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Blaj v. Stewart Enterprises

November 23, 2010


The opinion of the court was delivered by: Honorablelarryalanburns United States District Judge


Plaintiffs Blaj and Romero are a daughter and mother who were previously employed at a mortuary operated by Defendant Stewart Enterprises. Blaj sold funeral merchandise and services, and Romero was a cosmetologist. They were both fired in early February 2009, Blaj first and Romero one week later. Blaj alleges that she was fired because she had, or was perceived to have, a disabling liver condition. Romero alleges that she was fired because of her relation to Blaj. Now before the Court is Stewart's motion for summary judgment.

I. Factual Background

Blaj has had liver problems since 1999, and in 2006 she learned that she would need a liver transplant. Her physician at the time referred her to the liver transplant center at Scripps Hospital, where she saw Dr. Donald Hillebrand. It was around this time that Stewart learned of Blaj's illness, because her condition required her to take four weeks off of work.

On May 1, 2007, Stewart switched insurance carriers from United Healthcare to CIGNA. The employees were notified of the change by a memo distributed on February 2, 2007. Scripps Hospital, unfortunately, was not in CIGNA's network. This was a problem for Blaj because she'd been seeing Dr. Hillebrand at Scripps for some time and had decided, in April or May of 2007, to undergo a liver transplant there - probably because she was satisfied with the care she was receiving at Scripps and because United Healthcare was covering it.

In June 2007, once Blaj was insured under Stewart's plan with CIGNA, she was referred to a case manager named Susan Sananikone. Sananikone, upon receiving a request from Scripps for coverage for Blaj, filed a request on Blaj's behalf for out-of-network coverage, asking CIGNA to cover Blaj's ongoing care there. The request was denied on June 27, 2007. CIGNA covers only those transplants performed by facilities that it has designated a "LifeSOURCE Center of Excellence," and Scripps lacks that designation.

On July 5, 2007, Sananikone spoke with Blaj and directed her to other LifeSOURCE facilities where Blaj could receive treatment covered by CIGNA. One of those facilities was the University of California at San Diego, and Blaj indicated an interest in receiving treatment, and, eventually, a liver transplant there. By mid-August, she had been in touch with UCSD's transplant team and appeared to be in the process of having the necessary medical records forwarded from Scripps to UCSD. Unfortunately, UCSD did not perform transplants from living donors, which was the method Blaj preferred. On September 20, 2007, Blaj informed her new case manager, Colleen Carver, that she was not comfortable with the atmosphere at UCSD and wished to pursue treatment elsewhere. Carver told her Stanford and UCLA were LifeSOURCE facilities and that they performed live donor transplants. She also told Blaj that CIGNA would cover Blaj's travel and lodging if she chose to pursue treatment outside of the San Diego area.

Around this same time, in early August 2007, Blaj communicated to Elliot Stein, a Stewart employee relations manager, her dissatisfaction that a transplant at Scripps wouldn't be covered by CIGNA. Both Stewart and Blaj acknowledge that Stein pledged his support. According to Stewart, however, Blaj proved difficult to help, primarily because she would not return her case manager's phone calls. According to Blaj, she stayed in continual touch with Stein and received every assurance that he was working on her behalf; she was never under the impression that remaining in touch with CIGNA was her responsibility. The record does show that Stein contacted Kathy Richeson at Stewart's corporate office on Blaj's behalf, and that through August and September of 2007 Richeson was in communication with a representative at CIGNA in an attempt to continue Blaj's treatment at Scripps under the CIGNA plan.

CIGNA upheld its denial of out-of-network coverage on September 26, 2007. Blaj had the option then to pursue a second appeal*fn1 or submit a request from Dr. Hillebrand for outof-network coverage based on a medical necessity, and she did neither. But she did contact Carver on October 16 to inquire whether Stanford University and the University of California at San Francisco were within CIGNA's network such that she could pursue a live donor transplant at either institution. She was told they were, but according to Stewart, CIGNA did its best to assist with a referral to Stanford and Blaj was essentially non-responsive for a period of several months. In mid-January 2008 Carver was finally able to reach Blaj; Blaj told her she was still interested in receiving a transplant at Stanford, and Carver gave her instructions for initiating a consultation. Blaj completed her consultation at Stanford in early March 2008. She was approved for a live donor transplant and placed on a transplant waiting list.

In late September 2008, Blaj approached Stein and told him she was considering seeing an attorney on the ground that Stewart provided so little help to Blaj over the past year that it was responsible for the coverage conundrum she found herself in. But then Blaj became seriously ill and was admitted to the intensive care unit at Scripps, where she was placed at the top of the list for a liver transplant. Dr. Hillebrand filed a request with CIGNA, based on Blaj's life-threatening condition, that CIGNA cover the surgery. CIGNA's medical director, finally, approved the request and Blaj underwent liver transplant surgery at Scripps on October 15, 2008.

