Free Brief in Opposition to Motion - District Court of Colorado - Colorado

Case 1:04-cv-01124-JLK-MEH

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 04-CV-1124-JLK-OES LINDA FORGACS, MONICA JONES, DANIEL LINK, GRACE MORENO and PAM ROGGE, Plaintiffs, vs. EYE CARE CENTER OF NORTHERN COLORADO; WILLIAM L. BENEDICT, M.D.; JOEL S. MEYERS, M.D.; MORRIS TILDEN, M.D.; IRENE OLIJYNK, M.D.; and JAY R. HOLMS, Defendants. ________________________________________________________________________ PLAINTIFF'S RESPONSE TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AS TO THE ERISA PENALTY CLAIM ________________________________________________________________________

COME NOW the Plaintiffs, by and through their counsel, George C. Price, and hereby respond to Defendant's Motion for Summary Judgment as to the ERISA Penalty Claim. STANDARD OF REVIEW Summary judgment is appropriate if the pleadings and other documents submitted before the Court "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." Hennigh v. City of Shawnee, 155 F.3d 1249, 1253 (10th Cir. 1998) (quoting Fed. R. Civ. P. 56). When considering a motion for summary judgment, the Court views the evidence in the light most favorable

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to the nonmoving party. Baptiste v. J.C. Penney CO., 147 F.3rd 1252, 1255 (10th Cir. 1998). A fact is material if it might affect the outcome of the suit under the governing law, and a genuine issue exists if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Occusafe Inc., v. E G & G Rocky Flats, Inc., 54 F.3d 618, 621 (10th Cir. 1995). Courts may refuse to grant summary judgment because it is felt that a fuller record is necessary in order to be able to decide the issues. Askew v. Hargrove, 401 U.S. 476, 91 S. Ct. 856 (1971).

RESPONSE TO STATEMENT OF UNDISUPUTED FACTS Pursuant to this Courts Memorandum related to pretrial and trial procedures, Plaintiffs provide this response to Defendant's Statement of Undisputed Material Facts. Defendants have failed to separately number and paragraph what they consider the undisputed material facts. Plaintiffs will endeavor to indicate those facts with which they have disputes and to which they agree. 1. Plaintiff's dispute certain of the facts alleged in the paragraph that begins

"At PP 7-11 of The Complaint." Plaintiff Linda Forgacs was employed as the Practice Administrator until March 7, 2003, as the Complaint alleges. On March 7, 2003, however, she was placed on a three-month leave of absence to and including June 7, 2003 (See Exhibit 1). Her effective employment termination date is June 7, 2003. The same holds true for the other Plaintiffs. While the last day on the premises for Jones, Moreno and Link was April 24, 2003, the evidence shows that they received paychecks through August 18, 2003 and the company determined that the "qualifying event" took place on May 31, 2003 as that was the date used for medical insurance COBRA notification.

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2.

Plaintiff's dispute the statement in the final paragraph that March 22, 2004

was one year and fifteen days from Linda Forgacs last day of employment (see above).

STATEMENT OF ADDITIONAL DISPUTED AND/OR UNDISPUTED FACTS 1. Plaintiff Linda Forgacs was removed from her position as Practice

Administrator on March 7, 2003. She remained employed by Defendant Eye Car Center until June 7, 2003 under an agreement that provided her with a leave of absence with continued pay and benefits (Affidavit of Linda Forgacs, paragraphs 2-4, Exhbit 1; attachment to Forgacs affidavit). 2. The employment of Plaintiff's Moreno, Link and Jones did not terminate

until after the last day that they were actually on the premises. (Exhibits 2, 3). 3. Plaintiff's Moreno, Link and Jones continued to receive paychecks until

May 18, 2003 (Exhibit 2). 4. Plaintiff's Moreno, Link and Jones had continuing medical insurance

coverage until May 31, 2003. 5. Defendant company determined that the "qualifying event" that triggered

the COBRA notice requirement occurred on May 31, 2003. (Exhibit, pages 1-2). 6. The letter sent to the Plaintiff's Moreno, Link and Jones (Exhibit 2, the

letter sent to Moreno) that notifies them of reductions in staffing sets forth no date for the elimination of their position to take effect. 7. The same letter indicates that normal deductions would be taken from the

next two paychecks. Those scheduled for May 2, 2003 and May 18, 2003. (Exhibit 2, final paragraph).

