Sawyer v. USAA Insurance (912 F. Supp. 2d 1118, 2012)

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on Defendant Blue Cross and Blue Shield of Kansas City’s Motion to Dismiss Plaintiffs First Amended Complaint with Prejudice, filed April ' 19, 2012 (Doc. 56)(“MTD”). The Court held a hearing on May 31, 2012. The primary issues are: (i) whether the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 to 1461 (2012)(“ERISA”) preempts some or all of Plaintiff Constance A. Sawyer’s state-law claims; and (ii) whether Plaintiff Constance Sawyer’s federal cause of action under ERISA has accrued because she has exhausted her administrative remedies. Sawyer filed an affidavit outside of the pleadings on' this matter, and the Court has thus converted the motion to dismiss into a motion for summary judgment. No genuine issue of material fact exists whether ERISA preempts Sawyer’s state-law claims. ERISA completely preempts Sawyer’s state-law claims and thus they may be converted into federal causes of action; and the Court will thus not dismiss, her state-law claims on that basis. On the other hand, no genuine issue of material fact exists whether Sawyer exhausted the administrative remedies required under her benefits plan: Sawyer has not alleged that she has exhausted the administrative procedures that her benefits plan requires. Further, she -does hot dispute Defendant Blue Cross and Blue Shield of Kansas City’s allegation that she has not filed a written request for review of the denial of her coverage, as her benefits plan requires. Because Sawyer has not exhausted 'her administrative remedies, nor shown that she has met an exception to the exhaustion requirement, the Court will dismiss without prejudice her claim for relief that is framed under ERISA and her state-law ■ claims that ERISA completely preempts. Sawyer must exhaust her administrative remedies before bringing a civil suit to recover her benefits under her healthcare plan from Blue Cross and Blue Shield of Kansas City.

FACTUAL BACKGROUND

Defendant Nueterra Healthcare, LLC, employs Sawyer from April 9, 2007, through May 27, 2007. See First Amended Complaint and Jury Demand ¶ 8, at 2, filed Mar. 30, 2012 (Doc. 51)(“FAC”)(set-ting forth fact); Reply of Defendant Blue Cross and Blue Shield of Kansas City in Support of its Motion to Dismiss Plaintiffs First Amended Complaint with Prejudice ¶ 1, at 1, filed Sept. 26, 2012 (Doc. 81)(“Re-ply”)(not contesting fact). Sawyer had a health insurance policy through Nueterra Healthcare. See FAC ¶¶ 4, 8, at 2 (setting forth fact); Sawyer Aff. ¶ 2, at 1 (setting forth fact); Reply ¶ 1 at 1 (not contesting fact). Nueterra Healthcare gave Sawyer a copy of a policy document (“Policy”) from Defendant Blue Cross and Blue Shield of Kansas City (“B.CBSKC”), before June 7, 2007. See First Requests for Admissions to Plaintiff from Defendant Blue Cross Blue Shield of Kansas City, ¶ 1, at 2, filed Sept. 26, 2012 (Doc. 81-l)(“Requests for Admissions”)(setting forth fact). Sawyer’s health care policy was subject to the provisions of ERISA. See FAC ¶ 8, at 2 (setting forth fact); Reply ¶ 3, at 2 (not contesting fact).

On or about May 31, 2007, Sawyer’s employment with Nueterra Healthcare ended. See FAC ¶ 9, at 2 (setting forth fact); Reply ¶ 4, at 2 (not contesting fact). Sawyer elected to continue her coverage pursuant to the terms of the Consolidated Omnibus Budget Reconciliation Act, 29 U.S.C. § 1161 (2012)(“COBRA”). See FAC ¶ 9, at 3. Sawyer paid the premiums to continue her coverage to the COBRA administrator, CobraGuard. See FAC ¶ 9, at 3 (setting forth fact); Sawyer Aff. ¶ 2, at 1 (setting forth fact); Reply ¶ 4, at 2 (not contesting fact). BCBSKC did not receive notification from CobraGuard that Sawyer elected to continue her coverage. See FAC ¶ 45, at 7 (setting forth fact); Reply ¶ 4, at 2 (not contesting fact).

On June 7, 2007, Sawyer was involved in an automobile accident, and she suffered severe and significant injuries. See FAC ¶ 11, at 3 (setting forth fact); Reply ¶¶ 1-12, at 1-4 (not contesting fact). Sawyer was a passenger in a car that was driven negligently by Joel Widener, who was under the influence of alcohol, and his driving caused the vehicle to roll. See FAC ¶ 11, at 3 (setting forth fact); Reply ¶¶ 1-12, at 1-4 (not contesting fact). Sawyer received a full settlement from Widener at the maximum liability amount possible, but the amount she recovered was not enough to cover her medical bills. See FAC ¶ 12, at 3 (setting forth fact); Reply ¶¶ 1-12, at 1-4 (not contesting fact). Sawyer had, as of the filing of her FAC, outstanding medical bills. See FAC ¶ 12, at 3 (setting forth fact); Reply ¶¶ 1-12, at 1-4 (not contesting fact).

The Defendants in this action — United Services Automobile Association (“USAA”), BCBSKC, Nueterra Healthcare, and Cobraguard — have refused to make payments required by their policies with the Defendants. See FAC ¶ 13, at 3 (setting forth fact); Reply ¶ 5, at 2 (not contesting fact). Sawyer telephone BCBSKC once between June 7 and- 30, 2007, and she inquired why BCBSKC was not covering her' medical bills. See Requests for Admission ¶ 6, at 3 (setting forth fact). Sawyer was informed that BCBSKC could not find her policy number, but that BCBSKC would call her back after this issue had been' resolved. See Sawyer Aff. ¶ 4, at 1 (setting forth fact); Reply ¶ 5, at 2 (not contesting fact). Sawyer was informed by a representativé that BCBSKC had terminated her coverage on June 1, 2007. See Requests for Admissions ¶ 4, at 2 (setting forth fact). Sawyer never received- a follow-up telephone call from BCBSKC, or any other correspondence, except for medical bills. See Sawyer Aff. ¶¶ 4-7, at 1-2 (setting forth fact); Reply ¶ 5, at 2 (not contesting fact). Sawyer would have received better after-care for her injuries from her accident if her insurance had not been in question at the time. See Sawyer Aff. ¶¶ 9-12, at 2 (setting forth fact); Reply ¶¶ 1-12, at 1-4 (not contesting fact).

