Van Loo v. Cajun Operating Co.
| Decision Date | 01 December 2014 |
| Docket Number | Case No. 14–cv–10604. |
| Citation | 64 F.Supp.3d 1007 |
| Parties | Donald and Harriet VAN LOO, Plaintiffs, v. CAJUN OPERATING COMPANY d/b/a Church's Chicken, a Delaware Corporation, Reliance Standard Life Insurance Company Group Life Policy (Policy Number GL 140042), an employee welfare benefit plan, and Reliance Standard Life Insurance Company, an Illinois Corporation, Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Daniel D. Swanson, Tad T. Roumayah, Sommers Schwartz, Southfield, MI, for Plaintiffs.
Dennis J. Levasseur, Rebecca D. O'Reilly, Bodman, Detroit, MI, Edna S. Kersting, Wilson Elser Moskowitz Edelman & Dicker LLP, Chicago, IL, for Defendants.
Plaintiffs Donald and Harriet Van Loo bring this action pursuant to the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001 –1461. They assert that Defendants Cajun Operating Company d/b/a Church's Chicken (“Church's”), Reliance Standard Life Insurance Company (“Reliance”), and Reliance Standard Life Insurance Company Group Life Policy (Policy No. GL 140042) (“the Plan”) improperly denied them, as beneficiaries, the full value of supplemental life insurance benefits following the death of their daughter, Donna Van Loo. Presently before the Court is Defendant Church's Motion to Dismiss the Complaint and to Strike Jury Demand (Dkt. 12) under Federal Rules of Civil Procedure 12(b)(6) and 12(f) and Defendant Reliance Standard Life Insurance Company's Motion to Dismiss Counts II through V of the Complaint and to Strike Jury Demand (Dkt. 15) under Federal Rules of Civil Procedure 12(b)(6) and 12(f).
The Court finds that Plaintiffs can proceed against Church's on only one count of the Complaint, Count II. Church's did not make the final decision to deny benefits and so it is not the proper defendant to a claim for denied benefits. Plaintiffs' federal common law claims are preempted by ERISA or otherwise fail to state a claim upon which relief can be granted. Church's had no duty to provide Plaintiffs with the documents that Plaintiffs requested. But Plaintiffs have adequately pled that Church's acted as a fiduciary when making misrepresentations to Ms. Van Loo concerning her coverage, and the relief they seek is available under 29 U.S.C. § 1132(a)(3).
As to Reliance, the Court likewise finds that Plaintiffs' federal common law claims are preempted by ERISA or otherwise fail to state a claim upon which relief can be granted. The Court also finds that Plaintiffs cannot state a claim against Reliance for the documents they requested but did not receive because Plaintiffs' “de facto Plan Administrator” argument does not pass muster under Sixth Circuit precedent. While Plaintiffs have alleged that Reliance took on duties as the Plan Administrator during the relevant time period, their only specific allegation is insufficient to show that Reliance was acting in a fiduciary capacity with respect to anything other than claims adjudication.
Finally, there is no right to a jury trial in actions brought under ERISA § 502, which Plaintiffs concede in their response.
The Court will therefore grant in part and deny in part Church's motion and grant Reliance's motion. The Court will also strike Plaintiffs' jury demand.
Under Federal Rule of Civil Procedure 12(b)(6),1 a case warrants dismissal if it fails “to state a claim upon which relief can be granted.” When deciding a motion under Rule 12(b)(6), the Court must “construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff,” but the Court need not accept as true legal conclusions or unwarranted factual inferences. Hunter v. Sec'y of U.S. Army, 565 F.3d 986, 992 (6th Cir.2009). To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must plead “sufficient factual matter” to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The plausibility standard is not a “probability requirement,” but it does require “more than a sheer possibility that a defendant has acted unlawfully.” Id.
In addition to the Complaint, the Court may consider “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. NCAA, 528 F.3d 426, 430 (6th Cir.2008) ; see also New Eng. Health Care Emps. Pension Fund v. Ernst & Young, LLP, 336 F.3d 495, 501 (6th Cir.2003).
Under Rule 12(f), “the court may strike from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” A court has “liberal discretion to strike such filings” as it deems appropriate under Rule 12(f). Fed. Nat'l Mortg. Ass'n v. Emperian at Riverfront, LLC, No. 11–14119, 2013 WL 5500027, at *7, 2013 U.S. Dist. LEXIS 143110, at *18 (E.D.Mich. Oct. 3, 2013)(citing Stanbury Law Firm v. IRS, 221 F.3d 1059, 1063 (8th Cir.2000) ).
