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Street v. Ingalls Memorial Hospital

March 15, 2007

CHERYL STREET, PLAINTIFF,
v.
INGALLS MEMORIAL HOSPITAL, DEFENDANT.



The opinion of the court was delivered by: Amy J. St. Eve, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Cheryl Street filed the present three-count First Amended Class Action Complaint alleging a claim of disability discrimination under the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12131 et seq. against her former employer, Defendant Ingalls Memorial Hospital ("Ingalls"), and two claims pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. against Ingalls, as a plan administrator and fiduciary. Before the Court is Defendant's Motion to Dismiss Counts II and III of the First Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and Defendant's Motion for Summary Judgment as to Count II of the First Amended Complaint pursuant to Federal Rule of Civil Procedure 56(c). For the following reasons, the Court grants in part and denies in part Ingalls' motion to dismiss. The Court grants Ingalls' summary judgment motion.

BACKGROUND

Street, as a beneficiary and participant, alleges that Ingalls improperly delayed the payment of her short-term disability ("STD") and long-term disability ("LTD") benefits while her workers' compensation claim was still pending. Street seeks interest on these delayed benefit payments. Ingalls moves to dismiss these claims arguing that the monetary relief Street seeks is unavailable under ERISA Section 502(a)(3).

Moreover, in Count II of her First Amended Complaint Street alleges that Ingalls violated ERISA's reporting and disclosure requirements by failing to issue a summary plan description and IRS Form 5500s for its STD plan. In its summary judgment motion, Ingalls argues that ERISA does not govern its STD plan, and thus seeks to dismiss Count II in its entirety.

STANDARDS

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of the complaint, not the factual sufficiency. Szabo v. Bridgeport Mach., Inc., 249 F.3d 672, 675-76 (7th Cir. 2001); see also Cler v. Illinois Educ. Ass'n, 423 F.3d 726, 729 (7th Cir. 2005) (motion to dismiss challenges complaint's sufficiency). The Court will only grant a motion to dismiss if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Centers v. Mortgage, Inc., 398 F.3d 930, 933 (7th Cir. 2005) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)). The Court must assume the truth of the facts alleged in the pleadings, construe the allegations liberally, and view them in the light most favorable to the plaintiff. Centers, 398 F.3d at 333.

Summary judgment is proper when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P 56(c). A genuine issue of material fact exists only if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed. 2d 202 (1986). The party seeking summary judgment has the burden of establishing the lack of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed. 2d 265 (1986). "[W]hen a properly supported motion for summary judgment is made, the adverse party 'must set forth specific facts showing that there is a genuine issue for trial.'" Anderson v. Liberty Lobby, 477 U.S. at 255 (quoting Fed R. Civ. P. 56(e)).

ANALYSIS

I. ERISA-Governed Welfare Benefit Plan

The Court first turns to Ingalls' summary judgment motion. Under Count II of the First Amended Complaint, Street alleges that Ingalls violated ERISA's reporting and disclosure requirements by failing to issue a summary plan description and IRS Form 5500s for its STD plan. (First Am. Compl. Count II ¶¶ 22-24.) Ingalls contends that its STD benefit policy is not an ERISA plan, and thus it is not required to make such disclosures. More importantly, Ingalls argues that because ERISA does not govern its STD policy, the Court should dismiss Count II in its entirety.

A. Background

Street is a former employee of Ingalls Memorial Hospital. (R. 47-1, Def.'s Stmt. Facts ¶ 3.) Ingalls operates a hospital in Cook County, Illinois, and sponsors employee benefit plans for certain employees. (Id. ¶ 4.) More specifically, Ingalls pays compensation to employees who are unable to work due to an illness or injury which is not compensable under workers compensation. (Id. ¶ 5.) For example, on the 61st calendar day after an accident or injury that is not covered under workers compensation, Ingalls pays -- from its general assets -- compensation equal to a 60% of the exempt employee's income up to the 180th day after the accident or injury. (Id. ¶ 6.) Beginning on the 181st day, the employee may be eligible for LTD benefits under a separate employee benefit plan sponsored by Ingalls and funded through an insurance policy issued by Reliance Standard Insurance Company. (Id. ¶ 7.)

On May 22, 2004, Street suffered an injury at work and thereafter made a claim for workers compensation benefits with respect to her injury. (Id. ¶¶ 8-9.) After resolving her claim for workers compensation benefits, Ingalls paid Street $9,719.07 (gross) from its general assets, representing STD benefits for the period from June 15, 2004 through September 17, 2004. (Id. ¶ 9.) In a letter dated August 15, 2004, Reliance informed Street that she would receive LTD benefits for the period from September 18, 2004 through September 19, 2005. (Id. ¶ 10.)*fn1

B. Analysis

Street argues that Ingalls' program of paying disability benefits from the 61st day to the 180th day from the date of onset is an "employee welfare benefit plan" under 29 U.S.C. ...


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