. City of Goldsboro, 178 F.3d 231, 243-44 (4th Cir. 1999).

When rendering its decision, the Court should consider only the allegations

contained in the Complaint, the exhibits to the Complaint, matters of public record, and

other similar materials that are subject to judicial notice. Anheuser-Busch, Inc. v.

Schmoke, 63 F.3d 1305, 1312 (4th Cir. 1995), vacated on other grounds, 517 U.S. 1206

(1996). In Twombly, the Supreme Court, noting that “a plaintiff's obligation to provide the

‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a

formulaic recitation of the elements of a cause of action will not do,” fd. at 1964—65, upheld

the dismissal of a complaint where the plaintiffs did not “nudge[ ] their claims across the

line from conceivable to plausible.” fd. at 1974.

APPLICABLE LAW

ERISA “comprehensively regulates, among other things, employee welfare benefit

plans that, ‘through the purchase of insurance or otherwise,’ provide medical, surgical, or

hospital care, or benefits in the event of sickness, accident, disability, or death.” Pilot Life

ins. Co. v. Dedeaux, 481 U.S. 41, 44(1987). ERISA contains civil enforcement provisions

under which “a plan participant or beneficiary may sue to recover benefits due under the

plan, to enforce the participant's rights under the plan, or to clarify rights to future benefits.

Relief may take the form of accrued benefits due, a declaratory judgment on entitlement

to benefits, or an injunction against a plan administrator's improper refusal to pay benefits.”

id. at 53. “A participant or beneficiary may also bring a cause of action for breach of

fiduciary duty, and under this cause of action may seek removal of the fiduciary.” /d.

ERISA’s “civil enforcement remedies were intended to be exclusive,” fd. at 54, and thus

ERISA contains “express pre-emption provisions” that are “deliberately expansive, and

designed to ‘establish pension [and welfare] plan regulation as exclusively a federal

concern.” /d. at 45-46 (quoting Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523

(1981)).

The Supreme Court of the United States has explained these pre-emption

provisions as follows:

Congress capped off the massive undertaking of ERISA with three provisions

relating to the pre-emptive effect of the federal legislation:

“Except as provided in subsection (b) of this section [the saving

clause], the provisions of this subchapter and subchapter III of

this chapter shall supersede any and all State laws insofar as

they may now or hereafter relate to any employee benefit plan.

... §5714(a), as set forth in 29 U.S.C. § 1144(a) (pre-emption

clause).

“Except as provided in subparagraph (B) [the deemer clause],

nothing in this subchapter shall be construed to exempt or

relieve any person from any law of any State which regulates

insurance, banking, or securities.” § 514{b)(2)(A), as set forth

in 29 U.S.C. § 1144(b){2)(A) (saving clause).

“Neither an employee benefit plan . . . nor any trust established

under such a plan, shall be deemed to be an insurance

company or other insurer, bank, trust company, or investment

company or to be engaged in the business of insurance or

banking for purposes of any law of any State purporting to

regulate insurance companies, insurance contracts, banks,

trust companies, orinvestment companies.” § 514(b)(2)(B), 29

U.S.C. § 1144(b)(2)(B) (deemer clause).

To summarize the pure mechanics of the provisions quoted above: If a state

law “relate[s] to . . . employee benefit plan[s],” it is pre-empted. § 514(a).

The saving clause excepts from the pre-emption clause laws that “regulat[e]

insurance.” § 514(b)(2)(A). The deemer clause makes clear that a state law

that “purpori[s] to regulate insurance” cannot deem an employee benefit plan

to be an insurance company. § 514{b)(2)(B).

Pilot Life Ins. Co., 481 U.S. at 44-45,

With regard to the pre-emption clause, “[t]ne term ‘State law’ encompasses not only

statutes but also common law causes of action.” Gresham v. Lumbermen's Mut. Cas.

