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Carney v. Prudential Insurance Co. of America

United States District Court, S.D. Ohio, Western Division

January 10, 2017

SUSAN CARNEY, Plaintiff,
v.
PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant.

          DLOTT, J.

          REPORT AND RECOMMENDATION

          KAREN L. LITKOVITZ UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court on defendant Prudential Insurance Company of America's motion to partially dismiss the amended complaint and motion to strike request for extracontractual/punitive damages and jury demand (Doc. 17), defendant's supporting memorandum (Doc. 18), and defendant's reply memorandum (Doc. 19). Plaintiff has not filed a response in opposition to the motion.

         Plaintiff originally filed this action alleging a wrongful denial of accidental death benefits in state court. (Doc. 2). Defendant removed the action to this Court on June 23, 2016. (Doc. 1). Defendant asserted that plaintiffs claims, which were brought exclusively under state law, were completely preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C., § 1001, et seq. The Court subsequently granted plaintiff leave to amend the complaint to join the Plan Administrator, Cintas Corporation (Cintas), as a defendant to the action and to add an ERISA claim against Prudential Insurance Company of America[1] (Prudential) and Cintas. (Doc. 14). The Amended Complaint was filed on September 22, 2016. (Doc. 15).

         Defendant Prudential moves to dismiss the state law claims raised in the amended complaint under Fed. R. Civ, P. 12(b)(6) on the ground those claims are preempted by ERISA. (Docs. 17, 18). Prudential alleges that plaintiffs claim for extracontractual/punitive damages and her jury demand must be stricken because ERISA does not provide for such damages or for a trial by jury. (Id.).

         I. Motion to dismiss

         In deciding a motion to dismiss under Rule 12(b)(6), the Court must accept all factual allegations as true and make reasonable inferences in favor of the non-moving party. Keys v. Humana, Inc., 684 F.3d 605, 608 (6th Cir. 2012) (citing Harbin-Bey v. Rutter, 420 F.3d 571, 575 (6th Cir. 2005)). Only "a short and plain statement of the claim showing that the pleader is entitled to relief is required. Id. (quoting Fed.R.Civ.P. 8(a)(2)). "[T]he statement need only give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Id. (quoting Erickson v. Pardus, 551 U.S. 89, 93 (2007) (internal quotation marks omitted) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Although the plaintiff need not plead specific facts, the "[f]actual allegations must be enough to raise a right to relief above the speculative level" and to "state a claim to relief that is plausible on its face." Id. (quoting Twombly, 550 U.S. at 555, 570). A plaintiff must "plead[] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

         The issue raised by Prudential's motion to dismiss under Rule 12(b)(6) is whether plaintiff has pled state law claims that are not preempted by ERISA. ERISA broadly preempts state law claims insofar as they "relate to" any employee benefit plan as defined under the statute. 29 U.S.C. § 1144(a); see also Smith v. Commonwealth General Corp., 589 F.App'x 738, 744 (6th Cir. 2014) (quoting Metropolitan Life Ins. Co. v. Mass., 471 U.S. 724, 733 (1985)). ERISA defines "employee benefit plan" to include any "employee welfare benefit plan, " which means any plan maintained by an employer to provide certain benefits, including death benefits payable to a beneficiary. 29 U.S.C. § 1002(1), (3). The phrase "relate to" is construed broadly such that a state law claim is preempted by ERISA if "it has connection with or reference to that plan." Cromwell v. Equicor-Equitable HCA Corp., 944 F.2d 1272, 1276 (6th Cir. 1991) (citing Metropolitan Life Ins. Co., 471 U.S. at 732-33); Shaw v. Delta Airlines, Inc., 463 U.S. 85 (1983)). A claim brought under state law is completely preempted by ERISA if the claim seeks '"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)." Lockett v. Marsh USA, Inc., 354 F.App'x 984, 988 (6th Cir. 2009) (citations omitted).

