In reviewing a Rule 12(b)(6) motion to dismiss for failure to state a claim, the
court is limited to the allegations contained in the pleadings themselves. Documents
incorporated by reference into the pleadings and documents attached to the pleadings
as exhibits are considered part of the pleadings for all purposes. Fed.R. Civ.P. 10(c).
IN addition, “documents that a defendant attaches to a motion to dismiss are considered
a part of the pleadings if they are referred to in the plaintiff's complaint and are central

to her claim.” Venture Assoc. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th

Cir. 1993). With these principles in mind, the court turns to the instant motion.

DISCUSSION

Defendants raise two primary arguments in support of their motions to dismiss
DeBartolo’s complaint. First, Defendants argue that DeBartolo’s state law claims based
on estoppel and misrepresentation are preempted by ERISA. Second, they argue that his
complaint does not state a claim under 29 U.S.C. § 1132(a)(1)(B). The court addresses
each argument in turn.

Both the Wal-Mart Defendants and the Walgreens Defendants argue that
DeBartolo’s state law claims are preempted because they are based on the alleged
assignments of benefits he obtained from Gregg and Carlson and thus directly relate to
each patients’ Plan. The court agrees. In the Counts involving DeBartolo’s state law
claims, DeBartolo incorporates his allegations that both his patients assigned to him their
rights and benefits under their respective Plans. He also seeks to recover the payments

that are due under the Plans. Additionally, in support of his estoppel claims, he alleges

-4-


conclusion by interpreting this court’s prior decision on this matter as applying only to
29 U.S.C. § 1132(c)(1) because we addressed the issue in the context of assessing the
sufficiency of his former claim under that provision. Our determination that DeBartolo
lacks standing to sue under ERISA’s information disclosure provision applies equally
to the ERISA section DeBartolo currently asserts, 29 U.S.C. § 1132(a)(1)(B), and we
refer DeBartolo to our prior opinion and the cases cited therein. Nothing DeBartolo
alleges in his First Amended Complaint or argues in opposition to Wal-Mart’s motion
to dismiss changes this court’s conclusion that DeBartolo does not have standing to sue
under ERISA as Gregg’s assignee. Accordingly, DeBartolo’s claim for recovery of
benefits under the Wal-Mart Plan is dismissed with prejudice.

With regard to the Walgreens Plan, just as was the case in the court’s prior
opinion, there is no evidence of any anti-assignment language. Accordingly, we assume
for present purposes that DeBartolo has standing to sue as Carlson’s assignee, and we
assess whether DeBartolo has stated a claim to recover benefits under section
502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). We find that he has. DeBartolo alleges that
the Walgreens Defendants did not provide certain benefits that Carlson was entitled to
under the Walgreens Plan and that he, in turn, is now entitled to because of the alleged
assignment he obtained from Carlson. The Walgreens Defendants argue that his
allegations are insufficient in a number of ways, including that he does not have a valid

assignment and that the Walgreens Plan already made the disputed payments to Carlson.”

? In arguing that the disputed payments were already made to Carlson, the
Walgreens Defendants rely on allegations DeBartolo made in his original complaint
but are absent from his First Amended Complaint. An amended complaint supersedes

(continued...)

-7-


misrepresentation against the Wal-Mart Defendants. He brings the same state law
claims against the Walgreens Defendants in Counts V and VI!
LEGAL STANDARD
The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the

sufficiency of the complaint, not to decide the merits of the case. Triad Assoc., Inc. v.

Chicago Housing Auth., 892 F.2d 583, 586 (7th Cir. 1989). In ruling on a motion to
dismiss, the court must first construe the complaint’s allegations in the light most
favorable to the plaintiff and all well-pleaded facts and allegations in the plaintiff's

complaint must be taken as true. Bontkowski v. First Nat’] Bank of Cicero, 998 F.2d

459, 461 (7th Cir. 1993). The allegations of a complaint should not be dismissed for
failure to state a claim “unless it appears beyond a doubt that the plaintiff can prove no
set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson,

355 US. 41, 45-46 (1957); see also Hartford Fire Ins. Co. v. California, 509 U.S. 764

(1993); Sherwin Manor Nursing Ctr., Inc. v. McAuliffe, 37 F.3d 1216, 1219 (7th Cir.
1994). Nonetheless, in order to withstand a motion to dismiss, a complaint must allege
facts sufficiently setting forth the essential elements of the cause of action. Lucien v.

Preiner, 967 F.2d 1166, 1168 (7th Cir. 1992).

' Apparently due to a typographical error, Count VI of the First Amended
Complaint is mislabeled as Count III.

-3-


that the Defendants are estopped from refusing to comply with the alleged assignments.
Thus, DeBartolo’s state law claims are based on his alleged position as Gregg’s and
Carlson’s assignee.