Co., 404 F.3d 253, 258 (4th Cir. 2005). Furthermore, the phrase “relate to” is “given its

broad common-sense meaning, such that a state law ‘relate[s] to’ a benefit plan ‘in the

normal sense of the phrase, if it has a connection with or reference to such a plan.” Pilot

Life ins. Co., 481 U.S. at 47 (quoting Metropolitan Life Ins. Co. v. Massachusetts, 471

U.S. 724, 739 (1985)). Thus,

[wjhile the scope of preemption is thus quite broad, it is not unlimited. See

ingersoll~Rand [Co. v. McClendon], 498 U.S. [133, 139 (1990)]. “What

triggers ERISA preemption is not just any indirect effect on administrative

procedures but rather an effect on the primary administrative functions of

benefit plans, such as determining an employee's eligibility for a benefit and

the amount of that benefit.” Aetna Life ins. Co. v. Borges, 869 F.2d 142,

146-47 (2d Cir. 1989). Generally, when a state law claim may fairly be

viewed as an alternative means of recovering benefits allegedly due under

ERISA, there will be preemption. See Aetna Health Inc. v. Davila, 542 U.S.

200, 124 S.Ct. 2488, 2495, 159 L.Ed.2d 312 (2004) (“[A]ny 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.”); Monarch Cement

Co. v. Lone Star Indus., 982 F.2d 1448, 1452 (10th Cir. 1992).

Gresham, 404 F.3d at 258.

DISCUSSION

Defendant argues that each of plaintiffs’ state law claims “relate to” Mr. Kolenich’s

Plan and are not based on laws “regulat[ing] insurance.” Thus, defendant argues each

must be dismissed as pre-empted by ERISA. Plaintiffs, on the other hand, argue that the

“Non-ERISA claims in the amended complaint do not arise in the course of administrative

duties related to the pian, and are not related to plaintiff Karl Kolenich’s claim for benefits.

Therefore, the state law claims are not preempted by ERISA.” [Doc. 14 at 2].

Upon consideration, this Court agrees with defendant. Each of plaintiffs’ state law

claims “relate to” the Plan and are not based on laws “regulat[ing] insurance.” Thus, these

state law claims are subject to ERISA's pre-emption clause and cannot avoid pre-emption

by way of the saving clause. Accordingly, each of plaintiffs’ state law claims must be

dismissed as pre-empted by ERISA.

The first of plaintiffs’ state law claims is their Fourth Cause of Action titled “Common

Law Misconduct and Violations of the Unfair Settlement Practices Act,” which states the

following:

FOURTH CAUSE OF ACTION

COMMON LAW CLAIM MISCONDUCT AND VIOLATIONS OF THE

UNFAIR SETTLEMENT PRACTICES ACT

50. _—‘ Plaintiffs incorporates those allegations of the General Allegations,

Jurisdiction, Parties, and Factual Background sections along with the

First, Second and Third Causes of Action as though set forth in full in

this cause of action.

51. The actions of Defendant Highmark including but not limited to:

delaying payment of a clearly covered claim, paying claims at

less than full value with no justifiable reason or basis, unlawfully

denying coverage, failure to act reasonably and timely on

communications, and misrepresenting pertinent terms of the policy

of the Plaintiffs, wrongful withholding of payment for Plaintiff

Kolenich’s covered damages and losses and/or valid claim under

his Highmark insurance policy.

52. Plaintiffs and their medical providers advised Defendant Highmark

that Plaintiff Kolenich’s claim was covered under his Highmark

insurance policy under West Virginia law, and that the policy

contractually obligated Defendant Highmark to properly pay the

claims.

53. Defendant Highmark had possession of documents, materials and/or

evidence indicating that Plaintiffs claim was a covered loss under

the Highmark insurance policy at the time said denials were made.

54. Defendant Highmark’'s, acts and omissions of, included but not limited

to[:] failing to adopt and implement reasonable standards for the

prompt investigation and payment of claims arising under

insurance policies; unreasonably refusing to acknowledge that

plaintiffs claim was a covered loss; and failing to negotiate in good

faith.

55. Defendant Highmark’s acts and omissions as described herein, upon

information and belief, constitute breaches of the applicable

insurance contract lawfully entered into by the Parties.

