Sanchez v. Verizon Communications, Inc.

[7] 8 UNITED STATES DISTRICT COURT 9 DISTRICT OF NEVADA [10] 11 GERARD A. SANCHEZ SR., Case No.: 2:18-cv-01432-GMN-NJK 12 Plaintiff(s), ORDER 13 v. 14 VERIZON COMMUNICATIONS, INC., 15 Defendant(s). 16 Pending before the Court is Plaintiff’s second amended complaint. Docket No. 11. 17 Plaintiff is proceeding in this action pro se and has received authority pursuant to 28 U.S.C. 18 § 1915 to proceed in forma pauperis. See Docket Nos. 1, 7. 19 I. Screening Complaint 20 Upon granting an application to proceed in forma pauperis, courts additionally screen the 21 complaint pursuant to § 1915(e). Federal courts are given the authority to dismiss a case if the 22 action is legally “frivolous or malicious,” fails to state a claim upon which relief may be granted, 23 or seeks monetary relief from a defendant who is immune from such relief. 28 U.S.C. § 1915 (e)(2). 24 When a court dismisses a complaint under § 1915, the plaintiff should be given leave to amend 25 the complaint with directions as to curing its deficiencies, unless it is clear from the face of the 26 complaint that the deficiencies could not be cured by amendment. See Cato v. United States, 70 27 F.3d 1103, 1106 (9th Cir. 1995). [28] 1 Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for dismissal of a complaint for 2 failure to state a claim upon which relief can be granted. Review under Rule 12(b)(6) is essentially 3 a ruling on a question of law. See Chappel v. Lab. Corp. of Am., 232 F.3d 719, 723 (9th Cir. 2000). 4 First, a properly pled complaint must provide a short and plain statement of the claim showing that 5 the pleader is entitled to relief. Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 6 544, 555 (2007). Although Rule 8 does not require detailed factual allegations, it demands “more 7 than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” 8 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). 9 The court must accept as true all well-pled factual allegations contained in the complaint, but the 10 same requirement does not apply to legal conclusions. Iqbal, 556 U.S. at 679 . Mere recitals of the 11 elements of a cause of action, supported only by conclusory allegations, do not suffice. Id. at 678 . 12 Secondly, where the claims in the complaint have not crossed the line from conceivable to 13 plausible, the complaint should be dismissed. Twombly, 550 U.S. at 570 . Allegations of a pro se 14 complaint are held to less stringent standards than formal pleadings drafted by lawyers. Hebbe v. 15 Pliler, 627 F.3d 338 , 342 & n.7 (9th Cir. 2010) (finding that liberal construction of pro se pleadings 16 is required after Twombly and Iqbal). 17 II. Second Amended Complaint 18 Plaintiff’s second amended complaint appears to assert two causes of action. Docket No. 19 11. Plaintiff alleges that: (1) Defendant improperly changed Plaintiff’s Medicare primary 20 insurance and, therefore, denied him benefits and rights under the Employee Retirement Income 21 Security Act of 1974, 29 U.S.C. § 1001 (“ERISA”), and (2) Defendant breached its fiduciary duty. [22] Id. at 3-4 . 23 A. Denial of Benefits and Rights Claim 24 ERISA provides a cause of action for plan beneficiaries to recover benefits due under a 25 plan, to enforce rights under the plan, or to clarify their rights to future benefits under the plan's 26 terms. 29 U.S.C. § 1132 (a)(1)(B). Generally, ERISA § 502(a)(1)(B) claims have three 27 requirements: (1) the plaintiff exhausted the plan’s administrative appeals process; (2) the plaintiff [28] 1 is entitled to a particular benefit under the plan’s terms; and (3) the plaintiff was denied that benefit. 2 See id.; see also Amato v. Bernard, 618 F.2d 559 (9th Cir. 1980). 3 Here, Plaintiff has properly alleged some, but not all, of the required elements of an ERISA 4 claim. The second amended complaint sufficiently alleges Plaintiff’s exhaustion of the plan’s 5 administrative appeals process. Docket No. 11 at 4. Further, Plaintiff’s second amended 6 complaint articulates facts demonstrating he was denied the relevant benefit, in this case, his 7 original insurance plan. Id. at 3. Finally, Plaintiff submits facts that Defendant denied him his 8 “Healthsmart” service and alleges it did so in retaliation because he complained about an improper 9 deduction. Id. at 4. 10 However, Plaintiff’s second amended complaint is deficient. Plaintiff fails to allege facts 11 that demonstrate he is entitled to the particular benefit, in this case the insurance Option 33R, under 12 the plan’s terms. See Docket No. 11. Specifically, Plaintiff fails to allege facts showing that he is 13 entitled to the benefit because it is not clear that the benefit, insurance Option 33R, is vested. Id. 14 Further, Plaintiff’s second amended complaint alleges that the GTE of California Merger with 15 Atlantic Bell included a “Verbal Memorandum of Agreement” to honor and comply with previous 16 labor agreements, but Plaintiff fails to provide something to demonstrate that the benefit is vested, 17 such as the text of the Memorandum of Agreement or the previous labor agreements. Id. at 2-3. 