United States District Court, E.D. Pennsylvania
For TERRANCE HENRY CORRIGAN, III, Plaintiff: GEORGE R. SZYMANSKI, LEAD ATTORNEY, LAW OFFICES OF GEORGE R. SZYMANSKI, PHILADELPHIA, PA.
For BAKERY, CONFECTIONARY, TOBACCO WORKERS AND GRAIN MILLERS INTERNATIONAL LOCAL 6, Defendant: NANCY B.G. LASSEN, LEAD ATTORNEY, EMMA R. REBHORN, WILLIG WILLIAMS & DAVIDSON, PHILADELPHIA, PA.
For INDEPENDENCE BLUE CROSS, Defendant: DAVID L. COMERFORD, KATHERINE M. KATCHEN, LEAD ATTORNEYS, AKIN GUMP STRAUSS HAUER & FELD, LLP, PHILADELPHIA, PA; NANCY B.G. LASSEN, LEAD ATTORNEY, WILLIG WILLIAMS & DAVIDSON, PHILADELPHIA, PA.
EDUARDO C. ROBRENO, J.
Plaintiff Terrance Corrigan (" Plaintiff" ) brings this action against Independence Blue Cross (" Independence" ) and Bakery, Confectionary, Tobacco Workers and Grain Millers International Union Local 6 (the " Union" ). Plaintiff alleges that the Union breached its duty of fair representation to him, and that Independence both breached its contract and was negligent in failing to inform him of his right to continuing insurance coverage after the termination of his employment. Both defendants have moved for summary judgment, and Plaintiff has moved for summary judgment against Independence. For the reasons that follow, the Court will deny Plaintiff's motion and grant both Defendants' motions.
Plaintiff Terrance Henry Corrigan, III, was employed from 1988 to 2012 as a maintenance mechanic for a Hostess Brands plant in Philadelphia, Pennsylvania (" Hostess" ). Second Am. Compl. ¶ 4, ECF No. 36. During that time period, he was a member of the bargaining unit represented
by the Union under a collective bargaining agreement (the " CBA" ) with Hostess. Def. Union's Br. Supp. Mot. Summ. J. 3, ECF No. 59-1; Union Mot. Dismiss Ex. C, ECF No. 2-4. Additionally, under the CBA, Hostess provided employer-sponsored health insurance through Independence. Second Am. Compl. ¶ 31. Hostess, not Independence, was the plan administrator. See Independence Mot. Summ. J. Ex. 3 at 00284, ECF No. 58 (" THE CARRIER IS NOT THE PLAN ADMINISTRATOR UNDER THE COVERAGE OR FOR PURPOSES OF ERISA OR ANY OTHER FEDERAL OR STATE LAW. IN THE ABSENCE OF THE DESIGNATION OF ANOTHER PARTY AS PLAN ADMINISTRATOR, THE PLAN ADMINISTRATOR SHALL BE THE EMPLOYER." ); id. Ex. 4, Reed Decl.
Hostess filed for bankruptcy in March 2012. Second Am. Compl. ¶ 5. On November 9, 2012, after negotiations for a modified collective bargaining agreement had stalled, the Union went on strike. Def. Union's Mot. Summ. J. Ex. 1, Fields Dep. 16:1-2, Oct. 3, 2014, ECF No. 59-2 [hereinafter Fields Dep.]. Before the strike, Hostess had warned employees that if they went on strike, Hostess would " have no choice but to shut down and liquidate the entire company," which would result in the termination of the employees' jobs, and that " [t]erminated employees w[ould] no longer receive paychecks or health and welfare benefits after their date of termination." Plaintiff was aware of Hostess's position at the time. Id. Ex. 2a, Corrigan Dep. 59:5-14, 60:12-19, Oct. 2, 2014, ECF No. 59-3 [hereinafter Corrigan Dep.]. Consistent with these warnings, when the employees went on strike on November 9, 2012, their health insurance benefits were immediately terminated. See id. Ex. 2c, Hostess Brands COBRA Continuation Coverage Election Notice, ECF No. 59-5.
On November 11 or 12, 2012, Plaintiff was hospitalized at Aria Health Hospital, where he stayed until the beginning of December, at which time he returned to his home on Coral Street. Corrigan Dep. 22:16-24:3. During the course of his hospitalization, Plaintiff learned that he was no longer covered under Hostess's health insurance plan, and consequently, after his discharge, Plaintiff received a bill for $245,375.54 for his treatment at the hospital. Second Am. Compl. ¶ ¶ 11-12.
On November 16, 2012, while Plaintiff was hospitalized, Hostess (as Plan Administrator) mailed a notice of continuing coverage to Plaintiff at his Coral Street address. Independence Mot. Summ. J. Ex. 4, Reed Decl ¶ 7. A certificate of the notice's mailing was prepared the same day. Id. Plaintiff claims that he never received this notice. Aff. Terrance Henry Corrigan ¶ 15, ECF No. 61. The notice advised him
that his coverage ended on November 9, 2012, due to the strike, and that he was entitled to continue his Hostess-sponsored health benefits if he paid for continuation coverage by January 14, 2013. See Hostess Brands COBRA Continuation Coverage Election Notice.