56. Defendant Highmark, its agents, servants and employees, violated

the West Virginia Unfair Claims Settlement Practices Act, West

Virginia Code § 33-11-4(9), the Unfair Trade Practices Act, as well as

the West Virginia Insurance Regulations promulgated there under,

including, but not limited to, the following:

a. Failed to adopt and implement reasonable standards for

the prompt acknowledgment and investigation of claims

arising under insurance policies;

b. Failed in good faith to effectuate prompt, fair and

equitable settlement of claims;

Cc. Misrepresenting pertinent facts or insurance policy

provisions relating to coverage’s at issue;

d. Failing to acknowledge and act reasonably promptly

upon communications with respect to claims arising

under insurance policies;

e. Refusing to pay claims without conducting a reasonable

investigation based upon all available information;

f. Failing to promptly provide a reasonable explanation of

the basis in the insurance policy in relation to the facts

or applicable law for denial of a claim or for the offer of

a compromise settlement and;

g. Other acts and omissions as disclosed by discovery.

57. Defendant Highmark, by and through its agents, servants, and

employees has committed violations fo the West Virginia Unfair

Claims Settlement Practices Act with such frequency as to indicate a

general business practice.

58. As a direct and proximate result of the acts alleged in this count,

Plaintiffs were damaged as is hereinafter set forth.

[Doc. 7 at 17-19] (emphasis added).

Plaintiffs’ second state law claim is their Fifth Cause of Action titled “Breach of

Implied Covenant of Good Faith and Fair Dealing,” which states the following:

FIFTH CAUSE OF ACTION

BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR

DEALING

59. Plaintiffs incorporates those allegations of the General Allegations,

Jurisdiction, Parties, and Factual Background sections along with the

First, Second, Third and Fourth Causes of Action as though set forth

in full in this cause of action.

60. Defendant Highmark breached its implied covenant of good faith and

fair dealing with Plaintiff including, but not limited to:

A: Failing to accord the interest and rights of Plaintiff

Kolenich at least as great a respect as its own;

B: Failing to conduct a proper investigation and evaluation

of the relevant claims based upon the objective and

cogent evidence; and

C: Failing to timely and fully pay Plaintiff's claim when it

became reasonably clear the claim was covered.

61. Asadirect and proximate result of the acts of Defendant Highmark as

alleged in this Count of the Complaint, Plaintiffs were damaged and

injured as is hereinafter set forth.

[Id. at 19] (emphasis added).

This Court bolded several words and phrases in these Causes of Action to highlight

that, despite plaintiffs’ argument to the contrary, in each of these allegations plaintiffs claim

that defendant did something wrong in the administration of the Pian, even explicitly

claiming that defendant breached its duties pursuant to the Plan. Accordingly, each of

these allegations “relate to" an ERISA plan, and are subject to ERISA's pre-emption

clause.

Plaintiffs’ arguments to the contrary are simply unavailing. Plaintiffs rely on

Darcangelo v. Verizon Communications, Inc., 292 F.3d 181 (4th Cir. 2002), to argue

that “[hJere, like{] the plaintiff in Darcangelo, Plaintiffs have asserted claims that are not

related to the fiduciary obligations in the administration of the Plan, and have absolutely

nothing to do with the payment of the benefits owed to Plaintiff Karl Kolenich under the

Plan. Plaintiffs’ claims, similar to some of those upheld in Darcangelo, allege that the

Defendant committed fraud, violated unfair settlement practices, and violated good faith

and fair dealing practices, all of which fall outside the practices of the Defendant to

administer the Plan.” (Doc. 14 at 4]. This Court disagrees.

Darcangeio stands for the proposition that “the simple fact that a defendant is an

ERISA plan administrator does not automatically insulate it from state law liability for

alleged wrongdoing against a plan participant or beneficiary.” fd. at 191. In determining

that some of plaintiffs claims were not pre-empted by ERISA, the Darcangelo court

explained as follows:

As explained above, however, Darcangelo’s complaint alleges that Verizon

and CORE did nof obtain this information in pursuit of a legitimate or

appropriate end. This amounts to an allegation that Verizon and CORE

undertook conduct that was entirely unrelated to and outside of the scope of

their duties under the plan or in carrying out the terms of the plan.

