Hartquist v. Emerson Elec. Co.

SCOTT L. HARTQUIST, Plaintiff, v. EMERSON ELECTRIC CO., THE EMERSON ELECTRIC MANUFACTURING COMPANY,and EMERSON APPLIANCES & TOOLS, INC., Defendants.

1:11CV1067

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

March 31, 2016

MEMORANDUM OPINION AND ORDER

This matter comes before the Court on Defendants' Renewed Motion for Summary Judgment [Doc. #65]. This action has been referred to the undersigned to conduct all proceedings pursuant to 28 U.S.C. § 636(c) [Doc. #16].

This case involves claims made by Plaintiff Scott L. Hartquist ("Plaintiff") pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., against his former employer, Emerson Electric Co., The Emerson Electric Manufacturing Company, and Emerson Appliances & Tools, Inc. (collectively, "Defendants" or "Emerson") as Plan Sponsor and Plan Administrator of a Long Term Disability Plan. Defendants have moved for summary judgment, contending that Plaintiff's ERISA claims are barred by the applicable statute of limitations, that Plaintiff's state common law claims are preempted by ERISA, and that an agreement signed by Plaintiff in 2004 settling his workers' compensation claim estops him from now asserting his present claims.

For the reasons that follow, the Court concludes that the 2004 workers' compensation agreement does not estop Plaintiff from asserting his present claims, that Plaintiff's state law claims are preempted by ERISA, and that Plaintiff's claims related to events in 2003 and 2004 are barred by the statute of limitations. However, issues remain with respect to Plaintiff's ERISA claim challenging the denial of his benefits on August 31, 2011. Therefore, Defendants' Renewed Motion for Summary Judgment will be granted in part and denied in part.

I. BACKGROUND

On or about June 13, 2003, while working at a Home Depot store on behalf of Defendants, several ladders fell and struck Plaintiff on the back of the head, allegedly causing severe injury and exacerbating certain pre-existing conditions. (Am. Compl. [Doc. #63] ¶ 5.) Plaintiff contends that this incident rendered him completely and permanently disabled and that the resulting disability caused him to resign from his employment with Defendants on December 9, 2003. (Id. ¶¶ 8, 13; Compl., Ex. E, G [Docs. #6-6, #6-8].)

At the time of his resignation, Plaintiff was entitled to apply for long-term disability insurance coverage under the UNUM Group Corporation ("UNUM") Group Plan that Defendants maintained for their employees (the "Plan"). (Compl., Ex. I, K [Docs. #6-9, 6-11]; Plan [Doc. #63-1]; Defs.' Mot. Sum. J., Ex. 2 [Doc. # 21-2].) Defendants served as the designated Plan Administrator and Plan Sponsor responsible for administering the Plan. (Am. Compl. [Doc. #63] ¶ 15; Answer to Am. Compl. [Doc. #64] ¶ 14). In his Complaint, Plaintiff contends that he was not aware that he was eligible for Plan benefits at the time of his resignation, and that Defendants did not notify him of his eligibility after his resignation. (Am.Compl. [Doc. #63] ¶ 16; Compl., Ex. I, K [Docs. #6-9, 6-11]). Following his injury and resignation, Plaintiff sought benefits under the North Carolina Workers' Compensation Act, and the Parties settled that claim by Agreement dated October 13, 2004, signed by Plaintiff on November 30, 2004. (See Compl., Ex. F [Doc. #6-7].)

Six years later, in 2010, Plaintiff contacted Defendants requesting re-evaluation of his prior workers' compensation claim. (Id., Ex. G [Doc. #6-8].) That request was denied, but after receiving that denial in November 2010, Plaintiff contends that he discovered for the first time, via a benefits sheet in his records, that he was eligible for benefits under the Plan at the time of his resignation in December 2003. (Id., Ex. I [Doc. #6-9].) Plaintiff states that Defendants gave him the benefits sheet, along with voluminous other documents, when he began his employment with Defendants in January 2003, that he placed the two-page document in a personal employment file along with those other materials, and that he happened to be reviewing that employment file in November 2010 when he "randomly discovered the Benefits Sheet." (Pl.'s Decl. [Doc. #28] ¶¶ 8, 10, 11, 15.) On November 27, 2010, Plaintiff forwarded the discovered benefits sheet to Defendants and asserted his rights under the Plan. (Compl., Ex. I [Doc. #6-9].)

Defendants reviewed Plaintiff's file and informed him by letter on January 20, 2011 that he was "not offered [long-term disability benefits] at the time of [his] resignation," and that he is "entitled to apply for [long term disability] benefits and may do so at this time." (Id., Ex. K [Doc. #6-11].) Plaintiff completed the necessary paperwork (id., Ex. M [Doc. #6-13]) and Defendants forwarded Plaintiff's application to UNUM for review (Defs.' Mot. Sum. J., Ex. 2 [Doc. #21-2]). However, because "UNUM insurance policies contain a provisionrequiring notification of a disability within one year of occurrence in order to be eligible for benefits," UNUM would not review Plaintiff's application. (Id.)