The Policy that Sawyer possesses from BCBSKC states that “[f]or Employee Welfare Benefit Plans subject to [ERISA] You must file a first level Grievance before You bring a civil action under ERISA Section 502(a).” BCBSKC’s group health plan information ¶ 3, at 4, filed April 19, 2012 (Doc. 56-l)(“the Policy”); Sawyer Aff. ¶¶ 1-21, at 1-3 (not contesting fact). The Policy also states, in Section L, that a member has a right to bring a civil action under ERISA Section 502(a) to recover benefits under the Policy, “provided You have exhausted Your first level Grievance rights.” Policy ¶ 3, at 4 (setting forth fact); Sawyer Aff. ¶¶ 1-21, at 1-3 (not contesting fact). A first level Grievance is initiated when a member submits a Member Grievance form within 365 days of receiving an Explanation of Benefits from BCBSKC. See Policy ¶ 4, at 4-5 (setting forth fact); Sawyer Aff. ¶¶ 1-21, at 1-3 (not contesting .fact).. A Grievance is defined in Section L, paragraph 1 of the Policy, as “[a] written complaint submitted by or on- behalf of a Covered Person to Our Appeals Department regarding: ... (b) Post-Service Claims payment, handling or reimbursement for health care services.” Policy ¶ 1, at 3 (setting forth fact). See Sawyer Aff. ¶ 16, at 3 (not contesting fact).

Sawyer did not call or write to BCBSKC to request a review of BCBSKC’s denial of the claims processed on Sawyer’s behalf, in the amounts of $11,603.34, $29,050.92, and $16,162.27 as described in the Explanations of Benefits sent to Sawyer on or about December 10, 2007. See Requests for Admission ¶¶ 7-9, at 3-4 (setting forth fact). The Explanations of Benefits sent to Sawyer contain a section titled, “Notice to Member,” which provides:

If you disagree with our decision you may request a review of the claim. You must send a written request within 180 days of receiving this notice. You should explain why you disagree and you may provide additional information about the claim.... If your group •health plan is subject to ERISA ..., you may file a lawsuit under Section 502(a) of ERISA, if you have used all of the appeal rights required by your plan. Please see your certificate or summary plan description or call the phone number on the EOB for detailed information about the appeal process.

Explanation of Benefits at 8, 10, 12, 14, 16, filed Apr. 19, 2012 (Doc. 56-l)(setting forth fact); Sawyer Aff. ¶¶ 1-21, at 1-3 (not contesting fact and not contesting authenticity of the Explanations of Benefits).

Sawyer exhausted every effort of which she was aware at the time, but she did not exhaust the administrative remedies described in Section L of the Policy. See Sawyer Aff. ¶ 18, at 3 (setting forth that Sawyer exhausted “every effort known to [her] at the time” and not contesting that she did not exhaust the procedures outlined in Section L of the Plan). See also Requests for Admissions ¶ 13, at 5 (setting forth she did not exhaust the procedures outlined in Section L of the Plan). Cobra-Guard did not attempt to initiate a first level Grievance on Sawyer’s behalf. See Requests for Admissions ¶ 14, at 5 (setting forth fact).

PROCEDURAL BACKGROUND

Sawyer lawsuit “arises out of, among other things, a dispute between an insured and an insurer subject tot the provisions of ERISA,” and she thus alleges that this Court has jurisdiction under 28 U.S.C. § 1331 (2012), federal question jurisdiction. FAC ¶¶1, 3, 6, at 1-2. See 28 U.S.C. § 1331. A substantial portion of the events that gave rise to Sawyer’s complaint occurred in the State of New Mexico, and Sawyer thus asserts that the venue of this Court is proper under 28 U.S.C. § 1391(a)(2).

Sawyer alleges that the Defendants have breached their duties as an insurance companies “by failing to’ act in good faith in the performance of the contract in that they have failed to give equal consideration to the interest of its policy holder.” FAC ¶ 14, at 3. Sawyer argues that there is implied in every insurance policy or contract a duty on the part of the Defendants “to deal fairly with the policy holder,” which Sawyer alleges the Defendants have breached through their dealings with her. FAC ¶ 15, at 3. Sawyer alleges that the Defendants’ breach has proximately caused her damages, in an amount to be determined at trial. See FAC ¶ 15, at 3.

Sawyer has made five claims for relief in this case. Her first claim, for breach of contract, is alleged against USAA and BCBSKC. See FAC ¶¶ 16-22, at 4. Sawyer argues that she had a valid and effective contract of insurance with USAA and BCBSKC, and that contract required BCBSKC to cover Sawyer’s medical bills. See FAC ¶¶ 18, 20, at 4. Sawyer asserts that BCBSKC and USAA have refused to pay her medical bills, and are thus in breach of their contracts of insurance with Sawyer. See FAC ¶¶ 20-21, at 4. Sawyer argues that USAA and BCBSKC’s breach has directly and proximately caused her damages that she is entitled to recover. See FAC ¶ 22, at 4.

Sawyer’s second claim for relief is for insurance bad faith and is alleged against all of the Defendants. See FAC ¶¶ 23-31, at 4-5. Sawyer argues that she is insured under policies that USAA and BCBSKC issued, and that she has performed all of the duties and obligations which the terms of the policies required, including paying premiums that BCBSKC, CobraGuard, and Nueterra Healthcare accepted. See FAC ¶¶ 24-27, at 4-5. Sawyer asserts that her loss is compensable under the terms of her insurance policy. See FAC ¶ 28, at 5. Sawyer argues that the Defendants, breached their duty to act in good faith and deal fairly with Sawyer and did so in a manor that manifested willful and reckless disregard for her rights. See FAC ¶ 30, at 5. Sawyer asserts that this breach of good faith has directly and proximately caused her damages, which she is entitled to recover. See FAC ¶ 31, at 5.

Sawyer’s third claim against USAA and BCBSKC is a violation of the New Mexico Unfair Insurance Practices Act, N.M.S.A. 1978, § 59A-16-20 (1984). See FAC ¶¶ 32-35, at 5-6. Sawyer asserts that she had valid insurance policies with both USAA and BCBSKC, and that they violated the Unfair Insurance Practices Act by: (i) “[flailing to acknowledge and act reasonably and promptly” on Sawyer’s communications with BCBSKC and USAA regarding their policies; (ii) “[flailing to adopt and implement reasonable standards for the prompt investigation and processing” of Sawyer’s claims under their policies; (iii) “[flailing to attempt in good faith to effectuate prompt, fair, and equitable settlements” of her claims, for which Sawyer asserts their liability is reasonably •clear; and (iv) “[c]ompelling Sawyer to institute litigation to recover amounts due under the policies.” FAC ¶ 34, at 5. Sawyer asserts that she has directly and proximately suffered damages from these actions, and that she is entitled to recover against the USAA and BCBSKC. See FAC ¶ 35, at 6.

Sawyer’s fourth claim, breach of fiduciary duty, is alleged against BCBSKC, Nueterra Healthcare, and CobraGuard. See FAC ¶ 36-42, at 6-7. Sawyer alleges that these defendants “played [a role] in administering the plan that provided insurance, including making coverage and benefit decisions,” and thus acted as fiduciaries under ERISA. FAC ¶ 37, at 6. Sawyer asserts that ERISA prohibits BCBSKC from “denying] coverage for services unless the applicable health care plan expressly includes an exclusion specifying that such services are not covered benefits.” FAC ¶ 38, at 6. Sawyer asserts that BCBSKC must comply with the terms and conditions of its health care plan under ERISA. See FAC ¶ 39, at 7. Sawyer contends that, under ERISA, BCBSKC, Nueterra Healthcare, and CobraGuard, assume the role of “Plan Administrator,” as defined in ERISA, such that they will “interpret and apply plan terms, make all coverage decisions, and provide for payment to members and/or their providers.” FAC ¶ 40, at 7. Sawyer alleges that these Defendants breached their fiduciary duties by “im- ■ properly excluding benefits owed to []Sawyer on an incorrect determination that they were not owed and by failing to fulfill [its] obligations of good faith, due care, and loyalty, without limitation.” FAC ¶ 41, at 7. Sawyer alleges that she is entitled to recover damages directly and proximately caused by this breach. See FAC ¶ 42, at 7.

