Summary
stating that at the pleading stage, plaintiff may simultaneously assert alternate claims for recovery of benefits under § 1132(B) and for breach of fiduciary duty under § 1132
Summary of this case from Black v. Long Term Disability Ins. Co.Opinion
Civil Action No. 1:03-CV-1316-CC.
January 16, 2004
ORDER
Pending before the Court is Defendants Unum Life Insurance Company of America ("Unum"), UnumProvident Corporation ("UnumProvident"), and Genex Services, Inc.'s ("Genex") (collectively referred to herein as the "UnumProvident Defendants") motions to partially dismiss Plaintiff's Complaint and First Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted.
I. BACKGROUND
Plaintiff Joseph M. Edmond ("Plaintiff") was employed by Engelhard Corporation ("Engelhard") and worked as a water truck driver for over 22 years. Engelhard sponsored and maintained an employee welfare benefit plan ("the Plan") within the meaning of section 3(1) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1002(1), for certain of its eligible employees. Long term disability benefits under the Plan are funded by a group policy issued to Engelhard, as group policyholder, by Unum. Unum is a wholly owned subsidiary of UnumProvident. The Plan names Unum as the plan administrator with discretionary authority to interpret the terms of the group policy and to make eligibility determinations thereunder. Long-term disability benefits payable under the group policy are to be paid by Unum. As an eligible employee, Plaintiff was insured under the group policy and was a participant in the Plan.
Plaintiff ceased work with Engelhard in September 1999 due to low back pain, which was subsequently diagnosed as lumbar stenosis and necessitated two back surgeries. After first applying for and receiving short term disability benefits, Unum approved Plaintiff's claim for long term disability ("LTD") benefits. The LTD benefits were paid to Plaintiff from June 8, 2000 until they were terminated on December 7, 2001, apparently because it was determined that Plaintiff was not totally disabled. Defendant Genex, which is also a subsidiary of UnumProvident, performed a transferable skills analysis/employability analysis of Plaintiff while he was on leave and concluded that he could perform full-time sedentary work.
Subsequent to exhausting his administrative remedies, Plaintiff filed the instant action against Unum, UnumProvident, Genex, Engelhard and the Engelhard Group Long Term Disability Plan under ERISA, 29 U.S.C. § 1001 et seq., alleging wrongful termination of his disability benefits, breach of fiduciary duty, and wrongful denial of his other employee benefits, as well as seeking attorneys' fees. In lieu of an answer, the UnumProvident Defendants moved for a partial dismissal of Plaintiff's Complaint. Plaintiff then filed his First Amended Complaint, which the UnumProvident Defendants moved to partially dismiss on the same grounds as their motion to dismiss Plaintiff's original Complaint.
The same four counts are alleged in both Plaintiff's original and First Amended Complaint, and the Court will treat the First Amended Complaint as the operative complaint.
II. DISCUSSION
A. Motion to Dismiss Standard
On a motion to dismiss brought pursuant to Fed.R.Civ.P. 12(b)(6), all allegations in the plaintiff's complaint must be accepted as true, and the court may dismiss the complaint "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations."Powell v. U.S., 945 F.2d 374, 375 (11th Cir. 1991) (citingHishon v. King Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984)); see also, F.T.C. v. Citigroup, Inc., 239 F. Supp.2d 1302, 1305 (N.D.Ga. 2001) (a motion to dismiss "concerns only the complaint's legal sufficiency and is not a procedure for resolving factual questions or for addressing the merits of the case').
B. Count I
Count I of Plaintiff's First Amended Complaint is a claim for recovery of benefits under the Plan pursuant to 29 U.S.C. § 1132(a)(1)(B), and is asserted against Unum, UnumProvident, and the Engelhard Group Long Term Disability Plan.
Section 502(a)(1)(B) of ERISA provides that "[a] civil action may be brought by a participant or beneficiary . . . to recover benefits due to him 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." 29 U.S.C. § 1132(a)(1)(B).
The UnumProvident Defendants have moved to dismiss Count I against UnumProvident on the ground that UnumProvident was not a party to the Plan and had no obligations thereunder.
While there is no dispute that Unum is named as the plan administrator in the Plan documents, Plaintiff alleges in his First Amended Complaint that the persons involved in handling and denying his claim for LTD benefits were employees of UnumProvident, not employees of Unum, and that UnumProvident employees exercised authority, control and discretion with respect to Plaintiff's LTD benefits claim. In addition, Plaintiff alleges that UnumProvident issues checks on behalf of Unum, considers income of Unum as its own, and substantially controls the operations of Unum. "Proof of who is the plan administrator may come from the plan document, but can also come from the factual circumstances surrounding the administration of the plan, even if these factual circumstances contradict the designation in the plan document." Hamilton v. Allen-Bradley Co., Inc., 244 F.3d 819, 824 (11th Cir. 2001); see also, Garren v. John Hancock Mut. Life Ins. Co., 114 F.3d 186, 187 (11th Cir. 199 ("[t]he proper party defendant in an action concerning ERISA benefits is the party that controls administration of the plan"). Plaintiff's allegations that UnumProvident exercised control over the administration of the Plan, including initiating the investigation into Plaintiff's LTD benefits, determining what information to provide to the medical reviewers, and making the decision to terminate his benefits, are sufficient to state a claim against UnumProvident for wrongful termination of his disability benefits.
