Hayden v. Burt and Payne , 2021 UT App 102 ( 2021 )

2021 UT App 102THE UTAH COURT OF APPEALS
CALINDY H. HAYDEN,
Appellant,
v.
BURT & PAYNE PC AND
THE BURT & PAYNE HEALTH BENEFITS PLAN,
Appellees.
Opinion
No. 20200345-CA
Filed September 30, 2021
Third District Court, Salt Lake Department
The Honorable Kara Pettit
No. 190907378
James L. Harris, Attorney for Appellant
Bruce C. Burt and Clifford J. Payne,
Attorneys for Appellee
JUDGE DIANA HAGEN authored this Opinion, in which
JUDGES DAVID N. MORTENSEN and JILL M. POHLMAN concurred.
HAGEN, Judge:
¶1 Calindy H. Hayden appeals the district court’s dismissal
of her complaint against her former employer, Burt & Payne PC,
and the Burt & Payne Health Benefits Plan (collectively, B&P) for
failing to notify her of her right to extend her group insurance
coverage within thirty days after the termination of her
employment. The district court ruled that Utah’s mini-COBRA
statute does not create a private cause of action and dismissed
the complaint for failure to state a claim. We agree with the
district court and affirm.
Hayden v. Burt & Payne
BACKGROUND 1
¶2 Burt & Payne employed Hayden from February 2018 until
her termination in July 2018. During that time, Hayden
participated in its group insurance plan and received the
commensurate benefits. Both parties acknowledge B&P falls
under Utah’s mini-COBRA statute, Utah Code section 31A-22-
722, which, among other things, directs employers to notify
terminated employees of their right to extend their group
insurance coverage and the payment amounts required to do so.
See Utah Code Ann. § 31A-22-722(3)(a) (LexisNexis Supp. 2021). 2
¶3 A few months after her termination, Hayden underwent
emergency gallbladder surgery. At the time of the surgery, she
was uninsured and incurred approximately $60,000 in medical
bills.
¶4 Hayden subsequently filed a complaint against B&P
seeking her medical expenses as well as attorney fees and other
costs she incurred. Hayden claimed B&P did not notify her of
her right to extend her group benefits within thirty days of her
termination as required by the mini-COBRA statute. Rather, she
contended, B&P emailed her attorney four days after the
deadline, on August 8, 2018, confirming that her insurance
1. “On appeal from a motion to dismiss, we review the facts only
as they are alleged in the complaint. We accept the factual
allegations as true and draw all reasonable inferences from those
facts in a light most favorable to the plaintiff.” Haynes v.
Department of Public Safety, 2020 UT App 19, ¶ 2 n.2, 460 P.3d 565(cleaned up).
2. We cite the current version of the Utah Code because there
have been no substantive changes to the relevant statute since
the events that precipitated this action.
20200345-CA 2 2021 UT App 102Hayden v. Burt & Payne
coverage had lapsed on July 5, 2018, but still did not give
appropriate statutory notice of her right to continued coverage.
She claims she did not receive the required notice until February
2019, at which time she attempted to elect continued coverage
but was declined.
¶5 B&P filed a motion to dismiss Hayden’s complaint for
failure to state a claim upon which relief can be granted. See
Utah R. Civ. P. 12(b)(6). The district court ruled,
looking at the language of the statute, the entire
chapter as well as this particular [s]ection, 722, that
there is not an implied cause of action set forth in
here. . . . [I]f the legislature wants to have a remedy
for this, . . . they certainly could impose one,
similar to the provision found in the federal act,
and it just did not.
Accordingly, the district court dismissed the complaint with
prejudice. Hayden timely appeals.
ISSUE AND STANDARD OF REVIEW
¶6 Hayden claims that the district court erred in granting
B&P’s motion to dismiss her complaint for failure to state a claim
upon which relief can be granted. Hayden’s claim is based on
the contention that “the lower court should have inferred a
private cause of action from Utah’s mini-COBRA statute” and
should have found B&P financially liable for her incurred
medical bills based on that private cause of action. “We review a
decision granting a motion to dismiss for correctness, granting
no deference to the decision of the district court.” Haynes v.
Department of Public Safety, 2020 UT App 19, ¶ 5, 460 P.3d 565(cleaned up). “Whether a particular statute provides a private
right of action is a question of statutory interpretation, which we
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review for correctness.” Conner v. Department of Com., 2019 UT
App 91, ¶ 14, 443 P.3d 1250 (cleaned up).
ANALYSIS
¶7 The district court did not err in granting B&P’s motion to
dismiss because, even accepting all of the allegations in
Hayden’s complaint as true, the complaint did not state a claim
upon which relief could be granted. See Utah R. Civ. P. 12(b)(6).
Hayden concedes that the mini-COBRA statute does not
expressly create a private cause of action, but she contends the
district court should have inferred a private cause of action
because if no penalties “flow from” B&P’s failure to provide
Hayden with notice of her right to extend coverage, then “Utah’s
mini-COBRA statute has no meaning.”
