Van Arsdel v. Liberty Life Assurance Co. of Bos.

• Decision Date: 29 March 2016
• Docket Number: CIVIL ACTION NO. 14-2579
• Citation: 175 F.Supp.3d 464
• Parties: Craig Van Arsdel, Plaintiff, v. Liberty Life Assurance Company of Boston, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

175 F.Supp.3d 464

Craig Van Arsdel, Plaintiff,

v.Liberty Life Assurance Company of Boston, Defendant.

CIVIL ACTION NO. 14-2579

United States District Court, E.D. Pennsylvania.

Signed March 29, 2016

Gregory J. Boles, Fenner & Boles, LLC, Philadelphia, PA, for Plaintiff.

James P. Hollihan, Blank Rome LLP, Pittsburgh, PA, for Defendant.

MEMORANDUM OPINION

Smith

, District Judge

This action stems from the defendant's alleged wrongful denial of the plaintiff's claim for long-term disability benefits. The plaintiff has asserted two state-law causes of action and a cause of action under the Employee Retirement Income Security Act of 1974 (“ERISA”), 28 U.S.C. §§ 1001–1191c. The parties have both moved for summary judgment on the issue of whether ERISA preempts the state-law causes of action or whether the long-term disability insurance policy at issue is exempt from ERISA preemption because it falls into the “safe harbor” regulation, 29 C.F.R. § 2510.3–1(j)

. As discussed below, the court finds that ERISA preempts the state-law causes of action and the policy does not fall into the safe harbor provision. Accordingly, the court will deny the plaintiff's motion for summary judgment, grant the defendant's motion for summary judgment, and enter partial summary judgment in the defendant's favor on the state-law causes of action in the amended complaint.

I. PROCEDURAL HISTORY

The plaintiff, Craig Van Arsdel, filed a complaint against Liberty Life Assurance Company of Boston (“Liberty Life”) in the Court of Common Pleas of Philadelphia County on April 3, 2014. Notice of Removal (“Notice”), at Ex. 1, Complaint, Doc. No. 1.¹ In the complaint, the plaintiff alleges that while working as a plant controller for Pratt Industries he developed severe arthritis

in his right hip along with a multitude of other ailments. Complaint at ¶¶ 3, 8. By January 4, 2013, the plaintiff could not continue working at his job, and he applied for short-term disability (“STD”) benefits under a group disability insurance policy that he purchased from Liberty Life in 2011.²

Id. at ¶¶ 4, 9. Although Liberty Life initially denied the claim, it provided him with STD benefits from February 1, 2013, until April 7, 2013, after he successfully appealed from the denial. Id. at ¶¶ 9, 10. On March 28, 2013, the plaintiff applied for long-term disability (“LTD”) benefits. Id. at ¶ 11. Liberty Life denied the LTD benefits claim on or about May 2, 2013, and although the plaintiff appealed from the denial, Liberty Life affirmed its prior denial on August 23, 2013. Id. at ¶¶ 19-20.

Based upon Liberty Life's denial of his claim for LTD benefits, the plaintiff asserted state-law causes of action for breach of contract and statutory bad faith in the complaint. Id. at 8-9. On May 2, 2014, Liberty Life filed a notice of removal claiming that removal was proper because the plaintiff was actually seeking to enforce an ERISA claim. See Notice at ¶ 10 (referencing 28 U.S.C. §§ 1331

, 1441(b) and 29 U.S.C. § 1132 ). The plaintiff then filed an amended complaint on June 11, 2014, in which he appears to have repeated the underlying factual allegations from the original complaint, but added an alternative cause of action under ERISA to the preexisting state-law causes of action. Amended Compl., Doc. No. 3.

Liberty Life filed a motion to dismiss the state-law causes of action in the complaint on June 18, 2014. Doc. No. 5. In the motion, Liberty Life argued that the court should dismiss the state-law claims for breach of contract and statutory bad faith because ERISA preempted those claims. See Memorandum of Def. Liberty Mutual Ins. Co. in Supp. of Mot. to Dismiss Counts I and II of Pl.'s Am. Compl. at 2-6, Doc. No. 5. The plaintiff filed a response to the motion on June 26, 2014. Doc. No. 6. In the response, the plaintiff asserted that the court should deny the motion because the disability insurance plan at issue falls within the “safe harbor” provision, 29 C.F.R. § 2510.3–1(j)

and is exempt from ERISA coverage. Memorandum of Law in Supp. of Pl.'s Reply to Def.'s Mot. to Dismiss Counts I & II of the Am. Compl. at 6-7, Doc. No. 6.

