Lewis v. United States

• Docket Number: 22-344C
• Decision Date: 23 August 2023
• Parties: MARCUS E. LEWIS, Plaintiff, v. THE UNITED STATES, Defendant.
• Court: Court of Federal Claims

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MARCUS E. LEWIS, Plaintiff,
v.
THE UNITED STATES, Defendant.

No. 22-344C

United States Court of Federal Claims

August 23, 2023

Not to be Published

Richard Voytas, Voytas Law, LLC, Saint Louis, MO, for Plaintiff.

Anne Delmare, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for Defendant. With her on the briefs were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, and Claudia Burke, Assistant Director.

ORDER

MATTHEW H. SOLOMSON JUDGE

In attempting "to recover the remainder of . . . [life insurance] benefits" allegedly owed, ECF No. 1 ("Compl.") ¶ 3, Plaintiff's initial complaint for breach of contract inexplicably ignores the bedrock principle that "federal employee benefits and pay are governed by statute, not by contract." Doe v. United States, 513 F.3d 1348, 1359 (Fed. Cir. 2008) (citing Adams v. United States, 391 F.3d 1212, 1221 (Fed. Cir. 2004)).^[1] In response to the government's motion to dismiss for lack of jurisdiction, Plaintiff does not even attempt to defend his initial complaint; instead, he seeks leave to file an amended complaint, arguing that the new complaint moots the government's motion to dismiss.

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The government's motion to dismiss the initial complaint is correct. But while some parts of the amended complaint suffer from similar defects as the initial complaint, the amended complaint contains a narrow set of allegations sufficient to survive dismissal.

I. FACTUAL BACKGROUND^[2]

Plaintiff, Marcus E. Lewis, is the sole beneficiary of the lump-sum life insurance benefits for which his step-father, Roy Freeman, had paid as a government employee. Compl. ¶¶ 7, 14; ECF No. 14-1 (proposed amended complaint, or "Prop. Am. Compl.") ¶¶ 8, 16. Mr. Freeman retired from the United States Postal Service ("USPS") and, in 2020, passed away. Compl. ¶¶ 7, 15-16; Prop. Am. Compl. ¶¶ 8, 17, 32.

As a USPS employee, Mr. Freeman elected several lump-sum life insurance benefits through the Federal Employees Group Life Insurance Program ("FEGLI"). Compl. ¶ 8; Prop. Am. Compl. ¶ 9. These included, as of 2018: (1) Basic Life Insurance with a payout of $64,000, Compl. ¶ 10; Prop. Am. Compl. ¶ 10; (2) an "Option A benefit" with a payout of $10,000, Compl. ¶ 11; Prop. Am. Compl. ¶ 11; and (3) an "Option B benefit" with a payout of $124,000, Compl. ¶ 12; Prop. Am. Compl. ¶ 12. Plaintiff claims that, at all times before Mr. Freeman's death, Mr. Freeman satisfied the conditions for receiving these three distinct FEGLI life insurance benefits. Compl. ¶ 13; Prop. Am. Compl. ¶ 15. Office of Personnel Management ("OPM" or "USOPM") documentation seems to indicate that, when Mr. Freeman retired, he elected to continue Basic Life Insurance and an Option A benefit (at a "75% Reduction") but not an Option B benefit. ECF No. 7-1 at 5 (filed by Defendant).^[3] Plaintiff "reviewed this [OPM] documentation carefully, and disputes that it originated from" Mr. Freeman. Prop. Am. Compl. ¶ 32.

Separate from the FEGLI benefits, Mr. Freeman paid for a Federal Employee Retirement System ("FERS") annuity with a 2018 lump-sum value of $64,061.53; he began receiving annuity payments before his death. Compl. ¶¶ 8-9, 15; Prop. Am. Compl. ¶¶ 13-14. Plaintiff estimates that the remaining, unpaid value of Mr. Freeman's FERS benefit was approximately $38,000. Compl. ¶¶ 9, 15, 17; Prop. Am. Compl. ¶ 14.

Following Mr. Freeman's death, Plaintiff followed OPM's instructions for collecting Mr. Freeman's life insurance benefits. Compl. ¶¶ 18-19; Prop. Am. Compl.

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¶¶ 19-20. On or about January 2021, Plaintiff received a payment of $77,063.04. Compl. ¶ 20 (describing the payment as "under the Basic benefit"); Prop. Am. Compl. ¶ 21 (alleging that "Plaintiff did not receive an explanation for how [OPM] calculated $77,063.04"). Plaintiff proceeded to contact OPM for information about the life insurance payouts he expected to receive. Compl. ¶¶ 22-24; Prop. Am. Compl. ¶¶ 26-28. OPM sent Plaintiff an additional $915.21 payment. Compl. ¶ 25 (asserting this payment "did not contain any explanation for how the amount was calculated or under what benefit it came from"); Prop. Am. Compl. ¶ 29. Plaintiff sent OPM another inquiry on October 18, 2021, regarding the benefits, but he received no response. Compl. ¶¶ 28-29; Prop. Am. Compl. ¶¶ 30-31.

