Free Brief in Support of Motion - District Court of Colorado - Colorado

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 1 of 15

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Senior Judge Zita L. Weinshienk Civil Action No. 04-cv-01825-ZLW-BNB THE ESTATE OF CHANDA JOHNSON, Deceased, by DORRIS RICHARDSON, Plaintiff/Personal Representative, Plaintiff,

v. AVAYA COMMUNICATION INC., a Delaware Corporation, Defendant. ______________________________________________________________________________ DEFENDANT'S BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT ______________________________________________________________________________ COMES NOW, Defendant Avaya Inc. ("Avaya" or "Defendant"), pursuant to Fed.R.Civ.P. 56(c) and D.C.COLO.LCivR 56.1, and respectfully submits the following Brief in Support of Motion for Summary Judgment. SUMMARY OF THE ARGUMENT This case was brought by the Estate of Chanda Johnson ("Plaintiff" or "Estate"). The Estate brings three causes of action under Colorado state law: "unlawful dismissal," breach of contract, and bad faith. These claims are based upon the Estate's allegations that Chanda Johnson ("Johnson"), who was separated from employment with Avaya, received a favorable ruling on a grievance filed on her behalf and that, as a result, were it not for her untimely death, she would have returned to work for Avaya under one of three "options." The Estate claims that these options were: (1) reinstatement in the same department with the same supervisor with back

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 2 of 15

pay; (2) transfer to a different department without back pay; or (3) no reinstatement with severance pay. (See Complaint, filed Sept. 2, 2004, at ¶ 8). Because she apparently would have chosen one of the reinstatement options, the Estate argues, Johnson should have been considered a covered employee under Avaya's life insurance plans at the time of her death. Defendant brings this Motion for Summary Judgment on the basis that the Estate's state law claims are preempted by the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. ("ERISA"), because they relate to the provisions of an employee welfare benefit plan. As will be shown below, when a party seeks benefits under such a plan, claims brought under state law are preempted. Also, even if the Estate's claims were characterized as being brought under ERISA or state law, it cannot recover. The undisputed facts demonstrate that the grievance filed on Johnson's behalf was unsuccessful and that she never would have been entitled to reinstatement with Avaya. Therefore, because there is no doubt that Johnson was not an "employee" at the time of her death, a requirement for coverage under the pertinent plans, the Estate's claims should be dismissed. STATEMENT OF UNDISPUTED MATERIAL FACTS 1. (Compl. ¶ 7). 2. During her employment with Avaya, Johnson was a member of a collective Chanda Johnson ("Johnson") was an employee of Avaya until October 2001.

bargaining unit represented by Local 7777 of the Communication Workers of America ("Local 7777" or "Union"). (See Affidavit of Michael Covello, attached as Exhibit A-1 to Def.'s Mot. For Jmt. on the Pldgs., filed January 19, 2005, at ¶ 2).

2

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 3 of 15

3.

The Union grieved Johnson's separation from employment. Avaya records show

that this grievance was Grievance # 01-0831. (Affidavit of Susan White, Exhibit A-1, at ¶¶ 2-3). 4. Johnson died on January 20, 2002. (Deposition of Dorris Richardson, Exhibit A-

2 [hereafter "Richardson Dep." at 9:1-3). 5. On March 19, 2002, Avaya notified the Union that the grievance over Johnson's

separation was denied. (Affidavit of Susan White, Exhibit A-1, at ¶ 4).
6.

During her employment with Avaya, Johnson was provided with life insurance

and accidental death and dismemberment insurance by virtue of a collective bargaining agreement ("CBA") between Avaya and Local 7777. (Affidavit of Nancy Hackelberg, Exhibit A-3, at ¶ 2). Copies of the pertinent Plans are attached to Ms. Hackelberg's Affidavit. 7. Under the terms of the Plans, Johnson's coverage terminated at the end of the

month when she left employment with Avaya. (Hackelberg Affidavit at ¶ 6). Therefore, Johnson was not covered by these Plans at the time of her death. 8. The Estate never made a written claim for life insurance and death benefits.

