Evans v. Infirmary Health Services, Inc.

634 F.Supp.2d 1276

Darlene G. EVANS, Plaintiff, v. INFIRMARY HEALTH SERVICES, INC., Defendant.

Civil Action No. 08-0409-WS-C.

United States District Court, S.D. Alabama, Southern Division.

June 12, 2009.

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Daniel Robert Stankoski, Jr., Fairhope, AL, Joshua Paul Myrick, Stankoski, L.L.P., Fairhope, AL, for Plaintiff.

Celia J. Collins, David C. Hannan, Johnstone, Adams, Bailey, Gordon & Harris, Mobile, AL, for Defendant.

ORDER

WILLIAM H. STEELE, District Judge.

This matter comes before the Court on defendant's Motion for Summary Judgment (doc. 28). Additionally, embedded in plaintiff's Brief in Opposition (doc. 35) is a request that this action be remanded to state court for want of subject matter jurisdiction. The Court therefore construes plaintiff's brief as a motion to remand. Both motions have been briefed and are ripe for disposition.¹

I. Background.

A. Nature of the Case.

Plaintiff, Darlene G. Evans, brought this lawsuit in the Circuit Court of Mobile County, Alabama, against her former employer, Infirmary Health Services, Inc.,² to recover certain benefits that she claims Infirmary Health promised to pay her as a condition of her separation from defendant's employ. According to the Complaint, Evans entered into a severance agreement with defendant in December 2007, pursuant to which Infirmary Health agreed to continue her participation in certain benefits programs through May 26, 2008. During that severance period, the Complaint alleges, Evans began suffering from certain mental health conditions (including clinical depression, anxiety/panic attacks, and post-traumatic stress disorder), which necessitated that she receive long-term medical treatment. Evans contends that this treatment is covered by the terms of her severance agreement with Infirmary Health; however, Infirmary Health denied coverage. On that basis, Evans asserts facially state-law causes of action against Infirmary Health for declaratory judgment and breach of contract, maintaining that the severance agreement obligates Infirmary Health to provide medical coverage and expenses to Evans for these conditions, but that Infirmary Health has refused to do so.³

B. Relevant Facts.⁴

Evans was employed by defendant as Assistant Vice President of Nursing at Mobile Infirmary Medical Center ("MIMC") from September 5, 2006 through November 26, 2007. (Stembridge Aff., ¶¶ 2, 4.) The reasons for Evans' separation from MIMC are not germane to this action, and do not appear in the record. It is undisputed that Evans did not work for defendant in any capacity, or perform any duties of any kind at or for MIMC, after November 26, 2007. (Evans Dep., at 35-36.)⁵ Evans testified that her last day of work at MIMC was on approximately November 17 or 18. (Id.)

1. The Severance Agreement and Policy.

On November 26, 2007, Infirmary Health officials met with Evans, informed her that her employment was being terminated, and proffered a written severance agreement under which Infirmary Health would provide her with four months of severance pay, including health and dental benefits, in exchange for Evans executing a general release. (Stembridge Aff., ¶ 4.) Evans negotiated with Infirmary Health regarding the terms of severance, and ultimately defendant agreed to extend the severance period (for both severance pay and health and dental benefits) to six months, rather than the four months initially offered. (Id., ¶ 6; Evans Dep., at 22-23, 26.) Infirmary Health modified the written agreement to reflect these expanded benefits, and provided a new version of the document to Evans for her review on December 4, 2007. (Stembridge Aff., ¶ 8.) At that time, Evans promptly read and signed the severance agreement (the "Agreement"). (Id.; Evans Dep., at 21, 27.) Defendant executed the Agreement on December 5, 2007. (Plaintiff's Brief (doc. 35), at Exh. 1.)

In the Agreement, the parties confirmed that "Evans's employment with MIMC will cease effective November 26, 2007." (Id., § I.) Notwithstanding the termination of her employment, MIMC promised to "pay Evans an amount of severance equal to her current base salary in bi-weekly installments ... through May 26, 2008. During this period, Evans may continue her participation in the [Infirmary Health System, Inc.] group health and dental programs with the employee share of any contributions for such benefits being made by payroll deduction." (Id.) The Agreement further provided that "Evans expressly waives any rights to any other severance benefits not set forth in this Agreement." (Id., § II.2.) In addition to this waiver of other benefits, Evans released Infirmary Health, MIMC, and various affiliated individuals and entities from all claims and causes of action, including without limitation claims under "the Employee Retirement Income Security Act ... and any contract and tort claims under state law." (Id., § II. 1.) Finally, Evans acknowledged that "[s]he accepts the payment described above as final and complete settlement of all claims and causes of action that she has against Infirmary Health System, Inc. or any of its affiliates." (Id., § IV. 5.) The Agreement made no reference to any severance policy or guidelines of Infirmary Health, and did not purport to be adopting, incorporating or implementing any such policy. Nor did the Agreement specifically mention long-term or short-term disability benefits.⁶

