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Cruz v. Lovelace Health System, Inc.

United States District Court, D. New Mexico

September 3, 2019

ELDIE L. CRUZ, M.D., Plaintiff,
v.
LOVELACE HEALTH SYSTEM, INC., LOVELACE HEALTH SYSTEM, INC. dba LOVELACE MEDICAL GROUP, LOVELACE HEALTH SYSTEM, LOVELACE MEDICAL GROUP, AHS MANAGEMENT COMPANY, INC., AHS MANAGEMENT COMPANY, INC. dba ARDENT HEALTH SERVICES, AHS NEW MEXICO HOLDINGS, INC., AHS ALBUQUERQUE HOLDINGS, LLC, BHC MANAGEMENT SERVICES OF NEW MEXICO, LLC, ARDENT HEALTH SERVICES, INC., ARDENT HEALTH SERVICES, LLC, ARDENT HEALTH SERVICES, and RELIANCE STANDARD LIFE INSURANCE COMPANY, Defendants.

          MEMORANDUM OPINION AND ORDER

          ROBERT C. BRACK SENIOR U.S. DISTRICT JUDGE.

         Dr. Eldie Cruz (Plaintiff) was employed as a general surgeon. He brought suit after being denied long-term disability (LTD) benefits under an employer-sponsored insurance plan. Plaintiff also alleges that his employer violated the ADA by terminating his medical privileges and denying him reasonable accommodation during the medical leave of absence that gave rise to his claim. In this Memorandum Opinion and Order, the Court takes up the individual motions filed by Defendants Reliance Standard Life Insurance Company (Reliance) (Doc. 11) and Lovelace Health System, Inc. (Lovelace) (Doc. 13). The Court finds that Plaintiff has sufficiently pled his ERISA claim against both Reliance and Lovelace and sufficiently pled his ADA claim against Lovelace. The Court will dismiss Plaintiff's state law claims against both Reliance and Lovelace without prejudice as they are either preempted by ERISA or fail to state a plausible claim for relief.

         I. Background[1]

         Lovelace employed plaintiff as a general surgeon.[2] (Doc. 71 (Am. Compl.) ¶ 22.) Lovelace was the sponsor and “plan administrator” of a long term disability plan (LTD Plan) that it offered to its employees. (Id. ¶ 23.) “Plaintiff participated in the LTD Plan and paid approximately three thousand dollars per year in premiums for disability coverage” under the plan. (Id. ¶ 26.) Reliance was the “claims administrator” of the LTD plan. “On March 1, 2016[, ] Plaintiff made a claim for [LTD benefits] under the LTD Plan.” (Id. ¶ 28.) Plaintiff and his physicians “timely provided all required documentation demanded by Reliance in support of his claim for LTD Benefits . . . .” (Id. ¶ 29.) Reliance, however, “denied Plaintiff's claim for LTD Benefits eight months after Plaintiff filed his claim, which . . . was more than double the time allowed by Reliance's own internal guidelines to make a determination on disability benefits and over five times longer than allowed by the basic 45 day window specified in” ERISA. (Id. ¶ 30.)

         In February 2017, Plaintiff attempted to appeal the denial “but Reliance did not respond to Plaintiff's request to appeal.” (Id. ¶ 31.) On September 5, 2018, Reliance informed Plaintiff's counsel that “the original decision to deny benefits is final. . . . [Reliance] will not initiate another review or reconsideration of the original decision.” (Id. ¶ 32.) Though it denied Plaintiff's LTD benefits claim, Reliance did determine “that Plaintiff was entitled to three months of LTD benefits to be paid by Lovelace based upon Reliance's finding that Plaintiff met the policy definition of Totally Disabled during the relevant period of time for which Lovelace was responsible to pay . . . .” (Id. ¶ 34.) Lovelace did not pay any LTD benefits to Plaintiff. (Id.)

         Plaintiff did receive “limited short term disability payments in early 2016, but all payments and employment compensation stopped in March 2016 when Lovelace unilaterally put Plaintiff on unpaid leave.” (Id. ¶ 36.) He has not received any disability benefits since March 2016, and he never received any long term disability benefits from either Lovelace or Reliance. Lovelace did not pay Plaintiff anything between March 1, 2016, and November 25, 2016. (Id. ¶ 40.) On November 25, Lovelace issued a one-time final payment to Plaintiff designed by Lovelace as ‘EXTRA PY' . . . .” (Id.) Lovelace told Plaintiff that the “EXTRA PY” payment covers the LTD Benefits owed to him, but Plaintiff alleges that “the ‘EXTRA PY' amount does not equal the amount Lovelace was obligated to pay Plaintiff in LTD Benefits under the terms of the LTD policy, and . . . was reduced by taxes and withholding contrary to the LTD policy language . . . .” (Id.)

         Also “[b]eginning in early 2016, Plaintiff and his treating physicians repeatedly asked for reasonable accommodation from Lovelace under the ADA to allow Plaintiff to continue to work as a physician and support his family[, ]” but Lovelace did not provide the reasonable accommodation he requested. (Id. ¶¶ 38-39.) Instead, Lovelace “responded by demanding more and more information over a period of many months, ” then informed him on July 1, 2016, without notice, that he was fired. (Id. ¶ 39.)