As their assignee, DeBartolo steps into the shoes of Gregg and Carlson and may
enforce their rights under their respective Plans. When brought to recover benefits under
a welfare plan, a participant’s or beneficiary’s ~ or their assignee’s — state law claims

of estoppel and misrepresentation are preempted by ERISA. Russo v. Health, Welfare

& Pension Fund, Local 705, Int’l Bhd. of Teamsters, 984 F.2d 762 (7th Cir. 1993);

Cromwell v. Equicor-Equitable HCA Corp., 944 F.2d 1272 (6th Cir. 1991); Hermann
Hosp. v. MEBA Med. & Benefits Plan, 834 F.2d 1286 (Sth Cir. 1988); Misic v. Bldg.
Service Employees Health and Welfare Trust, 789 F.2d 1374, 1378079 (9th Cir. 1986);

Brentwood Nursing & Rehabilitation Center, Inc, v. Cornelia James, 1989 U.S. Dist.
LEXIS 10161, at *1 (N.D. Ill. Aug. 17, 1989); Integrated Health v. Commonwealth

Edison, 1999 WL 1256255 (N_D. Ill. Dec. 20, 1999); Simon v. Allstate Employee Grp.

Med. Plan, 2000 U.S. Dist. LEXIS 10414, at *1 (N.D. Ill. July 17, 2000); Response
Oncology, Inc. v. The Metrahealth Ins. Co., 978 F. Supp. 1052 (S.D. FL. July 29, 1997).
Accordingly, DeBartolo’s state law claims are preempted by ERISA.

The cases DeBartolo cites in which courts found that state law claims brought by
third party providers were not preempted by ERISA are not persuasive. In those cases,
the plaintiffs were not suing as assignees enforcing an assignor’s rights under a Plan.
Rather, the providers were suing independently; the providers’ lawsuits were based on

separate legal obligations that had arisen between the providers and the defendants. See

-5-


These arguments, however, involve matters of proof and go beyond the purposes of this
motion. For the purposes of this motion and looking at all the facts in a light most
favorable to DeBartolo, we find that he has sufficiently alleged a claim for recovery of
benefits under ERISA with respect to the Walgreens Plan. Whether he can ultimately
establish his claim is a question for a later stage in this litigation.

Finally, the Walgreens Defendants argue that Walgreens Company should be
dismissed from the case because DeBartolo may only recover benefits from the Plan. It
well-settled that “‘ERISA permits suits to recover benefits only against the Plan as an

entity.” Neuma, Inc. v. AMP, Inc., 259 F.3d 864, 872 n. 2 (7th Cir. 2001) (quoting Jass

v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1490 (7th Cir. 1996)); see 29 U.S.C.

§ 1132(d)(2); Garratt v. Knowles, 245 F.3d 941, 949 (7th Cir. 2001). Accordingly, the
Walgreens Company is dismissed from this case.
CONCLUSION

For the foregoing reasons, Counts I, IL, II, V, and VI, of DeBartolo’s First

Charles P. Kocoras
United States District Judge

Amended Complaint are dismissed.

MAR ~ i;

Dated:

2(.,.continued)
an original complaint and the allegations in a plaintiff's original complaint cannot be
used to dismiss the plaintiff's amended complaint. Kelley v. Crosfield Catalysts, 135
F.3d 1202, 1204 (7th Cir. 1998); Prymer v. Ogden, 29 F.3d 1208, 1215 n. 6 (7th Cir.
1994); Schmidt _v. Nissan Motor Acceptance Corp., 104 F. Supp.2d 955 (N.D. II.
2000); Smith v. Campagna, 1996 WL 364770, at *2 (N.D. Ill. June 26, 1996); Turner-
El v. Illinois Bd. of Educ., 1996 WL 480341 (N.D. HI. Aug. 21, 1996).

-8-


Minute Order Form (06/97)

United States District Court, Northern District of Illinois

Nameotasigneasuise | Charles P. Kocoras _ | itis Jue Other

CASE NUMBER 01 C5940 DATE 3/1/2002
CASE DeBartolo vs. Wal-Mart Stores, Inc. et al
TITLE

of the motion being presented.]

[In the following box (a) indicate the party filing the motion, ¢.g,, plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

are dismissed.

ql)

(For further detail see order attached to the original minute order.]

(Doc 18-1) to dismiss is granted in its entirety. The Walgreens Defendants’ motion (Doc 22-
is granted in part and denied in part. Counts I, I, III, V and VI of DeBartolo’s First Amended Complaint

MOTION:

DOCKET ENTRY:

(1) a Filed motion of [ use listing in “Motion” box above.]

(2) a Brief in support of motion duc

(3) a Answet brief to motion due. . Reply to answer brief due___

(4) a Ruling/Hearing on ____set for at.

(5) a Status hearing set for 3/26/2002 at 9:45 A.M..

(6) a Pretrial conference{held/continued to] [set for/re-set for] on set for at_

(7) Oo Trial{set for/re-set for] on at

(8) o [Bench/Jury trial} [Hearing] held/continued to____at

(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) OGeneral Rule2]1 OFRCP41(a)(1) OO FRCP41(a)(2).

(10) Ml [Other docket entry) ENTER MEMORANDUM OPINION: The Wal-Mart Defendants’ motion

1) to dismiss

No notices required, advised in open court.

