Lee v. Lincoln National Life Insurance Company, No. 6:2018cv02063 - Document 17 (N.D. Iowa 2018)
Court Description: ORDER granting 9 MOTION to Dismiss for Failure to State a Claim filed by Lincoln National Life Insurance Company, The; granting Motion to Amend Complaint contained in the 13 Resistance to Motion filed by Vanessa Lee; and granting 16 UNRESISTED Motion for Extension of Time to File Scheduling Report filed by Lincoln National Life Insurance Company, The. Amended Complaint due by 11/21/2018. Scheduling Report due by 12/30/2018. Signed by Judge CJ Williams on 10/31/2018. (jjh)
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Lee v. Lincoln National Life Insurance Company Doc. 17 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF IOWA EASTERN (WATERLOO) DIVISION VANESSA LEE, Individually and as Executor of the Estate of John Lee, No. 18-cv-2063-CJW Plaintiffs, vs. ORDER THE LINCOLN NATIONAL LIFE INSURANCE COMPANY, Defendant. ___________________________ The matters before the Court are defendant s M“ti“n to Dis’iss P‘aintiff s First Amended Petition at Law (Doc. 9), plaintiff s1 motion for leave to amend her petition (Doc. 13, at 6-7), and Defendant s Unopposed Motion to Extend the Deadline to Submit a Scheduling Report (Doc. 16). F“r the f“‘‘“wing reas“ns, defendant s ’“ti“n to dismiss is granted, ”‘aintiff s ’“ti“n t“ a’end is granted, and defendant s ’“ti“n t“ extend is granted. I. BACKGROUND On July 19, 2018, plaintiff filed her First Amended Petition at Law ( the ”etiti“n “r ”etiti“n ) in the Iowa District Court for Fayette County, Iowa. (Doc. 4). Plaintiff alleges that her husband, John Lee, passed away on July 19, 2015, as the result of an ATV accident. (Id., at ¶¶ 4, 9-14). Plaintiff claims that at all relevant times, Mr. Lee was an employee of Ashley Industrial Moldings, Inc. ( Ashley ), and that Mr. Lee was 1 Vanessa Lee brought this action individually and in her capacity as the executor of the Estate “f J“hn Lee. The C“urt wi‘‘ refer t“ Ms. Lee in b“th ca”acities c“‘‘ective‘y as ”‘aintiff. Dockets.Justia.com covered by an accidental death policy that defendant sold to Ashley (the P“‘icy ). (Id., at ¶¶ 3-5). Defendant asserts that it issued the P“‘icy ”ursuant t“ Ash‘ey s Life Benefit P‘an (the P‘an ). (D“c. 9-1, at 2). Plaintiff attached a copy of the Policy to the Petition and incorporated it by reference. (Docs. 4, at ¶ 17; 4-1). The P“‘icy is a Gr“u” Insurance P“‘icy issued by defendant t“ Ash‘ey. (D“c. 4-1, at 1-4). Plaintiff asserts that she is Mr. Lee s na’ed beneficiary for accidental death benefits under the Policy and that defendant has denied paying plaintiff accidental death benefits under the Policy. (Doc. 4, at ¶¶ 7, 20). P‘aintiff s petition asserts a single count against defendant for breach of contract. (Doc 4). On August 30, 2018, defendant timely removed this case to this Court based on both federal question jurisdiction and diversity jurisdiction (see Docs. 1, at 2-3; 1-2, at 43). 28 U.S.C. §§ 1331-32, 1446(b)(1). Defendant then filed its motion seeking dismissal under Federal Rule of Civil Procedure 12(b)(6). (Doc. 9). Defendant argues that ”‘aintiff has fai‘ed t“ state a c‘ai’ u”“n which re‘ief can be granted because ”‘aintiff s state-law breach of contract claim is preempted by the Employee Retirement Income Security Act “f 1974 ( ERISA ), 29 U.S.C. §§ 1001, et seq. (Doc. 9). In ”‘aintiff s ’“ti“n t“ extend the ti’e t“ resist defendant s ’“ti“n t“ dis’iss, ”‘aintiff stated it is admitted that the policy was issued as a part of a [sic] ERISA Plan . . .. (D“c. 11, ¶6). In her resistance, plaintiff