In Sawyer’s last claim for relief, she contends that she elected to continue her insurance coverage under COBRA and paid her premiums to CobraGuard. See FAC ¶ 43, at 7. BCBSKC asserts, however, that it never received her insurance premiums from CobraGuard. See FAC ¶ 44, at 7. Sawyer asserts that Nueterra Healthcare and CobraGuard represented to her that she was entitled to COBRA continuation of coverage, that she had properly elected continuation of coverage, and that she had made the premium payments necessary for her coverage to continue. See FAC ¶46, at 7-8. Sawyer states that she “reasonably relied upon the conduct and representation of Nueterra Healthcare and CobraGuard as to the status of her continuation coverage.” FAC ¶ 47, at 8.

BCBSKC moves to dismiss Sawyer’s FAC with prejudice. See MTD at 1. BCBSKC argues that the Court should dismiss Sawyer’s FAC with prejudice because ERISA preempts Sawyer’s state-law claims, and Sawyer “fails to state a claim under ERISA because she has failed to plead exhaustion of her administrative remedies” as described in her former employer’s group health plan. MTD at 1. BCBSKC argues that Sawyer must exhaust the available administrative remedies set forth in Section L of BCBSKC’s Healthcare Plan. See Defendant Blue Cross and Blue Shield of Kansas City’s Memorandum of Legal Points and Authorities in Support of its Motion to Dismiss Plaintiffs First Amended Complaint with Prejudice at 2, filed Apr. 19, 2012 (Doc. 57)(“BCBSKC Memo, in Support”).

BCBSKC first asserts that the Supreme Court of the United States precedent dictates that ERISA preempts Sawyer’s state-law claims. See BCBSKC Memo, in Support at '3 (citing Aetna Health, Inc. v. Davila, 542 U.S. 200, 210, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004)). BCBSKC argues that the Supreme Court has ruled that ERISA preempts a plaintiffs claims which arise from the denial of benefits under an ERISA-regulated employee benefit plan. See BCBSKC Memo, in Support at 4. BCBSKC thus argues that all of Sawyer’s state-law claims are preempted, because they arise from the alleged denial of her claimed benefits under an ERISA-regulated benefit plan. See BCBSKC Memo, in Support at 4. .

BCBSKC also argues that Sawyer’s FAC contains “eonelusory allegations and formulaic recitation of the elements of her causes of action for breach of contract,'... insurance bad faith, ... violation of the New Mexico Unfair Insurance Practices Act, ... and breach of a fiduciary duty....” BCBSKC Memo, in Support at 4. BCBSKC thus argues that Sawyer has not put forth “well-pled” facts, and her facts should on that basis-not be assumed to be true. BCBSKC Memo, in Support at 4.

Additionally, BCBSKC asserts that the United States Court of Appeals for the Tenth Circuit “has consistently held that the failure to exhaust administrative remedies precludes an employee from bringing a benefits recovery action in federal district court.” BCBSKC Memo. in Support at 4 (citing Lane v. Sunoco, Inc., (R & M), 260 Fed.Appx. 64 (10th Cir.2008); Evans v. Kirke-Van Orsdel, 122 Fed.Appx. 947 (10th Cir.2004); Woods v. Halliburton, Co., 49 Fed.Appx. 827 (10th Cir.2002); Lloyd v. General Motors Hourly Rate Employees Pension Plan, 1 Fed.Appx. 789 (10th Cir.2001)). BCBSKC asserts that federal ERISA common law requires a plaintiff to exhaust her “ERISA-required internal remedies before being allowed to sue.” BCBSKC Memo. in Support at 5 (citing Getting v. Fortis Benefits Ins. Co., Inc., 108 F.Supp.2d 1200 (D.Kan.2000)). BCBSKC thus asserts that the Tenth Circuit recognizes the federal common law that requires exhaustion of administrative remedies before bringing a civil suit under ERISA. See BCBSKC Memo, in Support at 5 (citing Whitehead v. Okla. Gas & Elec. Co., 187 F.3d 1184, 1190 (10th Cir.1999); Held v. Mfrs. Hanover Leasing Corp., 912 F.2d 1197, 1206 (10th Cir.1990)).

BCBSKC argues that, because Sawyer does not even allege that she “ever filed a grievance as required by Section L of the Policy,” the Court should dismiss her FAC. BCBSKC Memo, in Support at 6. BCBSKC points to Section L, ¶ 7, and the “Notice to Member,” in the Policy, for this assertion. BCBSKC Memo, in Support at 6. BCBSKC points to authorities from other circuits in support of its contention that the Court should dismiss Sawyer’s FAC because she has not exhausted her administrative remedies. See BCBSKC Memo, in Support at 6. BCBSKC asserts that failing to plead the exhaustion of administrative remedies takes Sawyer’s FAC out of the arena of complaints- that state a claim upon which relief can be granted, and thus dismissal of her FAC is proper under rule 12(b)(6) of the Federal Rules of Civil Procedure. See BCBSKC Memo, in Support at 7. BCBSKC argues that the Court must, therefore, dismiss Sawyer’s claims with prejudice. See BCBSKC Memo, in Support at 7.

' The Court held a hearing on May 31, 2012. See Transcript of Hearing, taken Máy 31, 2012 (“Tr.”). Sawyer began by stating that she agrees that ERISA preempts the state-law claims. See Tr. at 3:20-24 (Lindsey). Sawyer stated that she has no problem with the Court granting BCBSKC’s MTD with respect to the preemption allegation. See Tr. at 3:25^4:2 (Lindsey).

Sawyer asserted, however, that she is not certain that she has failed to exhaust her administrative remedies, as BCBSKC argues. See Tr. at 4:9-18 (Lindsey). Sawyer argued that the FAC adequately responds to that argument, and that she has exhausted her administrative remedies, pointing to her FAC setting forth that Sawyer applied to have her medical bills paid by her insurers. See Tr. at 4:9-5:11 (Lindsey). The Court inquired whether counsel would like to confer with Sawyer and see if Sawyer is certain she has exhausted her administrative remedies, and counsel stated it would like to so do. See Tr. at 5:12-24 (Court, Lindsey).

