Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


June 26, 2001


The opinion of the court was delivered by: James H. Alesia, U.S. District Judge.


Before the court is defendant American Medical Security's motion to dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6), plaintiff Medical Alliances LLC's complaint. For the following reasons, the court grants defendant's motion to dismiss.


Plaintiff Medical Alliances LLC ("plaintiff") is an Illinois corporation that provides medical services for contracted clients. John Gunther ("Gunther") was a client of plaintiff who received medical services (neurological testing and interpretation) which totaled $10,600.00. Defendant American Medical Security ("defendant") is an insurance carrier who insured Gunther for medical services. Gunther then assigned his right to payment to plaintiff. Plaintiff has sought payment from defendant, however defendant has refused to pay for the cost of the services. Plaintiff originally brought this action in the Circuit Court of Cook County, seeking payment for medical services. Defendant removed this case, claiming that this court has jurisdiction under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1003 (1) et seq. Defendant now moves to dismiss plaintiffs complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).*fn1

In its motion to dismiss, defendant argues that plaintiff's claim must be dismissed because plaintiff has failed to exhaust its administrative remedies. In response, plaintiff argues that, in paragraph seven of its circuit court complaint, plaintiff clearly alleges that it exhausted its administrative remedies. Paragraph seven of plaintiffs complaint states: "Plaintiff, Medical Alliances, LLC has made numerous demands for payment from the Defendant from June 16, 2000, to March 4, 2001, and the Defendant has refused and continues to refuse to pay the Plaintiff as required." (Pl.'s Compl. at ¶ 7.) Alternatively, plaintiff argues that, even if it did not exhaust its administrative remedies, any attempt to do so would be futile. The court addresses these arguments below.


A. Standard for deciding a motion to dismiss

The purpose of a motion to dismiss is to test the sufficiency of the complaint, not to decide the merits. Gibson v. Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). When deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court must accept all well-pleaded allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. FED. R. CIV. P. 12(b)(6); see also Szumny v. Am. Gen. Fin., Inc., 246 F.3d 1065, 1067 (7th Cir. 2000). If, when viewed in a light most favorable to the plaintiff, the complaint fails to state a claim upon which relief can be granted, the court must dismiss the case. Gomez v. Illinois State Bd. of Educ., 811 F.2d 1030, 1039 (7th Cir. 1987). However, dismissal is proper only if it is clear from the complaint that no set of facts consistent with its allegations would entitle the plaintiff to relief. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). The federal rules do not require detailed factual pleadings. FED. R. CIV. P. 8(a)(2). Rather, federal notice pleading requires only that the plaintiff set out in its complaint a short and plain statement of the claim. Scott v. City of Chicago, 195 F.3d 950, 951 (7th Cir. 1999).

B. The exhaustion-of-remedies requirement under ERISA

Despite the fact that exhaustion may be required, some courts in this circuit have held that an allegation of exhaustion is not necessary to properly state an ERISA claim. See Shaw v. Doherty Employment Group, No. IP 00-0139-C, 2001 WL 290376, at *1-2 (S.D. Ind. Feb. 7, 2001) (holding that the "failure to exhaust remedies" requirement is not an element of an ERISA claim, but an affirmative defense); Moore v. ABB Power T & D Co., No. IP 00-0085-C, 2000 WL 1902185, at *12 (S.D. Ind. Dec. 13, 2000) ("There is no doubt that a failure to exhaust administrative remedies is an affirmative defense under ERISA"). In those cases, the courts determined that it was only necessary that a plaintiff did not allege facts from which it is clear that plaintiff had failed to exhaust such remedies. Shaw, 2001 WL 290376, at * 1-2 (holding that, because plaintiff did not allege facts which showed that she failed to exhaust her administrative remedies, defendants' argument regarding plaintiffs failure to exhaust such remedies could only be considered on a motion for summary judgment). See also Cen. States v. Cent. Cartage Co., 84 F.3d 988, 990 (7th Cir. 1996) (recognizing "failure to exhaust administrative remedies" as an affirmative defense). Cf. Coats v. Kraft Foods, Inc., 12 F. Supp.2d 862, 868-69 (N.D. Ind. 1999) (requiring that a plaintiff affirmatively plead that it has exhausted administrative remedies).

On the other hand, some courts have found that, when a plaintiff includes allegations which seem to anticipate a defense like failure to exhaust administrative remedies, then plaintiff must include allegations sufficient to show that such remedies were exhausted or that plaintiff is excused from exhausting those remedies. See Wilczynski, 93 F.3d at 402-03 (finding that plaintiff's allegations may be sufficient to excuse her failure to exhaust her administrative remedies and refusing to grant defendant's motion to dismiss). However, the court notes that in Wilczynski, the Seventh Circuit acknowledged that, in most cases, the exhaustion doctrine is applied to a more developed record at the summary judgment stage. Id. (holding that the plaintiff's allegations were sufficient to survive a motion to dismiss).

This court finds that, because exhaustion is a discretionary requirement, a plaintiff does not have to affirmatively plead such an allegation. However, the court agrees with those cases that find if a plaintiff anticipates such an affirmative defense and makes allegations pertaining to the exhaustion of administrative remedies, plaintiff could plead themselves out of court.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.