18 Finally, Plaintiff fails to allege any facts that support his allegation that he is entitled to the 19 “Healthsmart” concession service, that Defendant improperly denied him that benefit, and that he 20 exhausted the plan’s administrative appeals process with respect to that benefit. Id. at 4. 21 Under ERISA, post-retirement medical benefits, such as insurance plan options, are 22 considered welfare benefits. 29 U.S.C. § 1002 (1). Unlike traditional pension benefits, welfare 23 benefits do not vest “unless and until the employer says they do.” Grosz-Salomon v. Paul Revere 24 Life Ins. Co., 237 F.3d 1154, 1160 (9th Cir. 2001). As a result, an employer is “generally free 25 under ERISA, for any reason at any time, to adopt, modify, or terminate” welfare benefits unless 26 “[it] contractually cedes its freedom.” Inter–Modal Rail Emps. Ass’n v. Atchison, Topeka & Santa 27 Fe Ry. Co., 520 U.S. 510, 515 (1997) (quoting Curtiss–Wright Corp. v. Schoonejongen, 514 U.S. 28 73, 78 (1995)). Accordingly, only the employer is capable of vesting welfare benefits, and the 1 terms purporting to vest welfare benefits must be stated in clear and express language contained 2 within the plan documents. See Vallone v. CNA Financial Corp., 375 F.3d 623 , 632 (7th Cir. 3 2004); see also Inter–Modal Rail Employees Ass'n, 520 U.S. 510 (1997). Where the policy is 4 silent, the Court presumes against the vesting of welfare benefits. Vallone, 375 F.3d at 632. 5 Nonetheless, the tenuous nature of welfare benefits is such that even language providing a 6 monetary grant of “lifetime medical benefits” may still be modified by the employer. See Grosz7 Salomon v. Paul Revere Life Ins. Co., 237 F.3d. at 1160 (discussing McGann v. H & H Music Co., [8] 946 F.2d 401 (5th Cir. 1991)). In other words, a cognizable claim under ERISA, with respect to 9 welfare benefits, is actually one that alleges the company did not amend the benefit in a permissible 10 way under the contract or agreement. Schoonejongen, 514 U.S., at 78. 11 Here, Plaintiff fails to allege facts showing that the benefits were vested, and, therefore, he 12 was entitled to the benefits. Further, Plaintiff fails to demonstrate that Defendant amended the 13 benefit in an impermissible way, such as contrary to the provisions of the collective bargaining 14 agreement, the memorandum of agreement, or the welfare benefits plan. See Schoonejongen, 514 15 U.S., at 78. Without these specific factual allegations, Plaintiff’s second amended complaint falls 16 short of a sufficiently stated claim. 17 B. Breach of Fiduciary Duty 18 To establish a claim for breach of fiduciary duty under ERISA § 502(a)(3), a plaintiff must 19 show that (1) the defendant is a plan fiduciary; (2) the defendant breached its fiduciary duties; and 20 (3) a cognizable loss to the participants of the plan resulted. See 29 U.S.C. § 1132 (a)(2); see also 21 Mathews v. Chevron Corp., 362 F.3d 1172, 1178 (9th Cir. 2004). 22 Here, Plaintiff provides no facts to demonstrate that Defendant is the plan fiduciary, that it 23 breached its fiduciary duty, or that he suffered a cognizable loss as a result. See Docket No. 11 at 24 4. Plaintiff generally alleges an inappropriate change of his health benefits, but does not provide 25 factual allegations that demonstrate the elements of a claim for breach of fiduciary duty. Id. 26 Without these specific factual allegations, Plaintiff’s second amended complaint falls short of a 27 sufficiently stated claim. 28 . . . 1 II. Conclusion 2 Accordingly, IT IS ORDERED that: 3 1. The second amended complaint is hereby DISMISSED without prejudice. If Plaintiff 4 believes he can cure the deficiencies noted herein, a third amended complaint shall be filed 5 by September 11, 2019. If Plaintiff chooses to further amend the complaint, Plaintiff is 6 informed that the Court cannot refer to a prior pleading in order to make a third amended 7 complaint complete. This is because, as a general rule, amended complaints supersede the 8 original complaint and previously-filed amended complaints. Local Rule 15-1(a) requires 9 that an amended complaint be complete in itself without reference to any prior pleading. 10 Once a plaintiff files an amended complaint, the original complaint and any previously11 filed amended complaints no longer serve any function in the case. Therefore, in an 12 amended complaint, each claim and the involvement of each Defendant must be 13 sufficiently alleged. 14 2. Failure to file a third amended complaint as required herein will result in a 15 recommendation that this case be dismissed without prejudice. 16 IT IS SO ORDERED. 17 Dated: August 12, 2019 18 ______________________________ Nancy J. Koppe 19 United States Magistrate Judge