Darcangelo does not allege that CORE improperly performed some

traditional fiduciary function, such as “managing assets” or “distributing

property” under the plan. Nor does Darcangelo allege that CORE negligently

“discharge[d its] duties,” § 404(a)(1), or negligently carried out the terms of

the plan. Rather, Darcangelo alleges conduct by CORE that is completely

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unauthorized—conduct that was not undertaken in the course of carrying out

its plan responsibilities. The complaint, in other words, does not simply

allege “faulty plan administration,” rather, it alleges improper conduct so

unrelated to the plan that it cannot be termed “plan administration” of any

sort. lf, as Darcangelo alleges, CORE obtained her private medical

information solely at the behest of Verizon to assist Verizon in its attempt to

find a reason to discharge her, CORE was not acting in the course of making

a benefits determination or performing any other plan function. The clear

implication of these allegations is that CORE was not performing a fiduciary

function, but was simply behaving as a rogue administrator, acting entirely

outside the scope of its duties under the plan.

fd. at 193 (internal citations omitted} (emphasis added).

This is simply not the case here. Though plaintiffs argue such in their Response,

plaintiffs’ Amended Complaint does not allege anywhere that defendant “undertook

conduct that was entirely unrelated to and outside of the scope of their duties under the

plan or in carrying out the terms of the plan.” /d. Instead, as highlighted above, plaintiffs’

Amended Complaint continually alleges defendant wrongfully administered the Plan. This

Court tends to agree with defendant that “[p]laintiffs’ response argument amounts to a post

hoc attempt to distance themselves from their own allegations in their First Amended

Complaint” (Doc. 16 at 2]. Though plaintiffs’ Response mentions allegations of fraud, the

word “fraud” does not appear once in plaintiffs’ Amended Complaint. Nor does the

allegation in plaintiffs’ Response that defendant “committed fraud by intentionally not

having an in-network provider of emergency air transportation so that Defendant can,

across the board for all policy holders, avoid coverage of claims,” [Doc. 14 at 4—5], appear

anywhere in plaintiffs’ Amended Complaint. Simply, plaintiffs’ state law claims do not

allege “improper conduct so unrelated to the plan that it cannot be termed ‘plan

administration’ of any sort.” Dareangelo, 292 F.3d at 193. To the contrary, plaintiffs’ state

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law claims relate entirely to defendant's plan administration.

Furthermore, this Court notes that in the very first paragraph of the Amended

Complaint, plaintiffs articulate that their claims “relate to” an ERISA plan. This paragraph

states as follows:

1. Plaintiffs alleges [sic] that Plaintiffs’ claims “relate to” an “employee

welfare benefit plan” as defined by ERISA, 29 U.S.C. section 1001 et

seq. and that the subject Medical Expense Plan instituted by Klie Law

Offices, PLLC constitutes a “plan under ERISA.” Therefore, Plaintiffs

allege that this Court's jurisdiction is invoked pursuant to 28 U.S.C.

Section 1337 and 29 U.S.C. Section 1132(e).

[Doc. 7 at 1]. This paragraph does not say “some of plaintiffs’ claims ‘relate to’ an ERISA

plan,” it says “[p]laintiffs’ claims ‘relate to” an ERISA plan. This is just further support for

what is evident from the face of plaintiffs’ Amended Complaint—plaintiffs’ state law claims

all “relate to” Mr. Kolenich’s ERISA Plan and therefore fall within ERISA’s pre-emption

clause.

Having found these state law claims subject to the ERISA pre-emption clause, this

Court must next determine if any of them are exempt from pre-emption by the saving

clause because they “regulate insurance.” § 514(b)(2)(A), as set forth in 29 U.S.C.

§ 1144(b)(2)(A) (saving clause). Upon consideration, this Court finds that none of these

state claims regulate insurance, and thus the saving clause does not apply.