(Plaintiff's Answers to Defendant's First Set of Requests for Production of Documents, Exhibit A-4, at 2). ARGUMENT I. Summary Judgment Standards. Under Fed. R. Civ. P. 56(c), summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." In determining a motion for summary

3

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 4 of 15

judgment, "all factual disputes and inferences must be drawn in favor of the nonmoving party." Cordova v. West, 925 F. Supp. 704, 707 (D. Colo. 1996). However, "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action.'" Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed. R. Civ. P. 1). Therefore: [c]ourts must construe Rule 56 "with due regard not only for the rights of the persons asserting the claims and defenses that are adequately based in fact to have those claims tried to a jury, but also for the rights of persons opposing such claims and defenses to demonstrate in the manner provided by the Rule, prior to trial, that the claims and defenses have no factual basis." U. S. ex rel. Grynberg v. Praxair, Inc., 207 F. Supp. 2d 1163, 1176 (D. Colo. 2001) (quoting Celotex, 477 U.S. at 327). II. The Estate's Claims Are Preempted by ERISA. The Estate's claims are preempted by ERISA. That statute supersedes "any and all state laws insofar as they may now or hereafter relate to any employee benefit plan . . . ." 29 U.S.C. § 1144(a). It also preempts state laws to the extent that they "conflict[] with the provisions of ERISA or operate[] to frustrate its objects." Boggs v. Boggs, 520 U.S. 833, 841 (1997). Both the Supreme Court and the Tenth Circuit have read this preemption provision broadly. See Egelhoff v. Egelhoff, 532 U.S. 141, 146 (2001); Cal. Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 324 (1997); FMC Corp. v. Holliday, 498 U.S. 52, 58 (1990); Coldesina v. The Estate of Simper, 407 F.3d 1126, 1136 (10th Cir. May 19, 2005); Metropolitan Life Ins. Co. v. Hanslip, 939 F.2d 904, 906 (10th Cir. 1991); Settles v. Golden Rule

4

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 5 of 15

Ins. Co., 927 F.2d 505, 509 (10th Cir. 1991).1 The Court has held that a law "relates" to a benefit plan "if it has a connection with or reference to such a plan." Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 739 (1985); see also Felix v. Lucent Technologies, Inc., 387 F.3d 1146, 1153-54 (10th Cir. 2004) (same). As will be shown below, the life insurance plans at issue in this case are covered by the pertinent ERISA provisions. Because the Estate's claims "relate" to these plans, they are preempted. A. Avaya's Group Life Insurance Plans, Under Which the Estate Seeks Benefits, Is an "Employee Welfare Benefit Plan" Under ERISA.

There can be no dispute that the Plans under which the Estate seeks insurance proceeds are "employee welfare benefit plans" subject to ERISA preemption. An "employee welfare benefit plan" under ERISA is "any plan, fund, or program . . . established or maintained by an employer . . . for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance . . . benefits in the event of . . . death . . . ." 29 U.S.C. § 1002(1); see also Peckham v. Gem State Mut. of Utah, 964 F.2d 1043, 1047 (10th Cir. 1992) (discussing the definition of "employee welfare benefit plan"). As demonstrated below, each one of these elements is met in this case. 1. The Plans are a "Plan, Fund, or Program."

A "plan, fund, or program" exists when "from the surrounding circumstances a reasonable person can ascertain the intended benefits, a class of beneficiaries, the source of financing, and the procedures for receiving benefits." Peckham, 964 F.2d at 1047; see also Halprin v. Equitable Life Assur. Soc. of U.S., 267 F.Supp.2d 1030, 1035 (D. Colo. 2003)
This Court, in adopting the recommendation of Chief Magistrate Judge Abram in an ERISA preemption case, also has recognized the breadth of ERISA preemption. Anglund v. American Tel. and Tel. Co., 828 F.Supp. 809, 811-12 (D. Colo. 1993).
1

5

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 6 of 15

(Babcock, C.J.) (same). In this case, all of these descriptions are present. The Plans clearly delineate the benefits intended (Hackelberg Affidavit, Ex. 1, at 1; Ex. 2 at 1), the class of beneficiaries covered, i.e. represented, salaried, and retired employees (Hackelberg Affidavit, Ex. 1 at 3 and 6, Ex. 2 at 3 and 6 ), the source of financing (Hackelberg Affidavit, Ex. 1 at 8, Ex. 2 at 8), and the procedures for beneficiaries to make claims for benefits (Hackelberg Affidavit, Ex. 1 at 10-13, Ex. 2 at 10-13). 2. The Plans Were Established by Avaya, an Employer.