BCBSKC then argued, regarding the exhaustion allegation, that Sawyer has not attached any records which indicate that she followed up on her denials of coverage with an appeal or by contesting the denial, the Policy requires. See Tr. at 6:18-7:1 (Bartell). BCBSKC asserted that Sawyer was advised in each of her denials to be in contact with BCBSKC. See Tr. at 7:3-18 (Bartell). BCBSKC contended that Sawyer was put on notice about the administrative remedies for review that were available, but the records show that she made no attempt to exercise her right to review. See Tr. at 7:19-21 (Bartell). BCBSKC asserted that an administrative review would not be futile, but rather that BCBSKC would have conducted an investigation if Sawyer had alerted it that her claims were denied while she had paid premiums. See Tr. at 7:24-8:13 (Court, Bartell). BCBSKC asserted that it could have found the lapse in communication between itself and CobraGuard led to the denials of Sawyer’s coverage, the problem could have thus been addressed at an earlier time, and her coverage would have been paid, if Sawyer had requested a 'review of the denials of her coverage. See Tr. at 8:13-25 (Bartell).

The Court inquired what recourse Sawyer would have if the Court granted BCBSKC’s MTD, and BCBSKC responded that Sawyer could seek recourse from BCBSKC. See Tr. at 9:1-5 (Court, Bar-tell). The Court inquired whether statutes of limitations with the Policy would preclude Sawyer from receiving coverage, and BCBSKC admitted that it is now too late for Sawyer to file a new claim. See Tr. at 9:9-13 (Court, Bartell). BCBSKC stated that five years have elapsed from the time Sawyer filed her claim. See Tr. at 9:14-20 (Bartell).

The Court then inquired whether exhaustion must be pled for a plaintiffs claims to survive a motion to dismiss. See Tr. at 9:21-10:5 (Court). BCBSKC responded that exhaustion must be pled, because exhaustion is a prerequisite to bringing a lawsuit such as Sawyer’s. See Tr. at 10:6-8 (Bartell). BCBSKC pointed to Section L, ¶ 3 of the Policy, which outlines procedures required for filing a grievance, and stated that the Policy requires a grievance to be filed before bringing a civil ERISA claim against the insurer. See Tr. at 10:10-19 (Bartell). BCBSKC contended that the Policy, as a contract, requires members to comply with certain administrative procedures before bringing civil lawsuits. See Tr. at 10:20-25 (Bartell). BCBSKC also contended that Sawyer has been on notice of BCBSKC’s defense of a failure to exhaust from earlier pleadings in this litigation, yet she has not ■ brought forth any facts which show she has exhausted her administrative remedies. See Tr. at 11:1-13 (Bartell).

BCBSKC agreed with Sawyer that the bar to survive a motion to dismiss is not very high, and that neither Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), nor Ashcroft v. Iqbal, 556 U.S. 662, 670, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), require a plaintiff to provide “in-depth exhaustive pleading of every last fact known to [Sawyer].” Tr. at 11:14-21 (Bartell). BCBSKC asserted that Sawyer’s FAC would be sufficient had it merely stated that she telephoned, or sent a letter or an electronic mail transmission to follow up with the denial of her requests for coverage. See Tr. at 11:21-25 (Bartell). BCBSKC asserted that it was unaware of Sawyer’s dissatisfaction with her coverage, because she had not followed the required procedures to voice a grievance. See Tr. at 12:4-11 (Bartell). BCBSKC asserted that, had Sawyer voiced a grievance, her requests for coverage would have been handled much earlier. See Tr. at 12:13-19 (Bartell).

The Court encouraged counsel for Sawyer to talk to Sawyer as soon as possible and determine if she has anything more to add on the motion. See Tr. at-13:16-18 (Court). The Court requested counsel for Sawyer to inform the Court if the motion was unopposed, based on counsel’s conversations with Sawyer. See Tr. at 13:18-23 (Lindsey).

After the hearing, Sawyer filed an affidavit with the Court. See Notice of Filing of Affidavit of Constance Sawyer at 1, filed July 6, 2012 .(Doe. 69). Sawyer asserts in her affidavit that she has proof of the premiums she paid to CobraGuard to extend her insurance coverage. See Sawyer Aff. ¶ 2, at 1. Sawyer • also asserts that after she telephoned BCBSKC at least three times to inquire why her medical bills from her accident were not covered, BCBSKC never followed-through on its promise to communicate with her regarding her coverage. See Sawyer Aff. ¶¶ 2, 4, 5-7, at 1-2. Additionally, Sawyer re-states that her disputed insurance ‘coverage caused her to not receive the care she needed after her accident. See Sawyer Aff. ¶¶ 8-12, at 2. Sawyer admits that she has a copy of the Policy. See Sawyer Aff. ¶ 18, at 3.

BCBSKC filed a reply in support of its motion to dismiss Sawyer’s FAC with prejudice on September 26, 2012. See Reply at 1. In its Reply, BCBSKC argues first that Sawyer’s failure to respond to its MTD constitutes a consent to granting the motion, pursuant to D.N.M.LR-Civ. 7.1(b). See Reply at 4. BCBSKC further argues that the Court should grant BCBSKC’s MTD because Sawyer did not respond to the MTD after the Court allowed Sawyer more time to file a response at the status conference on May 31, 2012. See Reply at 4. BCBSKC asserts that the Sawyer Affidavit cannot constitute a reply, even if read in the “most expansive interpretation possible,” because the affidavit does not cite any authority in support of an argument, as D.N.M.LR-Civ. 7.3(a) requires. Reply at 4. BCBSKC argues, that the Court should thus grant the MTD, pursuant to D.N.M.LR-Civ. 7.1(b), which provides that a court should.grant a motion if the opposing party fails to-respond within the proscribed time limit. See Reply at 4. Additionally, BCBSKC asserts that the Court should deem BCBSKC’s Requests for Admissions as “admitted” by Sawyer, because Sawyer did not serve a response or objection within thirty days, rule 36(a)(3) of the Federal Rules of Civil Procedure requires. Reply at 5. BCBSKC served its Requests for Admissions on July 31, 2012. See Certificate of Service at 1. Sawyer has not yet responded to the Requests for Admissions, and BCBSKC argues that the requests should thus be “deemed admitted pursuant to Fed. R.Civ.P. 36(a)(3).” Reply at 5.