Defendant Reliance issued a Group Life Policy to Defendant Church's, effective January 1, 2006. (Church's Mot. to Dismiss Ex. B, Ins. Policy at PageID 107 [hereinafter “Plan”] ). The policy was a welfare benefit plan that provided both Basic Life and Accidental Death and Dismemberment benefits and Supplemental Life Insurance benefits. (Compl. at ¶¶ 4, 13.) Church's was the designated policyholder and administrator of the Plan and Reliance was the designated claims administrator. The Summary Plan Description states that Reliance served as the “claims review fiduciary” with “discretionary authority to interpret the Plan and ... determine eligibility for benefits.” (SPD at PageID 103.)
Church's elected the “Self–Administered” billing and administration option for the Policy. This meant that as the policyholder and appointed administrator, Church's would “typically [be] responsible for ensuring that coverage elections (including any required proof of good health) are processed in accordance with the terms and conditions of the applicable policy and that premium remittances are accurate and timely.” (Reliance Mot. to Dismiss Ex. C, Appeal Letter, at PageID 247–48.) It also meant that Reliance would “typically ha[ve] no record of individual coverage or premium amounts.” (Id. )
“[A]ctive, Full-time employee[s], except ... temporary or seasonal” workers, were eligible to enroll in the Plan. (Plan at PageID 111.) As noted, the Plan provided both “Basic Life” and “Supplemental Life” benefits. (Compl. at ¶ 13.) The Basic Life benefits consisted of “One (1) times Earnings, rounded to the next higher $1,000, subject to a maximum Amount of Insurance of $200,000.” (Plan at PageID 111.) Eligible employees could elect Supplemental Life benefits in multiples of one, two, three, four, or five times their annual salaries; for example, a salaried employee with an annual salary of $100,000 could elect “2x salary” in Supplemental Life benefits for a total Supplemental Life amount of $200,000. (See id. at ¶ 18; Plan at PageID 111.) Church's collected Benefit Enrollment/Change forms annually. (See id. at ¶¶ 18; 24.) Once an employee enrolled in the Plan, Church's would deduct premiums from the employee's paycheck. (See id. at ¶ 21.)
The Plan provides that “[a]mounts of insurance over $300,000 are subject to [Reliance's] approval of a person's proof of good health.” (Plan at PageID 111.) Without proof of good health and/or an Evidence of Insurability Form (“EIF”), a beneficiary would only be eligible for the “guaranteed issue” amount of $300,000. (See Compl. ¶¶ 40–41.)
Plaintiffs' daughter, Donna Van Loo, began working for Church's on May 21, 2007. (Compl. at ¶ 17.) She earned an annual salary of $100,000. (Id. at ¶ 18.) On July 29, 2007, Ms. Van Loo enrolled in the Plan and elected Basic Life valued at one times her salary and Supplemental Life valued at two times her annual salary. (Id. at ¶ 18.) Thus, her total coverage for 2007 was $300,000. Ms. Van Loo did not know that she had reached the “guaranteed issue” threshold. (See Compl. ¶¶ 19–20, 40–41.)
On November 11, 2007, Ms. Van Loo, through an Open Enrollment Change Form, increased her supplemental benefits election to three times her salary. (Compl. at ¶ 22.) As a result, her election was $100,000 in Basic Life and $300,000 in Supplemental Life, for a total of $400,000. Thus, she crossed the “guaranteed issue” threshold. She still was not aware of the proof of good health requirement, nor did she receive an EIF. (Id. at ¶ 43.) She continued her “3x salary” election through 2010, and Church's adjusted her premiums during that time, presumably because her salary increased. (Id. at ¶¶ 23, 25, 27.)
In 2010, Church's apparently asked Reliance to mail an EIF to Ms. Van Loo. (Appeal Letter at PageID 247.) Reliance says that it “made an exception” to its usual practice of leaving plan administration to Church's and did mail the EIF per Church's' request (Id. ); regardless of whether this is true, Ms. Van Loo, her parents allege, did not receive the EIF. (Compl. ¶ 43.)
In 2011, Ms. Van Loo increased her election to four times...
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