United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND OPINION
Rosenthal, Chief United States District Judge
Hospital, LLC sued GAP Inc. and GAP Inc. Health and Life
Insurance Plan under the Employee Retirement Income Security
Act of 1974 (ERISA) § 502(a)(1)(b). 29 U.S.C. §
1132(a). After GAP moved to dismiss, the court converted the
motion to one for summary judgment in order to consider the
administrative record. (Docket Entry Nos. 35, 44). Based on a
careful review of the parties' motions and responses, the
record, the arguments of counsel, and the applicable law,
GAP's motion for summary judgment is granted and this
action is dismissed with prejudice. Final judgment is entered
by separate order.
reasons for these rulings are set out below.
is a health-care provider based in Houston, Texas. GAP is a
multinational corporation selling clothing and other retail
goods, headquartered in San Francisco, California. GAP is the
Plan Sponsor and Plan Administrator for GAP Inc. Health and
Life Insurance Plan, a self-insured ERISA health-benefits
plan. United Healthcare acts as the third-party claims
administrator for GAP's health plan.
SK is a Plan Beneficiary. In February 2014, RedOak treated SK
as an out-of-network provider. Before providing the medical
services, RedOak verified with United that SK had
out-of-network benefits under the Plan. SK signed a Legal
Assignment of Benefits and Designation of Authorized
Representative form, assigning RedOak the rights to receive
benefit payments, conduct administrative appeals, and seek
judicial review. RedOak's records show that it provided
$68, 517.00 in medical treatment and services to SK. RedOak
submitted UB-04 forms for payment, but United reduced the
allowed amount to $7, 436.13 and then offset that amount for
an alleged overpayment on a "stranger" plan. The
result was no payment. (Docket Entry No. 29 at 7-8).
began the administrative processes the Plan requires before
an ERISA suit can be brought. (Docket Entry No. 11-3, 53). A
denial must be appealed within 180 days of the claim
decision. (Id. at 57). If the member disagrees with
this first-level appeal decision, a second and final appeal
must be filed within 60 days "after receipt of the
notice of adverse appeal decision." (Id. at
58). The Plan bars a legal action brought more than "90
days after the date the claims administrator renders its
final decision upon appeal." (Id. at 53).
filed a first-level appeal on July 14, 2014.United notified SK
on August 21, 2014 that the original claim decision had been
upheld. (Docket Entry No. 11-8 at 18-20). The letter showed a
"cc" to RedOak, but RedOak claims that it never
received a copy of this notice from United. (Docket Entry No.
55-5 at2-4). The parties agree that RedOak's next
communication with United was a letter sent on October 23,
2015. This letter stated that RedOak was starting another
appeal. But the letter continued: "We have officially
exhausted any and all administrative remedies . . . ."
(Docket Entry No. 55-2 at 4; see also Docket Entry
No. 29 at 9). RedOak sent another letter repeating this
statement verbatim on April 25, 2016. (Id.). RedOak
filed this lawsuit on May 10, 2016. (Docket Entry No. 1).
RedOak's unilateral attempt to add years to the appeal
process and circumvent the Plan's limitations provisions
is the basis of the summary judgment motion.
First Amended Complaint, (Docket Entry No. 4), asserted a
claim under ERISA § 502(a)(1), a claim for failure to
provide a "full and fair review, " and claims for
breach of fiduciary duty against GAP Inc., GAP Inc. Health
and Life Insurance Plan, and two GAP employees, Cynthia
Radovich and Lesley Dale. In August 2016, after argument, the
breach of fiduciary duty claims were dismissed for lack of
standing, and the claims against Radovich and Dale were
dismissed with prejudice. (Docket Entry No. 23).
filed a Second Amended Complaint in October 2016, (Docket
Entry No. 29), which GAP moved to dismiss on the basis that
RedOak had failed to exhaust the internal appeals process and
comply with the time limits under the Plan, (Docket Entry No.
35). RedOak abandoned the claim for failure to provide a full
and fair review in its response. (Docket Entry No. 39 at 7).
At a hearing in December 2016, the court converted GAP's
motion to dismiss to a summary judgment motion in order to
allow the court to consider the full record. (Docket Entry No.
The Summary Judgment Standard
judgment is required when 'the movant shows that there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.'" Trent
v. Wade, 776 F.3d 368, 376 (5th Cir. 2015) (quoting
Fed.R.Civ.P. 56(a)). "A genuine dispute of material fact
exists when the' evidence is such that a reasonable jury
could return a verdict for the nonmoving party.'"
Nola Spice Designs, LLC v. HaydeI Enters., Inc., 783
F.3d 527, 536 (5th Cir. 2015) (quoting Anderson v.
Liberty Lobby, 411 U.S. 242, 248 (1986)). "The
moving party 'bears the initial responsibility of
informing the district court of the basis for its motion, and
identifying those portions of [the record] which it believes
demonstrate the absence of a genuine issue of material
fact.'" Id. (quotingEEOC v. LHC Grp.,
Inc., 113 F.3d 688, 694 (5th Cir. 2014)); see also
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
the non-movant bears the burden of proof at trial, the movant
may merely point to the absence of evidence and thereby shift
to the non-movant the burden of demonstrating by competent
summary judgment proof that there is an issue of material
fact warranting trial." Id. (quotation marks
omitted); see also Celotex, 477 U.S. at 325.
Although the party moving for summary judgment must
demonstrate the absence of a genuine issue of material fact,
it does not need to negate the elements ofthenonmovant's
case. Boudreauxv. Swift Transp. Co., 402 F.3d 536,
540 (5th Cir. 2005). "A fact is 'material' if
its resolution in favor of one party might affect the outcome
of the lawsuit under governing law." Sossamon v.
Lone Star State of Texas, 560 F.3d 316, 326 (5th Cir.
2009) (quotation omitted). "If the moving party fails to
meet [its] initial burden, the motion [for summary judgment]
must be denied, regardless of the nonmovant's
response." United States v. $92, 203.00 in U.S.
Currency, 537 F.3d 504, 507 (5th Cir. 2008) (quoting
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th
Cir. 1994) (en banc) (per curiam)).
the moving party [meets its initial burden], the nonmoving
party must 'go beyond the pleadings and by her own
affidavits, or by the depositions, answers to
interrogatories, and admissions on file, designate specific
facts showing that there is a genuine issue for
trial.'" Nola Spice, 783 F.3d at 536
(quotingLf/C Grp., 773 F.3d at 694). The nonmovant
must identify specific evidence in the record and articulate
how that evidence supports that party's claim.
Baranowski v. Hart,486 F.3d 112, 119 (5th Cir.
2007). "This burden will not be satisfied by 'some
metaphysical doubt as to the material facts, by conclusory
allegations, by unsubstantiated assertions, or by only a
scintilla of evidence.'" Boudreaux, 402
F.3d at 540 (quoting Little, 37 F.3d at 1075). In
deciding a summary ...