BCBSKC contends that Sawyer admits that she failed to exhaust her ERISArequires administrative remedies. See Reply at 5. BCBSKC argues that the Tenth Circuit has “consistently held that the failure to exhaust administrative remedies under an ERISA-qualified plan precludes an employee from bringing a benefits recovery action under ERISA in federal district court.” Reply at 5. BCBSKC cites to this Court’s decision in Begay v. Pub. Serv. Co. of N.M., 710 F.Supp.2d 1161, 1191 (D.N.M.2010)(Browning, J.), for the proposition that the “exhaustion of administrative remedies is one among related doctrines ... that govern the timing of federal-court decision making ... [and] [w]here Congress provides that certain administrative remedies -are exclusive, exhaustion is required.” Reply at 6. BCBSKC asserts that the policy is clear in that i Sawyer can file a lawsuit only if she has exhausted her first level Grievance rights. See Reply at 6. BCBSKC contends that Sawyer does not attempt to allege that she has exhausted her Grievance rights. See Reply at 6. BCBSKC asserts that Sawyer is “chargeable with knowing that the Policy required the submission of a written Member Grievance form to initiate a first level Grievance,” because Sawyer admits that she possesses a copy of the Policy. Reply at 6. BCBSKC contends that Sawyer has, admitted that she did not file a first level Grievance, and she has not provided any explanation why she failed to invoke her right to a Grievance. See Reply at 6-7. BCBSKC thus argues that, even if Sawyer’s facts are true and she made three telephone calls which BCBSKC did not return, she has not exhausted her Grievance rights as the policy requires. See Reply at 7. BCBSKC argues that Sawyer was on notice that she should file any evidence showing that she had exhausted her Grievance rights after the May 31, 2012, status conference, but because Sawyer failed to provide any evidence of exhaustion, she has not alleged facts that allow her to bring an ERISA claim in federal court. See Reply at 7. BCBSKC argues that, because Sawyer did not give the administrative relief process available to her an opportunity to work, as federal law requires, the Court should dismiss her FAC with prejudice. See Reply at 6-7.

STANDARD FOR A MOTION TO DISMISS UNDER RULE 12(b)(6)

Under rule 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed. R.Civ.P. 12(b)(6). “The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d at 340. The sufficiency of a complaint is a question of law, and when considering and addressing a rule 12(b)(6) motion, a court must accept as true all well-pleaded factual allegations in the complaint,- view those allegations in the light most favorable to the non-moving party, and draw all reasonable inferences in the plaintiffs favor. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007); Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir.2006); Hous. Auth. of Kaw Tribe v. City of Ponca, 952 F.2d 1183, 1187 (10th Cir.1991).

A complaint challenged by a rule 12(b)(6) motion to dismiss does not require detailed factual allegations, but a plaintiffs burden to set forth the grounds of his or her entitlement to relief “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. at 546, 127 S.Ct. 1955. See Ashcroft v. Iqbal, 556 U.S. at 663, 129 S.Ct. 1937 (stating that' a plaintiffs complaint must set forth more than a threadbare recital “of the elements of a cause of action, supported by mere conclusory statements”). “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. at 545, 127 S.Ct. 1955 (citation omitted). To survive a motion to dismiss, a plaintiffs complaint must contain sufficient facts that, if assumed to be true, state a claim to relief that is plausible on its face. See Bell Atl. Corp. v. Twombly, 550 U.S. at 570, 127 S.Ct. 1955; Mink v. Knox, 613 F.3d 995 (10th Cir.2010). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. at 663, 129 S.Ct. 1937. “Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.” Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir.2007). The Tenth Circuit has stated:

“[P]lausibility” in this context must refer to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs “have not nudged their claims across the line from conceivable to plausible.” The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief.

Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir.2008)(internal citations omitted).

A court must convert a motion to dismiss into a motion for summary judgment if “matters outside the pleading are presented to and not excluded by the court,” and “[a]ll parties are given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.” Fed. R.Civ.P. 12(d). “[Fjederal courts have complete discretion to determine whether or not to accept the submission of any material beyond the pleadings that is offered in conjunction with a Rule 12(b)(6) motion and rely on it, thereby converting the motion, or to reject it or simply not consider it.” 5C Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. Civ. § 1366, at 159 (3d ed. 2004). See Dobson v. Anderson, 319 Fed.Appx. 698, 702 (10th Cir.2008)(unpublished); Lowe v. Town of Fairland, 143 F.3d 1378, 1381 (10th Cir.1998)(“[C]ourts have broad discretion in determining whether or not to accept materials beyond the pleadings.”). A party is considered to have adequate notice that a motion to dismiss under 12(b)(6) has been converted to a motion for summary judgment when that party is the one whose submission of documents outside of the pleadings triggered the conversion. Normally, notice and opportunity to present material must be given of such a conversion. See, e.g., Fed.R.Civ.P. 12(d). If “the non-moving party is the party introducing the additional material and the Court is nonetheless granting summary judgment to the moving party .... notice is not necessary.” Chavez-Rodriguez v. City of Santa Fe, No. CIV 07-0633, 2008 WL 5992270, at *20 n. 7 (D.N.M. Oct. 17, 2008)(Browning, J.). See Burnham v. Humphrey Hospitality Reit Trust, Inc., 403 F.3d 709, 713-714 (10th Cir.2005) (noting that a plaintiff is not prejudiced when a defendant’s motion to dismiss is converted to a motion for summary judgment, when the plaintiffs “opposition to the motion to dismiss first introduced affidavits containing facts beyond those in the complaint.”).

LAW REGARDING SUMMARY JUDGMENT

Rule 56(a) of the Federal Rules of Civil Procedure states: “The court shall-grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.Civ.P. 56(a). The movant bears the initial burden of “showfing] that there is an absence of evidence to support the non-moving party’s case.” Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir.1991)(internal quotation marks omitted). See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the movant meets this burden, rule 56 requires the non-moviñg party to designate specific facts showing that there is a genuine issue for trial. See Celotex Corp. v. Catrett, 477 U.S. at 324, 106 S.Ct. 2548; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

The party opposing a motion for summary judgment must “set forth specific facts showing that there is a genuine issue for trial as to those dispositive matters for which it carries the burden of proof.” Applied Genetics Int’l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir.1990). See Vitkus v. Beatrice Co., 11 F.3d 1535, 1539 (10th Cir.1993)(“However, the nonmoving party may not rest on its pleadings but must set forth specific facts showing that there is a genuine issue for trial as to those dispositive matters for which it carries the burden of proof.” (internal quotation marks omitted)). Rule 56(c)(1) provides: “A party asserting that a fact ... is genuinely disputed must support the assertion by .... citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” 1 Fed.R.Civ.P. 56(c)(1). It is'not enough for the party opposing a properly supported motion for summary judgment to “rest on mere allegations or denials of his [or her] pleadings.” Anderson v. Liberty Lobby, Inc., 477 U.S. at 256, 106 S.Ct. 2505. See Abercrombie v. City of Catoosa, 896 F.2d 1228, 1231 (10th Cir.1990); Otteson v. United States, 622 F.2d 516, 519 (10th Cir.1980)(“However, ‘once a properly supported summary judgment motion is made, the opposing party may not rest on the allegations contained in his complaint, but must respond with specific facts showing the existence of a genuine factual issue to be tried.’ ” (citation omitted)). Nor can a party “avoid summary judgment by repeating conclusory opinions, allegations unsupported by specific facts, or speculation.” Colony Nat’l Ins. Co. v. Omer, No. 07-2123, 2008 WL 2309005, at *1 (D.Kan. June 2, 2008)(citing Fed.R.Civ.P. 56(e); Argo v. Blue Cross & Blue Shield of Kan., Inc., 452 F.3d 1193, 1199 (10th Cir.2006)). “In responding to a motion for summary judgment, ‘a party cannot rest on ignorance of facts, on speculation, or on suspicion and may not escape summary judgment in the mere hope that something will turn up at trial.’ ” Colony Nat’l Ins. Co. v. Omer, 2008 WL 2309005, at *1 (quoting Conaway v. Smith, 853 F.2d 789, 794 (10th Cir.1988)).

