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Minerley v. Aetna, Inc.

United States District Court, D. New Jersey

September 29, 2018

JAY MINERLEY, individually and as class representative, Plaintiff,


          ANTHONY M. CHRISTINA RICHARD W. COHEN GERALD LAWRENCE URIEL RABINOVITZ LOWEY DANNENBERG, P.C. Attorneys for Defendants Aetna, Inc., Aetna Health, Inc. (a N.J. corp.), Aetna Health Insurance Co., Aetna Life Insurance Co., and the Rawlings Company, LLC


          NOEL L. HILLMAN, U.S.D.J.

         This case concerns the interpretation of an insurance policy and whether the insurer may require the insured to reimburse medical costs paid by the insurer when the insured receives an award from a third-party tortfeasor. Currently before the Court is Plaintiff's Motion for Partial Summary Judgment and Defendants'[1] Motion for Summary Judgment. For the reasons discussed below, Plaintiff's Motion will be denied and Defendants' Motion will be granted, in part, and denied, in part.


         Our recitation of the facts is taken from Plaintiff's and Defendants' Statements of Material Facts Not in Dispute. This Court notes factual disagreement where applicable. Plaintiff Jay Minerley was an employee of Weiss-Aug Company Inc. (“Weiss-Aug”), a New Jersey company, from February 2007 through April 2017. During that time, Minerley, a resident of Pennsylvania, enrolled in an employer-sponsored health benefits provided by Weiss-Aug. Of relevance, Minerley attended a Weiss-Aug employee benefits meeting on October 27, 2009 and received a plan design document, which provided a top-level overview of the benefits offered.

         Minerley participated in the Weiss-Aug sponsored healthcare benefits plan (the “Weiss-Aug Plan” or the “ERISA Plan”). Debra Myshkoff was the plan administrator for the Weiss-Aug Plan. Weiss-Aug received copies of the relevant policies provided by Aetna. It is unclear whether Myshkoff provided copies of the policies at the meeting, but it is undisputed that Minerley had access to plan documents through an electronic portal provided by Aetna.

         As part of the Weiss-Aug Plan, Minerley received benefits under an Aetna Citizen Choice Point of Service HMO Plan (the “Aetna insurance policies” or the “Aetna policies”). Minerley's insurance benefits consisted of two policies: the Pennsylvania HMO policy (the “Aetna PA Policy”), underwritten by Aetna Health Inc., and the New Jersey Non-Referred policy (the “Aetna N.J. Policy”), underwritten by the Aetna Health Insurance Company. The Aetna PA Policy provided in-network benefits and emergency services while the Aetna N.J. Policy provided out-of-network and non-referred medical services.

         Each of these policies contained two overall documents. The first document was an agreement between Weiss-Aug and the underwriting Aetna entity. The second document was a Certificate of Coverage (“Certificate”). Within this Certificate is a section pertaining to the underwriting Aetna entities' right of recovery against an insured in specific situations. In relevant part, the Aetna PA Policy's Certificate stated:

The Member also specifically acknowledges HMO's right of reimbursement. This right of reimbursement attaches, to the fullest extent permitted by law, when HMO has provided health care benefits for injuries or illness for which a third party is and the Member and/or the Member's representative has recovered any amounts from the third party or any party making payments on the third party's behalf. By providing any benefit under this Certificate, HMO is granted an assignment of the proceeds of any settlement, judgment or other payment received by the Member to the extent of the full cost of all benefits provided by HMO.

(emphasis in original). This was amended effective November 1, 2009, to state:

By accepting benefits under this Plan, the Member also specifically acknowledges HMO's right of reimbursement. This right of reimbursement attaches when this Plan has provided health care benefits for expenses incurred due to Third Party injuries and the Member or the Member's representative has recovered any amounts from any sources, including but not limited to: payments made by a third Party or any insurance company on behalf of the Third Party . . . .

