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TRUESDALE v. PACIFIC HOLDING COMPANY/HAY ADAMS DIV

November 25, 1991

LAURIE TRUESDALE, Plaintiff
v.
PACIFIC HOLDING COMPANY/HAY ADAMS DIVISION, et al. Defendants


GREEN


The opinion of the court was delivered by: JUNE L. GREEN

This case involves the plaintiff's claim that her employer and a third-party service provider failed to provide her with notice of her right to continuing health care coverage after she was fired from employment at the employer's hotel. The plaintiff alleges that both defendants violated the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") *fn1" and their respective fiduciary duties under the Early Retirement Insurance Security Act of 1974 ("ERISA") *fn2" in failing to notify her of her right to continuing coverage.

 Each defendant has moved separately for summary judgment. The plaintiff has filed an opposition, in which she raises, for the first time, the issue of the defendants' failure to provide her with notice at the commencement of her coverage under her employer's health benefits plan.

 I. BACKGROUND

 The plaintiff is a former employee of the Hay Adams Hotel in the District of Columbia. She was employed as a security guard by the defendant, Pacific Holding Company/Hay Adams Division (hereinafter "Hay Adams"), at the Hay Adams from July 26, 1988 until January 15, 1990, when her position was terminated.

 Pacific Holding Company sponsored a group health plan (hereinafter "Hay Adams Plan") for employees of the Hay Adams Hotel from July 1, 1986 to December 31, 1989. According to the terms of the plan, defendant Hay Adams served as the administrator of the plan. It is uncontroverted that the plaintiff was covered by the Hay Adams Plan during the period she was employed by the Hay Adams Hotel.

 The defendant Penn General Insurance Services, Inc. (hereinafter "Penn General"), a California-based third-party service provider, contracted with defendant Pacific Holding from July 1986 to December 31, 1989 to provide certain administrative services for the Hay Adams Plan covering non-union employees of the Hay Adams Hotel.

 It is uncontroverted that on the day that the Hay Adams Hotel hired the plaintiff, they provided her with a copy of a notification form which explained her right to continuing health care coverage under COBRA. The plaintiff signed the notice indicating she had read and understood its contents. *fn3"

 The defendants contend that on the day Hay Adams terminated Ms. Truesdale, the Hotel's personnel director, Ms. Tanya Wood, met with the plaintiff and informed her of her rights under COBRA to continue her health care coverage at a cost of $ 127.79 per month. Defendants allege that plaintiff refused the continued coverage, stating she could not afford the premium. The plaintiff denies that this conversation took place.

 Defendants further contend that on January 23, 1990, Ms. Wood mailed a COBRA notification form and an election form to the plaintiff's last known address, in accordance with normal office procedures. Defendants provide the affidavit of Ms. Wood, who states that on January 23rd, she enclosed the notice and election form in an envelope upon which she had typed the plaintiff's last known address; then, mailed the package in a routine manner. According to Ms. Wood, the address, 4401 Clermont Drive, Washington D.C. 20011, was provided by the plaintiff in her employment application. Ms. Wood states that this is the only address Ms. Truesdale ever provided to the Hay Adams Hotel during her employment there. Ms. Wood also states that she retained a copy of the COBRA notice for the plaintiff's personnel files, noting on the copy the date that the notice was mailed.

 In addition, Ms. Wood states in her affidavit that when Ms. Truesdale failed to respond to the January 23rd notice, she mailed a follow-up letter reminding plaintiff of her right to coverage and of the sixty-day election period. She attests that she also included another COBRA notice and election form. This letter, she attests, also was mailed to plaintiff's last known address in a manner consistent with office procedure.

 The plaintiff, in her statement of material facts, asserts that she never received either notice letter. She argues that the notices, if mailed, were addressed incorrectly in that they failed to include the city quadrant designation of Northeast, and her apartment number. She also suggests that the notices were never mailed, asserting that she has received other correspondence from the Hay Adams addressed in the same manner as the alleged notices. Finally, the plaintiff questions Ms. Wood's veracity. She alleges that Ms. Wood was terminated from prior employment for her failure to authorize payment of health care insurance benefits for hundreds of employees.

 In its reply, defendant Hay Adams provides an additional affidavit of Ms. Wood. In the second affidavit, Ms. Wood states that the plaintiff's allegation regarding Ms. Wood's former employment are untrue.

 In her opposition to defendants' summary judgment motions, plaintiff Truesdale also argues, for the first time, that defendants failed to provide her with notice of commencement of health care coverage (hereinafter "commencement notice") when Penn General superseded the Pacific Holding Group Health Plan and again when George Washington University Health Plan ("GWUHP") replaced the Pacific Holding/Penn General group health plan. At oral argument on the motions, plaintiff's counsel informed the Court that counsel intended to file a motion to amend the complaint to include this cause of action.

 In addressing the defendants' motions, the Court first considers the issue of COBRA notice to the plaintiff upon termination of her employment at the Hay Adams. Then, the Court considers the commencement notice issue raised by the plaintiff in her opposition.

 II. DISCUSSION

 Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment should be granted where there exists "no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." The burden is on the moving party to demonstrate to the court, by way of pleadings, depositions, answers to interrogatories, admissions on file or affidavits, that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Once that showing is made, the non-moving party must respond with specific facts showing a genuine issue for trial. Id. at 324. The non-moving party cannot rely merely on the pleadings. Id. And "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment". Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-248, 91 L. Ed. 2d 202, ...


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