argues that her claim is only a claim for breach of contract, not an ERISA claim, and, accordingly, plaintiff asserts that her breach of contract claim is not preempted. (Doc. 13, at 1-6). Plaintiff requests, in the alternative to the Court denying defendant s ’“ti“n t“ dis’iss, that the Court grant plaintiff leave to amend the petition t“ satisfy the ERISA requirements. (D“c. 13, at 7). On October 29, 2018, defendant filed an unopposed motion to extend the deadline for the parties to file their scheduling order and discovery plan. (Doc. 16). 2 II. A. MOTION TO DISMISS Applicable Law Federal Rule of Civil Procedure 8(a)(2) requires that a complaint include a short and ”‘ain state’ent “f the c‘ai’ sh“wing that the ”‘eader is entit‘ed t“ re‘ief. Prior to filing an answer, a defendant ’ay ’“ve t“ dis’iss a c“’”‘aint f“r fai‘ure t“ state a c‘ai’ u”“n which re‘ief can be granted. FED. R. CIV. P. 12(b)(6). T“ survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is plausible on its face when the facts set forth in the complaint are sufficient for the Court to reasonably infer that the defendant is liable for the conduct alleged. Id. In ruling on a motion to dismiss, the Court draws all reasonable inferences in favor of the nonmoving party and accepts all of the facts alleged in the complaint as true. Richter v. Advance Auto Parts, Inc., 686 F.3d 847, 850 (8th Cir. 2012). In ruling on a Rule 12(b)(6) motion to dismiss, the Court may consider, in addition to the face of the c“’”‘aint, matters incorporated by reference or integral to the claim, items subject to judicial notice, matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint whose authenticity is unquestioned; with“ut c“nverting the ’“ti“n int“ “ne f“r su’’ary judg’ent. Miller v. Redwood Toxicology Lab., Inc., 688 F.3d 928, 931 n.3 (8th Cir. 2012) (quoting Charles Alan Wright & Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE § 1357 (3d ed. 2004)). The Court may also consider materials that are outside the complaint, but do not contradict the complaint, without converting a Rule 12(b)(6) motion to dismiss into a motion for summary judgment. Id.; see also Papasan v. Allain, 478 U.S. 265, 269 n.1 (1986) (holding that the Supreme Court would consider historical documentation outside of the complaint 3 where the facts in the documents were not disputed by the parties, but the parties disagreed as to the legal significance of the facts). B. Discussion Defendant argues that p‘aintiff s sole claim for breach of contract claim is preempted by ERISA, and, accordingly, the petition fails to state a claim upon which relief may be granted. (Doc. 9-1, at 3-6). To determine if a claim is preempted by ERISA the Court must determine if the plan at issue is governed by ERISA, and if so, determine if the ”‘aintiff s particular claim is preempted by ERISA. See Van Natta v. Sara Lee Corp., 439 F. Supp.2d 911, 921-35 (N.D. Iowa 2006). This Court has “ut‘ined ERISA s ”ree’”tive f“rce as f“‘‘“ws: Essentially, there are two components to ERISA s extensive preemptive force. First, ERISA § 514(a) expressly preempts all state laws insofar as they may now or hereafter relate to any employee benefit plan . . .. 