(emphasis in original).[2]

         There are two processes for administrative exhaustion under the Aetna PA Policy, the “appeal” process and the “complaint” process. The appeal process is used for “adverse benefit determinations.” An adverse benefit determination includes “decisions made by the HMO that result in denial, reduction or termination of a benefit or the amount paid for it.” (emphasis in original). An appeal occurs when there is a “request to the HMO to reconsider an adverse benefit determination.” (emphasis in original).

         The complaint process starts with a “complaint.” A “complaint” is “an expression of dissatisfaction about . . . the quality of coverage, operations or management policies of the HMO.” (emphasis in original). There are procedures, which are not relevant to the issue at hand, that the Aetna PA Policy prescribes for Aetna to follow when reviewing a “complaint.” Although both an “appeal” and a “complaint” under the Aetna PA Policy are subject to different procedures, both are subject to an exhaustion of process provision. This “must be exhausted prior to . . . the establishing of any litigation.”

         Myshkoff, the ERISA Employee Retirement Income Security Act (“ERISA”) plan administrator for Weiss-Aug, stated that the Aetna PA Policy was the relevant ERISA plan document for the time period at issue.[3] Weiss-Aug submitted a single Form 5500 for the year 2010, received one plan identification number, 502, and identified through various schedules that Aetna Health, Inc., Sun Life and Health Insurance Company, and Unum Life Insurance Company of America would provide benefits.

         On May 20, 2010, Minerley was involved in a motor vehicle accident in Morris County, New Jersey. He sustained multiple injuries, including fractured ribs, fractured vertebrae, and herniated disks. He was treated at St. Clare's Hospital and Morristown Memorial Hospital. Minerley's medical treatments totaled $3, 512.82 and were paid for by his Aetna PA Policy.[4]

         Minerley retained a personal injury attorney, Charles Kannebecker. Defendant Rawlings, which was Aetna's subrogation and reimbursement claims vendor at the time, notified Kannebecker on July 21, 2010 of the Aetna PA Policy's reimbursement provision discussed supra. Minerley later successfully recovered from the third-party tortfeasor in this accident. On January 9, 2013, Rawlings received a reimbursement check from Kannebecker, sent on Minerley's behalf, in the amount of $3, 512.82 - the exact amount of the health benefits provided.

         Minerley did not contest this policy provision through the administrative procedures set forth in the Aetna PA Policy (or the Aetna N.J. Policy) as described supra. Minerley claims he did not do so because he never received a “Notice of Adverse Benefit Determination.” Defendants do not contest that Minerley did not receive a document with that title, but do state that the July 21, 2010 letter from Rawlings and their own filings in this case serve as notice of their adverse benefit determination. Instead of pursuing his administrative remedies, Minerley, along with Michelle Roche and Tim Singleton, filed a complaint against Defendants in the New Jersey Superior Court, Law Division, Atlantic County. Defendants removed the action to this Court on March 7, 2013. Multiple opinions, motion practice, and discovery ensued.

         Currently, Minerley is the only Plaintiff in this case. Singleton's claims were dismissed on March 1, 2016 [45, 46]. Minerley, through his amended complaint, now claims the following:

• Aetna violated 29 U.S.C. § 1132(a)(1)(B) by denying benefits to which Minerley was entitled; and
• Aetna violated 29 U.S. § 1004(a)(1)(A) and 29 U.S.C. § 1132(a)(3) (concerning breaches of fiduciary duty) by requiring reimbursement of Minerley's tort claim, for allegedly misrepresenting its right to reimbursement, and by failing to avoid the alleged conflict of interest in demanding reimbursement.

         All parties filed their respective summary judgment motions on February 9, 2018. These motions were fully briefed and are now ripe for adjudication.


         A. Subject Matter Jurisdiction

         This Court exercises jurisdiction pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 1132(f).

         B. Summary Judgment Standard

         Summary judgment is appropriate where the Court is satisfied that “‘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” and that the moving party is entitled to a judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986) (citing Fed.R.Civ.P. 56).

         An issue is “genuine” if it is supported by evidence such that a reasonable jury could return a verdict in the nonmoving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is “material” if, under the governing substantive law, a dispute about the fact might affect the outcome of the suit. Id. “In considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence; instead, the non-moving party's evidence ‘is to be believed and all justifiable inferences are to be drawn in his favor.'” Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (citing Anderson, 477 U.S. at 255).

         Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323 (“[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact.”); see Singletary v. Pa. Dep't of Corr., 266 F.3d 186, 192 n.2 (3d Cir. 2001) (“Although the initial burden is on the summary judgment movant to show the absence of a genuine issue of material fact, ‘the burden on the moving party may be discharged by “showing”-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party's case' when the nonmoving party bears the ultimate burden of proof.” (citing Celotex, 477 U.S. at 325)).

         Once the moving party has met this burden, the nonmoving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 324. A “party opposing summary judgment ‘may not rest upon the mere allegations or denials of the . . . pleading[s].'” Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001). For “the non-moving party[] to prevail, [that party] must ‘make a showing sufficient to establish the existence of [every] element essential to that party's case, and on which that party will bear the burden of proof at trial.'” Cooper v. Sniezek, 418 Fed.Appx. 56, 58 (3d Cir. 2011) (citing Celotex, 477 U.S. at 322). Thus, to withstand a properly supported motion for summary judgment, the nonmoving party must identify specific facts and affirmative evidence that contradict those offered by the moving party. Anderson, 477 U.S. at 257.

         If this case proceeds to trial, the remaining issues will be tried before this Court in a bench trial. “When deciding a motion for summary judgment, it is not our role to evaluate the evidence and decide the truth of the matter, but to determine whether there is a genuine issue for trial.” Rubin v. Amerihealth Adm'rs, Inc., No. 12-3719, 2013 WL 3967569, at *8 (E.D. Pa. Aug. 2, 2013) (citing Anderson, 477 U.S. at 249). “A judge does not sit as a trier of fact when deciding a motion for summary judgment even if the case is scheduled to be heard without a jury.” Id. (quoting Stewart v. Bert Bell/Pete Rozelle NFL Player Ret. Plan, No. 12-3719, 2012 WL 122362, at *4 (D. Md. Jan. 12, 2012)). But see Chao v. Local 54, Hotel Emps. & Rest. Emps. Int'l Union, 166 F.Supp.2d 109, 116 (D.N.J. 2001) (“While questions of ‘reasonableness' involve a primarily factual inquiry, in a non-jury case, where the material evidentiary facts relating to the issue of ‘reasonableness' have been fully developed in the record and are undisputed, the Court may appropriately grant summary judgment if a bench trial would not enhance its ability to draw inferences and conclusions.” (citing Coats & Clark, Inc. v. Gay, 755 F.2d 1506, 1509-10 (11th Cir. 1985); Nunez v. Superior Oil Co., 572 F.2d 1119, 1123-24 (5th Cir. 1978))); Coleman v. Mfrs. Hanover Corp., No. 89-1249, 1990 WL 27370, at *5 n.4 (E.D. Pa. Mar. 14, 1990) (“To the extent that the court must draw inferences from the undisputed evidentiary facts to determine whether there has been prohibited discrimination, the court in a nonjury case is entitled to draw such inferences and conclusions on motions for summary judgment if a bench trial would not enhance its ability to draw those inferences and conclusions.” (citing Coats & Clark, 755 F.2d at 1509-10; Nunez, 572 F.2d at 1123-24; Phillips v. Amoco Oil Co., 614 F.Supp. 694, 723 n.35 (D. Ala. 1985), aff'd, 799 F.2d 1164 (11th Cir. 1986))).

         C. Weiss-Aug's ERISA Plan

         The Court will address the arguments by both sides concerning whether the Aetna PA Policy may properly be considered an ERISA plan document. These arguments were briefed in both Plaintiff's Motion for Partial Summary Judgment and Defendants' Motion for Summary Judgment. This Court has considered the parties' respective positions and holds that the Aetna PA Policy is an ERISA plan document under the Weiss-Aug Plan and may properly control the rights and obligations of the parties in this case.

         By way of background, ERISA defines an “employee welfare benefit plan” as

any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purposes of providing for its ...

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