Opinion
2:07-CV-1983-GEB-KJM.
January 16, 2008
ORDER
This matter was determined to be suitable for decision without oral argument. L.R. 78-230(h).
Defendant Colonial Life and Accident Insurance ("Colonial") moves for dismissal of Plaintiff's Complaint under Federal Rule of Civil Procedure 12(b)(6), or in the alternative for summary judgment. Plaintiff alleges in his Complaint that the insurance payments Colonial offered Plaintiff under a Long Term Disability ("LTD") insurance policy Plaintiff purchased were not as high as a Colonial agent represented they would be when Plaintiff purchased the LTD. (Compl. ¶¶ 5, 9-10.) Therefore, Plaintiff alleges against Defendants three state law claims in his Complaint: fraud, breach of contract, and breach of the implied covenant of good faith and fair dealing. (See Compl. ¶¶ 1-17.) Colonial argues these claims are preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), prescribed in 29 U.S.C. §§ 1001 et seq. Plaintiff counters his claims are not preempted since the LTD policy was not "established" or "endorsed" by Plaintiff's employer, as required to be governed by ERISA.
Subsequent references to "Rules" are to the Federal Rules of Civil Procedure.
MOTION TO DISMISS
The Rule 12(b)(6) dismissal standards are well known and need not be repeated here.
To prevail on its dismissal motion, Colonial must demonstrate that the LTD policy was "established or maintained by an employer." 29 U.S.C. § 1002(1). "A plan is `established' when there has been some degree of implementation by the employer going beyond a mere intent to confer a benefit." Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1214 (11th Cir. 1999). Colonial has not shown that Plaintiff's employer established or maintained the LTD policy. Therefore, Colonial's dismissal motion is denied.
Colonial does not assert that Plaintiff's employer "maintained" the LTD policy as an ERISA plan, but instead argues only that Plaintiff's employer "established" the LTD.
MOTION FOR SUMMARY JUDGMENT
The summary judgment standards are well known and need not be repeated here.
Colonial seeks summary judgment on Plaintiff's state law claims, arguing that the undisputed facts show that the LTD policy was an ERISA plan. (Mot. at 3:14-9:28.) Plaintiff opposes the motion and requests additional time for discovery under Rule 56(f). (Opp'n at 8:14-10:6.) A party opposing a summary judgment motion on Rule 56(f) grounds "must identify by affidavit the specific facts that further discovery would reveal, and explain why those facts would preclude summary judgment." Tatum v. City County of San Francisco, 441 F.3d 1090, 1100 (9th Cir. 2006).
Plaintiff argues discovery would reveal facts allowing him to defeat Colonial's motion. Specifically, Plaintiff argues he would be able to show that his employer did not "establish," "maintain" or "endorse" the LTD policy, and thereby demonstrate that the LTD policy is not an ERISA plan. Plaintiff contends that, even if his employer did "establish" or "maintain" the LTD policy, Plaintiff would be able to defeat the motion by showing that the LTD policy falls within the "safe harbor" exemption from ERISA. (Opp'n at 10:2.) Under the "safe harbor" exemption, codified at 29 C.F.R. § 2510.3-1(j), a group insurance plan is exempt from ERISA coverage when the plan meets four requirements, including the requirement that the employer has not "endors[ed]" the plan.Stuart v. UNUM Life Ins. Co. of Am., 217 F.3d 1145, 1149 (9th Cir. 2000).
Colonial counters that Plaintiff's Rule 56(f) request should be denied because further discovery on these issues would be futile and Plaintiff has not diligently conducted discovery. (Reply at 6:19-7:16.) However, Colonial filed its summary judgment motion prior to serving its initial disclosures under Rule 26(a), and Plaintiff represents he lacks the discovery necessary to respond adequately to the motion. (Decl. of Trenton Diehl in Opp'n to Def.'s Mot. for Summ. J. ¶ 3.) Therefore, Plaintiff's Rule 56(f) motion is granted and Colonial's summary judgment motion is denied without prejudice.
IT IS SO ORDERED.