29 U.S.C. § 1144(a). . .. Second, ERISA § 502(a) contains a comprehensive scheme of civil remedies to enforce ERISA s provisions. See 29 U.S.C. § 1132(a). The preemptive force of this ERISA subsection likewise casts a broad net. A state cause of action that would fall within the scope of this remedial scheme is preempted as conflicting with the intended exclusivity of the remedies provided for by ERISA s remedial scheme, even if those causes of action would not necessarily be preempted by section 514(a). Van Natta, 439 F. Supp.2d at 924-25 (internal citations omitted). Preemption under Secti“n 514(a) is kn“wn as ex”ress ”ree’”ti“n and ”ree’”ti“n under Secti“n 502(a) is kn“wn as c“’”‘ete ”ree’”ti“n. Prudential Ins. Co. of Am. v. Nat’l Park Med. Ctr., Inc., 413 F.3d 897, 907 (8th Cir. 2005). In drafting the express preemption provision, Congress gave broad meaning to the ter’ relate to, and courts have interpreted the express preemption provision to apply to claims having a c“nnecti“n with or reference to an ERISA plan. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47 (1987). A claim also relates to an ERISA plan where the claim is premised on the existence of an ERISA plan. Estes v. Fed. Express Corp., 417 4 F.3d 870, 872 (8th Cir. 2005). Claims for breach of contract or vexatious refusal to pay benefits under an ERISA group insurance policy re‘ate t“ the ”‘an, and are ”ree’”ted by ERISA s ex”ress ”ree’”ti“n ”r“visi“n. See Pilot Life Ins. Co., 481 U.S. at 47-48. (holding that ”‘aintiff s state law tort and breach of contract claims for failure to pay benefits under a group insurance policy governed by ERISA related to an ERISA plan, and acc“rding‘y ”‘aintiff s c‘ai’s were ”ree’”ted by the ex”ress ”ree’”ti“n ”r“visi“n); see also Glenn v. Life Ins. Co. of N. Am., 240 F.3d 679, 680-81 (8th Cir. 2001) (noting that ERISA preempts breach of contract and vexatious refusal to pay claims seeking unpaid policy proceeds). Although ERISA s ex”ress ”ree’”ti“n ”r“visi“n ”ree’”ts state ‘aw c‘ai’s f“r breach of contract or vexatious refusal to pay, ERISA does not leave beneficiaries without a remedy to recover benefits under an ERISA plan. ERISA Section 502(a) sets forth a comprehensive civil enforcement scheme to protect the interests of beneficiaries of ERISA plans. Aetna Health Inc. v. Davila, 542 U.S. 200, 208–09 (2004). Section 502(a) ”r“vides [a] civil action may be brought . . . by a . . . beneficiary . . . to recover benefits due to him under the terms of his plan, [or] to enforce his rights under the terms “f the ”‘an. 29 U.S.C. § 1132(a). ERISA s c“’”rehensive civi‘ enf“rce’ent sche’e would be completely undermined if ERISA-plan . . . beneficiaries were free to obtain remedies under state law that Congress rejected in ERISA. Aetna Health Inc., 542 U.S. at 208-209 (quoting Pilot Life Ins. Co., 481 U.S. at 54). Acc“rding‘y, any state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore pre-empted. Id., at 209. Turning to the facts of the case at bar, there is no dispute that the Policy is governed by ERISA because plaintiff concedes that the Plan, under which defendant issued the Policy, is an ERISA plan. (Doc. 11, ¶ 6). This admission is also consistent 5 with ”‘aintiff s a‘‘egati“ns that defendant s“‘d an Accidenta‘ Death P“‘icy t“ Ash‘ey Industria‘ M“‘dings, Inc., t“ be ”r“vided t“ said Ash‘ey s e’”‘“yees . . .. (D“c. 4, ¶3); See also Pilot Life Ins. Co. 481 U.S. at 43 (finding that an employer established an e’”‘“yee benefit ”‘an g“verned by ERISA when it purchased qualifying a group insurance plan from an insurer); 29 U.S.C. §§ 1002-3. A‘th“ugh ”‘aintiff s ad’issi“n regarding ERISA applying to the Plan is not in the petition itself, the Court will consider the admission with“ut c“nverting defendant s Ru‘e 12(b)(6) ’“ti“n into a motion for su’’ary judg’ent because ”‘aintiff s ad’issi“n is a ”art “f the rec“rd “f the case. See Miller, 688 F.3d at 931 n.3. The C“urt s c“nsiderati“n “f ”‘aintiff s admission is particularly appropriate