¶8 “A private statutory right of action exists when a private
party can bring a lawsuit for relief from injuries caused by
another’s violation of a . . . statute.” Buckner v. Kennard, 2004 UT
78, ¶ 37, 99 P.3d 842 (cleaned up). To determine whether a
statute creates a private right of action, “we look first to the plain
language of the statute for an express indication that a private
right of action was intended.” Conner v. Department of Com., 2019
UT App 91, ¶ 27, 443 P.3d 1250 (cleaned up). Absent such
“specific direction from the legislature,” we “are not generally in
the habit of implying a private right of action based upon state
law.” Id. (cleaned up); see also Buckner, 2004 UT 78, ¶ 43 (“Utah
courts have rarely, if ever, found a Utah statute to grant an
implied private right of action.”).
¶9 Utah’s mini-COBRA statute generally requires an
employer’s group insurance policy to offer extended coverage to
a terminated employee for a period of twelve months. Utah
Code Ann. § 31A-22-722(1) (LexisNexis Supp. 2021). The statute
places the burden on the employer to notify the terminated
employee “in writing of the right to extend group coverage and
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the payment amounts required for extension of coverage,
including the manner, place, and time in which the payments
shall be made.” Id. § 31A-22-722(3)(a). The notice must “be sent
[by] first class mail within 30 days after the termination date of
the group coverage to . . . the terminated insured’s home address
as shown on the records of the employer.” Id. § 31A-22-722(3)(b).
But the plain language of the statute contains no express
indication that the legislature intended to create a private right
of action against an employer for failure to comply with this
provision.
¶10 Hayden agrees, but argues that we should look beyond
the statute’s plain language to infer a private right of action
because of the public policy implications of employers
neglecting their duty to notify under the mini-COBRA statute.
Yet even in the face of much stronger public policy arguments
than this one, we have eschewed the temptation to read in such a
right, explaining that “even where there is a strong public policy,
as in discrimination, the legislative body retains the right to
specify the remedies and course of action available for violations
of a statute it has enacted to pursue such policy.” Conner, 2019
UT App 91, ¶ 30 (cleaned up). If public policy considerations
demand a remedy when an employee does not receive the
statutorily required notice, the legislature can create a private
cause of action or other enforcement mechanism. It has chosen
not to do so.
¶11 Hayden further argues that “Utah’s mini-COBRA statute
has no meaning” if no penalties “flow from” an employer’s
violation of its notice provision. But “[m]any statutes do not
provide a private right to sue in court.” Buckner, 2004 UT 78, ¶ 37
(cleaned up); see, e.g., J.H. ex rel. D.H. v. West Valley City, 840 P.2d
115, 125 (Utah 1992) (declining to infer “a private right of action
for failure to follow any specific procedure in hiring police
officers” provided by statute). And “[a] statute’s mere
prohibition of a certain act does not imply creation of a private
20200345-CA 5 2021 UT App 102Hayden v. Burt & Payne
right of action for its violation.” Conner, 2019 UT App 91, ¶ 27
(quoting Antonin Scalia & Bryan A. Garner, Reading Law: The
Interpretation of Legal Texts 313 (2012)). Where the legislature has
not expressly stated such a private right of action, that right
must be “clearly implied from the text” in order for courts to
recognize it. See id. (cleaned up). We see no such implication
here.
¶12 To the contrary, the statute specifically contemplates the
situation in which an employer fails to properly notify an
employee of the right to coverage and yet does not suggest that a
private right of action exists. The statute provides that, if “the
employer policyholder does not provide the terminated insured
the written notification required by Subsection (3)(a),” the
insurer must still allow the employee to extend coverage if the
employee “contacts the insurer within 60 days of coverage
termination.” Utah Code Ann. § 31A-22-722(4). In other words,
even if the employer fails to give the required notice, the
employee can contact the insurance company directly within
sixty days of termination to elect extended coverage. Thus, the
statute envisions that an employee, who is undoubtedly aware
of her termination and the impending cancellation of her
insurance coverage, will have an opportunity to obtain the
continued coverage afforded by statute even if the employer has
neglected its duty. A private cause of action cannot be clearly
implied from the text where the legislature provided a
procedure for obtaining coverage in the absence of the required
notice but chose not to include the right to sue the employer for
economic damages allegedly flowing from that violation. 3
3. If we find no statutory remedy here, Hayden urges us to find
an equitable one. We do not undertake that analysis because
Hayden’s complaint did not include a claim for equitable relief.
As the district court noted, “the sole cause of action” Hayden
(continued…)
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CONCLUSION
¶13 Because the mini-COBRA statute does not contain either
an express private cause of action or a textual basis for
concluding that one is clearly implied, we agree with the district
court that Hayden’s complaint fails to state a claim upon which
relief can be granted. Therefore, we affirm the district court’s
order dismissing Hayden’s complaint.
(…continued)
pled in her complaint was for B&P’s alleged failure to provide
notice as required by the mini-COBRA statute.
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