         "It is not the label placed on a state law claim that determines whether it is preempted, but whether in essence such a claim is for the recovery of an ERISA plan benefit." Peters v. Lincoln Elec. Co., 285 F.3d 456, 469 (6th Cir. 2002) (citing Cromwell, 944 F.2d at 1275). Regardless how a claim is labeled, it is a claim for the recovery of ERISA benefits for preemption purposes if "(1) the plaintiff complains about the denial of benefits to which he is entitled 'only because of the terms of an ERISA-regulated employee benefit plan'; and (2) the plaintiff does not allege the violation of any 'legal duty (state or federal) independent of ERISA or the plan terms[.]"' Gardner v. Heartland Indus. Partners, 715 F.3d 609, 613 (6th Cir. 2013) (quoting Aetna Health Inc. v. Davila, 542 U.S. 200, 210 (2004)).

         Claims for breach of contract and fiduciary duty, if brought under an employee benefit plan, are preempted because such claims necessarily relate to the ERISA plan. Girl Scouts of Middle Tennessee, Inc. v. Girl Scouts of the U.S.A., 770 F.3d 414, 419 (6th Cir. 2014) (citations omitted); see also Soehnlen v. Fleet Owners Ins. Fund, No. 16-3124, 2016 WL 7383993, at *9 (6th Cir. Dec. 21, 2016) (state laws that grant relief for these breaches are preempted because ERISA affords the requested relief). State law claims for the torts of fraud and misrepresentation have also been held to be preempted as simply providing "alternative enforcement mechanisms" to the ERISA enforcement scheme. See Briscoe v. Fine, 444 F.3d 478, 498 (6th Cir. 2006) (citing Penny/Ohlnwnn/Nieman, Inc. v. Miami Valley Pension Corp., 399 F.3d 692, 698 (6th Cir. 2005)).

         There is no dispute that plaintiff here seeks to recover benefits under an employee benefit plan as defined under ERISA. Plaintiff states in the amended complaint that this case arises from the wrongful denial of accidental death benefits payable to her as a beneficiary under a fully insured group term life insurance policy, Group Policy No. G-39971 (Policy) issued by Prudential to defendant Cintas. (Doc. 15, Amended Complaint, ¶¶ 1, 5, 21; Exh. C).[2] Plaintiff alleges that Prudential issued the Policy and that the policyholder and Plan Administrator is Cintas, which is a fiduciary under ERISA. (Id., ¶¶ 5, 6). Plaintiff alleges that the Policy covered her deceased spouse, Kelly Carney. (Id., ¶ 1). Plaintiff asserts that the action arises under ERISA and "to the extent the claims are not pre-empted by ERISA, [she] has asserted, bad faith, wrongful refusal to pay a valid" accidental death claim under the policy. (Id., ¶ 2). Plaintiff contends she brings the action under the following provisions of ERISA: 29 U.S.C. §§ 1132(a)(1)(B), 1132(a)(3), and 1132(c). (Id.). She brings a claim against defendants for breach of fiduciary duty under ERISA. (Id., ¶¶ 20, 21, 22, Count One).

         Because plaintiff seeks to recover benefits allegedly owing under an employee benefit plan, her state law claims are preempted to the extent they "relate to" the plan. 29 U.S.C. § 1144(a). Plaintiffs state law claims clearly arise from the denial of benefits under the plan at issue and duplicate her ERISA claim. Plaintiff brings state law claims for breach of contract based on allegations that Prudential refused to pay benefits owed under the Policy (Id., ¶¶ 23- 26, Count Two); fraud and deceit premised on allegations that Prudential fraudulently represented to decedent and plaintiff that it would promptly pay a valid claim under the Policy (Id., ¶¶ 27-31, Count Three); and bad faith failure to pay benefits based on defendant's alleged refusal to pay plaintiff accidental death benefits due under the Policy (Id., ¶¶ 32-35, Count Four). In making these claims, plaintiff incorporates by reference the same conduct she alleges in support of her ERISA claim and then contends such conduct constitutes violations of state law and is actionable to the extent her state law claims are not preempted by ERISA. (Id., ¶¶ 25, 30, 34). By presenting her state law claims in this manner, plaintiff leaves no doubt that these claims simply "mirror[]" her ERISA claim. See Briscoe, 444 F.3d at 498-99. Moreover, plaintiff does not dispute that her state law claims "relate to" an employee benefit plan and that her state law claims seek to recover benefits under that plan.

         Thus, plaintiffs state law claims for breach of contract (Count Two), fraud and deceit (Count Three) and bad faith failure to pay benefits (Count Four) are preempted by ERISA. Defendant Prudential's motion to dismiss these claims under Rule 12(b)(6) should be granted.

         II. ...


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