The court resolved the motion to dismiss via a memorandum opinion and order filed on September 5, 2014. Doc. Nos. 9, 10. The court (1) denied the motion to dismiss the state-law claims in counts I and II of the amended complaint because the parties' contentions raised issues of fact that the court could not resolve through a motion to dismiss, and (2) provided the parties with a period of time to conduct limited discovery on the potential applicability of the safe harbor provision and then file motions for summary judgment on this issue. Memorandum Op. at 4-6, Doc. No. 9; Order, Doc. No. 10. With respect to this discovery period, the parties sought and received two extensions of time to finish conducting discovery on the safe harbor issue. Doc. Nos. 11-14.

On May 13, 2015, the parties filed cross-motions for summary judgment on the applicability of the safe harbor provision and the viability of the state-law claims in the amended complaint. Doc. Nos. 17-21. Liberty Life then filed an answer to the amended complaint with affirmative defenses on May 28, 2015. Doc. No. 22. On the same date, Liberty Life filed a response to the plaintiff's statement of facts in support of his motion for summary judgment and a brief in opposition to the plaintiff's motion for summary judgment.³ Doc. Nos. 23, 24. The court heard oral argument on the cross-motions for summary judgment on July 8, 2015. The cross-motions are ripe for disposition.

II. DISCUSSION

A. Summary Judgment Standard

A district court “shall grant summary judgment if the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a)

. Additionally, “[s]ummary judgment is appropriate when ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ ” Wright v. Corning , 679 F.3d 101, 103 (3d Cir.2012) (quoting Orsatti v. New Jersey State Police , 71 F.3d 480, 482 (3d Cir.1995) ). An issue of fact is “genuine” if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is “material” if it “might affect the outcome of the suit under the governing law.” Id.

The party moving for summary judgment has the initial burden “of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)(internal quotation marks omitted). Once the moving party has met this burden, the non-moving party must counter with “ ‘specific facts showing that there is a genuine issue for trial.’ ” Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)

(citation omitted); see Fed. R. Civ. P. 56(c) (stating that “[a] party asserting that a fact... is genuinely disputed must support the assertion by... citing to particular parts of materials in the record...; or ... [by] showing that the materials cited do not establish the absence... of a genuine dispute”). The non-movant must show more than the “mere existence of a scintilla of evidence” for elements on which the non-movant bears the burden of production. Anderson , 477 U.S. at 252, 106 S.Ct. 2505. Bare assertions, conclusory allegations, or suspicions are insufficient to defeat summary judgment. See

Fireman's Ins. Co. v. DuFresne , 676 F.2d 965, 969 (3d Cir.1982) (indicating that a party opposing a motion for summary judgment may not “rely merely upon bare assertions, conclusory allegations or suspicions”); Ridgewood Bd. of Educ. v. N.E. for M.E. , 172 F.3d 238, 252 (3d Cir.1999) (explaining that “speculation and conclusory allegations” do not satisfy non-moving party's duty to “set forth specific facts showing that a genuine issue of material fact exists and that a reasonable factfinder could rule in its favor”). Additionally, the non-moving party “cannot rely on unsupported allegations, but must go beyond pleadings and provide some evidence that would show that there exists a genuine issue for trial.” Jones v. United Parcel Serv. , 214 F.3d 402, 407 (3d Cir.2000). Moreover, arguments made in briefs “are not evidence and cannot by themselves create a factual dispute sufficient to defeat a summary judgment motion.” Jersey Cent. Power & Light Co. v. Township of Lacey , 772 F.2d 1103, 1109–10 (3d Cir.1985).

“When considering whether there exist genuine issues of material fact, the court is required to examine the evidence of record in the light most favorable to the party opposing summary judgment, and resolve all reasonable inferences in that party's favor.” Wishkin v. Potter , 476 F.3d 180, 184 (3d Cir.2007)

. The court must decide “not whether... the evidence unmistakably favors one side or the other but whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented.” Anderson , 477 U.S. at 252, 106 S.Ct. 2505. “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial[ ]’ ” and the court should grant summary judgment in favor of the moving party. Matsushita Elec. Indus. Co. , 475 U.S. at 587, 106 S.Ct. 1348 (citation omitted).

The summary judgment standard is the same even when, as here, the parties have filed cross-motions for summary judgment. Erbe v. Connecticut Gen. Life Ins. Co. , No. CIV.A. 06–113, 2009 WL 605836, at *1 ...