Beach v. Mutual of Omaha Ins. Co.
| Decision Date | 28 October 2002 |
| Docket Number | No. 02-2124-DJW.,02-2124-DJW. |
| Citation | 229 F.Supp.2d 1230 |
| Parties | Kevin C. BEACH, Plaintiff, v. MUTUAL OF OMAHA INSURANCE CO., et al., Defendants. |
| Court | U.S. District Court — District of Kansas |
Kevin J. Berger, David P. Crandall, Crews, Waits, Brownlee, Berger & Hoop, Kansas City, MO, for Plaintiff.
Richard E. McLeod, Dean E. Nash, McLeod, Nash & Franciskato, Kansas City, MO, for Defendants.
Plaintiff brings this action pursuant to the Employee Retirement Income Security Act of 19741 ("ERISA"), and Kansas state law, seeking medical benefits under a group health insurance policy. Plaintiff also seeks an injunction requiring health insurance coverage. Currently pending before the Court is Plaintiff's Motion for Leave to Amend Complaint (doc. 19), Defendants' Motion to Dismiss (doc. 2) and Plaintiff's Motion for Oral Argument on both of Defendants' Motions (doc. 28). For the reasons stated below, Plaintiff's Motion for Leave to Amend Complaint will be granted and Defendants' Motion to Dismiss will be granted in part and denied in part as specifically set forth herein.
Moreover, the Court determines, after examining the briefs submitted by the parties, that oral argument would not materially assist in resolving the pending Motions. Thus, Plaintiff's Motion for Oral Argument will be denied.
Plaintiff's First Amended Complaint alleges the following facts, which the Court accepts as true for purposes of the pending Motion to Dismiss2:
Defendant Peter Kiewit Sons', Inc. ("Kiewit") is a construction company incorporated in Nebraska. During the relevant time period, Plaintiff's father, Barry Beach, worked for Kiewit. Kiewit's group health insurance policy ("the Benefit Plan" or "the Plan") is self-funded. Defendant Mutual of Omaha Insurance Company ("Mutual of Omaha") is an administrator of the Benefit Plan.
Prior to December 31, 2000, Plaintiff was an eligible beneficiary under the Benefit Plan because he was Barry Beach's natural-born, unmarried son, under the age of 23 years, who was a full-time student at an accredited college and chiefly dependent on Barry Beach for support. Plaintiff's eligibility for plan benefits lapsed on or about December 31, 2000, however, because Plaintiff chose not to continue full-time enrollment as a college student.
On or about July 13, 2001, Plaintiff was accepted as a student at Iowa Western Community College. At that time, Plaintiff enrolled in classes on a full-time basis with course work to begin on August 20, 2001. Plaintiff paid $1,568.00 in tuition for 18 credit hours, purchased required tools and supplies in an amount exceeding $400.00 and attended a day-long on-campus mandatory orientation session for full-time students.
On or about July 30, 2001, Barry Beach contacted agents of the administrator of the Plan to advise them of his desire to have Plaintiff covered under the Benefit Plan based on Plaintiff's recent college enrollment. On or about July 30, 2001 — and on several other occasions prior to August 13, 2001-agents of the administrator of the Plan, including but not limited to Sandy Otto and Kris Athey, orally informed Barry Beach that Plaintiff was covered by the Benefit Plan as of Barry Beach's July 30, 2001 request for such coverage. Such agents further communicated to Barry Beach that an enrollment form would be sent to Barry Beach by the Plan administrator, which he should return when completed.
Between the time period of July 30, 2001 and August 13, 2001, neither Defendant provided the referenced enrollment form to Barry Beach. On August 13, 2001, Plaintiff was seriously injured in an automobile accident, rendering him a paraplegic. Since the accident, Plaintiff has made claims for medical benefits under the Benefit Plan. Plaintiff's claims for benefits have been denied. In support of denial, Defendants assert that, at the time of the accident, Plaintiff had not yet begun attending classes and thus was not eligible to receive benefits under the Benefit Plan.
Plaintiff brings this lawsuit against Defendants seeking benefits under the Benefit Plan, as well as an injunction requiring coverage under the Benefit Plan. In his original Complaint, Plaintiff asserts the following four claims against Defendants: (1) ERISA Civil Enforcement; (2) Promissory Estoppel; (3) Negligent Misrepresentation; and (4) Intentional Misrepresentation.
