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Ihde v. United of Omaha Life Insurance Co.

United States District Court, D. Colorado

November 14, 2017

LAURA IHDE, Plaintiff,
v.
UNITED OF OMAHA LIFE INSURANCE COMPANY, Defendant.

          RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          Nina Y. Wang, United States Magistrate Judge.

         This matter comes before the court on Defendant United of Omaha Life Insurance Company's (“United”) Motion to Dismiss Plaintiff's Second Claim for Relief (Amended Complaint) (“Motion to Dismiss” or “Motion”) [#70, filed August 25, 2017]. The undersigned considers the Motion pursuant to 28 U.S.C. § 636(b), the Order Referring Case dated June 1, 2017 [#18], and the memorandum dated August 25, 2017 [#71]. Upon careful review of the Motion, the relevant case law, the entire docket, and the comments offered at the November 2, 2017 Motion Hearing, this court respectfully RECOMMENDS that United's Motion to Dismiss be GRANTED.

         BACKGROUND

         Plaintiff initiated this action on April 5, 2017. [#1]. Plaintiff suffers from severe and disabling injuries and illnesses that render her disabled, see [id. at ¶¶ 26-32 (detailing Plaintiff's ailments)]-the Social Security Administration found Ms. Ihde completely disabled for Social Security Disability Insurance and Supplemental Security Income purposes. [Id. at ¶¶ 14-15]. Plaintiff is a beneficiary of and participant in the Generational Equity, LLC Employee Benefits Health & Welfare Plan (the “Plan”), an employee welfare benefit plan as that term is defined under Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et. seq. [Id. at ¶¶ 2, 6-8]. The Complaint named Generational Equity, LLC (“Generational Equity”); the Plan; and United, a fiduciary and insurer of the Plan, as Defendants in this action for unlawfully withholding benefits and violating ERISA. [#1].

         Plaintiff alleges that she filed claims with the Plan for Short Term and Long Term Disability (“LTD”) benefits, and that the Plan approved and paid ($5, 000 per month) those claims through November 20, 2014. [Id. at ¶¶ 16-18]. However, according to Plaintiff, United, acting on behalf of the Plan, terminated payments on November 20, 2014, and issued a denial of benefits letter on November 21. [Id. at ¶¶21-22]. Plaintiff administratively appealed this denial that same day. [Id. at ¶ 23]. United, acting on behalf of the Plan, upheld its denial of benefits, despite medical evidence proffered by Plaintiff, on April 28, 2015. [Id. at ¶ 36].

         Plaintiff maintains that she continues to satisfy the definition of disability under the Plan, has done so since June 22, 2013, and is permanently disabled. [Id. at ¶¶ 37-38]. Plaintiff has exhausted her administrative remedies and, thus, filed this suit. [Id. at ¶ 39].

         Plaintiff's Complaint asserted three claims against the named Defendants. [#1]. First, that all Defendants unlawfully withheld LTD benefits under the Plan in violation of 29 U.S.C. § 1132(a)(1)(B) (“Claim I”). [Id. at 6-7]. Second, that Defendants Generational Equity and United, as fiduciaries of the Plan, breached their fiduciary duties owed to Plaintiff as a participant in the Plan under 29 U.S.C. §§ 1109(a) and 1132(a)(2) (“Claim II”). [Id. at 7-11]. Lastly, that Defendant Generational Equity failed to provide requested documents pursuant to 29 U.S.C. §§ 1132(a)(1)(A) and 1132(c)(1) (“Claim III”). [Id. at 11-17]. On May 18, 2017, Defendants Generational Equity and the Plan filed their Partial Motion to Dismiss seeking dismissal of Claims I and II under Rule 12(b)(6) of the Federal Rules of Civil Procedure, and an Answer to Claim III. [#7; #8]. In addition, United filed a Motion to Strike and a Motion to Dismiss Plaintiff's Complaint on June 2 and June 7, 2017, respectively. See [#21; #24].

         On June 7, 2017, Plaintiff filed a Motion for Extension of Time to Respond to the Partial Motion to Dismiss, indicating that she and Defendants Generational Equity and the Plan were engaged in meaningful settlement negotiations. [#26]. Then, on June 22, 2017, Plaintiff filed a Notice of Settlement informing the court that she had settled all of her claims against Generational Equity and the Plan, and that she would not file a response to their Partial Motion to Dismiss. [#34]. On August 3, 2017, Plaintiff filed a stipulation of dismissal dismissing Generational Equity and the Plan as Defendants. See [#56; #58].