II. PROCEDURAL BACKGROUND

On March 30, 2022, Mr. Lewis filed his complaint in this Court against OPM specifically. See Compl. The only claim in Mr. Lewis's complaint is that OPM breached an alleged contract "to provide Mr. Freeman with retirement benefits and life insurance benefits." Compl. ¶ 31; see id. ¶¶ 30-44. The requested relief includes Plaintiff's estimated value of Mr. Freeman's unpaid benefits ($158,123.44), Plaintiff's "costs incurred herein," and pre- and post-judgment interest. Compl. at 6.

On August 1, 2022, the government filed a motion to dismiss Mr. Lewis's claim for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims ("RCFC"). ECF No. 7 ("MTD"). Defendant argues this Court lacks jurisdiction to decide Mr. Lewis's complaint because: (1) the federal government's duties pursuant to FEGLI do not include payment of life insurance benefits, see MTD at 5; (2) the federal government does not contract with federal employees for FEGLI benefits and thus was never in privity of contract with Mr. Freeman (or Mr. Lewis), see MTD at 5-7 (describing how employees contract with an insurance carrier); and (3) this Court lacks jurisdiction to decide claims for FERS benefits, see MTD at 8-9.^[4]

On January 19, 2023, Mr. Lewis filed a response to the government's motion to dismiss and a cross-motion to amend his complaint. ECF No. 14. Mr. Lewis's proposed amended complaint "account[s] for additional information learned" since he initiated this case. Id. at 1. In light of the proposed amended complaint, Plaintiff argues the Court should deny the government's motion to dismiss as moot. Id. at 2.

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Plaintiff attached his proposed amended complaint to his response and crossmotion. In that proposed amended complaint, Mr. Lewis raises two counts. Count I alleges that the government violated the "FEGLI act" in at least one of the following ways:

a. USOPM failed to accurately and correctly process [Mr Freeman's] retirement paperwork, causing the loss of insurance benefits;

b. USOPM failed to cause the issuance of the insurance contract relevant to the Basic benefit;

c. USPOM [sic] failed to cause the issuance of the insurance contract relevant to Option A; and

d. USOPM failed to cause the issuance of the insurance contract relevant to Option B.

Prop. Am. Compl. ¶ 36; id. ¶ 33 (referring to the "Federal Employees' Group Life Insurance ('FEGLI') Act" without citing here or elsewhere any specific statutory provision). As with the initial complaint, the basis for this proposed claim is the alleged discrepancy between the amount Plaintiff received and the amount he believes he should have received based on the benefits for which Mr. Freeman allegedly paid. Prop. Am. Compl. ¶¶ 10-12, 37-47 (describing Plaintiff's damages calculation and alleging OPM has not explained its own FEGLI payout calculations).

Count II of Plaintiff's proposed amended complaint claims that OPM "has a statutory obligation to pay all benefits due and owing under the FERS program" and that OPM "has failed to meet" this obligation. Prop. Am. Compl. ¶¶ 50-51 (citing 5 U.S.C. § 8341(a)). The claim's entire factual basis is also the previously alleged payout discrepancy. Prop. Am. Compl. ¶ 49. In total, Plaintiff's proposed amended complaint seeks damages "in excess of" $158,000 plus costs and interest - similar to what Plaintiff requested in his original complaint. See Prop. Am. Compl. at 6-7.

On February 2, 2023, the government responded to Plaintiff's motion to amend his complaint. ECF No. 15 ("Def. Resp.").^[5] There, the government argued "that leave to amend should be denied when amendment would be futile." Id. at 4 (citing cases). In response to Plaintiff's revised claim that OPM failed to facilitate the payments due and owed pursuant to a FEGLI policy, the government argues that "Mr. Lewis is unable to identify the contract that was elected by Mr. Freeman and never issued" and instead "offers conclusory allegations that are unsupported by factual allegations and cannot withstand a motion to dismiss." Id. at 7; see also id. at 8 (citing Ashcroft v. Iqbal, 556 U.S.

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662, 677-78 (2009), amongst other cases, and suggesting that Mr. Lewis sue the insurance carrier for any unpaid amount). In response to Plaintiff's new FERS-specific claim, the government repeats its argument from the motion to dismiss that this Court's jurisdiction does not include FERS-related claims. Id. at 9 ("Congress has made clear that claimants must first seek review from OPM, then from the [Merit Systems Protection Board ("MSPB")], and finally from the Court of Appeals for the Federal Circuit." (citing 5 U.S.C. §§ 8461(c), (e)(1), 5 U.S.C. § 7703(b)(1), and 28 U.S.C. § 1295(a)(9))).^[6]

On February 9, 2023, Mr. Lewis filed a reply in support of his motion to amend his complaint. ECF No. 16 ("Pl. Rep."). There, he asserts that he "simply wants to know through discovery the information that he has been unable to otherwise obtain and, if that information shows he is entitled to additional payment, he would like to be paid what he is owed." Id. at 1. Based on the information the government provided during this litigation, Plaintiff located additional documents that "formed the basis for his goodfaith belief that [OPM] failed to cause . . . the issuance of the proper insurance policies pursuant to the FEGLI act." Id. at 2-3 (citing 5 U.S.C. § 8701 et seq.). This led to the "specific allegations regarding the United States'...