Nor can there be any dispute that the Plans are "established or maintained" by an employer, in this case Avaya. This requirement is "designed to ensure that the plan is part of an employment relationship." Peckham, 964 F.2d at 1049 (citing Massachusetts v. Morash, 490 U.S. 107, 115 (1989)). It is clear from the plain language of the Plans that "Avaya established the Plan to provide . . . insurance through the Insurance Contracts issued by the Insurance Company . . . ." (Hackelberg Affidavit, Ex. 1 at 1, Ex. 2 at 1). Therefore, this requirement is satisfied. 3. The Purpose of the Plans is to Provide Life Insurance to Beneficiaries.

Finally, it is clear that the Plans are designed to provide benefits "in the event of death" to designated beneficiaries. The very first page of the Basic Plan states that: Avaya established the Plan to provide the following types of insurance coverage through the Insurance Contracts issued by the Insurance Company: (a) Basic group life insurance for Employees, including AD&D insurance . . . . (Hackelberg Affidavit, Ex. 1 at 1). The Supplementary Plan has similar language. (Id., Ex. 2 at 1). Therefore, there can be no doubt that the Plans meet the definition of "employee welfare benefit plan" under ERISA.

6

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 7 of 15

B.

Because the Plans are "Employee Welfare Benefit Plans," the Estate's Claims, Which "Relate To" the Plans, are Preempted by ERISA.

As noted above, a law "relates" to a benefit plan "if it has a connection with or reference to such a plan." It is well-established that state law causes of action directly seeking benefits under an ERISA plan, such as those brought by the Estate in this case, are preempted. The Tenth Circuit has recognized as a category of state law claims preempted by ERISA those brought under "laws and common-law rules providing remedies for misconduct growing out of the administration of ERISA plans." Coldesina, 407 F.3d at 1136 (quoting Woodworker's Supply, Inc. v. Principal Mut. Life Ins. Co., 170 F.3d 985, 990 (10th Cir. 1999)). As will be shown below, the Estate's claims fall under this category. 1. The Estate's First Claim for Relief, Entitled "Unlawful Dismissal," Seeks "Life Insurance and Death Benefits" Under the Plans, and Therefore is Preempted.

Though captioned as a claim for "unlawful dismissal," it is undisputed that the Estate's First Claim for Relief seeks "life insurance and death benefits." (Compl. ¶ 10).2 This claim is preempted by ERISA because in order to determine whether or not Johnson was covered by the Plans at the time of her death, i.e. whether any alleged reinstatement would have entitled her to coverage, one must naturally look to the language of the Plans themselves. In other words, because this claim does not arise independently from the Plans, it necessarily is preempted. Cf.,

Defendant notes that this claim for relief also seeks back pay as a result of an allegedly successful appeal of Johnson's dismissal. (Compl. ¶ 10). On January 19, 2005, Defendant filed a Motion for Judgment on the Pleadings arguing that this claim for back pay was preempted by § 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185(a) ("§ 301") because the Estate is seeking compensation allegedly derived from the grievance and arbitration procedures under a collective bargaining agreement. (See Def.'s Mot. For Jmt. on the Pldgs., filed Jan. 19, 2005, at 5-8). Defendant's motion also argued that the claims seeking insurance proceeds were also preempted by § 301 because the entitlement to such proceeds arose from that same collective bargaining agreement. (See id.). Defendant reasserts those arguments here and incorporates by reference its Motion for Judgment on the Pleadings.

2

7

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 8 of 15

Wilcott v. Matlack, Inc., 64 F.3d 1458, 1462-63 (10th Cir. 1995) (holding that state law claims were not preempted by ERISA where the factual basis for such claims were independent of rights and duties created by the plan). 2. Plaintiff's Claim for Breach of Contract Also is "Related" to the Plans, and Therefore is Preempted.

Plaintiff's Second Claim for Relief, Breach of Contract, is also preempted by ERISA. The Estate alleges that Johnson had an employment contract with Avaya, the terms and conditions of which included life insurance coverage. (Compl. ¶ 12). As noted above, the life insurance referred to in the Complaint is that provided by the Plans. It has long been established that common law claims for breach of contract are preempted by ERISA. See Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 62 (1987); Cannon v. Group Health Service of Oklahoma, Inc., 77 F.3d 1270, 1273-74 (10th Cir. 1996), cert. denied, 519 U.S. 816 (1996); Halprin, 267 F.Supp.2d at 1039. "Common law tort and breach of contract claims are preempted by ERISA if the factual basis of the cause of action involves an employee benefit plan." Settles, 927 F.2d at 509.3 Again, because this claim is premised upon an alleged entitlement to benefits provided by ERISA plans, it is preempted. Indeed, the instant case is not unlike that of Bernard v. Michelin North America, Inc., 193 F.Supp.2d 908 (E.D. Tex. 2001). There, the estate of a former employee brought suit against the employer for breach of contract to recover benefits under a life insurance policy. Id. at 909. The court held that the claim was preempted for two reasons. First, it noted that "[t]o determine if