         A Scheduling Conference regarding Plaintiff's remaining claims against United (Claims I and II) was held on June 23, 2017. See [#37]. At this Scheduling Conference, the undersigned set July 15, 2017 (later extended to July 25, 2017 [#47]) as the deadline for the Parties to submit the Administrative Record; August 15, 2017 as the deadline for the filing of any motion(s) requesting discovery; and also set a briefing schedule on the Administrative Record. See [#37; #38]. The undersigned also scheduled oral argument on the Motion to Dismiss for September 21, 2017 [#37], later reset for November 2, 2017 [#72].

         United and Plaintiff filed a Stipulated Motion to Suspend Defendant's Motion to Dismiss, and to Set Deadline to Amend Complaint that requested this court set July 28, 2017, as the deadline for Plaintiff to file an amended complaint and August 7, 2017, as the deadline for United to file a Reply to its Motion to Dismiss should Plaintiff forego filing an amended complaint. See [#42]. Pursuant to the Parties request, this court set July 28, 2017, as Plaintiff's deadline to file an amended complaint. [#44]. Plaintiff thus filed her Motion to Amend on July 28, 2017. [#53]. At the August 3, 2017 Status Conference, United clarified that it did not oppose the Motion to Amend but maintained its right to file an appropriate responsive motion, and that it believed the Amended Complaint mooted its Motion to Strike and its Motion to Dismiss Plaintiff's Complaint. See [#57; #59]. The presiding judge, the Honorable Raymond P. Moore, adopted this court's Recommendation that United's first Motion to Dismiss be denied as moot; this court also denied as moot United's Motion to Strike. See [#60; #66].

         On August 4, 2017, Plaintiff's First Amended Complaint (“FAC”) became the operative complaint in this matter. [#62]. The FAC alleges two claims against United: (1) unlawful withholding of LTD benefits under the Plan in violation of 29 U.S.C. § 1132(a)(1)(B) (“Claim I”); and (2) breach of fiduciary duty pursuant to 29 U.S.C. §§ 1109, 1132(a)(2), and 1132(a)(3) (“Claim II”).[1] [Id. at 5-12]. As relief, Plaintiff seeks her past due LTD benefits with pre- and post-judgment interest, future LTD benefits up to the maximum benefits allowed, make-whole damages for injuries attributable to United's breaches of its fiduciary duties, costs and fees, as well as injunctive relief (1) enjoining “United [] from violating ERISA and its implementing regulations in the future” and “administering any ERISA governed plans offering [LTD] benefits”, (2) removing United “as fiduciary of the Plan”, (3) ordering United to provide all Plan participants with a complaint Summary Plan Description (“SPD”), and (4) prohibiting United from dispersing any future noncompliant SPD. [Id. at 18-19].

         On August 25, 2017, United filed the instant Motion seeking dismissal of Claim II. [#70]. The undersigned held oral argument on the Motion to Dismiss on November 2, 2017, and took the Motion under advisement. [#84]. Because the Motion is ripe for recommendation, this court considers the Parties' arguments below.

         LEGAL STANDARD

         Under Rule 12(b)(6) a court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). In deciding a motion under Rule 12(b)(6), the court must “accept as true all well-pleaded factual allegations . . . and view these allegations in the light most favorable to the plaintiff.” Casanova v. Ulibarri, 595 F.3d 1120, 1124 (10th Cir. 2010) (quoting Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)). A plaintiff, however, may not rely on mere labels or conclusions, “and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rather, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009); see also Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (explaining that plausibility refers “to the scope of the allegations in a complaint, ” and that the allegations must be sufficient to nudge a plaintiff's claim(s) “across the line from conceivable to plausible.”). The ultimate duty of the court is to “determine whether the complaint sufficiently alleges facts supporting all the elements necessary to establish an entitlement to relief under the legal theory proposed.” Forest Guardians v. Forsgren, 478 F.3d 1149, 1160 (10th Cir. 2007).

         ANALYSIS

         Congress enacted ERISA to regulate employee pension and welfare benefits, and “to promote the interests of employees and their beneficiaries in employee benefit plans.” Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 137 (1990) (internal quotations and citation omitted). Section 502(a), 29 U.S.C. § 1132(a), is ERISA's civil enforcement scheme that “consists of several carefully integrated provisions.” Millsap v. McDonnell Douglas Corp., 368 F.3d 1246, 1250 (10th Cir. 2004) (citation omitted). Relevant here, § 1132(a)(2) authorizes suits by “a participant, beneficiary or fiduciary for appropriate relief under section 1109, ” which imposes liability on “[a]ny person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter, ” id. § 1109(a). In addition, a participant, beneficiary, or fiduciary may bring a civil action “to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.” Id. ยง 1132(a)(3)(B). Importantly, ...


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