Horizon Surgery Center, PLLC v. D. Reynolds Company, LLC

Summary

This Memorandum and Recommendation addresses Defendant’s partial motion to dismiss claims arising from alleged nonpayment of medical services under an ERISA-governed health benefit plan. The magistrate judge recommends dismissing the ERISA breach-of-fiduciary-duty claim as duplicative of the denial-of-benefits claim and dismissing the state-law breach-of-contract, promissory-estoppel, and quantum-meruit claims as preempted by ERISA. The recommendation also proposes dismissal with prejudice of the state-law claims.

Holdings

1. A claimant whose alleged injury consists of unpaid or underpaid benefits and whose requested relief is monetary may not proceed under ERISA § 1132(a)(3) when § 1132(a)(1)(B) provides an adequate mechanism for redress. Horizon's fiduciary-duty claim was therefore duplicative and should be dismissed.
2. ERISA § 514(a) preempted Horizon's state-law breach-of-contract, promissory-estoppel, and quantum-meruit claims because each related to the ERISA plan, addressed the federally governed right to receive plan benefits, and directly affected relationships among traditional ERISA entities.
3. Horizon's breach-of-contract claim was preempted by ERISA and should be dismissed with prejudice because the alleged agreement concerned payment for services under the ERISA Plan and Horizon identified no separate non-ERISA contract.
4. Horizon's promissory-estoppel claim was preempted by ERISA and should be dismissed with prejudice because the alleged representations concerned payment of Plan benefits and determining liability required interpreting the Plan's terms.
5. Horizon's quantum-meruit claim was preempted by ERISA and should be dismissed with prejudice because it sought payment for services allegedly unpaid under the Plan and could not proceed independently of the denial of Plan benefits.

Questions Presented

1. Whether Horizon's ERISA breach-of-fiduciary-duty claim under 29 U.S.C. § 1132(a)(3) was duplicative of its ERISA denial-of-benefits claim under § 1132(a)(1)(B).
2. Whether Horizon's state-law breach-of-contract, promissory-estoppel, and quantum-meruit claims were preempted by ERISA § 514(a), 29 U.S.C. § 1144(a).
3. Whether the state-law claims should be dismissed with prejudice.

Disposition

other