Opinion
Civil Action No. SA-05-CA-210RF.
August 8, 2005
ORDER GRANTING DEFENDANTS' PARTIAL MOTION TO DISMISS
In this action, Plaintiff Elvira Zavala sued Defendant Liberty Life Assurance Company of Boston ("Liberty"), United Services Automobile Association ("USAA"), USAA Short-Term Disability Plan, and USAA Long-Term Disability Plan under the Employee Retirement Income Security Act of 1974 ("ERISA") in a dispute arising from Liberty's denial of short term disability benefits in the amount of $7,812.40 and long term disability benefits in the amount of $15,466.15. Zavala seeks to recover benefits under Liberty's disability plan pursuant to 29 U.S.C. § 1132(a)(1)(B). Additionally, Zavala alleges that because Liberty acted in bad faith and breached its fiduciary duties by denying her disability benefits an additional claim against Liberty for equitable relief can be brought pursuant to 29 U.S.C. § 1132(a)(3). Liberty has filed a Partial Motion to Dismiss Plaintiff's § 1132(a)(3) claim under Fed.R.Civ.P. 12(b)(6) (Docket No. 5), arguing that because Plaintiff's remedy can be adequately redressed under § 1132(a)(1)(B), the law bars Plaintiff from recovering on a § 1132(a)(3) claim. Because the Court finds that Plaintiff's denial of disability benefits can be adequately remedied with a § 1132(a)(1)(B) claim, the Court will grant Defendant's 12(b)(6) Motion to Partially Dismiss with respect to Plaintiff's § 1132(a)(3) claim and will permit Plaintiff to proceed with her § 1132(a)(1)(B) claim.
Complaint, ¶ 17.
Id., ¶ 20.
Id.
Docket No. 5, at 1-2.
FACTS PROCEDURAL BACKGROUND
USAA employed Plaintiff Elvira Zavala for twenty-nine years. On November 15, 2003, while working as a USAA mortgage service representative, Plaintiff became disabled. Hypertension, anxiety disorder, and major depression rendered Plaintiff unable to work. As a benefit of employment with USAA, Plaintiff participated in USAA's short-term and long-term disability plans. Plaintiff began receiving short-term disability payments on November 22, 2003. Plaintiff lost her short-term disability payments on December 18, 2003 as a consequence of being diagnosed with mild depression and normal blood pressure. On July 14, 2004, Defendant denied Plaintiff's long-term disability claim for the same reasons.
Complaint, ¶ 7.
Id.
Id.
Id., ¶ 8.
Id., ¶ 10.
Id.
Id., ¶¶ 10, 14.
Plaintiff Elvira Zevala initiated this suit suing Liberty, USAA, USAA Short-Term Disability Plan, and USAA Long-Term Disability Plan. On May 20, 2005, Defendants filed a Motion to Partially Dismiss Plaintiff's Complaint, arguing that pursuant to Fed.R.Civ.P. 12(b)(6), Plaintiff's § 1132(a)(3) ERISA claim does not provide an avenue for legal redress. Plaintiff responded to Defendants' Motion to Partially Dismiss on May 31, 2005. All Defendants replied to Plaintiff's response on June 8, 2005. On July 18, 2005, pursuant to Rule 41(a) of the Federal Rules of Civil Procedure, Plaintiff and two of the named defendants, USAA and USAA Short-Term Disability Plan, agreed and stipulated that this action be dismissed with prejudice against USAA and USAA Short-Term Disability Plan (Docket No. 12). Thus, before the Court is Defendant Liberty and Defendant USAA Long-Term Disability Plan's 12(b)(6) Motion to Partially Dismiss Plaintiff's case for failure to state a § 1132(a)(3) claim under ERISA upon which relief can be granted.
Complaint, ¶ 1.
Docket No. 5, at 1-2.
Docket No. 8.
Docket No. 9.
STANDARD OF REVIEW
When reviewing a Rule 12(b)(6) motion to dismiss for failure to state a claim, the complaint must be liberally construed in favor of the plaintiff, and all the facts pleaded in the complaint must be taken as true. Dismissal on this basis is a disfavored means of disposing of a case, and district courts should avoid such dismissals "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." "The question therefore is whether, in the light most favorable to the plaintiff and with every doubt resolved in his behalf, the complaint states any valid claim for relief."
Campbell v. Wells Fargo Bank, N.A., 781 F.2d 440, 442 (5th Cir. 1986); United States ex rel. Riley v. St. Luke's Episcopal Hosp., 355 F.3d 370, 375 (5th Cir. 2004).
Kennedy v. Tangipahoa Parish Library Bd. of Control, 224 F.3d 359, 365 (5th Cir. 2000).
Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 102 (1957); Kane Enters. v. MacGregor, Inc., 322 F.3d 371, 374 (5th Cir. 2003).
Gregson v. Zurich American Ins. Co., 322 F.3d 883, 885 (5th Cir. 2003) (citing 5 CHARLES A. WRIGHT ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1357, at 601 (1969)).