However, inasmuch as Plaintiff states in his opposition to the UnumProvident Defendants' motion to dismiss that he does not seek extra-contractual damages, Plaintiff's claim for "damages," including "other economic and consequential damages" ( see First Amended Complaint, ¶ 88) in Count I is DISMISSED as to both Unum and UnumProvident. See also, Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134,105 S.Ct. 3085, 87 L.Ed.2d 96 (1985) (recovery of extra-contractual damages not authorized by ERISA).
C. Count II
Plaintiff's second cause of action is a claim for breach of fiduciary duty in connection with the handling and termination of his disability claim. As an initial matter, while the caption for Count II names only Unum, in his allegations with respect to the this claim, Plaintiff alleges that "Defendants" have breached their fiduciary duties owed to Plaintiff ( see, e.g., First Amended Complaint, ¶¶ 96-99). It is clear from the allegations made with respect to Count II, as well as from Plaintiff's responsive brief, that Plaintiff is actually asserting breaches of fiduciary duty against UnumProvident and Genex, as well as Unum. As such, the Court will treat Count II as being alleged against each of the UnumProvident Defendants. Additionally, while Plaintiff does not specify in his First Amended Complaint that Count II is being brought pursuant to 29 U.S.C. § 1132(a)(3), in his opposition brief he argues that he may seek equitable relief pursuant to this section, and clarifies that he is not seeking relief under 29 U.S.C. § 1132(a)(2).
Section 1132(a)(3) authorizes a civil action by a participant "to enjoin any act or practice which violates . . . the terms of the plan, or . . . to obtain other appropriate equitable relief. . . ." 29 U.S.C. § 1132(a)(3). A breach of fiduciary duty maybe such a violation, and Plaintiff is entitled to seek equitable relief under § 1132(a)(3). Varity Corp. v. Howe, 516 U.S. 489, 116 S.Ct. 1065,134 L.Ed.2d 130 (1996). Further, while the UnumProvident Defendants contend that Plaintiff may not seek relief under both § 1132(a)(1)(B) and § 1132(a)(3), at the pleadings stage, Plaintiff may simultaneously assert alternative claims for recovery of benefits under § 1132(a)(1)(B) and for breach of fiduciary duty under § 1132(a)(3). See, e.g., Devlin v. Empire Blue Cross and Blue Shield, 274 F.3d 76, 89 (2nd Cir. 2001); Gieger v. Unum Life Ins. Co. of America, 213 F. Supp.2d 813, 816-818 (N.D.Ohio 2002). The Court finds that Plaintiff has alleged sufficient facts to state a claim for breach of fiduciary duty against Unum and UnumProvident to survive these defendants' motion to dismiss Count II. However, Plaintiff has not sufficiently alleged that Genex has any authority or control with respect to the management of the Plan, and dismissal of Count II as to Genex is warranted.
Under ERISA, a fiduciary is defined as a person who "exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets. . . ." 29 U.S.C. § 1002(21)(A).
D. Count III
In Count III, Plaintiff alleges that "Defendants" have wrongfully denied and interfered with his other employee benefits, including his continued receipt of medical insurance benefits. In his responsive brief, however, Plaintiff clarifies that Count III is not being brought against the UnumProvident Defendants, but instead is brought only against Engelhard. Accordingly, Count III is DISMISSED as to each of the UnumProvident Defendants.
E. Count IV
In Count IV, Plaintiff seeks an award of attorneys' fees against all defendants. Insofar as Plaintiff has stated sufficient claims against Unum and UnumProvident to survive their motions to dismiss, dismissal of Plaintiff's claim for attorneys' fees against Unum and UnumProvident is not appropriate.
III. CONCLUSION
The UnumProvident Defendants' Motion to Partially Dismiss Plaintiff's Complaint [7-1] and Motion to Partially Dismiss Plaintiff's First Amended Complaint [25-1] are GRANTED in part, DENIED in part. The motions are GRANTED with respect to all of Plaintiff's claims against Genex, and Genex is HEREBY DISMISSED as a defendant. The motions are also GRANTED with respect to Plaintiff's claim for extra-contractual damages under Count I and GRANTED with respect to Count III against Unum and UnumProvident. The motions are DENIED with respect to Plaintiff's claim for recovery of benefits under Count I and with respect to Counts II and IV against Unum and UnumProvident.
SO ORDERED.