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Sheedy v. Adventist Health System Sunbelt Healthcare Corp.

United States District Court, M.D. Florida, Orlando Division

July 23, 2018

DONNA SHEEDY, Plaintiff,



         This matter comes before the Court without a hearing on the Defendant's Motion to Dismiss Plaintiff's Amended Complaint (Doc. 62), the Plaintiff's Response (Doc. 73), and the Defendant's Reply (Doc. 76).

         I. Introduction

         The Plaintiff, Donna Sheedy, has filed suit against Adventist Health Systems[1] (“AHS”) and various affiliated entities (collectively, “Defendants”). Her Amended Complaint (Doc. 47) asserts fifteen claims: eleven claims based on the Employee Retirement Income Security Act[2] (“ERISA”), one constitutional claim, and three state law claims. These claims involve two distinct defined-benefit pension plans associated with AHS: the Hospital Plan and the Merged Plan. The Plaintiff, who is a participant in these plans, contends that they are not “church” plans and are thus subject to ERISA requirements. Alternatively, she argues that ERISA's church plan exemption is unconstitutional under the Establishment Clause of the First Amendment to the United States Constitution (Count XII). Finally, she asserts three alternative state law claims: breach of contract (Count XIII), unjust enrichment (Count XIV), and breach of fiduciary duty (Count XV).

         II. Factual Background

         The Plaintiff's claims all relate to pension plans connected to employment with Adventist Health Systems.[3] In addition to bringing suit against AHS, the Plaintiff also named the Adventist Retirement Board (“Retirement Board”), the Adventist Retirement Plan Administrative Committee (“Hospital Plan Committee”), and the Adventist Health System Benefits Administrative Committee (“Merged Plan Committee”) as Defendants.

         The Amended Complaint groups the pension plans at issue into two categories: the “Old Plan” and the “Frozen Plans.”[4] Doc. 47 ¶ 46. Because the Plaintiff's usage of terms describing the Plans is inconsistent in its Memorandum in Opposition, the Court will use the Defendants' terms instead: “Hospital Plan” for the Old Plan and “Merged Plan” for the Frozen Plans.[5]

         According to the Amended Complaint, both the Hospital Plan and the Merged Plan “were established and are maintained by [AHS] to provide retirement [benefits] to employees.” Id. ¶ 47. The Plaintiff states that neither Plan qualifies as a “church plan” under ERISA because they are not maintained by a church and the employees covered by the plans are not employed by an entity controlled or associated with a church. Id. ¶ 9. The Plans allegedly were established and maintained by AHS, which the Plaintiff claims is a business and not a church or a convention or association of churches. Id. ¶ 9, 47. According to the Amended Complaint, the underfunding of the Plans violates ERISA. See Id. ¶ 10. The Plaintiff also contends that the Defendants have violated ERISA by failing to comply with reporting and disclosure requirements, failing to establish the Plans pursuant to a written instrument, failing to establish a trust as required, and breaching fiduciary duties. Alternatively, the Plaintiff asserts that even if the Plans are not subject to ERISA, the Defendants are liable for state law claims of breach of fiduciary duty, breach of contract, and unjust enrichment for failing to adequately fund the plans. Id. ¶ 11.

         A. The Hospital Plan

         The Hospital Plan is a defined-benefit pension plan that was established in 1980, Doc. 63-1 at 7, and suspended in 1992. Doc. 63-5 at 28. The Plan is administered by the Retirement Board and the Hospital Plan Committee. The Plaintiff alleges that AHS did not make contributions to the Hospital Plan in 2012 or 2013, resulting in the Hospital Plan being “underfunded by $112 million as of December 31, 2013.” Doc. 47 ¶ 2-3. However, according to the December 31, 2016 Audited Consolidated Financial Statements, the Hospital Plan is funded at 100.1% of its benefit obligations. Doc. 63-5 at 29.[6]

         B. The Merged Plan

         The Merged Plan, which is also a defined-benefit pension plan, was frozen in 2010. Doc. 47 ¶ 73. It is administered by the Merged Plan Committee. Id. ¶ 21. The 2016 Financial Statement reflects that this Plan is underfunded by $29 Million. Doc. 63-5 at 29.

         III. Legal Standards

         In ruling on a motion to dismiss, the Court must view the complaint in the light most favorable to the Plaintiff, see, e.g., Jackson v. Okaloosa County, Fla., 21 F.3d 1531, 1534 (11th Cir. 1994), and must limit its consideration to the pleadings and any exhibits attached thereto. See Fed. R. Civ. P. 10(c); see also GSW, Inc. v. Long County, Ga., 999 F.2d 1508, 1510 (11th Cir. 1993). The Court will liberally construe the complaint's allegations in the Plaintiff's favor. See Jenkins v. McKeithen, 395 U.S. 411, 421 (1969). However, “conclusory allegations, unwarranted factual deductions or legal conclusions masquerading as facts will not prevent dismissal.” Davila v. Delta Air Lines, Inc., 326 F.3d 1183, 1185 (11th Cir. 2003).

         In reviewing a complaint on a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), “courts must be mindful that the Federal Rules require only that the complaint contain ‘a short and plain statement of the claim showing that the pleader is entitled to relief.'” U.S. v. Baxter Intern., Inc., 345 F.3d 866, 880 (11th Cir. 2003) (citing Fed.R.Civ.P. 8(a)). This is a liberal pleading requirement, one that does not require a plaintiff to plead with particularity every element of a cause of action. Roe v. Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 683 (11th Cir. 2001). However, a plaintiff's obligation to provide the grounds for 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 Atlantic Corp. v. Twombly, 550 U.S. 544, 554-555 (2007). The complaint's factual allegations “must be enough to raise a right to relief above the speculative level, ” id. at 555, and cross “the line from conceivable to plausible.” Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009).

         IV. Analysis

         A. The ERISA Claims

         In her first eleven counts, the Plaintiff sues both AHS and the three plan administrative committees, alleging violations of ERISA because neither ...

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