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Dawson-Murdock v. National Counseling Group, Inc.

United States Court of Appeals, Fourth Circuit

July 24, 2019

REMA DAWSON-MURDOCK, Plaintiff - Appellant,
v.
NATIONAL COUNSELING GROUP, INC.; NATIONAL COUNSELING GROUP, INC. PLAN, Defendants - Appellees.

          Argued: May 8, 2019

          Appeal from the United States District Court for the Eastern District of Virginia, at Richmond. John A. Gibney, Jr., District Judge. (3:18-cv-00058-JAG)

         ARGUED:

          Elizabeth Hopkins, KANTOR & KANTOR LLP, Northridge, California, for Appellant.

          Jeremy David Capps, HARMAN CLAYTOR CORRIGAN & WELLMAN, P.C., Glen Allen, Virginia, for Appellees.

         ON BRIEF:

          Michelle L. Roberts, KANTOR & KANTOR LLP, Northridge, California, for Appellant.

          Laura Lee Miller, HARMAN CLAYTOR CORRIGAN & WELLMAN, P.C., Glen Allen, Virginia, for Appellees.

          Before KING, DIAZ, and QUATTLEBAUM, Circuit Judges.

          KING, Circuit Judge

         Plaintiff Rema Dawson-Murdock ("Rema") appeals from the dismissal of her civil action in the Eastern District of Virginia. Rema sued National Counseling Group, Inc. ("NCG"), alleging two claims under the Employee Retirement Income Security Act of 1974 ("ERISA") (codified primarily in Title 29 of the United States Code). See Dawson-Murdock v. Nat'l Counseling Grp., Inc., No. 3:18-cv-00058 (E.D. Va. Jan. 26, 2018), ECF No. 1 (the "Complaint").[1] More specifically, the Complaint alleges that NCG contravened ERISA by breaching its fiduciary duties in the administration of a group life insurance plan in which Rema's late husband had enrolled and for which NCG is the "named fiduciary." The district court dismissed Rema's ERISA claims pursuant to Federal Rule of Civil Procedure 12(b)(6), concluding that NCG's relevant actions were not taken in a fiduciary capacity. See Dawson-Murdock v. Nat'l Counseling Grp., Inc., No. 3:18-cv-00058 (E.D. Va. Aug. 7, 2018), ECF No. 12 (the "Opinion"). Because the Complaint sufficiently alleges NCG's fiduciary status in relation to those claims, we vacate and remand.

         I.

         A.

         Because this appeal stems from a Rule 12(b)(6) dismissal, we accept the facts alleged in the Complaint as true and recite them in the light most favorable to Rema. See Feminist Majority Found. v. Hurley, 911 F.3d 674, 680 (4th Cir. 2019). As part of the benefits package that it offers to employees, NCG provides its workers the opportunity to enroll in a group life insurance plan (the "Plan"). The insurer for the Plan is Unum Life Insurance Company of America ("Unum"). The documents that constitute the Plan are the Summary of Benefits and the Summary Plan Description (the "SPD").[2]

         The Summary of Benefits explains that an NCG employee who desires to enroll in the Plan must pay a premium to NCG, which in turn sends the premium payment to Unum. In addition to transmitting premiums, NCG is obliged to "regular[ly]" provide Unum with information about employees "who are eligible to become insured; whose amounts of coverage change; and[] whose coverage ends." See J.A. 28.[3]

         The SPD specifies that, for the purposes of ERISA, NCG "is the [p]lan [a]dministrator and named fiduciary of the Plan," and that benefits under the Plan are "administered" by Unum. See J.A. 65 (emphasis added). The SPD also explains that "ERISA imposes duties upon the people who are responsible for the operation of the . . . [P]lan," and that "[t]he people who operate [the] Plan, called 'fiduciaries' of the Plan, have a duty to do so prudently and in the interest of . . . Plan participants and beneficiaries." Id. at 71. And the SPD instructs Plan participants and beneficiaries to contact NCG if they have questions about the Plan.

         B.

         While working full-time for NCG, Rema's late husband, Wayne Murdock ("Wayne"), elected $150, 000 in life insurance coverage through the Plan. Wayne identified Rema as his primary beneficiary for any benefits resulting from the coverage. To secure that coverage, Wayne paid premiums to NCG, which forwarded those payments to Unum.

         On March 21, 2016, Wayne stopped working full-time for NCG and began working part-time for it. Although enrollment in the Plan is limited to full-time NCG employees, NCG either never informed or misinformed Wayne about whether he remained eligible to participate in the Plan. Additionally, although Wayne could have converted or ported his life insurance coverage after transitioning to part-time status, NCG never notified him of those options.[4] The parties have not disputed that Wayne continued to pay premiums to NCG after March 21, 2016, despite his apparent ineligibility.

         On August 30, 2016, Wayne died. Rema, as Wayne's widow and beneficiary, thereafter submitted a life insurance benefits claim for $150, 000 to Unum pursuant to Wayne's participation in the Plan. On October 24, 2016, before Rema heard anything from Unum regarding her claim, Christopher Baham - NCG's Vice President of Human Resources - emailed Rema to notify her that Unum had denied it. Baham assured Rema, however, that NCG would directly pay her the claim amount and work with Unum to recoup the payment. Baham also advised Rema that she would "not have to deal with Unum insurance company going forward." See Complaint ¶ 16. Three days later, on October 27, 2016, she received a letter from Unum stating that it had denied her benefits claim because Wayne "was not eligible for coverage due to his part-time status and [he] failed to convert or port his coverage." Id. ¶ 17.

         During the next four months, Rema and Vice President Baham communicated regularly regarding her life insurance benefits claim. Those communications included the following:

• On November 7, 2016, Rema emailed a copy of Unum's denial letter to Baham and asked him for advice regarding her next steps;
• The following day, Baham responded via email and told Rema that she did not need to do anything else, such as appeal the claim denial, and that NCG was "working through the details," see Complaint ¶¶ 20, 39;
• On November 15, 2016, Baham emailed Rema and said that NCG was still working on her claim;
• About two weeks later, Baham again emailed Rema, stating that NCG was "working through a separate insurance company to pay out Wayne's benefits," and that Unum would "not be involved at all." Id. ΒΆ 22. He again reassured her that ...

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