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Honey v. Dignity Health

United States District Court, D. Nevada

June 16, 2014

REGINA C. HONEY, individually and as natural parent of ADDISON M. HONEY, a minor, and LUCAS R. HONEY, a minor; ADAM D. HONEY, individually and as natural parent of ADDISON M. HONEY, a minor, and LUCAS R. HONEY, a minor, Plaintiffs,
v.
DIGNITY HEALTH, a California non-profit corporation, doing business as ST. ROSE DOMINICAN HOSPITAL-SIENNA CAMPUS; CONEXIS BENEFIT ADMINISTRATORS LP, a Texas limited partnership; CONEXIS LLC, a California limited liability partnership; PAYFLEX SYSTEMS, USA, INC., a Nebraska corporation; DOE Entities I-V; and ROE individuals VI-X, Defendants

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[Copyrighted Material Omitted]

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For Regina C. Honey, individually and as natural parent on behalf of Addison M. Honey, on behalf of Lucas R. Honey, Adam D Honey, individually and as natural parent, on behalf of Addison M. Honey, on behalf of Lucas R. Honey, Plaintiffs: Eric Pepperman, Kemp, Jones & Coulthard, LLP, Las Vegas, NV.

For Dignity Health, doing business as St. Rose Dominican Hospitals-Siena Campus, Defendant: Keith A. Weaver, V. Andrew Cass, LEAD ATTORNEYS, Lewis Brisbois Bisgaard & Smith, LLP, Las Vegas, NV.

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ORDER

MIRANDA M. DU, UNITED STATES DISTRICT JUDGE.

(Def.'s Motion for Summary Judgment -- dkt. no. 85; Plf.'s Motion for Summary Judgment -- dkt. no. 87)

I. SUMMARY

This dispute involves the notification provisions of the Consolidated Omnibus Budget Reconciliation Act (" COBRA" ). Plaintiffs Regina C. Honey, Addison M. Honey, Lucas R. Honey, and Adam D. Honey (collectively, " Plaintiffs" ) allege that Defendant Dignity Health (" Dignity" ) failed to provide timely and adequate notice regarding Plaintiffs' right to continue participation in Dignity's group health plan following Dignity's termination of Regina's employment. Plaintiffs allege they suffered various harms due to the delayed notice, and request the maximum statutory damages detailed in section 502(c) of the Employee Retirement Income Security Act (" ERISA" ), 29 U.S.C. § 1132(c).

Before the Court are the parties' cross motions for summary judgment (dkt. nos. 85, 88), and Plaintiffs' Motion for Leave to File a Sur-Reply (dkt. no. 103). For the reasons discussed below, the Motion for Leave to File Sur-Reply is granted, and the parties' cross motions for summary judgment are granted in part and denied in part.

II. BACKGROUND

The following facts are undisputed. Dignity provides health, vision, and dental insurance coverage to its employees through an " employee welfare benefit plan" (the " Plan" ), as that term is used in 29 U.S.C. § 1002(1). (Dkt. no. 85-1, Ex. A.) Dignity is both the " sponsor" and the " administrator" of the Plan, as those terms are used in 29 U.S.C. § 1002(16). (Dkt. no. 85.) Until December 31, 2010, Dignity contracted with Defendant Conexis, LLC (" Conexis" ) to administer Dignity's compliance with COBRA's notification provisions for the Plan. (Dkt. no. 86, Ex. B.) After December 31, 2010, Dignity contracted with Defendant Payflex Systems, USA, Inc. (" Payflex" ) for the same services. (Dkt. no. 86, Ex. C.)

Dignity hired Regina on April 8, 2008, to work as a registered nurse. (Dkt. no. 88-1 ¶ 2.) Regina participated in Dignity's group health, vision, and dental plans with Addison as a covered beneficiary. ( Id. ) Adam was also a covered beneficiary for the dental portion of the Plan only. ( Id. ) Because Regina and Adam were not married until December 31, 2010, Adam was covered under the Plan as a Legal Domiciled Adult. ( Id. )

A. Regina's First Termination

In March, 2010, Regina began experiencing signs of pre-term labor and her doctor ordered bed rest. ( Id. ¶ 4.) Regina requested leave between March 26 and