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ARGUMENT Defendants have filed this motion in which they assert that a one-year statute of limitations applies to Plaintiff's claims of statutory penalty for Defendant's failure to provide COBRA notice and benefits. The motion should be denied for a variety of reasons. First, it is clear from the documents (Exhibit 1) that Linda Forgacs, despite the fact that her position of Practice Administrator ended on March 7, 2003, her employment continued with the company as she was placed on a three-month leave of absence with continued pay through June 7, 2003. Even assuming the one-year statute of limitations argued by Defendants is correct for the penalty claim made by Plaintiffs, Forgacs filed within one year and fifteen days of her termination (the qualifying event). Second, Plaintiffs, despite attempts, have not been able to obtain a complete copy of the 125-Plan, a document that may contain information relevant to the subject of this Motion for Summary Judgment. It is requested that any decision on this motion be stayed until Plaintiff's can obtain a complete copy of the plan through discovery. Third, there are a number of disputed or undisputed facts that relate to when employment was terminated for Plaintiffs Jones, Moreno and Link. The letters of position elimination received by the above employees do not specify the last day of employment. While it appears that they were not required to appear for work after April 24, 2003, there is evidence that the employment relationship continued in an altered form. First, health insurance coverage continued through the end of May 2003.

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The Colorado Wage Act, Section 8-4-109, C.R.S. requires that when an employer terminates an employee, pay is due immediately. The last paycheck provided to these employees was May 18, 2003. If employment ended on that day, the Complaint in this case was timely under the Statute of Limitations arguments made by the Defendants. The last day to file the Complaint would have been June 2, 2004. Health insurance benefits remained in effect for these employees until May 31, 2003. Defendant company's administrator confirmed in a letter dated June 11, 2003, that he deemed the date of the "qualifying event" as being May 31, 2003. "When an employee or dependent has experienced a `qualifying event', they will be sent notifications of these rights to elect COBRA continuation coverage. Employees shall provide this notification within fourteen (14) days from the date group coverage would be terminated (or as soon as administratively possible) . . ." (Exhibit 2, page 1). It is clear that the practice administrator determined that the "qualifying event", in this case termination, took place on May 31, 2003. Based upon the Defendant's determination that the "qualifying event" took place on May 31, 2003, the Complaint is timely for all Plaintiffs. Fourth, contrary to the Defendants' position that the `Anderson v. Royal Crest Dairy case, 281 F. Supp 1242 (D. Colo. 2003), shortened the forty-four day period to fourteen when the employer was also the plan administrator, it is submitted that no determination was reached in that case as to which period applied. It is urged that this Court's Findings of Fact and Conclusions of Law ­ Cobra Claims issued as September 8, 2003 in Anderson indicates that the Court did not reach a conclusion on the issue. Finally, it is submitted that even if the one-year statute of limitations (Section 1280-103 C.R.S.) applies in this case, that it is appropriate to apply a continuing violation

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approach to the penalty issue. The Court stated in Damon v. Unisys Corporation, 841 F. Supp. 1094 at 1097 (D. Colo. 1994), quoting Sage v. Automation, Inc. Pension Plan and Trust, 845 F. 2d 885 (10th Cir. 1988) that "[t]he penalty contained in 1132(c) was designed to induce compliance with information requests by plan participants and beneficiaries." It is urged that a new cause of action accrues each day that the COBRA information is not provided. Otherwise, as in this case, there would no longer be any inducement to provide the COBRA information as the Defendant has continually failed to do. For the above reasons, Defendants motion for Summary Judgment should be denied.

s/ George C. Price____________________ George C. Price 900 Logan Street Denver, CO 80203 Telephone: (303) 861-5500 Facsimile: (303) 484-2421 [email protected]

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CERTIFICATE OF SERVICE I certify that on July 18, 2005, I sent a true and correct copy of Plaintiff's Response to Defendants' Motion for Summary Judgment, by facsimile to:

John R. Paddock, Esq. Pryor, Johnson, Carney, Montoya and Karr 5619 DTC Parkway, Suite 1200 Greenwood Village, CO 80111 (303) 779-0740

s/ George C. Price__________

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