here because the parties do not dispute that ERISA governs the Policy; they only dispute the legal significance “f ERISA s ”ree’”ti“n ”r“visi“ns in re‘ati“n t“ ”‘aintiff s breach “f c“ntract c‘ai’. See Papasan, 478 U.S. at 269 n.1. Therefore, the Court finds that Plan, and the Policy issued under the Plan, are governed by ERISA. Having determined that the Policy is governed by ERISA, the Court must deter’ine if ”‘aintiff s breach “f c“ntract c‘ai’ is ”ree’”ted under either “f ERISA s preemption mechanisms. ERISA s ex”ress ”ree’”ti“n ”r“visi“n, Secti“n 514(a) a””‘ies to state law claims that have a connection with or reference to an ERISA plan. Pilot Life Ins. Co., 481 U.S. at 46-47. P‘aintiff s ”etiti“n states that defendant s“‘d an Accidenta‘ Death P“‘icy t“ Ash‘ey Industria‘ M“‘dings, Inc., t“ be ”r“vided t“ said Ash‘ey s employees, as a benefit of said employees [sic] e’”‘“y’ent ”ackage. (D“c. 4, ¶ 3). Plaintiff asserts that Mr. Lee was an employee of Ashley, Mr. Lee paid premiums to defendant for accidental death benefits, and that ”‘aintiff was Mr. Lee s na’ed beneficiary for accidental death benefits. (Doc. 4, ¶¶ 4-7). Plaintiff incorporates the Policy into the petition. (Docs. 4, ¶ 17; 4-1). P‘aintiff s s”ecifica‘‘y alleges that none 6 of the limitations contained in the Policy apply, and plaintiff claims that defendant breached the Policy by failing to pay accidental death benefits. (Doc. 4, ¶¶ 21-23). P‘aintiff s breach “f c“ntract c‘ai’ is ”re’ised “n the existence “f an ERISA ”‘an, because the Policy was issued as part of an ERISA plan, and ”‘aintiff s c‘ai’ f“r ”ay’ent from defendant is expressly conditioned on the existence of the Policy. Further, ”‘aintiff s petition references and incorporates the Policy itself, which was issued under an ERISA plan, s“ ”‘aintiff s breach of contract claim has a connection with and reference to an ERISA plan. See Pilot Life Ins. Co., 481 U.S. at 47; Howard v. Coventry Health Care, of Iowa, Inc., 293 F.3d 442, 446 (8th Cir. 2002). Therefore, the Court finds that ”‘aintiff s breach “f c“ntract c‘ai’, the “n‘y c‘ai’ set f“rth in the ”etiti“n, is preempted under ERISA s ex”ress ”ree’”ti“n ”r“visi“n. P‘aintiff s breach “f c‘ai’ is a‘s“ c“’”‘ete‘y ”ree’”ted by ERISA Secti“n 502(a). Any state-law cause of action that duplicates the remedies available under ERISA s civi‘ enforcement provision is completely preempted by ERISA. Aetna Health Inc., 542 U.S. at 209. Plaintiff alleges that she is a beneficiary under the Policy and seeks the payment of benefits due under the Policy which, as set forth above, is governed by ERISA. (Doc 4.) The Court finds that ”‘aintiff s state-law breach of contract claim seeking benefits under the Policy du”‘icates the re’edies avai‘ab‘e under ERISA s civi‘ enf“rce’ent provision, Section 502(a), and theref“re ”‘aintiff s claim is completely preempted. Because ERISA governs the Plan, and the Policy issued under it, and because ERISA both expressly and completely preempts ”‘aintiff s state-law breach of contract claim, the defendant s ’“ti“n t“ dis’iss (D“c. 9) is granted. III. A. Motion to Amend Applicable Law Plaintiff may not amend the petition as a matter of course because more than twenty-one days have passed since defendant filed its Rule 12(b)(6) motion to dismiss. 