Allen v. First Unum Life Ins. Co., Case No: 2:18-cv-69-FtM-99MRM

• Decision Date: 12 December 2018
• Docket Number: Case No: 2:18-cv-69-FtM-99MRM
• Parties: MARCUS ALLEN, M.D., Plaintiff, v. FIRST UNUM LIFE INSURANCE COMPANY, PROVIDENT LIFE AND CASUALTY INSURANCE COMPANY, and UNUM GROUP, Defendants.
• Court: U.S. District Court — Middle District of Florida

MARCUS ALLEN, M.D., Plaintiff, v. FIRST UNUM LIFE INSURANCE COMPANY, PROVIDENT LIFEAND CASUALTY INSURANCE COMPANY, and UNUM GROUP, Defendants.

Case No: 2:18-cv-69-FtM-99MRM

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA FORT MYERS DIVISION

December 12, 2018

OPINION AND ORDER

This matter comes before the Court on defendants' Motion to Dismiss Amended Complaint as "Shotgun" Pleading, or in the Alternative, Motion to Dismiss Counts IV, V, VI, VII, and VIII (Doc. #68) and defendants' Motion for Judgment on the Pleadings as to Counts I-III, filed on September 24, 2018. Responses (Docs. ##73, 74) and Replies (Docs. ##79, 80) have been filed. Plaintiff also submitted his Declaration with six exhibits attached (Doc. #74-1) to his Response to the Motion for Judgment on the Pleadings. For the reasons set forth below, the Motion for Judgment on the Pleadings is denied and the Motion to Dismiss is granted in part with leave to amend.

I. Background

Plaintiff Marcus Allen, M.D. filed this case to recover benefits allegedly due to him under five disability insurance policies. Allen is a former diagnostic radiologist with Prospect Hill Radiology Group, P.C., where he was insured against disability pursuant to four individual¹ and one group² long-term "own occupation" disability income insurance policies³ from defendants. Plaintiff specifically chose defendants'⁴ policies because they provided for "total disability" if he was unable to perform the duties of his regular occupation ("own occupation") even if he were physically capable of working in another occupation.

In May 2010, after 24 years as a radiologist and shareholder/partner with Prospect Hill⁵, Dr. Allen began suffering changes in his vision which prohibited him from performing the acute visual analysis required of a diagnostic radiologist. Three separate physicians examined plaintiff the week of May 1-7, 2010, and ultimately diagnosed him with ocular degeneration, posterior vitreous detachment with retinal tear, bleed in his left eye, as well as significant floaters and visual disturbances of both eyes detrimentally impacting his visual field. (Doc. #64, ¶ 50.) Dr. Allen resigned from his radiology practice on June 23, 2010 and filed a claim for disability benefits with defendants claiming that he became totally disabled as of May 1, 2010. Defendants agreed plaintiff was totally disabled, and paid Dr. Allen monthly benefits for the next five years until August 31, 2015, when defendants determined that Dr. Allen failed to support the continued existence of his permanent disability with objective medical findings.

Defendants conducted periodic review of Dr. Allen's disability claim over the years, requesting his medical records and contacting his physicians. As part of the claim and under the policies' terms, defendants required plaintiff to apply for SocialSecurity disability benefits. If he was approved, the benefit that defendants paid would be reduced by the amount of Social Security benefits. As part of the review process, in 2013, the Social Security Administration (SSA) had plaintiff undergo a physical examination and several physicians and a vocational expert reviewed his medical records. The SSA determined that Dr. Allen was incapable of performing the occupation of diagnostic radiologist since June 2010, but defendants disagreed with that determination. Defendants therefore required plaintiff to undergo examinations with its chosen physicians, who found that Dr. Allen was no longer disabled.

Defendants terminated Dr. Allen's disability benefits in August 2015 on the ground that he was no longer disabled. Plaintiff has exhausted all appeals and this lawsuit followed. According to Dr. Allen, defendants failed to investigate his disability claims in good faith, failed to place his interests above their own, and arbitrarily terminated benefits despite his continued disability under the policies. Plaintiff alleges that his inexplicable benefit termination was fueled by Unum's scheme of terminating claims of high benefit disabled medical professionals insured under "own occupation" disability insurance policies in order to favorably impact Unum's bottom line and corporate share value. (Doc. #64, ¶¶ 133, 153, the "Scheme".)