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April 12, 2010, to comply with the doctor's orders. ( Id. ) However, when Regina attempted to return to work after her symptoms had subsided, she was instructed not to come in, and, on April 22, 2010, Dignity informed Regina that her employment and benefits were terminated (the " First Termination" ). ( Id. ¶ 5.) Regina received a COBRA notification regarding her right to continue her health care benefits on May 19, 2010. ( Id. )

B. Regina's Second Termination

After filing a successful grievance against Dignity over the First Termination, Dignity reinstated Regina, and Regina returned to work on June 10, 2010. ( Id. ¶ 6.) However, on June 14, 2010, Regina again experienced symptoms of pre-term labor and her doctor again ordered bed rest for the remainder of her pregnancy and for a six-week postpartum period. ( Id. ¶ ¶ 7, 9.) Regina remained on bed rest until her son, Lucas, was born on July 27, 2010. ( Id. )

At the end of her postpartum period, Regina informed her employer that she was medically cleared to begin working again on September 7, 2010, but she was never scheduled to return to work. (Dkt. no. 88-4.) In the following days, Regina attempted several times to reach a representative in Dignity's Human Resources (" HR" ) Department regarding her return to work, but she was unable to do so. (Dkt. no. 88-1 ¶ ¶ 11-14.) Regina also attempted to add Lucas to the Plan, but she could not access her self-service benefits account. ( Id. ¶ 12; Dkt. no. 85-2, Ex. D, 45:1-47:21.) On September 22, 2010, Regina was finally able to speak to someone in HR, who informed her that Dignity had retroactively terminated both her employment and her benefits, with effective dates of June 22, 2010, and June 30, 2010, respectively. (Dkt. no. 88-1 ¶ 15.) On September 28, 2010, Regina received correspondence from Dignity dated September 15, 2010, formally notifying her of her termination. ( Id. ¶ 16; Dkt. no. 88-6.)

C. Regina's Attempts to Procure COBRA Notice

During her September 22, 2010, conversation with Dignity's HR representative, Regina stated that she had yet to receive a notification or information regarding her continued benefits under COBRA; she expressly requested the notification, conveying the urgency she felt as a result of medical bills related to her high-risk pregnancy. (Dkt. no. 88-1 ¶ 15.) The September 28, 2010, termination letter included an attachment explaining the availability of COBRA coverage. (Dkt. no. 85-2, Ex. E.) However, the letter did not provide a form for Plaintiffs to elect COBRA coverage. ( Id. ) Rather, the letter simply stated that enrollment information would be sent separately. ( Id. ) On September 30, 2010, Regina again called and left a message for Dignity's HR representative, informing her that no COBRA notification had arrived. (Dkt. no. 88-1 ¶ 17.) Regina received no response. ( Id. )

On November 2, 2010, Regina and Adam attended a union meeting to discuss the issues surrounding her termination. ( Id. ¶ 18.) At that meeting, Regina informed Dignity's representatives that she still had not received a COBRA notice. ( Id. ¶ 19.) One of those representatives, Ms. Spencer, promised to look into the matter. ( Id. ) On November 8, 2010, Regina followed up with Ms. Spencer by email regarding her inquiry. ( Id. at ¶ 21.) The following week, on November 15, 2010, Ms. Spencer wrote back and informed Regina that " [a]fter researching the COBRA issue, you were contacted based on the records. Unfortunately, there is really nothing else I can do." (Dkt. no. 88-8.) Regina made

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several more attempts to procure the COBRA notice. (Dkt. no. 88-1 ¶ ¶ 22-25.) On November 30, 2010, Regina received an email from Dignity's HR representative, which stated, " [w]e are contacting Conexis right now to have them issue the missed Cobra notification." ( Id. ; Dkt. no. 88-12.)

D. The COBRA Notices

Conexis issued the required COBRA notification in connection with Regina's Second Termination in a correspondence dated December 7, 2010. (Dkt. no. 85-2, Ex. F.) Although the correspondence was addressed " [t]o Participant and/or any Covered Dependents," the correspondence listed only Regina and Addison as participants and/or beneficiaries. ( Id. ) Additionally, the coverage premiums were set out only for Regina and Addison. ( Id. ) The notice did make a request to " [p]lease verify our ...


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