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KEEGAN v. BLOOMINGDALE'S

January 23, 1998

ANGEL KEEGAN, Plaintiff,
v.
BLOOMINGDALE'S, INC., and FEDERATED DEPARTMENT STORES, INC., Defendants.



The opinion of the court was delivered by: DENLOW

 This matter involves the requirements under the Comprehensive Omnibus Budget Reconciliation Act ("COBRA"), 29 U.S.C. ยง 1161 et seq., of employers and group health plan administrators to provide notice to individuals whose employment has ended of their right to continuing health care coverage. Angel Keegan ("Plaintiff") alleges in Count I that Bloomingdale's, Inc. ("Bloomingdale's"), her former employer, failed to notify Federated Department Stores, Inc. ("FDS"), the administrator of Bloomingdale's group health plan, that her employment had ended and that Bloomingdale's failed to extend to her the right of continuing coverage under its group health plan. In Count II, Plaintiff alleges that FDS failed to notify her of her right to continuing coverage under Bloomingdale's group health plan. Bloomingdale's and FDS ("Defendants") move for summary judgment on both counts. For the reasons set forth below, the Court grants Defendants' motion.

 I. BACKGROUND FACTS

 Plaintiff was employed by Bloomingdale's in Chicago as the manager of the personal shopping service at the North Michigan Avenue store from November 1, 1993, through December 20, 1994. (Pl.'s Local Rule 12(n) Statement ("Pl.'s 12(n)") P 1.) Plaintiff enrolled in the group health plan sponsored by Bloomingdale's and administered by FDS. (Pl.'s 12(n) P 4.) As a result of Plaintiff's resignation on December 20, 1994, her coverage under the group health plan was scheduled to cease on December 31, 1994, unless she elected to continue coverage under COBRA. (Pl.'s 12(n) P 6.)

 FACS Group, Inc. ("FACS") is a division of FDS. (Pl.'s 12(n) P 5.) FDS Benefits is the department of FACS that is responsible for administering all of the benefit programs offered by FDS. (Pl.'s 12(n) P 5.) The COBRA Notification Unit is the department of FDS Benefits that is responsible for notifying all former employees of their right under COBRA to elect continuation coverage. (Pl.'s 12(n) P 10.) The COBRA Notification Unit generates and mails 1,000 to 1,500 COBRA notification letters each month. (Pl.'s 12(n) P 12.)

 After receiving notice from Plaintiff, Bloomingdale's notified FDS Benefits of her resignation on three separate occasions. The day after receiving notice of Plaintiff's resignation, Rosemary Spano ("Spano"), Bloomingdale's Manager of Merchandise Recruitment for Stores other than New York, forwarded a completed Request for Termination - Executives form to FDS Benefits to notify it of Plaintiff's termination of employment. (Pl.'s 12(n) P 8.) On January 3, 1995, Sheena Ashley ("Ashley"), Bloomingdale's Welfare Plan Administrator, completed and sent to FDS Benefits a Benefits Transmittal - Termination form that included Plaintiff's name to notify it of all Bloomingdale's employees whose employment had terminated in December 1994. (Pl.'s 12(n) P 8; Ashley Aff. PP 6-7.) On January 4, 1995, Bloomingdale's sent to FDS Benefits via computer transmission a Compare Report containing all personnel changes for Bloomingdale's employees during December 1994 which included an entry for Plaintiff. (Pl.'s 12(n) P 8.)

 On January 9, 1995, Kathy Summerville ("Summerville"), a Benefits Coordinator for FDS Benefits entered into the FDS Benefits computer the information concerning Plaintiff's employment termination and generated a COBRA EFORM that was sent to the COBRA Notification Unit. (Pl.'s 12(n) P 9.)

 Data entry personnel in the COBRA Notification Unit entered the information in the COBRA EFORM into a separate computer that automatically generates a notification form letter with cost information for electing continuation coverage for that specific employee. (Pl.'s 12(n) P 11.) A photocopy of each letter is retained as a file copy. (Pl.'s 12(n) P 11.) The COBRA notification letter for Plaintiff was automatically generated on January 14, 1995. *fn1" (Pl.'s 12(n) P 11.) FDS retained a photocopy of the letter generated for Plaintiff. (Mueller Aff. P 5, Ex. A.)

 The COBRA Notification Unit utilizes a standard procedure for mailing the notification letters. (Pl.'s 12(n) P 12.) An employee folds and inserts each letter into a window envelope which has a return address. (Pl.'s 12(n) P 12.) The sealed envelopes are delivered to the mail room in the same building. (Pl.'s 12(n) P 12.) A postage meter is used to affix the proper postage. (Pl.'s 12(n) P 12.) The mail is picked up by the United States Postal Service at approximately 4:00 p.m. daily. (Pl.'s 12(n) P 12.)

 Because FDS Benefits received no response from Plaintiff, the COBRA Notification Unit computer automatically generated a follow-up letter that was printed on March 21, 1995. (Pl.'s 12(n) P 13-14.) A photocopy of the follow-up letter was retained as a file copy. (Pl.'s 12(n) P 14; Mueller Aff. P 5, Ex. B.) FDS Benefits follows the same procedures for mailing the follow-up letters as for the first notification letters. (Pl.'s 12(n) P 14.)

 The FDS COBRA Notification Unit computer records contained Plaintiff's home address as she had supplied it to Bloomingdale's when she started to work, and the letters generated on January 14 and March 21 printed that address. *fn2" (Pl.'s 12(n) PP 3, 17; Mueller Aff. Ex. A, B.) Plaintiff received her final paycheck and her W-2 form which were mailed to that same address. (Pl.'s 12(n) P 16.) FDS maintains records to indicate that a notification letter has been returned as undeliverable. (Pl.'s 12(n) P 15.) FDS has no records to indicate that either of the notification letters generated for Plaintiff were returned as undeliverable. (Pl.'s 12(n) P 15.)

 Plaintiff did not receive either the January 14 or the March 21 letter. (Pl.'s 12(n) P 19; Defs.' 12(m) P 19.) The only other resident at Plaintiff's home address was her husband. (Pl.'s 12(n) P 17.) Plaintiff's cost of continuing her medical insurance coverage through Bloomingdale's would have been $ 148.22 per month until April 1, 1995, when she moved outside the coverage area. (Defs.' 12(m) P 21.) After her medical insurance through Bloomingdale's expired, Plaintiff obtained medical insurance through CIGNA at $ 50.00 per week. (Defs.' 12(m) P 22.) Plaintiff seeks damages as a result of not receiving a COBRA notice.

 II. SUMMARY JUDGMENT STANDARD

 Summary judgment is proper when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, demonstrate the absence of a genuine issue of material fact." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986). A "genuine issue of material fact" exists if there is sufficient evidence for a jury to return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 2510-11, 91 L. Ed. 2d 202 (1986). While all inference from the record must be made in a light most favorable to the non-moving party, this Court is not ...


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