Yo notics red,
No notices required. umber of notices

Document
Number

Notices mailed by judge's staff.

Notified counsel by telephone.

v Docketing to mail notices.
. . q
Mail AO 450 form. pens sn celng dophty initials
Copy to jygge/magistrate judge.
mn
scT deputy’s
initials

Date/time received in
central Clerk’s Office

mailing deputy initials



e.g., In Home Health, Inc., v. The Prudential Ins. Co., 101 F.3d 600, 604 (8th Cir. 1996).

DeBartolo’s state law claims are based on the alleged assignments he received from
Gregg and Carlson. As such, his state law claims of estoppel and misrepresentation fall
squarely within ERISA’s broad preemptive scope and must be dismissed.
Additionally, with regard to his estoppel claim, DeBartolo cannot be said to have
alleged an estoppel claim under the federal common law that has developed around
ERISA. He has not asserted as much, and his allegations do not sufficiently plead such

aclaim in any event. In Coker v. Trans World Airlines, Inc., 165 F.3d 579, 585 (7th Cir.

1999), the Seventh Circuit clarified that a federal common law claim of estoppel brought
in the ERISA context has four elements: (1) a knowing misrepresentation; (2) made in
writing; (3) with reasonable reliance on that misrepresentation by the plaintiff; (4) to her
detriment. DeBartolo fails to allege the second element. We also note that, although the
Seventh Circuit has applied estoppel in ERISA cases involving single-employer

unfunded welfare plans, see e.g., Black v. TIC Investment Corp., 900 F.2d 112 (7th Cir.

1990), it has “expressed reservations about employing estoppel in other contexts.”

Gallegos v. Mt. Sinai Med. Ctr., 210 F.3d 803, 809 (7th Cir. 2000).

Having concluded that DeBartolo’s state law claims are preempted by ERISA, the
court now turns to Defendants’ argument that DeBartolo fails to make out a claim for
recovery of benefits under section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). With
respect to the Wal-Mart Defendants, this court has already determined that DeBartolo
cannot assert a claim under ERISA as Gregg’s assignee because the Wal-Mart Plan

contained an anti-assignment provision. DeBartolo attempts to circumvent our

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

MAR O 4 2002

DR. HANSEL M. DeBARTOLO,
Plaintiff,

vs. 01 C 5940
WALMART STORES, INC., a Delaware,
corporation, WALMART, INC., ASSOCIATES
HEALTH AND WELFARE PLAN,
ADMINISTRATIVE COMMITTEE OF THE
WALMART ASSOCIATES HEALTH AND
WELFARE PLAN, WALGREENS CO., an
Illinois coporation, WALGREENS MEDICAL
PLAN, and HEALTH CARE SERVICE
CORPORATION,

eS ES HS HS ES HS HS HS HS SS SS WD

Defendants.

MEMORANDUM OPINION

This matter is before the court on the motions to dismiss pursuant to Rule
12(b)(6) of Defendants Wal-Mart Stores, Inc., Wal-Mart Stores, Inc. Associates’ Health
and Welfare Plan, Administrative Committee of the Wal-Mart Stores, Inc. Associates’
Health and Welfare Plan (collectively the “Wal-Mart Defendants”), Walgreens Co.,
Walgreens Medical Plan (collectively the “Walgreens Defendants”) and Health Care
Service Corporation (“Health Care Service”). For the reasons set forth below, the Wal-
Mart Defendants’ motion is granted in its entirety, and the Walgreens Defendants’

motion is granted in part and denied in part.


BACKGROUND

Plaintiff Dr. Hansel M. DeBartolo (“DeBartolo”) had filed an originalcomplaint
in this case on August 3, 2001. The Defendants subsequently moved to dismiss
DeBartolo’s original complaint as legally insufficient and this court granted their
motions but granted DeBartolo leave to amend.

DeBartolo filed a First Amended Complaint on December 1, 2001. As with his
original complaint, DeBartolo’s First Amended Complaint is based on allegations that
the Defendants did not pay him for services he provided to two patients — Erica Gregg
(“Gregg”) and Kimberly Carlson (“Carlson”) — despite the fact that those patients
assigned to him their rights under their respective employee benefit plans. Gregg was
a participant of the Wal-Mart Plan and Carlson was a participant of the Walgreens Plan.
DeBartolo now adds in his First Amended Complaint allegations that with regard to
both Gregg and Carlson, he contacted Health Care Service for the purpose of verifying
coverage and Health Care Service verified coverage as to both. Health Care Service is
the ERISA designated plan administrator for both the Wal-Mart Plan and the Walgreens
Plan. He further alleges that the Wal-Mart Defendants paid him directly for services
he provided to Gregg for two years but stopped doing so in December 1997.

DeBartolo now sues the Wal-Mart Defendants, in Count I, and the Walgreens
Defendants, in Count IV, for recovery of benefits under section 502(a)(1)(B) of the
Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C.

§ 1132(a)(1)(B). In Counts I and III, DeBartolo brings state law claims of estoppel and