On April 23, 2002, Defendants moved to dismiss Counts II, II, and IV of the Complaint on grounds that those three claims are preempted by ERISA. After the Motion to Dismiss was fully briefed, Plaintiff moved to amend the original Complaint by modifying the promissory estoppel claim in Count II of the Complaint. More specifically, Plaintiff seeks in his Motion for Leave to Amend to change the Kansas common law promissory estoppel claim to a claim for equitable estoppel under federal ERISA law. In his Motion for Leave to Amend, Plaintiff also seeks to add his father as a party plaintiff.
Based on the relationship between the two pending motions, the Court finds it prudent to resolve Plaintiff's Motion for Leave to Amend the Complaint before turning to the issues presented by Defendants' Motion to Dismiss.
Rule 15 of the Federal Rules of Civil Procedure allows one amendment of the pleadings, before a responsive pleading is served or within twenty days after service.3 Subsequent amendments are allowed by leave of court or by written consent of an adverse party and should be "freely given when justice so requires."4 "The decision to grant leave to amend a complaint, after the permissive period, is within the trial court's discretion ... and will not be disturbed absent an abuse of that discretion."5 The district court should deny leave to amend only when it finds "undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility of amendment."6
In support of their Motion to Dismiss Count II of Plaintiff's Complaint, Defendants assert Plaintiff's state law claim of promissory estoppel is preempted by ERISA and thus fails to state a claim for relief on its own. In his Motion for Leave to Amend, Plaintiff seeks to rectify this preemption issue by changing the state law promissory estoppel claim to an equitable estoppel claim under federal ERISA law. Defendants oppose the motion, arguing "Plaintiff's request to recharacterize his state law promissory estoppel claim as an estoppel claim under ERISA is [merely] an attempt to avoid dismissal."7 Defendants further oppose the motion on grounds that "the Tenth Circuit has not adopted an ERISA equitable estoppel claim and Plaintiff has not presented facts that would support such a claim even if it were adopted."8 Because "recharacterization" is not prohibited by the rules absent flagrant abuse, bad faith, inordinate/unexplained delay or prejudice to the opposing party, the Court will construe Defendants' sole argument to be futility of the proposed amendment.
A court may deny a motion to amend as futile if the proposed amendment would not withstand a motion to dismiss or if it otherwise fails to state a claim.9 Accordingly, this Court must analyze Plaintiff's proposed amendments as if they were before the Court on a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). Dismissal of a claim under Rule 12(b)(6) is appropriate only when it appears beyond a doubt that a plaintiff can prove no set of facts in support of the theory of recovery that would entitle him or her to relief.10 Thus, the issue before the Court is not whether Plaintiff will ultimately prevail, but whether he is entitled to offer evidence to support his proposed claim.11
For the reasons stated in Section III(B)(1)(b) of this Memorandum and Order denying Defendants' Motion to Dismiss Count II of Plaintiff's First Amended Complaint, infra, the Court cannot say, based on the allegations pled in the proposed First Amended Complaint, that it appears beyond a doubt that Plaintiff can prove no facts in support of an equitable estoppel claim under federal ERISA law. Defendants may very well be able to obtain summary judgment on this new claim; however, it would be premature for the Court to dismiss the claim at this point in time.
Plaintiff seeks to add his father, Barry Beach, as a party to this action. In opposition to Plaintiff's request, Defendants state Plaintiff fails to identify a claim different or distinct from those claims already set forth in the original Complaint by Plaintiff.
Plaintiff's motion is timely under the August 21, 2002 Scheduling Order. Defendants do not allege, and the Court does not find, any undue prejudice to Defendants in allowing Plaintiff to add his father as a party to this action. Thus, the Court finds that the Plaintiff's request to add his father as a party plaintiff should be granted.
Defendants move to dismiss Counts II, III and IV of Plaintiff's Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. As noted above, a Rule 12(b)(6) motion to dismiss will be granted only if it appears beyond a doubt that the plaintiff is unable to prove any set of facts entitling him to relief under his theory of recovery.12 "All well-pleaded facts, as distinguished from conclusory allegations, must be taken as true."13 The Court must view all reasonable inferences in favor of the plaintiff, and the pleadings must be liberally construed.14 Again, the issue in reviewing the sufficiency of a complaint is not whether the plaintiff will prevail, but whether the plaintiff is entitled to offer evidence to support her claims.15
Defendants argue Count II of the original Complaint...
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...that is, if it “would not withstand a motion to dismiss or if it otherwise fails to state a claim,” Beach v. Mut. of Omaha Ins. Co., 229 F.Supp.2d 1230, 1234 (D.Kan.2002) (Waxse, J.). As noted above, the Court has reviewed all of Gonzalez' voluminous filings since his original Complaint. Ev......
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