         On February 27, 2018, “Lovelace notified Plaintiff that his medical privileges with Lovelace were being terminated . . . .” (Id. ¶ 41.) He filed a claim with the Equal Employment Opportunity Commission (EEOC) alleging Lovelace violated the ADA by refusing his requests for accommodation, and on October 15, 2018, received a right to sue letter from the EEOC. (Id. ¶ 42.) Plaintiff asserts that “[d]uring all relevant periods of time, Plaintiff has been Totally Disabled as defined in the LTD Plan.” (Id. ¶ 35.) He alleges that “Defendant's wrongful conduct has caused Plaintiff and his family significant” financial damages. (Id. ¶ 44.) He brings seven claims for relief: (1) that Defendants violated ERISA by denying Plaintiff LTD Benefits; (2) that the Lovelace Defendants violated the ADA; (3) that Defendants violated the New Mexico Insurance Code and New Mexico Administrative Code; (4) breach of contract by Defendants; (5) breach of fiduciary duty by Defendants; (6) bad faith by Defendants; and (7) intentional misrepresentation, negligence, and negligent misrepresentation by Defendants. (Id. ¶¶ 46-59.)

         II. Legal Standard

         In reviewing a motion to dismiss under Rule 12(b)(6), the Court “must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff.” In re Gold Res. Corp. Sec. Litig., 776 F.3d 1103, 1108 (10th Cir. 2015) (citation omitted). “To survive a motion to dismiss, ” the complaint does not need to contain “detailed factual allegations, ” but it “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 Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (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.” Id. (citing Twombly, 550 U.S. at 556). Plausibility does not equate to probability, but there must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. (citing Twombly, 550 U.S. at 556).

         III. Analysis

         A. The Court will grant Lovelace's Notice of Joinder (Doc. 22) and deny all others.

         At the outset, the Court must address the plethora of notices of joinder (and responses and replies thereto) that have been filed in connection with this case. (Docs. 20, 22, 30, 37, 38, 50, 58.) The purpose of the provision in Local Rule 7.1(a) allowing one party to adopt by reference a different motion or document is presumably to promote efficiency and judicial economy. See Hartford Cas. Ins. Co. v. Trinity Universal Ins. Co. of Kan., No. CV 12-1110 MV/KK, 2015 WL 12720321, at *1 (D.N.M. Apr. 17, 2015). To the extent that the arguments in various defendants' motions to dismiss overlap in this case-and they certainly do-this rule is properly invoked when the defendants use it to avoid filing identical, duplicative motions, and Plaintiff should use it to avoid filing identical responses to similar motions, with the result that the entire process is generally streamlined for the Court. See id.

         While it is true that “Rule 7.1(a) does not specify a time frame in which a party is required to adopt by reference another party's motion” (see Doc. 58 at 1-2), the Court doubts it was designed to be used as some of the defendants have utilized it in this case-namely, filing their own fully argued motions to dismiss and then, upon reading subsequent similar motions by other defendants, adopting those motions by reference after the fact. Plaintiff argues in response to many of the notices of joinder in this case that “[w]hile it is true that LR 7.1(a) ‘allows a party to adopt by reference another party's motion or other paper . . .,' it does not allow a party to file a second impermissible motion to dismiss, especially after the deadline for filing a motion to dismiss has passed.” (See, e.g., Doc. 37 at 2.) The Court agrees.

         A party making use of Rule 7.1(a) not to avoid filing duplicative motions but instead to “cover all its bases” by adopting the arguments laid out by other defendants that it may have missed or forgotten to include in its own motion strikes the Court as a contortion of the rule. Worse, it actually decreases judicial economy and efficiency by requiring the Court to repeatedly cross-reference all the motions and try to deduce which adopted arguments apply to supplement each motion. Though the Court agrees with Plaintiff that the rule is being misused in many of the notices of joinder in this case, the results, here, are negligible. By virtue of reading, analyzing, and ruling on each motion to dismiss the Court must consider all relevant law and legal arguments that apply to each motion, even if certain issues weren't raised in the briefing.

         Still, to the extent that the Court must rule on each of these notices of joinder as they have been docketed and briefed, see Hartford Cas. Ins. Co., 2015 WL 12720321, at *2, the Court finds that only Lovelace's Notice of Joinder (Doc. 22) adopting by reference Reliance's Motion to Dismiss (id. ¶ 1) and BHC's Motion to Dismiss (id. ¶ 3) are permissible. When Lovelace filed its Motion to Dismiss (Doc. 13) on December 3, 2018, Defendants Reliance and BHC had already filed their own motions to dismiss (Docs. 11 and 12.) Thus, judicial economy was well-served by Lovelace incorporating by reference the arguments contained in those motions and focusing its own motion mainly on the ADA claims which are unique to Lovelace. All the other notices of joinder attempting to incorporate by reference subsequently filed motions to dismiss, however, are summarily stricken.

         B. Plaintiff fails to state a claim in Count III - New Mexico Insurance Code and Insurance Administrative Code Violations.

         Due to the complicated web of named defendants in this case, the determination of whether most of Plaintiff's claims for relief are sufficiently pled is influenced, at least in part, by which defendant is moving to dismiss them. Count III of the Complaint, however, is insufficient on its face as it applies to all named defendants. The Court will dismiss Count III without prejudice.

         Plaintiff's broad allegations in Count III state that all defendants violated “the New Mexico Insurance Code, 59A-1-1 through 59A-1-18 including Trade Practices and Frauds, 59A-16-1 through 59A-16-30, and the New Mexico Administrative Code, Title 13 Insurance . . . .” (Am. Compl. ¶ 51.) This claim is not well-pled, as it simply lists broad swaths of the New Mexico Insurance Code without specifying which portions Defendants allegedly violated or how they allegedly did so. In addition, Title 13 of the New Mexico Administrative Code includes 21 distinct Chapters covering all aspects of insurance regulation, and Count III includes no specific citation to a part of the code and fails even to specify which chapter applies. ...


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