To deny a motion for summary judgment, genuine factual issues must exist that “can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson v. Liberty Lobby, Inc., 477 U.S. at 250, 106 S.Ct. 2505. A mere “scintilla” of evidence will not avoid summary judgment. Vitkus v. Beatrice Co., 11 F.3d at 1539 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. at 248, 106 S.Ct. 2505). Rather, there must be sufficient evidence on which the factfinder could reasonably find for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 251, 106 S.Ct. 2505 (quoting Schuylkill & Dauphin Improvement Co. v. Munson, 81 U.S. 442, 448, 14 Wall. 442, 20 L.Ed. 867 (1871)); Vitkus v. Beatrice Co., 11 F.3d at 1539. “[T]here is no evidence for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable ... or is not significantly probative, ... summary judgment may be granted.” Anderson v. Liberty Lobby, Inc., 477 U.S. at 249, 106 S.Ct. 2505 (citations omitted). Where a rational trier of fact, considering the record as a whole, could not find for the non-moving party, there is no genuine issue for trial. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

When reviewing a motion for summary judgment, the court should keep in mind three principles. First,.the court’s role is not to weigh the evidence, but to assess the threshold issue whether a genuine issue exists as to material facts requiring a trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 249, 106 S.Ct. 2505. Second, the court must resolve all reasonable inferences and doubts in favor of the non-moving party, and construe all evidence in the light most favorable to the non-moving party. See Hunt v. Cromartie, 526 U.S. at 550-55, 119 S.Ct. 1545; Anderson v. Liberty Lobby, Inc., 477 U.S. at 255, 106 S.Ct. 2505 (“The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.”). Third, the court cannot decide any issues of credibility. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 255, 106 S.Ct. 2505.

LAW REGARDING FAILURE TO RESPOND TO A MOTION

“Failure of a party to file and serve a response in opposition to a motion within the time prescribed for doing so constitutes consent to grant the motion.” D.N.M.LR-Civ. 7.1(b). The court cannot, however, grant a motion to dismiss based solely on plaintiffs failure to respond and must consider the merits of the motion. See Issa v. Comp USA 354 F.3d 1174, 1177-78 (10th Cir.2003)(holding that a court must address the merits of a motion to dismiss notwithstanding the plaintiffs failure to respond); Reed v. Bennett, 312 F.3d 1190, 1194-95 (10th Cir.2002)(holding that a district, court cannot grant an unopposed motion for summary judgment unless the moving party has first met its burden of production and demonstrates it is legally entitled to judgment under rule 56). The requirement that a court consider the merits before granting an unopposed motion to dismiss “consistent with the purpose of Rule 12(b)(6) motions as the purpose of such motions is to test ‘the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.’ ” Issa v. Comp USA 354 F.3d at 1177-78 (quoting Mobley v. McCormick, 40 F.3d at 340). Similarly, when a party fails to respond to a motion for summary judgment, a district court can properly grant the motion only “if the motion demonstrates no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law.” Reed v. Bennett, 312 F.3d at 1196. Failure to respond does “not relieve the court of its duty to make the specific determination required by Fed.R.Civ.P. 56(c).” Reed v. Bennett, 312 F.3d at 1196.

LAW REGARDING ERISA PREEMPTION

ERISA provides a uniform regulatory regime over employee-benefit plans and includes expansive preemption provisions which are intended to ensure that employee-benefit-plan, regulation are “exclusively a federal concern.” Aetna Health Inc. v. Davila, 542 U.S. at 208, 124 S.Ct. 2488 (quoting Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523, 101 S.Ct. 1895, 68 L.Ed.2d 402 (1981)). See 29 U.S.C. § 1144 (§ 514 of ERISA). Congress “expressly included a broadly worded pre-emption provision” in ERISA. Ingersoll-Rand Co. v. McClendon, 498 U.S. at 138, 111 S.Ct. 478. See Straub v. W. Union Tel. Co., 851 F.2d 1262, 1263 (10th Cir.1988)(“The scope of ERISA preemption ... is very broad.”). The Tenth Circuit has explained that “[i]mportant to understanding the propriety of removing [a case] is the distinction between ‘conflict preemption’ under § 514 of ERISA and ‘complete preemption’ under § 502 of ERISA.” Felix v. Lucent Techs., Inc., 387 F.3d 1146, 1153 (10th Cir.2004).

1. Express Preemption.

. Section 514 of ERISA, 29 U.S.C. § 1144, contains an express preemption provision which provides that ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan” that ERISA covers. 29 U.S.C. § 1144(a). The Supreme Court has “observed repeatedly that- this broadly worded provision is ‘clearly expansive.’” Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141, 146, 121 S.Ct. 1322, 149 L.Ed.2d 264 (2001). The Supreme Court has explained: “The key to § 514(a) is found in the words ‘relate to.’ Congress used those words in their broad sense, rejecting more limited pre-emption language.... ” Ingersoll-Rand Co. v. McClendon, 498 U.S. at 138, 111 S.Ct. 478. “But at the same time, [the Supreme Court has] recognized that the term ‘relate to’ cannot be taken ‘to extend to the furthest stretch of its indeterminacy,’ or else ‘for all practical purposes pre-emption would never run its course.’ ” Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. at 146; 121 S.Ct. 1322 (quoting N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995)).

The Supreme Court. has held that a state law “relates to” an ERISA plan, and is thus expressly preempted under § 514, “if it has a connection with or reference to such a plan.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). Additionally, the Supreme Court has

cautioned against an uncritical literalism that would make pre-emption turn on infinite connections. Instead, to determine 'whether a state law has the forbidden connection, we look both to the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive, as well as to the nature of the effect of the state law on ERISA plans.

Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. at 147, 121 S.Ct. 1322 (citation omitted)(internal quotation marks omitted).

The ERISA express preemption provision does not apply “if the state law has only a tenuous, remote, or peripheral connection - with covered plans, as is the case with many laws of general applicability.” District of Columbia v. Greater Wash. Bd. of Trade, 506 U.S. 125, 130 n. 1, 113 S.Ct. 580, 121 L.Ed.2d 513 (1992) (quotations and citations omitted). See Guidry v. Sheet Metal Workers Nat’l Pension Fund, 39 F.3d 1078, 1084 (10th Cir.1994)(en banc).