Defendant's uncontroverted evidence is that "[t]he severance arrangements made with Ms. Evans were made pursuant to Infirmary Health System's Leadership Severance Guidelines which have been followed for a number of years." (Stembridge Aff., ¶ 9.)⁷ The applicable Infirmary Health policy (the "Policy") on Leadership Severance in effect in 2007 provided, inter alia, that "upon the involuntary termination of an eligible leader or executive and upon execution of a binding release agreement," Infirmary Health would provide severance pay using a formula dependent on the employee's job level and length of service. (Id., Exh. A, § II.D.)⁸ The Policy also provides for a "30-day notification period" for eligible employees, distinct from the "conditional severance" period. (Id., ¶ II.A.) Defendant offers no evidence that plaintiff received a 30-day notification period. More generally, the record is devoid of evidence explaining how Evans' severance period was computed under the Policy's formula. Presumably, however, that formula would yield a period of four months in plaintiff's case, since that is what defendant offered her. That Evans successfully negotiated her severance period upward from four months to six months reflects that Infirmary Health agreed to pay her severance benefits in excess of those authorized by the Policy. With respect to insurance coverages, two Policy provisions are potentially significant. First, the Policy states that basic group life insurance, dental insurance, and medical insurance benefits continue during the severance period, but that "[o]rdinarily, all other benefits afforded under the STHS Benefits Program cease on the last day of actual work." (Id., § II.E.) Second, the Policy reflects that "Sick/Disability benefit and ETO benefits do not accrue beyond the last day of active work." (Id., § II.F.)

2. Evans' Medical Condition(s) and Request for Benefits.

Evans acknowledges that defendant paid her all severance pay promised from November 26, 2007 through May 26, 2008, in accordance with the Agreement. (Evans Dep., at 27.)⁹ She further concedes that defendant continued her coverage for health and dental benefits during that six-month severance period, and that it deducted the employee share of those premiums from her semi-weekly severance checks in the ordinary course of business. (Id. at 27-28, 80-81.)

In February 2008, Evans was hospitalized and diagnosed with various mental health conditions, including post-traumatic stress disorder, anxiety disorder, detachment, and panic disorder. (Evans Dep., at 54-55.)¹⁰ From approximately April 2008 through June 2008, Evans was unable to work because she was receiving outpatient or day treatment at a facility in Daphne, Alabama. (Id. at 57-62.) As of her deposition in February 2009, Evans was working part-time (approximately one week per month), but had not been released by her treating physicians to work full time. (Id. at 71-74.) Upon becoming unable to work because of her mental health issues, Evans contacted Infirmary Health to inquire about short-term and longterm disability benefits. (Id. at 78.) She was informed that she was ineligible for benefits under the Infirmary Health disability plans because those coverages were not part of her severance agreement. (Id. at 25-26, 79.) In particular, on May 1, 2008, Infirmary Health sent Evans a letter stating that, while the Agreement provided for her health and dental coverage to continue through May 26, 2008, "[o]ther benefits, such as short and long term disability[,] ceased with your separation date of November 26, 2007, since you were no longer in an eligible group." (Plaintiff's Brief (doc. 35), at Exh. 3.)

C. Procedural Posture.

As mentioned supra, Evans' Complaint filed in state court interposed claims against Infirmary Health for declaratory judgment and breach of contract, based on defendant's failure to provide disability benefits to her during the severance period. On July 14, 2008, Infirmary Health removed this action to federal court pursuant to 28 U.S.C. §§ 1441 and 1446. Notwithstanding the nominally state-law causes of action joined in the Complaint, defendant contended that federal jurisdiction was conferred by 28 U.S.C. § 1331 because plaintiffs' claims were subject to superpreemption under the Employment Retirement Income Security Act of 1974 29 U.S.C. §§ 1001 et seq. ("ERISA"). As defendant reasoned in its Notice of Removal:

"The Severance Agreement, providing for periodic payments and a continuation of health and dental programs pursuant thereto, is...