Itis clear that plaintiffs’ common law claims—"common law misconduct” and “breach

of implied covenant of good faith and fair dealing’—are based on laws that do not “regulate

insurance.” “[SJuch actions are not directed at the insurance industry alone and do not

relate to the spreading of risk.” Custer v. Pan Am. Life Ins. Co., 12 F.3d 410, 420 (4th

Cir. 1993). Further, while certainly a closer question on its face, all pertinent courts to have

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considered the issue have found that claims under the West Virginia Unfair Trade

Practices Act, W.Va. Code §§ 33-11-1 through 33-11-10, including claims for unfair claim

settlement practices under W.Va. Code § 33-11-4(9) such as those brought by plaintiffs

here, are not subject to ERISA'’s saving clause as “regulat[ing] insurance.” See Ball v. Life

Planning Servs., inc., 187 W.Va. 682, 686, 421 S.E. 2d 223, 227 (1992) (“[W]ith respect

to [plaintiffs] claim under W.Va. Code § 33-11-4(9)[, t]his claim relates to unfair claim

settlement practices and is clearly the same type of claim that the United States Supreme

Court found to be pre-empted by § 514(a) of ERISA in Pilot Life Insurance Co. v.

Dedeaux.”); Custer, 12 F.3d at 420 (“[W]e hold that [plaintiff's] claims under West Virginia

law[, brought pursuant to W.Va. Code § 33-1 1-4(9),] relating to improper claims processing

or administration are not saved from preemption by the savings clause.”); Tri-State Mach.,

inc. v. Nationwide Life ins. Co., 33 F.3d 309 (4th Cir. 1994) (holding that claims for

violation of the insurance chapter of the West Virginia Unfair Trade Practices Act are not

saved from pre-emption); Coffman v. Metro. Life Ins. Co., 138 F.Supp.2d 764 (S.D.

W.Va. 2001) (Haden, C.J.) (dismissing plaintiff's claims brought pursuant to the West

Virginia Unfair Trade Practices Act as pre-empted based on the Fourth Circuit's rulings in

Custer and Nationwide); Copley v. Liberty Life Assurance Co. of Boston, 2006 WL

8438618, at*3 (S.D. W.Va. Apr. 24, 2006) (Copenhaver, J.) (“Claims seeking relief under

the West Virginia Unfair Trade Practices Act (“WVUTPA’) are also preempted when they

‘relate to’ the processing of benefits pursuant to an ERISA plan.”) (citing Nationwide, 33

F.3d at 315; Coffman, 138 F.Supp.2d at 766-67). Accordingly, this Court finds that the

saving clause does not apply to plaintiffs’ state law claims. Thus, plaintiffs’ state law

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claims—their Fourth and Fifth Causes of Action—are pre-empted and will be dismissed.

Dismissing plaintiffs’ Fourth and Fifth Causes of Action also necessitates dismissal

of plaintiff Erika Kolenich’s loss of consortium claim. As Erika Kolenich was not a party in

the original Complaint and no loss of consortium claim was made in the original Complaint,

this Court assumes that Mrs. Kolenich’s loss of consortium claim is based on the state law

Causes of Action raised in plaintiffs’ Amended Complaint. “In West Virginia, loss of

consortium claims are ‘derivative of the underlying tort claim with which they are brought’

and recovery depends upon the success of the underlying tort claim.” Councell v. Homer

Laughlin China Co., 2012 WL 907086, at *18 (N.D. W.Va. Mar. 15, 2012) (Stamp, J.)

(citing Dupont v. United States, 980 F.Supp. 192, 195-96 (S.D. W.Va. 1997) (Goodwin,

J.)}. Thus, having dismissed the underlying tort claims, Mrs. Kolenich’s loss of consortium

claim must also be dismissed.’

Additionally, as only ERISA claims remain, this Court will strike plaintiffs’ demands

for compensatory and punitive damages. It is “clear that compensatory and punitive

damages are not available under ERISA.” Copley, 2006 WL 8438618, at *4 (citing Griggs

v. E.l. DuPont de Nemours & Co., 237 F.3d 371, 384 (4th Cir. 2001) (ERISA civil

enforcement provision does not encompass compensatory damages)); see a/so Bast v.