Numerous cases from other jurisdictions are in accord. See Howard v. Coventry Health Care, Of Iowa, Inc., 293 F.3d 442, 446 (8th Cir. 2002) (state law claim for breach of contract preempted); Glenn v. Life Ins. Co. of North America, 240 F.3d 679, 681 (8th Cir. 2001) (same), cert. denied, 534 U.S. 893 (2001); McNeil v. Time Ins. Co., 205 F.3d 179, 191 (5th Cir. 2000) (same), reh'g and suggestion for reh'g denied, 224 F.3d 767 (5th Cir. 2000), cert. denied, 531 U.S. 1191 (2001); Qualls v. Blue Cross of California, 22 F.3d 839, 842-43 (9th Cir. 1994) (same);

3

8

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 9 of 15

Plaintiffs can recover the benefits they seek, the court will need to determine if Defendant violated the terms of its benefit program, which is governed by ERISA . . . ." Id. at 910. Second, the claim was preempted because it "involve[d] the interpretation of an employee benefit plan provided to [the former employee], by his former employer." Id. Here, both of those factors are present as well. In order for this Court to award the Estate the benefits it claims, it must first determine that Avaya violated the terms of the Plans. The Court's determination necessarily will also involve "interpreting" a benefit plan provided to Johnson by Avaya. Therefore, the Estate's claims are preempted. Other cases involving similar state law claims for benefits under employer-sponsored life insurance plans, involving the death of a former employee, have held that such claims are preempted. See Mounce v. Mounce, 921 F.Supp. 712, 714 (N.D. Okla. 1996) (holding that ERISA preempts Oklahoma statute providing that all contracts for death benefits in favor of exspouses are revoked by operation of law); Estate of Curtis by Curtis v. Prudential Ins. Co., 839 F.Supp. 491, 494 (E.D. Mich. 1993) (holding that state law claims of negligence, breach of a third party beneficiary contract, and estoppel, based upon allegations that defendant failed to ascertain whether beneficiary was involved in decedent's death prior to paying him proceeds from policy, were preempted by ERISA). 3. The Estate's Bad Faith Claim Also is Preempted.

The Estate's claim for bad faith is also preempted by ERISA. The Tenth Circuit has specifically held that "Colorado bad faith claims are preempted by ERISA because they conflict with ERISA's remedial scheme." Kidneigh v. UNUM Life Ins. Co. of America, 345 F.3d 1182, 1185 (10th Cir. 2003), cert. denied, 540 U.S. 1184 (2004). In other words, because bad faith

9

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 10 of 15

claims, in certain circumstances, allow for the recovery of consequential and punitive damages, remedies not available under ERISA, such claims conflict with the purposes of Congress in enacting ERISA. Therefore, they are preempted. Id. (citing Conover v. Aetna U.S. Health Care, Inc., 320 F.3d 1076, 1080 (10th Cir. 2003)). 4 4. Plaintiff's Claims Do Not Fall Within ERISA's "Savings Clause."

Nor are Plaintiff's claims resurrected by ERISA's "savings clause," which saves from preemption state laws which "regulate[] insurance." 29 U.S.C. § 1144(b)(2)(A). In Kidneigh, the Tenth Circuit noted that in order for this provision to apply, the state law must "not `just have an impact on the insurance industry' but must be `specifically directed toward that industry.'" Kidneigh, 345 F.2d at 1186 (quoting Pilot Life Ins. Co., 481 U.S. at 50). Case law consistently has held that claims similar to those brought in this case do not come within this savings clause. See Cannon, 77 F.3d at 1275 (holding that claims for breach of contract, fiduciary duty negligence, and bad faith do not fall within savings clause); Kidneigh, 345 F.3d at 1186-87 (holding that bad faith claim was preempted and not saved by savings clause); Kelley v. Sears, Roebuck and Co., 882 F.2d 453, 456 (10th Cir. 1989) ("We also conclude . . . that Colorado's