Blaj returned to work at the mortuary operated by Stewart in January 2009, after she had recovered from the transplant surgery. But in early February she was fired, ostensibly for violating a company conflict-of-interest policy. As Stewart tells it, Blaj referred a Stewart customer to a third-party vendor to purchase a grave marker and acted as a liaison between the two, in direct contravention of a company policy that forbids direct referrals. Stewart also suggests that Blaj had already received a final written warning for other work-related misconduct, but it's not clear from the record what the misconduct was. Approximately one week after Blaj was terminated, Romero was terminated. The stated justification for Romero's termination was a reduction in force.

II. Blaj's Claims

Blaj initially brought four claims against Stewart. The first alleged wrongful termination in violation of public policy. The second alleged a hostile work environment. The third and fourth alleged, respectively, the negligent and intentional infliction of emotional distress.

Blaj concedes there is insufficient evidence to support the hostile work environment claim. (Opp'n Br. at 16.) That claim is therefore DISMISSED.

She also concedes - and the Court will defer to her judgment - that the emotional distress claims are preempted by ERISA. (Opp'n Br. at 14.) Those claims are also DISMISSED. But Blaj attempts to repackage them under the ERISA statute 29 U.S.C. § 1140, which makes it unlawful to discharge an employee "for exercising any right to which he is entitled under the provisions of an employee benefit plan." Blaj is, in essence, attempting to convert her emotional distress claims into a second wrongful termination claim, based on her pursuit of coverage for her liver transplant from CIGNA: "Further the discharge in retaliation for her exercise of an ERISA plan right is not pled in those terms, rather it is pled by state law claims that are indeed preempted by ERISA." (Opp'n Br. at 16.)

There are a couple of problems here. First, the conversion is not a smooth one. The claims have different factual predicates, so an ERISA-based retaliatory discharge claim is hardly the emotional distress claims by a different name. The heart of Blaj's emotional distress claims was Stewart's alleged foot-dragging in helping Blaj obtain coverage from CIGNA for a liver transplant at Scripps.*fn2 (Compl. ¶ 44.) The retaliatory discharge claim, by contrast, alleges that Blaj attempted to avail herself of medical benefits under the CIGNA plan and was fired for doing so. In the portion of her opposition brief devoted to the ERISA-based retaliation claim, Blaj repeats her alleges that Stewart said it would help her obtain CIGNA's approval to have a liver transplant at Scripps but then failed to keep her in the loop about its progress (or lack thereof). (Opp'n Br. at 15.) But this was the basis of the emotional distress claims that Blaj now concedes are preempted, and it is irrelevant to the retaliatory discharge claim she now wishes to plead in their place.

Second, Blaj is inconsistent as to what she is alleging Stewart fired her for. Initially, it's the mere fact that she sought coverage from CIGNA for a liver transplant at Scripps. (Opp'n Br. at 14:24--25.) But later, it's the fact that Blaj threatened to hire an attorney to pursue legal action against Stewart.*fn3 (Opp'n Br. at 15:26--27.) And finally, Blaj alleges that Stewart "desire[d] to distance itself from Blaj after [it] negligently handled Blaj's relationship with CIGNA," which doesn't even sound like an allegation of retaliation. (Opp'n Br. at 16:4--6.) In any event, Blaj's attempt to re-brand her emotional distress claims as wrongful discharge claims under ERISA is, as the Court sees it, an attempt to amend her complaint to add an ERISA claim.

As Stewart rightly argues, it isn't a given that, at this stage in the litigation, Blaj can amend her complaint to add new claims - especially when her medium for doing so is a brief opposing summary judgment that was filed after the deadline for amendments specified in the Court's scheduling order and after the close of discovery. See, e.g., Lamon v. Director, S-06-0156, 2010 WL 3448593 at *7 (E.D. Cal. Sept. 1, 2010) ("Plaintiff cannot use his opposition to a motion for summary judgment, filed long after the answers were filed in this case, as a vehicle to further amend his complaint to raise additional claims.") Blaj has had more than enough time to face the facts as they've been developed in discovery and ask for the Court's permission to amend her complaint, and she hasn't done so. It's not fair to Stewart to present it with claims it hasn't had the opportunity to investigate, answer, and take discovery on.

Cutting against this somewhat, the Ninth Circuit has held that "when a party raises a claim in materials filed in opposition to a motion for summary judgment, the district court should treat the filing as a request to amend the pleadings and should consider whether the evidence presented creates a triable issue of material fact." United States ex rel. Schumer v. Hughes Aircraft Co., 63 F.3d 1512, 1524 (9th Cir. 1995). The Court is inclined to follow Hughes Aircraft, if only because Stewart appears willing to confront the claim head-on and does not view Blaj's attempt to rebrand her emotional distress claims as an attempt to amend her complaint. (Reply Br. at 1:18--19.) Blaj therefore has two claims against Stewart. The first, for wrongful termination in violation of public policy, alleges that Stewart fired Blaj because of her medical condition. The second claim is for wrongful retaliation under ERISA.

III. Summary Judgment Standard

Summary judgment is appropriate where "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). As the moving party, it is Stewart's burden to show there is no factual issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To meet this burden, Stewart show that Blaj lacks evidence to support her case. Id. at 325. If it makes that showing, ...

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