2. Complete Preemption.

“The complete-preemption doctrine allows the removal .of state actions that fall within the scope of § 502(a), 29 U.S.C. § 1132, ERISA’s civil-enforcement provision.” Ruby v. Sandia Corp., 699 F.Supp.2d 1247, 1260 (D.N.M.2010)(Browning, J.). Section 502(a)(1) provides a cause of action to any plan beneficiary or participant “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the Policy, or to clarify rights to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a). “[T]he preemptive force of § 502(a) of ERISA is so ‘extraordinary’ that it converts a state claim into a federal claim for purposes of removal and the well-pleaded complaint rule.” Felix v. Lucent Techs., Inc., 387 F.3d at 1156 (quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987)). Even absent the express preemption provision in 29 U.S.C. § 1144 (§ 514 of ERISA), § 502(a) would still preempt state-law claims that conflict with the enforcement mechanism § 502(a) provides. See Aetna Health Inc. v. Davila, 542 U.S. at 214 n. 4, 124 S.Ct. 2488. As the Supreme Court has held:

Respondents also argue that ERISA § 502(a) completely pre-empts a state cause of action only if the cause of action would be pre-empted under ERISA § 514(a)____But a state cause of action that provides an alternative remedy to those provided by the ERISA civil enforcement mechanism conflicts with Congress’ clear intent to make the ERISA mechanism exclusive.

Aetna Health Inc. v. Davila, 542 U.S. at 214 n. 4, 124 S.Ct. 2488.

In Metro. Life Ins. Co. v. Taylor, the Supreme Court found that ERISA mani.fested sufficient congressional intent to re-characterize state-law claims that fall 'within the scope of § 502(a) of ERISA as federal claims subject to reinoval. See 481 U.S. at 65-66, 107 S.Ct. 1542., The Supreme Court concluded that an ERISA preemption defense provides a sufficient basis for removal of a cause of action to the federal courts notwithstanding the traditional limitation the “well-pleaded complaint” rule imposes. 481 U.S. at 63-66, 107 S.Ct. 1542.

“[Defendants seeking removal under the doctrine of complete preemption bear a significant burden. They must establish congressional intent to extinguish similar state claims by making the federal cause of action exclusive. And as [courts] must construe removal strictly, reasonable doubts must be resolved against the complete preemption basis for it.” Lontz v. Tharp, 413 F.3d 435, 441 (4th Cir.2005). The Supreme Court in Metro. Life Ins. Co. v. Taylor held that the scope of the “complete preemption” exception for removal is narrow, and limited to state common-law or statutory claims that fall within § 502(a)(1)(B) of ERISA’s civil-enforcement provision, because “the legislative history consistently sets out this clear intention to make [§ 502(a)(1)(B)] suits brought by participants or beneficiaries federal questions for the purpose of federal court jurisdiction.” 481 U.S. at 66, 107 S.Ct. 1542. The Supreme Court noted, however, that it had previously held that, in light of the various forms of ERISA preemption, “ERISA pre-emption, without more, does not convert a state claim into an action arising under federal law.” 481 U.S. at 64, 107 S.Ct. 1542.

To come within the removal exception to the well-pleaded complaint rule, a court must, therefore, conclude that the state-law claim “should be characterized as a superseding ERISA action ‘to recover benefits due to [the plaintiff] under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan,’ as provided in § 1132(a)(1)(B).” Wright v. Gen'l Motors Corp., 262 F.3d 610, 614 (6th Cir.2001). In Wright v. General Motors Corp., the United States Court of Appeals for the Sixth Circuit held that ERISA did not preempt a complaint for unlawful termination as a result of race and sex discrimination, and retaliation. The state complaint included a request for damages for the proceeds of the plaintiffs late-husband’s life-insurance policy under his former employer’s Health and Disability Benefit Program. The Sixth Circuit concluded that the complaint was not removable, because it “is not a lawsuit claiming wrongful withholding of ERISA covered plan benefits; it is a lawsuit claiming race and sex discrimination and retaliation resulting in damages, one component of which is a sum owed under the provision of the [employee-benefits] plan.” Wright v. Gen'l Motors Corp., 262 F.3d at 614 (internal quotation marks omitted).

In Aetna Health Inc. v. Davila, the Supreme Court set forth the test for finding complete preemption:

Where the individual is entitled to such [claimed] coverage only because of the terms of an ERISA-regulated employee benefit plan, and where no legal duty (state or federal) independent of ERISA or the plan terms, is violated, then the suit falls “within the scope of’ ERISA § 502(a)(1)(B). In other words, if an individual, at some point in time, could have brought his claim under ERISA § 502(a)(1)(B), and where there is no other independent legal duty that is implicated by a defendant’s actions, .then the individual’s cause of action is completely pre-empted by ERISA § 502(a)(1)(B).

542 U.S. at 210, 124 S.Ct. 2488. The Supreme Court held that ERISA completely preempted a claim brought under a separate statute, the Texas Health Care Liability Act, for drug benefits under an ERISA plan, because the claim was not independent of the ERISA plan. See Aetna Health Inc. v. Davila, 542 U.S. at 210, 124 S.Ct. 2488. The Supreme Court emphasized that complete preemption under § 502(a) of ERISA is not limited to situations in which the state cause of action precisely duplicates a cause of action under § 502(a). See Aetna Health Inc. v. Davila, 542 U.S. at 216, 124 S.Ct. 2488 (“Congress’ intent to make the ERISA civil enforcement mechanism exclusive would be undermined if state causes of action that supplement the ERISA § 502(a) remedies were permitted, even if the elements of the state cause of action did not precisely duplicate the elements of an ERISA claim.”).

3. Distinguishing Between Express Preemption and Complete Preemption.

The Supreme Court in Metro. Life Ins. Co. v. Taylor treated express preemption under § 514 and complete preemption under § 502(a) as two distinct concepts, with only'the latter supporting removal. See Metro. Life Ins. Co. v. Taylor, 481 U.S. at 64, 107 S.Ct. 1542 (“ERISA pre-emption [under § 514], without more, does not convert a state claim into an action arising under federal law.”); Felix v. Lucent Techs. Inc., 387 F.3d at 1156. The Supreme Court in Metro. Life Ins. Co. v. Taylor explained that “federal pre-emption is ordinarily a federal defense to the plaintiffs suit” and thus is insufficient grounds for- removal. 481 U.S. at 63, 107 S.Ct. 1542. Although the Supreme Court in Metro. Life Ins. Co. v. Taylor determined that § 514 of ERISA expressly preempted the plaintiffs state-law claims, the “well-pleaded complaint” rule precluded removal on the basis of a federal defense. 481 U.S. at 64, 107 S.Ct. 1542.

The Tenth Circuit has explained that “ERISA preemption under § 514 is not sufficient for removal jurisdiction and that a state-law claim is only ‘completely preempted’ under Taylor if it can be re-characterized as a claim under § 502(a).” Felix v. Lucent Techs., Inc., 387 F.3d at 1156. In Felix v. Lucent Techs., Inc., the Tenth Circuit summarized the distinction between express preemption and complete preemption', quoting from the United States Court of Appeals for the Third Circuit’s opinion in Dukes v. U.S. Healthcare, Inc., 57 F.3d 350 (3d Cir.1995):

The difference between preemption and complete preemption is important. "When the doctrine of complete preemption does not apply, but the plaintiffs state claim is arguably preempted under § 514(a), the district court, being without removal jurisdiction, cannot resolve the dispute regarding preemption. It 'lacks power to do anything other than ■ remand to the state court where the preemption issue can be addressed and resolved.

