Stolte v. Securian Life Ins. Co.
| Docket Number | Case No. 21-cv-07735-DMR |
| Decision Date | 15 August 2022 |
| Parties | Shannon STOLTE, Plaintiff, v. SECURIAN LIFE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of California |
Michelle Lee Roberts, Roberts Disability Law, Oakland, CA, for Plaintiff.
Jodi Krystyn Swick, Charan M. Higbee, McDowell Hetherington LLP, Oakland, CA, for Defendant.
ORDER GRANTING MOTION TO DISMISS
Re: Dkt. No. 27
Plaintiff Shannon Stolte alleges that Defendant Securian Life Insurance Company violated the Employee Retirement Income Security Act ("ERISA") when it denied life insurance benefits for her now-deceased spouse, John Stolte ("J. Stolte."). Defendant moved to dismiss Plaintiff's First Amended Complaint ("FAC"). [Docket Nos. 27 ("Mot."), 31 ("Reply").] Plaintiff opposed. [Docket No. 28 ("Opp'n").] The court held a hearing on the motion on March 10, 2022. For the following reasons, the court grants Defendant's motion.
The following facts are derived from the FAC.1 J. Stolte participated in a health and welfare plan (the "Plan") sponsored by his employer Allstate that included life insurance coverage for eligible employees. FAC ¶¶ 2, 6. Defendant insures and administers the Plan's coverage for life insurance benefits. Id. ¶ 2. J. Stolte maintained $710,000 in life insurance coverage under the Plan. Id. ¶ 6. Plaintiff was the beneficiary of her husband's life insurance benefits. Id. ¶ 2.
On Friday, January 22, 2021, J. Stolte resigned from his position with Allstate. See FAC ¶ 12. According to a subsequent internal investigation, Allstate confirmed that J. Stolte proceeded to work the rest of the day. Id. On Monday, January 25, 2021, Allstate sent J. Stolte a "Notice to Employee as to Change in Relationship" and a "Conversion/Portability Notice" (collectively, the "Notices"). Id. ¶¶ 7, 13. The first Notice stated that J. Stolte's employment status had changed due to voluntary separation on Saturday, January 23, 2021. Id. ¶ 13. Plaintiff alleges on information and belief that her husband continued to communicate with Allstate employees after January 22, 2021. Id. ¶ 14. J. Stolte passed away on February 24, 2021. Id. ¶ 9.
The Plan provides that Defendant will pay death benefits to an insured plan participant's beneficiary if the participant dies within 31 days of the termination of group life insurance coverage, regardless of whether the participant had applied to convert his group coverage into an individual life insurance policy. FAC ¶ 8. Plaintiff submitted a claim to Defendant for life insurance benefits following her husband's death. Id. ¶ 9. Defendant denied Plaintiff's claim on the grounds that J. Stolte's coverage terminated on January 22, 2021, his "last day of work," and that he died outside of the 31-day window. Id.
Plaintiff appealed Defendant's denial. FAC ¶ 10. She argued that J. Stolte's coverage could not have terminated earlier than January 25, 2021 because he worked a full workday on January 22 and the "Plan provides for coverage during all days one is actively at work and on the weekends." Id. ¶¶ 10-11. After conducting an investigation and obtaining relevant documents from Allstate, Defendant affirmed its denial of Plaintiff's claim on August 6, 2021. Id. ¶¶ 12-15. Defendant's denial letter informed Plaintiff that she could file a lawsuit or submit a second voluntary appeal. Id. ¶ 15. Plaintiff then requested all documents relevant to her claim, and Defendant provided her with a copy of its post-appeal claim file. Id. ¶ 16. That file contained redacted communications from Defendant's in-house legal department about her appeal. Id. ¶¶ 16-18. Plaintiff demanded production of the unredacted communications, but Defendant objected absent a court order. Id. ¶¶ 17-18.
Plaintiff claims that Defendant's denial of life insurance benefits violated the terms of the Plan and ERISA. She alleges one claim for relief under ERISA section 502, 29 U.S.C. § 1132(a)(1)(B). She also asserts—but without making a separate claim for relief—that Defendant violated her right to a full and fair review under ERISA's implementing regulations, 29 C.F.R. § 2560.503-1; see ERISA section 503, 29 U.S.C. § 1133(2).
