Butler v. FCA US, LLC, Case No. 14–14752.

• Decision Date: 11 August 2015
• Docket Number: Case No. 14–14752.
• Citation: 119 F.Supp.3d 699
• Parties: John BUTLER, Plaintiff, v. FCA US, LLC, a Delaware Limited Liability Company, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

119 F.Supp.3d 699

John BUTLER, Plaintiff,

v.FCA US, LLC, a Delaware Limited Liability Company, Defendant.

Case No. 14–14752.

United States District Court, E.D. Michigan, Southern Division.

Signed Aug. 11, 2015.

Andrew M. Harris, Kitch, Drutchas, Wagner, Valitutti & Sherbrook, Detroit, MI, for Plaintiff.

Cynthia M. Filipovich, Clark Hill, Detroit, MI, William E. Altman, Vercruysse, Murray, Bingham Farms, MI, for Defendant.

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS (Doc. # 4)

SEAN F. COX, District Judge.

This is an ERISA¹ benefits case. Plaintiff John Butler ("Plaintiff") alleges that Defendant FCA US, LLC² ("Defendant" or "FCA") wrongfully denied his claim for benefits after he was seriously injured in an automobile accident. (Compl., Doc. # 1).

This matter is before the Court on Defendant's Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. # 4). The motion has been fully briefed by the parties. For the reasons set forth below, the Court shall GRANT Defendant's Motion to Dismiss Count Two of the Complaint, DENY Defendant's Motion to Dismiss Count Four, and DENY WITHOUT PREJUDICE Defendant's Motion to Dismiss the entire Complaint based on the affirmative defense of res judicata.

BACKGROUND

Plaintiff was employed by Chrysler Group, LLC (Defendant's predecessor entity) for more than forty-four years. (Compl., Doc. # 1 at ¶ A). Plaintiff alleges that he purchased and paid for additional disability insurance coverage to supplement the other various employee benefits he received through Chrysler. (Compl. at ¶ A). Specifically, Plaintiff alleges that he was covered under Chrysler's Group Insurance Plan ("the Plan") (see Compl. at ¶ 1), and that in 2002 he also purchased Voluntary Group Accident Insurance ("VGAI") as an option under the Plan. (Compl. at ¶ 7). Plaintiff claims that one of the benefits under the VGAI is a Permanent and Total Disability Benefit ("PTDB"). (Compl. at ¶ 7). Plaintiff alleges that Metropolitan Life Insurance Company ("MetLife") was the insurer and third-party administrator of Chrysler's VGAI Plan, but that "Chrysler is still responsible for the Plan and its benefits." (Compl. at ¶ 8).

Plaintiff alleges that, in 2008, he was rendered permanently and totally disabled by an automobile accident. (Compl. at ¶ B). "Sometime in 2011, [Plaintiff] submitted a claim to MetLife for a disability benefit under the Plan." (Compl. at ¶ 15). Under the 2002 version of the Plan, which Plaintiff believes applies to his claim for benefits, MetLife is listed as the Plan Underwriter of the VGAI Group Policy. (Compl. at Ex. B, PgID# 71).³

MetLife denied Plaintiff's claim on March 30, 2012. (Compl. at ¶ 16). Plaintiff timely appealed, but MetLife denied his claim a second time. (Compl. at ¶ 17). Plaintiff alleges that he communicated with someone at Chrysler's Plan and Benefit Express ("BE") who confirmed with MetLife that Plaintiff was entitled to PTDB benefits under the Plan. (Compl. at ¶ 20). Yet, Plaintiff never received those benefits. (Id. ).

On December 5, 2013, Plaintiff, represented by counsel, filed a one count complaint against MetLife, alleging that MetLife wrongfully denied payment of benefits to Plaintiff in violation of ERISA. (Butler v. Metropolitan Life Ins. Co., Civil Case No. 13–14958, E.D. Mich., Doc. # 1) ("Butler I " ). That case was assigned to Honorable Lawrence P. Zatkoff, United States District Judge. On April 4, 2014, after no activity had taken place since the case had been filed, Judge Zatkoff issued an "Order for Plaintiff to Show Cause Why This Case Should Not be Dismissed for Failure to Prosecute." (Butler I, Case No. 13–14958, Doc. # 4). Plaintiff's response was due by April 18, 2014. (Id. ). Plaintiff failed to respond to the April 4, 2014 Show Cause Order. On April 22, 2014, Judge Zatkoff dismissed Plaintiff's case for failure to prosecute, pursuant to Local Rule 41.2.⁴ (Case No. 13–14958, Doc. # 6).