Cases addressing this issue under the laws of other jurisdictions have reached similar results. See Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 50 (1987) (holding that claim of bad faith under Mississippi law was preempted); Moffett v. Halliburton Energy Services, Inc., 291 F.3d 1227, 1236-37 (10th Cir. 2002) (holding that Wyoming's bad faith law is preempted by ERISA); Conover v. Aetna US Health Care, Inc., 320 F.3d 1076, 1079 (10th Cir. 2003) (holding ERISA preempts claims of bad faith under Oklahoma law); Gaylor v. John Hancock Mut. Life Ins. Co., 112 F.3d 460, 466 (10th Cir. 1997) (noting that Oklahoma's law regarding bad faith is derived "from general principles of tort and contract law"); Phillips-Foster v. UNUM Life Ins. Co. of America, 302 F.3d 785,796 (8th Cir. 2002) ("Any bad faith claim Phillips-Foster might assert under state law based on the delayed acknowledgment of UNUM's basic life obligation is preempted under ERISA."); Walker v. S. Co. Servs., 279 F.3d 1289, 1293-93 (11th Cir. 2002) (holding that bad faith claim preempted); Gilbert v. Alta Health & Life Ins. Co., 276 F.3d 1292, 1297-99 (11th Cir. 2001) (applying ERISA preemption to Alabama bad faith statute); McNeil, 205 F.3d at 191 (state law claim for breach of the duty of good faith and fair dealing preempted); Qualls, 22 F.3d at 842-43 (holding that claim for tortuous breach of the covenant of good faith and fair dealing was preempted); Swerhun v. Guardian Life Ins. Co of Am., 979 F.2d 195, 199 (11th Cir. 1992) (applying ERISA preemption to Florida bad faith statute).

4

10

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 11 of 15

common law of bad faith does not regulate insurance."). Therefore, the Estate's claims brought under Colorado law must be dismissed. III. Even if The Estate's Claims Are Not Preempted, Defendant is Entitled to Judgment As a Matter of Law Because The Undisputed Facts Show That The Union's Grievance Was Denied. A. Even if This Court Treats The Estate's Claims As Claims for Benefits Under ERISA, Defendant is Entitled to Summary Judgment. 1. The Grievance Upon Which the Estate Relies Was Denied by Avaya.

In the event that this Court concludes that the Estate's claims are not preempted by ERISA, the Complaint must still be dismissed. The lynchpin of the Estate's claims is the allegation of a "favorable appeal ruling on . . . Johnson's dismissal by Defendant." (Compl. ¶ 12). It cannot be denied that without proof of such a successful appeal, there can be no possibility of recovery. The undisputed facts show that the grievance was, in fact, denied, (see Affidavit of Susan White, at ¶¶ 3-4), and the Estate can produce no admissible evidence to the contrary. Even the Estate concedes that the success of its claims depends upon this alleged "employee" status. (See Plaintiff's Response to Defendant's Motion for Judgment on the Pleadings, filed Feb. 18, 2005, at ¶ 3 ["Plaintiff's position is because she was an employee of the company and she is owed her life insurance claim, death claim and back pay . . . ."]. Therefore, because the undisputed facts show that Johnson was not an employee at the time of her death, the Estate cannot recover. After all, the language of the Basic Plan unequivocally states the following regarding termination of coverage:

11

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 12 of 15

3.3.1

Represented Employees and Salaried Employees

For an Employee, coverage under the Plan shall terminate at the end of the month in which the first of the following events occurs: (a) the employee leaves any Participating Company for any reason except retirement on a service or disability pension . . . . (Hackelberg Affidavit, Ex. 1 at 6). The Supplemental Plan states that "[a] Represented Employee's coverage under the Plan shall terminate when his or her life insurance coverage terminates under The Avaya Inc. Group Life Insurance Plan [i.e. the Basic Plan], or at the end of the month in which . . . he or she terminates employment with any Participating Company." (Hackelberg Affidavit, Ex. 2 at 6-7). It is undisputed that Johnson was separated from employment with Avaya in October 2001. (Compl. ¶ 7). Under the plain language of the Plans, then, her insurance coverage ceased at the end of that month. (See Hackelberg Affidavit at ¶ 6). Therefore, even if this case were treated as one claiming benefits under ERISA, the Estate's claims must be dismissed. The facts of this case are similar to those of Ollson v. Darling & Co., 759 F.Supp. 381 (E.D. Mich. 1991). In that case, the employer contracted with an insurance company to provide life insurance benefits to its employees. Id. at 383. Under the terms of the policy at issue, an individual who was not actively working at the time of death was not eligible for coverage. Id. at 384. The widow of an employee who had not been working for the company for three years before his death brought state law claims to recover proceeds under the terms of the policy. Id. at 383. After holding that the state law claims were preempted by ERISA, the court held that because the employee was not entitled to coverage under the plan, dismissal was appropriate. Id. at 385.