Felix v. Lucent Techs., Inc., 387 F.3d at 1158 (quoting Dukes v. U.S. Healthcare, Inc., 57 F.3d at 355). See Giles v. NYL-Care Health Plans, Inc., 172 F.3d 332, 337 (5th Cir.1999)(“When a complaint contains only state causes of action that the defendant argues are merely conflict-preempted [under § 514], the court must remand for want of subject matter jurisdiction.”).

The Tenth Circuit elaborated on its view of ERISA complete preemption in Schmeling v. NORDAM, 97 F.3d 1336 (10th Cir.1996), stating:

We read the term not as a crude measure of the breadth of the preemption (in the ordinary sense) of a state law by a federal law, but rather as a description of the specific situation in which a federal law not only preempts a state law to some degree but also substitutes a federal cause of action for the state cause of action, • thereby manifesting Congress’s intent to permit removal.,.. This usage reveals that “complete preemption” refers to the replacement of a state cause of action with a federal one.

Schmeling v. NORDAM, 97 F.3d at 1342. In Carland v. Metro. Life Ins. Co., 935 F.2d 1114 (10th Cir.1991), the Tenth Circuit held that “a state law claim will convert to a federal claim only if the claim is preempted by ERISA and within the scope of ERISA’s civil enforcement provisions.” 935 F.2d at 1118-19. See Felix v. Lucent Techs., Inc., 387 F.3d at 1157 (quoting Carland v. Metro. Life Ins. Co.).

Other circuits have also stressed that § 502’s complete preemption is necessary for removal. See Warner v. Ford Motor Co., 46 F.3d 531, 535 (6th Cir.1995)(en banc)(overruling its prior precedent for “mistakenly allowing removal in a case not covered by § 1132(a)(1)(B) [§ 502' of ERISA] and only arguably covered by § 1144(a) [§ 514 of ERISA]”); Giles v. NYLCare Health Plans, Inc., 172 F.3d at 337 (“The presence of conflict-preemption [§ 514 of ERISA] does not establish federal question jurisdiction. Rather than transmogrifying a state cause of action into a federal one — as occurs with complete preemption — conflict preemption serves as a defense to state action.” (emphasis in original)); King v. Marriott Int’l Inc., 337 F.3d 421, 425 (4th Cir.2003) (holding that a state claim must fit within the scope of § 502 and disregarding § 514 express preemption); Rice v. Panchal, 65 F.3d 637, 646 (7th Cir.1995); Dukes v. U.S. Healthcare, Inc., 57 F.3d at 355 (“That the Supreme Court has recognized a limited exception to the well-pleaded complaint rule for state law claims which fit within the scope of § 502 by no means implies that all claims preempted by ERISA are subject to removal.”); Lupo v. Human Affairs Int’l, Inc., 28 F.3d 269, 272 (2d Cir.1994).

The Tenth Circuit noted in Felix v. Lucent Techs., Inc. that a claim which is remanded to state court risks being preempted in state court under § 514 of ERISA, leaving the plaintiff with no remedy. “Although this is a valid concern, we have not found it to be a concern of the federal judiciary.” Felix v. Lucent Techs., Inc., 387 F.3d at 1162.

4. ERISA Preemption and Insurance.

Pilot Life Ins. Co. v. Dedeaux presented the question whether ERISA “pre-empts state common law tort and contract actions asserting improper processing of a claim for benefits under an insured employee benefit plan.” 481 U.S. 41, 43, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987). The plaintiffs complaint in that case contained only state-law claims for fraud, tortuous breach of contract, and breach of fiduciary duties arising out of his insurance company’s failure to pay disability benefits under the terms of the policy. See 481 U.S. at 43, 107 S.Ct. 1549. The Supreme Court noted that ERISA’s purpose is to

“protect ... participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts.”

481 U.S. at 44, 107 S.Ct. 1549 (quoting 29 U.S.C. § 1001(b)). The Supreme Court also noted that, although a “saving clause excepts from the pre-emption clause laws that ‘regulat[e] insurance,’ ” under 29 U.S.C. § 1144(b)(2)(B), ,“a state law that ‘purports] to regulate insurance’ cannot deem an employee benefit plan to be an insurance company.” 481 U.S. at 45, 107 S.Ct. 1549 (alterations in original). Because the plaintiffs common-law causes of action for tortuous breach of contract and breach of fiduciary duties were based on alleged improper processing of a claim for benefits under the plaintiffs employee benefit plan, the Supreme Court held that 29 U.S.C. § 1144 preempted the claims. See 481 U.S. at 57, 107 S.Ct. 1549.

Applying Pilot Life Ins. Co. v. Dedeaux, the Tenth Circuit has held that ERISA preempts, common-law or state-law statutory claims for breach of contract, and bad faith or unfair insurance practices, because they conflict with ERISA’s remedial scheme. See Allison v. UNUM Life Ins. Co. of Am., 381 F.3d 1015, 1026 (10th Cir.2004)(holding that ERISA preempted the plaintiffs breach-of-contract claim against her long-term-disability-benefits insurance carrier, because she sought consequential and punitive damages, which conflicted with ERISA’s remedial scheme); Kidneigh v. UNUM Life Ins. Co. of Am., 345 F.3d 1182, 1184-87 (10th Cir.2003)(holding that state-law claims for bad faith and loss of consortium were preempted); Kelley v. Sears, Roebuck & Co., 882 F.2d 453, 455-56 (10th Cir.1989)(holding that ERISA preempted state-law claims brought under Colorado’s unfair-insurance-practices statute, which is virtually identical to the New Mexico statute). Accordingly, the United States District Court for the District of New Mexico has held that ERISA preempts claims for employee health-insurance benefits brought under the Unfair Insurance Practices Act. See Nechero v. Provident Life & Accident Ins. Co., 795 F.Supp. 374, 380-81 (D.N.M.1992)(Mechem, J.); Wexler v. Brokerage Servs., Inc., No. 88-1487-JB, 1989 WL 379862, at *2-3 (D.N.M. Oct. 18, 1989)(Burciaga, J.)(relying on Kelley v. Sears, Roebuck & Co. to conclude that ERISA preempts claims for misrepresentation and unfair claims practices pursuant to the equivalent sections of the New Mexico unfair-insurance-practices statute).

ERISA contains a savings clause for laws that regulate insurance. See 29 U.S.C. § 1144(b)(2)(A) (§ 514(b)(2)(A) of ERISA) (“Except as provided in subparagraph (B), nothing in this subchapter shall be construed- to exempt or relieve any person from any law of any State which regulates insurance, banking, or securities.”). The Supreme Court has explained how ERISA § 514(b)(2)(A) operates: “To summarize the pure mechanics of the provisions quoted above: If a state law ‘reláteos] to ... employee benefit plan[s],’ it is pre-empted. The saving clause excepts from the pre-emption clause laws that ‘regulat[e] insurance.’ ” Pilot Life Ins. Co. v. Dedeaux, 481 U.S. at 45, 107 S.Ct. 1549. The Supreme Court has-recognized that a Court must consider two factors to determine whether a state