Plaintiff, now represented by different counsel, filed this case against Defendant FCA on December 16, 2014. (Compl., Doc. # 1). In his Complaint, Plaintiff alleges four Counts against FCA:

Count One—Claim for Benefits Pursuant to 29 U.S.C. § 1132(a)(1)(B) ;

Count Two—Claim for Failure to Provide Notice of Deletion of Benefits to 29 U.S.C. § 1132(a)(1)(B) ;

Count Three—Claim for Equitable Estoppel 29 U.S.C. § 1132(a)(3)(B) ; and

Count Four—Claim for Failure to Provide Documents Pursuant to 29 U.S.C. § 1024(b)(4).

(Compl., Doc. # 1).

In lieu of filing an Answer, Defendant has filed a Motion to Dismiss Pursuant to Civil Rule 12(b)(6). (Doc. # 4). Defendant argues that Plaintiff's claims are barred by res judicata based on the dismissal for failure to prosecute of Plaintiff's first case against MetLife. Alternatively, Defendant argues that Counts Two and Four should be dismissed because they each fail to state a claim upon which relief may be granted. (Doc. # 4 at i). Plaintiff opposes Defendant's motion. (Pl. Resp., Doc. # 10).

STANDARD OF REVIEW

When deciding a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court must construe the complaint in the light most favorable to the plaintiff and must accept all the factual allegations contained in the complaint as true. Lambert v. Hartman, 517 F.3d 433, 439 (6th Cir.2008). "When a court is presented with a Rule 12(b)(6) motion, it may consider the Complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant's motion to dismiss so long as they are referred to in the Complaint and are central to the claims contained therein." Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir.2008).

In order to survive a Rule 12(b)(6) motion to dismiss, Plaintiff's complaint need contain only "enough facts to state a claim for relief that is plausible on its face." See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "Where a complaint pleads facts that are merely consistent with a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 557, 127 S.Ct. 1955 ). "Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679, 129 S.Ct. 1937.

ANALYSIS

Defendant argues that all of Plaintiff's claims in this case are barred by the doctrine of res judicata, which is also known as claim preclusion. In the alternative, Defendant argues that Counts Two and Four should be dismissed because they each fail to state a claim upon which relief may be granted.

I. Defendant Has Not Met Its Burden Of Establishing That Res Judicata Applies In This Case.

Res judicata is an affirmative defense, but may be raised in the context of a motion to dismiss. See Westwood Chemical Co., Inc. v. Kulick, 656 F.2d 1224, 1228–29 (6th Cir.1981) ("[I]t is now clearly established that res judicata can also be raised by motion."). "The doctrine of res judicata precludes a subsequent suit between the same parties based on the same claims or causes of action that were or could have been raised in a prior action." Fillmore v. Brush Wellman, Inc., 2004 WL 527167, at *1 (N.D.Ohio Feb. 5, 2004) (citing Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981) ).

"The preclusive effect of a federal-court judgment is determined by federal common law." Stryker Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, 681 F.3d 819, 824 (6th Cir.2012) (citation omitted). Under federal common law, a party asserting res judicata must establish four elements: "(1) a final decision on the merits by a court of competent jurisdiction; (2) a subsequent action between the same parties or their privies; (3) an issue in the subsequent action which was litigated or which should have been litigated in the prior action; and (4) an identity of the causes of action." Kane v. Magna Mixer Co., 71 F.3d 555, 560 (6th Cir.1995) ; see also Bittinger v. Tecumseh Products Co., 123 F.3d 877, 880 (6th Cir.1997). "The party asserting the defense of res judicata ... bears the burden of proof." Keymarket of Ohio, LLC v. Keller, 483 Fed.Appx. 967, 971 (6th Cir.2012).

Plaintiff argues that the second and fourth elements cannot be met. In other words, Plaintiff claims that MetLife and FCA are not in privity, and that there is no identity between the causes of action in Butler I and the instant case. Because Plaintiff only challenges two of the four res judicata elements, the Court presumes that Plaintiff concedes that Defendant has met its burden of proof on the other two elements.⁵

A) Same Parties Or Their Privies

In order for res judicata to apply, the prior case and the current case must involve the same parties or their privies. Kane, 71 F.3d at 560. It is undisputed that FCA was not a party to Butler I. Generally, a nonparty to a suit is not barred or prevented from re-litigating claims and issues resolved by that suit.⁶ See, e.g., Amos v. PPG Indus., Inc., 699 F.3d 448, 451 (6th Cir.2012) (acknowledging the general rule against nonparty preclusion).

The existence of "privity" is an exception to this general rule. The term "privity" is used to describe a situation in which a nonparty to a prior suit should nevertheless be bound by its judgment. Sturgell, 553 U.S. at 894 n. 8, 128 S.Ct. 2161 ("The term ‘privity,’ however, has also come to be used more broadly, as a way to express the conclusion that nonparty preclusion is appropriate on any ground."); see also Wright & Miller, Fed. Prac. & Proc. Juris. § 4449 (2d ed.) ("As the preclusive effects of judgments have expanded to include nonparties in more and more situations, however, it has come to be recognized that the privity...