12

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 13 of 15

2.

No Valid Claim for Life Insurance and Death Benefits Ever Was Made.

Both Plans at issue in this case state that "[a] participant, his or her beneficiaries, or any individual duly authorized by the Participant has the right to file a written claim for benefits with the Insurance Company or the Plan Administrator, as the case may be." (Hackelberg Affidavit, Ex. 1 at 10-11, Ex. 2 at 10-11 [emphasis added]). Here, the Estate states that "Dorris Richardson made the claim that was made for life insurance and death benefits verbally over the phone on behalf of the estate of Chanda Johnson in February of 2001." (Exhibit A-4 at 2). In other words, it is undisputed that no written claim was made, as is required by the language of the Plans.5 "Although ERISA contains no explicit exhaustion requirement, we have held that `exhaustion of administrative (i.e., company or plan-provided) remedies is an implicit prerequisite to seeking judicial relief.'" Whitehead v. Oklahoma Gas & Elec. Co., 187 F.3d 1184, 1190 (10th Cir. 1999) (quoting Held v. Manufacturers Hanover Leasing Corp., 912 F.2d 1197, 1206 (10th Cir.1990)). In this case, because the Estate did not exhaust its administrative remedies by not submitting a written claim for benefits, as required by the Plan language, it cannot recover. See Medina v. Anthem Life Ins. Co., 983 F.2d 29, 33 (5th Cir. 1993) (finding a failure to exhaust when no claim was made), cert. denied, 510 U.S. 816 (1993). B. Even When Analyzed Under Colorado Law, the Estate's Claims Must Be Dismissed.

Similarly, should the Court treat this case as arising under Colorado law, it is clear that standard contract principles require dismissal for the same reasons as discussed above, i.e. that the language of the Plans make it clear that for coverage to apply Johnson had to be an Avaya
In its discovery responses, the Estate also refers to a "survivor benefit," which was denied by Avaya. (Ex. A-6 at 2). However, this benefit has nothing to do with life insurance and death benefits. (See Exhibit A-5, Affidavit of James Kobar, at ¶ 3).
5

13

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 14 of 15

employee at the time of her death. In a case directly on point, and involving similar facts, the Colorado Supreme Court looked at the plain language of the plan at issue and determined that coverage simply did not exist. Massachusetts Mutual Life Ins. Co. v. De Salvo, 482 P.2d 380, 382 (Colo. 1971) (holding that the widow of an employee transferred to a non-bargaining position two days before his death was not entitled to life insurance benefits for non-bargaining employees because the employee was still covered under the plan for bargaining employees at the time of his death). Therefore, there is no theory under which the Estate can recover life insurance proceeds from Defendant. Therefore, its claims must be dismissed. CONCLUSION For the foregoing reasons, Defendant respectfully requests that its Motion for Summary Judgment be granted, that the Court enter judgment in Defendant's favor, that the Court dismiss Plaintiff's claims with prejudice, that Defendant be awarded its reasonable attorney fees and costs, and that the Court provide any other relief it deems just and appropriate. Respectfully submitted this 11th day of July, 2005. /s Patrick J. Miller Patrick J. Miller SHERMAN & HOWARD, L.L.C. DC BOX 12 633 Seventeenth Street, Suite 3000 Denver, CO 80202 Tel: (303) 297-2900 Fax: (303) 298-0940 Attorneys for Defendant Avaya Inc.

14

Case 1:04-cv-01825-ZLW-BNB

Document 51

Filed 07/11/2005

Page 15 of 15

CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on July 11, 2005 I electronically filed the foregoing BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: [email protected] Larry Carroll, Esq. Carroll & Associates, P.C. 1900 Grant Street, Suite #650 Denver, Colorado 80203

s/ Cheryl D. Witt

15