On October 4, 2021, Plaintiff filed her initial complaint. On November 30, 2021, Defendant moved to dismiss; Plaintiff timely filed an amended complaint on December 14, 2021, thereby terminating that motion. Defendant responded by filing the current motion.
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims alleged in the complaint. See Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). When reviewing a motion to dismiss for failure to state a claim, the court must "accept as true all of the factual allegations contained in the complaint," Erickson, 551 U.S. at 94, 127 S.Ct. 2197, and may dismiss a claim "only where there is no cognizable legal theory" or there is an absence of "sufficient factual matter to state a facially plausible claim to relief," Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010) (citing Ashcroft v. Iqbal, 556 U.S. 662, 677-78, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)) (quotation marks omitted). A claim has facial plausibility when a plaintiff "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citation omitted). In other words, the facts alleged must demonstrate "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).
Under Federal Rule of Civil Procedure 15(a), leave to amend should be granted as a matter of course, at least until the defendant files a responsive pleading. Fed. R. Civ. P. 15(a)(1). After that point, Rule 15(a) provides generally that leave to amend the pleadings before trial should be given "freely . . . when justice so requires." Fed. R. Civ. P. 15(a)(2). "This policy is to be applied with extreme liberality." Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (quotation omitted). However, leave to amend may be denied where the complaint "could not be saved by any amendment," i.e., "where the amendment would be futile." Thinket Ink Info. Res., Inc. v. Sun Microsystems, Inc., 368 F.3d 1053, 1061 (9th Cir. 2004).
ERISA section 502(a) authorizes a participant in an employee benefit plan to bring a civil action to recover benefits due under the plan's terms. 29 U.S.C. § 1132(a)(1)(B). The court applies a de novo standard of review to actions for the recovery of ERISA benefits, unless the plan grants discretionary authority to the trustee or fiduciary. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). "When conducting a de novo review of the record, the court does not give deference to the claim administrator's decision, but rather determines in the first instance if the claimant has adequately established that he or she is [entitled to benefits] under the terms of the plan." Muniz v. Amec Const. Mgmt., Inc., 623 F.3d 1290, 1295-96 (9th Cir. 2010). The parties agree that Defendant's denial of Plaintiff's claim is subject to de novo review. See Mot. at 12; Reply at 14; Docket No. 22 at 6.
The Supreme Court has "recognized the particular importance of enforcing plan terms as written" in ERISA claims. Heimeshoff v. Hartford Life & Acc. Ins. Co., 571 U.S. 99, 100, 134 S.Ct. 604, 187 L.Ed.2d 529 (2013). When reviewing an ERISA plan, the court must "apply contract principles derived from state law . . . guided by the policies expressed in ERISA and other federal labor laws." Gilliam v. Nev. Power Co., 488 F.3d 1189, 1194 (9th Cir. 2007). "Those direct us to look to the agreement's language in context and construe each provision in a manner consistent with the whole such that none is rendered nugatory." Dupree v. Holman Pro. Counseling Ctrs., 572 F.3d 1094, 1097 (9th Cir. 2009). "[T]erms in an ERISA plan should be interpreted in an ordinary and popular sense as would a person of average intelligence and experience." Gilliam, 488 F.3d at 1194. Id.
The Ninth Circuit has explained that "[i]n interpreting the terms of an ERISA plan, we examine the plan documents as a whole and, if unambiguous, we construe them as a matter of law." Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620, 626 (9th Cir. 2008) (quoting Welch v. Unum Life Ins. Co. of Am., 382 F.3d 1078, 1082 (10th Cir. 2004)). "An ambiguity exists when the terms or words of a [benefits] plan are subject to more than one reasonable interpretation." McDaniel v. Chevron Corp., 203 F.3d 1099, 1110 (9th Cir. 2000). Any ambiguities "must be construed against the insurer." Kunin v. Benefit Tr. Life Ins. Co., 910 F.2d 534, 539 (9th Cir. 1990). However, courts Dupree, 572 F.3d at 1097-98. "Whether the terms of a plan are plain or ambiguous is a question of law." McDaniel, 203 F.3d at 1110. "A court may resolve contractual claims on a motion to dismiss if the terms of the contract are unambiguous." Ellsworth v. U.S. Bank, N.A., 908 F. Supp. 2d 1063, 1084 (N.D. Cal. 2012).
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