The Court dismissed the initial Complaint (Doc. #1) as a shotgun pleading with leave to amend. (Doc. #62.) In its Opinion, the Court pointed out the defects in the Complaint so that plaintiff could properly avoid future shotgun pleadings. (Id., Sec. IV.) Plaintiff filed his Amended Complaint (Doc. #64) on August 22, 2018.

II. Judgment on the Pleadings (Counts I-III)

Defendants' Motion for Judgment on the Pleadings asks the Court to decide whether one or more of plaintiff's state law claims seeking damages for breach of contract and breach of fiduciary duty are defensively preempted by the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. (ERISA). Defendants assert that it is evident from the pleadings that Counts I-III are preempted by ERISA because the policies at issue are part of an ERISA-governed employee welfare benefit plan. Thus, defendants believe they are entitled to judgment as a matter of law on their first affirmative defense, as asserted in their Answer and supported by the exhibits attached thereto (Doc. #69).

Rule 12(c) of the Federal Rules of Civil Procedure provides that a party may move for judgment on the pleadings "[a]fter the pleadings are closed." Fed. R. Civ. P. 12(c). "Judgment on the pleadings is proper when no issues of material fact exist, and the moving party is entitled to judgment as a matter of law based on the substance of the pleadings and any judicially noticed facts.We accept all the facts in the complaint as true and view them in the light most favorable to the nonmoving party." Interline Brands, Inc. v. Chartis Specialty Ins. Co., 749 F.3d 962, 965 (11th Cir. 2014) (internal citation omitted). See also Bankers Ins. Co. v. Fla. Residential Prop. & Cas. Joint Underwriting Ass'n, 137 F.3d 1293, 1295 (11th Cir. 1998). "Judgment on the pleadings is appropriate only when the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Horsley v. Feldt, 304 F.3d 1125, 1131 (11th Cir. 2002) (citations omitted).

A court adjudicating a motion for judgment on the pleadings considers the complaint and any attached exhibits, as well as the answer and any attached exhibits that are undisputedly authentic and central to the claim. Horsley v. Feldt, 304 F.3d 1125, 1134-35 (11th Cir. 2002). See also Fed. R. Civ. P. 12(d) ("If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment."). "The Court has broad discretion to choose whether to covert the motion for judgment on the pleadings to a motion for summary judgment under Rule 56." Szabo v. Fed. Ins. Co., 2011 WL 3875421, *3 (M.D. Fla. Aug. 31, 2011).

A. ERISA Preemption

To begin, the Court notes that under ERISA, two types of preemption may arise—conflict preemption or complete preemption.Here, defendants rely on conflict preemption. (Doc. #69; Doc. #70, pp. 6-7.) "Conflict preemption, also known as defensive preemption, is a substantive defense to preempted state law claims." Conn. State Dental. Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1344 (11th Cir. 2009). "This type of preemption arises from ERISA's express preemption provision, § 514(a), which preempts any state law claim that 'relates to' and ERISA plan." Id. (citing 29 U.S.C. § 1144(a) (ERISA "supersede[s] any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and are not exempt under section 1003(b) of this title.")).

Here, the parties dispute whether an applicable ERISA "plan" exists under which plaintiff seeks to recover benefits. Defendants argue that all four individual and the Group Policy are part of an employee welfare benefit plan. Plaintiff argues the policies are not ERISA plans. Thus, the first and central inquiry is whether the policies qualify as ERISA plan(s).

B. Whether the Policies Qualify as ERISA Plans

Section 1132(a) of ERISA provides, in relevant part, that a participant or beneficiary of a "plan" may bring suit "to recover benefits due to him under the terms of his plan...." 29 U.S.C. § 1132(a)(1)(B). The statute defines "plan" as "an employee welfare benefit plan or an employee pension benefit plan or a plan which is both an employee welfare benefit plan and an employee pensionbenefit plan." 29 U.S.C. § 1002(3); see also Kemp v. Int'l Business Machines Corp., 109 F.3d 708, 712 (11th Cir. 1997) ("The term 'plan' as used in ERISA means an 'employee welfare benefit plan' (or an employee pension benefit plan[ ) ] ...."). "Employee welfare benefit plan" specifically encompasses:

any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services or (B) any benefit described in section 186(c) of this title (other than pensions on retirement or death, and insurance to provide such pensions).

29 U.S.C. § 1002(1). Whether there is an employee welfare benefit plan governed by ERISA is a question for the court. Stern v. Provident Life & Accident Ins. Co., 295 F. Supp. 2d 1321, 1324 (M.D. Fla. 2003).

The Eleventh Circuit has adopted a "flexible analysis for determining whether an ERISA plan is...