In light of UNUM's denial, Defendants retained GENEX Services, Inc. ("GENEX"), a medical review firm, to review Plaintiff's case as an independent consultant "before making any final determination on [Plaintiff's] request for benefits." (Id.) GENEX concluded that "[t]here is no evidence submitted that would indicate [Plaintiff] had impairments that would render him disabled as of [his resignation]." (Id., Ex. 3 [Doc. #21-3].) Defendants informed Plaintiff of this denial by way of letter dated August 31, 2011. (Id., Ex. 2 [Doc. #21-2].)

In November 2011, Plaintiff filed this action in North Carolina state court against Defendants asserting claims for: (1) Breach of Fiduciary Duty; (2) Breach of Contract; and (3) Negligence. (Compl. [Doc. #6].) Defendants removed this action to federal court on the basis of diversity of citizenship. (Notice of Removal [Doc. #1].) Defendants subsequently filed a Motion for Summary Judgment [Doc. #20] contending that Plaintiff's claims were barred both by the three-year statute of limitations applicable to contract actions in North Carolina and by virtue of a valid release previously entered into between Plaintiff and Defendants in connection with Plaintiff's prior workers' compensation claim. In Plaintiff's Response to that Motion, he suggested for the first time that some of his claims may arise under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. (Pl.'s Br. [Doc. #27] at 5, 8). Defendants replied, noting that "[P]laintiff is not asserting any cause of action grounded in, referencing, or relying upon ERISA," but argued that even under ERISA, Plaintiff's claims would be barred by the statute of limitations. (Defs.' Br. [Doc. #53] at 4.)

After reviewing the Motion and the Parties' related submissions, the Court issued an Order [Doc. #57] directing the Parties to address whether the Plan for long-term disability insurance provided by Defendants was an ERISA plan and, if so, whether Plaintiff's state law claims either were preempted by ERISA or should be construed as claims under ERISA. The Court further ordered the Parties to address whether Plaintiff's first claim, if construed as an ERISA claim for breach of fiduciary duty by Defendants, would be barred by the statute of limitations found in 29 U.S.C. § 1113(1).

The Parties subsequently filed supplemental briefs on those issues [Docs. #58, 59]. In the supplemental briefing, Defendants contended that the Plan was an ERISA plan, that Plaintiff's state law claims were preempted by ERISA, and that if Plaintiff's first claim were construed as an ERISA claim for breach of fiduciary duty, it would be barred by the statute of limitations found in 29 U.S.C. § 1113(1). Plaintiff did not specifically address any of the questions raised by the Court, but rather argued only that because Defendants did not explicitly cite the statute of limitations in 29 U.S.C. § 1113(1) as an affirmative defense in their Answer (instead referring only to the "applicable statutes of limitation" generally), Defendants waived any ERISA statute of limitations defense.

The Court set this matter for a hearing on April 30, 2015 to clarify Plaintiff's claims and the respective positions of the parties. (See Text Order dated Mar. 27, 2015.) At the hearing, counsel for Plaintiff, when asked to clarify whether Plaintiff's claims were brought under ERISA or under state law, did not initially give a definite response, but eventually asserted that the claims, as pled, were brought under state law, but that the Plan likely fell under ERISA, and that Plaintiff would be proceeding under ERISA. However, the matter didnot appear completely settled, and counsel for Plaintiff noted that Plaintiff could make a definite determination on this issue if provided with a copy of the Plan itself. After hearing the Parties' arguments, the Court directed Defendants to provide Plaintiff with a copy of the Plan and directed Plaintiff, if he should intend to assert ERISA claims, to file an amended complaint setting out each claim and the basis for the claim. The Court likewise afforded Defendants an opportunity to file an amended answer.

Plaintiff subsequently filed an Amended Complaint [Doc. #63] noting that the Plan is an ERISA employee welfare plan as defined by 29 U.S.C. § 1002(1), and asserting claims for (1) Breach of Fiduciary Duties in violation of 29 U.S.C. §§ 1109 and 1132; (2) Breach of Contract in violation of 29 U.S.C. §§ 1132(a)(1)(A), 1132(a)(1)(B), and 1132(c); (3) Failure to Notify in violation of 29 U.S.C. § 1132(c); (4) Common Law Negligence; and (5) Common Law Breach of Fiduciary Duty. Plaintiff also attached a copy of the Plan [Doc. #63-1] to the Amended Complaint. Defendants filed an Amended Answer [Doc. #64] and the instant Renewed Motion for Summary Judgment [Doc. #65], in which they contend that Plaintiff's ERISA claims are...