Case No. 3:06CV890.United States District Court, N.D. Ohio, Western Division.
June 29, 2006
ORDER
JAMES CARR, District Judge
Neil Oberlin brought an ERISA action under 29 U.S.C. § 1332(a)(1)(B) for denial of benefits against South Lorain Merchants Association Health and Welfare Benefits Plan Trust, d/b/a Cardinal Health Plan (Cardinal Health) and its third-party administrator, Commerce Benefits Group, Inc. (Commerce). Jurisdiction exists pursuant to 28 U.S.C. § 1331.
Pending is Commerce’s motion to dismiss under Fed.R.Civ.P. 12(b)(6) and a motion to strike the jury demand. For the following reasons, the motion to dismiss and the motion to strike the jury demand shall be granted.[1]
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Background
Oberlin is an employee with Airmate Co., Inc. He participates in Airmate’s Cardinal Health employee welfare benefit plan. After his application process to the plan and his approval for coverage in the Summer, 2004, Oberlin underwent a colonoscopy and an MRI relating to a lump. These procedures took place in November, 2004.
Oberlin went to see a specialist in December, 2004. During the next six months he received treatment for a diagnosed anal fistula. The cost of treatment exceeded $28,000. The plan denied his claim on the basis of a pre-existing condition clause in August, 2005.
Oberlin appealed the denial of his claim on two occasions. Commerce denied the first appeal on September 23, 2005. Along with his second appeal, Oberlin sent a letter from his physician stating he had not had a pre-existing condition. Cardinal Health denied his second appeal on December 5, 2005.
Discussion
Oberlin argues that both Cardinal Health and Commerce are proper parties to a cause of action for denial of benefits under 29 U.S.C. § 1332(a)(1)(B). Commerce argues that, as a third-party administrator, it is not a proper party to a claim for denial of benefits.
ERISA permits two types of claims, one for denial of benefits and the other for breach of fiduciary duty. Gelardi v. Pertec Computer Corp., 761 F.2d 1323, 1324 (9th Cir. 1985); See also Thorton v. Evans, 692 F.2d 1064, 1077 (7th Cir. 1982). Suits to recover benefits are permitted only against the plan. Gelardi, 761 F.2d at 1324.
This view has been accepted in the Sixth Circuit. The “administrator of employer group health plans is treated as a fiduciary to the plan and is limited in its liability to a
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breach of that fiduciary duty.”[2] U.S. v. Blue Cross Blue Shield of Mich., 726 F.Supp. 1517, 1521 (E.D. Mich. 1989).
“Under ERISA, a money judgment for benefits . . . is enforceable only against the plan as an entity.” Jameson v. Bethlehem Steel Corp., 714 F.2d 140 (6th Cir. 1983) (citing 29 U.S.C. § 1132(d)(2)). According to this subchapter, a third-party administrator is not a proper party to a suit for a money judgment concerning denied benefits.
In Mathis v. Mahle, a party initially named by the plaintiff as indispensable was found to be “a third-party administrator and . . . not a proper party to the lawsuit.” 165 Fed.App’x 457, 459
(6th Cir. 2006).
Therefore, Commerce, as a third-party administrator, is an improper party to this action. Oberlin thus fails to state a claim for which relief can be granted as pertaining to Commerce.
Conclusion
For the foregoing reasons, it is therefore,
ORDERED THAT the motion of defendant, Commerce Benefits Group, Inc., to dismiss be, and the same hereby is, granted.
So ordered.
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