DISCUSSION
The Court considers whether Zavala is entitled to recover under a § 1132(a)(3) claim. In Varity Corp. v. Howe, the Supreme Court ruled that an ERISA plaintiff may bring a private action for breach of fiduciary duty only where there is no other remedy available under 29 U.S.C. § 1132. Additionally, the Fifth Circuit has held that a potential beneficiary may not sue for breach of fiduciary duty if he has a pending claim under § 1132(a)(1)(B) for benefits allegedly owed. In allowing beneficiaries to obtain equitable relief with a § 1132(a)(3) claim, the Supreme Court pays deference to the canon "the specific governs the general" that the legislature had in mind when it created ERISA. The Supreme Court has understood this canon to be a warning against applying a general provision when doing so would undermine limitations created by a more specific provision. The Supreme Court has interpreted § 1132(a)(3) to be a "catchall provision" which acts as a safety net, offering appropriate equitable relief for injuries caused by violations that § 1132 does not remedy elsewhere.The Fifth Circuit has consistently followed the Supreme Court's decision in Varity. Where the plaintiff in a purported § 1132(a)(3) action was only seeking disability benefits allegedly due under a policy for which § 1132(a)(1)(B) provided an adequate remedy, the plaintiff was barred for recovering under § 1132(a)(3). In another matter, when a plaintiff sought damages under § 1132(a)(3) for breach of fiduciary duty and additionally sought to recover disability plan benefits under § 1132(a)(1)(B), the Fifth Circuit dismissed the plaintiff's breach of fiduciary duty claim under § 1132(a)(3). The Fifth Circuit based its dismissal of the section § 1132(a)(3) breach of fiduciary duty claim on the fact that the § 1132(a)(1)(B) claim to recover disability benefits was the predominate cause of action in the plaintiff's suit. More recent federal cases have said that it is "settled law" in the Fifth Circuit that a plaintiff who brings a lawsuit for benefits may not also bring a claim under § 1132(a)(3) for breach of fiduciary duty.
Estate of Bratton v. Nat'l Union Fire Ins. Co. of Pittsburgh, 215 F.3d 516, 526 (5th Cir. 2000).
Rhorer v. Raytheon Eng'rs Constructors, Inc., 181 F.3d 634, 639 (5th Cir. 1999).
Id.
Metro. Life Ins. Co. v. Palmer, 238 F. Supp. 2d 826, 830 (E.D. Tex. 2002) (citing Constantine v. Am. Airlines Pension Benefit, 162 F.Supp. 2d 552, 557 (N.D. Tex. 2001)).
In the instant case, Plaintiff filed a § 1132(a)(1)(B) claim as a consequence of being denied short and long term disability benefit payments. Plaintiff seeks recovery against Defendants for the § 1132(a)(1)(B) claim in conjunction with recovery for a § 1132(a)(3) claim for breach of fiduciary duty. Plaintiff argues that she can recover on both claims. Plaintiff's argument fails to realize that a § 1132(a)(3) claim is unavailable as a matter of law when a § 1132(a)(1)(B) claim affords Plaintiff an adequate remedy. The most recent United States Supreme Court and Fifth Circuit cases have found that where a plaintiff seeks recovery under both § 1132(a)(3) and § 1132(a)(1)(B), the § 1132(a)(1)(B) claim alone provides the plaintiff with an adequate remedy. As a matter of general policy, the legislature designated § 1132(a)(3) as the "catchall" section that would afford plaintiffs an adequate remedy only when no other remedies under § 1132 are available to them. In the instant case, the predominate cause of action in Plaintiff's case is Plaintiff's denial of disability benefits. Consequently, Plaintiff filed a claim to recover disability benefits under § 1132(a)(1)(B), and this specific section alone provides an adequate remedy to Plaintiff. Plaintiff cannot simultaneously recover under § 1132(a)(1)(B) and § 1132(a)(3).
Plaintiff argues that a § 1132(a)(3) claim is available if she does not succeed on her § 1132(a)(1)(B) claim for disability benefits. However, the United States Supreme Court and Fifth Circuit have unambiguously held that a plaintiff's unsuccessful § 1132(a)(1)(B) claim will not render the plaintiff's alternative § 1132(a)(3) claim for equitable relief viable. Plaintiff has erroneously confused prevailing with viability. A claim under § 1132(a)(3) is not viable whether or not Plaintiff prevails on his § 1132(a)(1)(B) claim. Having filed a § 1132(a)(1)(B) claim for denial of disability benefits for which there is an adequate avenue for legal redress, Plaintiff cannot additionally seek recovery under § 1132(a)(3) for breach of fiduciary duty.
Tolson, 141 F.3d at 610.
CONCLUSION
Accordingly, it is ORDERED that Defendant's Partial Motion to Dismiss (Docket No. 5) be GRANTED, as stated herein.