Following Hostess's filing of bankruptcy, the Union filed claims in the bankruptcy court for severance and vacation pay that Plaintiff and other employees had earned before the strike and liquidation. Corrigan Dep. 116:19-117:15. On February 28, 2013, Plaintiff attended a Union meeting concerning these bankruptcy claims that the Union was filing on behalf of its members. Id. 117:2-21. By that date, he was aware that bankruptcy claims against Hostess needed to be filed by March 31, 2013, thanks to a letter the Union sent to its members on February 15, 2013. Id. 130:15-24. The letter informed Plaintiff of the March 31 deadline for monetary claims against Hostess, and stated that the Union would be filing claims on his behalf for vacation and severance pay. The letter did not state that the Union would file any other types of claims, including claims for medical bills. See Def. Union's Mot. Summ. J. Ex. 2c, ECF No. 59-5. However, contrary to the information provided in the letter, Plaintiff believed, from a conversation he claims to have had with then-Union President Barry Fields after the February 28 meeting, that his medical bill was " being handled" by the Union. Corrigan Dep. 118:2-119:13, 131:1-19. For his part, Fields claims that he told Plaintiff he had no health care after the strike began. Fields Dep. 15:14-24. Plaintiff never filed a bankruptcy claim for his medical costs. Corrigan Dep. 132:14-19.
Plaintiff initiated this action on January 6, 2014, by filing a Complaint in the Court of Common Pleas of Philadelphia County. The case was then removed to this Court on February 21, 2014. ECF No. 1. In turn, the Union filed a motion to dismiss, ECF No. 2, which the Court granted with leave to amend, ECF No. 13. After Plaintiff filed an Amended Complaint, ECF No. 17, Independence filed a motion to dismiss, ECF No. 1, which the Court also granted with leave to amend, ECF No. 27.
On July 30, 2014, Plaintiff filed a Second Amended Complaint. ECF No. 36. The Second Amended Complaint contains one claim of a breach of the duty of fair representation against the Union, and two claims against Independence: breach of contract/breach of the implied covenant of good faith and fair dealing, and negligence. Independence filed another motion to dismiss, ECF No. 40, which is pending. Before the Court ruled on the motion to dismiss, both defendants filed motions for summary judgment. ECF Nos. 58, 59. Plaintiff filed for summary judgment as to its claims against Independence alone. ECF No. 57. The parties filed responses, and the motions are now ripe for disposition.
II. LEGAL STANDARD
Summary judgment is appropriate if there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). " A motion for summary judgment will not be defeated by 'the mere existence' of some disputed facts, but will be denied when there is a genuine issue of material fact." Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir. 2009) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). A fact is " material" if proof of its existence or nonexistence might affect the outcome of the litigation, and a dispute is " genuine" if " the evidence is such that a reasonable jury could return a verdict for the nonmoving
party." Anderson, 477 U.S. at 248.
The Court will view the facts in the light most favorable to the nonmoving party. " After making all reasonable inferences in the nonmoving party's favor, there is a genuine issue of material fact if a reasonable jury could find for the nonmoving party." Pignataro v. Port Auth., 593 F.3d 265, 268 (3d Cir. 2010). While the moving party bears the initial burden of showing the absence of a genuine issue of material fact, meeting this obligation shifts the burden to the nonmoving party who must " set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 250 (quoting Fed.R.Civ.P. 56(e)) (internal quotation marks omitted).
The guidelines governing summary judgment are identical when addressing cross-motions for summary judgment. See Lawrence v. City of Phila., 527 F.3d 299, 310 (3d Cir. 2008). When confronted with cross-motions for summary judgment, " [t]he court must rule on each party's motion on an individual and separate basis, determining, for each side, whether a judgment may be entered in accordance with the Rule 56 standard." Schlegel v. Life Ins. Co. of N. Am., 269 F.Supp.2d 612, 615 n.1 (E.D. Pa. 2003) (Robreno, J.) (alteration in original) (quoting 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2720 (1998)).
A. Defendant Independence Blue Cross's Motion for Summary Judgment
Plaintiff asserts two claims against Independence: breach of contract/breach of the implied covenant of good faith and fair dealing, and negligence. He claims that it was an " expressed or implied provision" of the contract between Independence and Hostess that Independence was required to notify Plaintiff of any discontinuation of his insurance benefits, Second Am. Compl. ¶ 32, and that Independence owed a duty of care to Plaintiff to inform him of such discontinuation, and his right to continue his coverage, id. ¶ 36. Independence asserts in response that both claims, which are state law claims, are preempted by the Employee Retirement Income Security Act of 1974 (" ERISA" ), Pub. L. No. 93-406, 88 Stat. 829 (codified as amended in scattered sections of 26 and 29 U.S.C.). Mem. Law Supp. Def. Independence Mot. Summ. J. 3, ECF No. 58. Section 514(a) of ERISA preempts " any and all State laws insofar as they may now or hereafter relate to any employee benefit plan."  29 U.S.C. § 1144(a). The United States Supreme Court has concluded that " [t]he pre-emption clause is conspicuous for its breadth," Ingersoll-Rand Co. v. McClendon,498 U.S. 133, 138, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990) (quoting FMC Corp. v. Holliday,498 U.S. 52, 58, 111 S.Ct. 403, 112 L.Ed.2d 356 (1990)) (internal quotation marks omitted), and that " [i]ts 'deliberately expansive language' was designed to 'establish pension plan regulation as exclusively a federal ...