7 FED. R. CIV. P. 15(a)(1); (Doc. 9) (stating that defendant s ’“ti“n t“ dis’iss was served on plaintiff via ECF on September 6, 2018). Plaintiff may still amend the petition by the “””“sing ”arty s written c“nsent, “r by the C“urt s ‘eave which is free‘y given when justice requires. FED. R. CIV. P. 15(a)(2). When a ’“ti“n t“ dis’iss is granted, the usua‘ ”ractice is t“ grant ‘eave t“ a’end the c“’”‘aint. Hayden v. Cty. of Nassau, 180 F.3d 42, 53 (2d Cir. 1999). The Court may deny a motion for leave to amend where it would prejudice the nonmoving party, or where the amendment would be futile. Popoalii v. Corr. Med. Servs., 512 F.3d 488, 497 (8th Cir. 2008). B. Discussion The Court finds that justice requires allowing plaintiff to amend the petition. Trial in this matter has not yet been scheduled, and the parties have not served discovery, so defendant will not be prejudiced by plaintiff amending her petition. Further, defendant has recognized that plaintiff has, at minimum, a cognizable claim under ERISA s civi‘ enforcement provision. (See D“cs. 9, at 1 n.1; 15, at 1 n.1) ( Linc“‘n d“es n“t oppose the Court allowing Plaintiff to file a second amended petition that contains a claim for rec“very “f benefits under 29 U.S.C. § 1132(a)(1)(b) . . .. ). Theref“re, it is n“t futi‘e to allow plaintiff to amend the petition. P‘aintiff s ’“ti“n t“ amend, set forth in the a‘ternative in ”‘aintiff s resistance t“ defendant s ’“ti“n t“ dis’iss (Doc. 13), is granted. Plaintiff may amend the petition within twenty-one days from the date of this Order. If plaintiff does not amend the petition within the time provided, the Court will dismiss this matter without prejudice. IV. Motion to Extend The Court may, for good cause, extend any deadline if a request is made before the deadline expires. FED. R. CIV. P. 6(b). The parties had sixty days from the date of defendant s a””earance t“ fi‘e a ”r“”“sed schedu‘ing “rder and disc“very ”‘an. See FED. R. CIV. P. 16(b)(2). Defendant appeared on August 30, 2018, when defendant filed its 8 N“tice “f Re’“va‘. (D“c. 1). Acc“rding‘y, the ”arties deadline to file their proposed scheduling order and discovery plan was October 29, 2018. On October 29, 2018, Defendant filed an unopposed motion to extend the time for the parties to file their proposed scheduling order. (Doc. 16). Defendant states that, in light of the ”arties disagreement as to whether ”‘aintiff s c‘ai’ is governed by ERISA, the parties could not agree which scheduling order form use. (Id., at 1-2). The Court finds that defendant filed its unopposed motion to extend before the expiration of the deadline, and good cause exists t“ extend the ”arties dead‘ine t“ sub’it their ”r“”“sed schedu‘ing “rder and disc“very ”‘an. Defendant s Un“””“sed M“ti“n t“ Extend the Dead‘ine t“ Sub’it a Scheduling Report is granted. The parties shall have sixty days from the date of this order to file a scheduling order and discovery plan. V. CONCLUSION F“r the reas“ns stated ab“ve, defendant s M“ti“n t“ Dis’iss P‘aintiff s First Amended Petition at Law (Doc. 9) is granted, plaintiff s ’“ti“n t“ a’end, set f“rth in ”‘aintiff s Resistance to Defendant's Motion to Dismiss Plaintiff's Petition for Failure to State a Claim (Doc. 13), is granted, and defendant s Un“””“sed M“ti“n to Extend the Deadline to Submit a Scheduling Report (Doc. 16) is granted. Plaintiff may file an amended petition within twenty-one days of the date of this order. If plaintiff does not file an amended petition within twenty-one days of the date of this order the Court will dismiss this case without prejudice. The parties shall file a scheduling order and discovery plan within sixty days of the date of this order. 9 IT IS SO ORDERED this 31st day of October, 2018. __________________________________ C.J. Williams United States District Judge Northern District of Iowa 10
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