Prudential ins. Co. of Am., 150 F.3d 1003, 1009 (9th Cir. 1998) (“Extracontractual,

‘This Court notes Mrs. Kolenich’s loss of consortium claim would also be dismissed

if it derives from Mr. Kolenich’s ERISA claims. “If the loss of consortium claim is derived

from the ERISA claim, then the loss of consortium claim is best characterized as a state

law claim preempted by ERISA.” Kidneigh v. UNUM Life Ins. Co. of Am., 345 F.3d 1182,

1189 (10th Cir. 2003) (citing Bast v. Prudential Ins. Co. of Am., 150 F.3d 1003, 1009-10

(9th Cir. 1998); Pacificare of Oklahoma, Inc. v. Burrage, 59 F.3d 151, 155 (10th Cir.

1995) (“A loss of consortium claim against an [insurer] alleging negligent or fraudulent

administration of the plan is preempted by ERISA.”)).

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compensatory, and punitive damages are not available under ERISA.”).

Finally, this Court will address plaintiffs’ alternative arguments presented in their

Response to defendant’s Motion. First, plaintiffs argue that they “should be allowed to

conduct discovery and then have the Court rule whether or not, based on the factual record

that develops, these claims were undertaken in the performance of the plan's

administrator's fiduciary duties” [Doc. 14 at 5]. Plaintiffs again rely on Darcangefo, which

stated that plaintiffs claims “relating to confidentiality of medical records, unfair trade

practices, privacy, and negligence, cannot be disposed of on preemption grounds at the

motion to dismiss stage.” Darcangelo, 292 F.3d at 186. The problem with this argument

is that in the very next sentence the court explained that “[t]his is because the complaint,

in setting forth these four claims, charges [defendant] with conduct that is entirely unrelated

to its duties under the ERISA plan.” fd. (emphasis added). As explained in detail above,

that is not the case here. Plaintiffs did not allege any conduct by defendant that was

entirely unrelated to its duties under the Plan, and thus there is no need to let the factual

record develop on claims that are not presented.

Next, plaintiffs argue that “[a]lternatively, should the Court be inclined to grant

Defendant's motion, the same should not be granted with prejudice, and the Plaintiffs

should be granted leave to amend the pleading” [Doc. 14 at 5]. This request will be

granted in part. This Court cannot simply grant plaintiffs leave to amend, as plaintiffs have

not made a formal motion to amend and this Court has not been presented with a

proposed second amended complaint as required by Loca! Rule of Civil Procedure 15.01.

Without any argument regarding amendment or a proposed second amended complaint

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to consider, this Court cannot determine whether some reason exists to deny amendment,

“such as undue delay, bad faith or dilatory motive on the part of the movant, repeated

failure to cure deficiencies by amendments previously allowed, undue prejudice to the

opposing party by virtue of allowance of the amendment, [or] futility of the amendment.”

Foman v. Davis, 371 U.S. 178, 182 (1962). However, this Court will grant plaintiffs’

request for a dismissal without prejudice, and will allow plaintiffs the opportunity to move

for amendment, should they so choose. Any such motion to amend shall be filed by the

February 17, 2020, Joinder & Amendments Deadline set forth in this Court’s Scheduling

Order [Doc. 19]. Should plaintiff not file a motion to amend by that time, or should this

Court deny plaintiffs’ motion to amend, then the dismissal of plaintiffs’ state law claims shall

be with prejudice.

CONCLUSION

Based upon the foregoing, this Court hereby GRANTS defendant's Motion to

Dismiss Non-ERISA Claims and Damages [Doc. 8]. Accordingly, plaintiffs’ Fourth Cause

of Action, Fifth Cause of Action, loss of consortium claim, request for compensatory

damages, and request for punitive damages are hereby DISMISSED WITHOUT

PREJUDICE. Any motion for leave to file a second amended complaint shail be filed no

later than February 17, 2020.

lt is so ORDERED.

The Clerk is directed to transmit copies of this Order to all counsel of record herein.

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DATED: January 21, 2020.

PRESTON BAILEY

D STATES DISTRICT JUDG

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