Allen v. First Unum Life Ins. Co.

MARCUS ALLEN, M.D., Plaintiff, v. FIRST UNUM LIFE INSURANCE COMPANY, PROVIDENT LIFEAND CASUALTY INSURANCE COMPANY and UNUM GROUP, Defendants.

CASE NO. 2:18-cv-69-FtM-99NPM

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA FORT MYERS DIVISION

October 22, 2020

OPINION AND ORDER

This matter comes before the Court on Defendants' Motion for Judgment on the Pleadings for Count III Breach of Fiduciary Duty of the Second Amended Complaint (Doc. #114) filed on December 26, 2019. Plaintiff filed an Opposition to Defendants' Motion (Doc. #121) on January 8, 2020. For the reasons set forth below, the motion is granted.

I.

This case is before the Court on Plaintiff's seven-count Second Amended Complaint alleging claims for breach of contract (Counts I, II), breach of fiduciary duty (Count III), and RICO violations (Counts IV-VI). (Doc. #87.) The Court previously granted Defendants' Motion to Dismiss Counts IV, V, VI (RICO claims) of Plaintiff's Second Amended Complaint. (Docs. ##92, 103). Defendants now seek judgment on the pleadings on the breach of fiduciary duty claim in Count III. Defendants argue that regardless of whether New York or Florida law applies, the pleadings establish there was no fiduciary duty owed by any Defendant to the insured in connection with the insured's first-party claim. (Doc. #114, p. 1.) Plaintiff, on the other hand, contends that both Florida and New York law impose a fiduciary duty upon all Defendants in a first-party claim where there is a "special relationship of trust and confidence" with the insured. Plaintiff asserts that such a relationship is sufficiently alleged in the Second Amended Complaint and supporting exhibits, and therefore the motion must be denied. (Doc. #121, p. 2.)

II.

The Federal Rules of Civil Procedure provide that "[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." FED. R. CIV. P. 12(c). "Judgment on the pleadings is proper when there are no material facts in dispute, and the moving party is entitled to judgment as a matter of law" based on the substance of the pleadings and any judicially noticed facts. Palmer & Cay, Inc. v. Marsh & McLennan Cas., Inc., 404 F.3d 1297, 1303 (11th Cir. 2005). See also Interline Brands, Inc. v. Chartis Spec. Ins. Co., 749 F.3d 962, 965 (11th Cir. 2014). The Court may consider the complaint and any exhibits attached thereto, as well as the answerand any attached exhibits that are undisputedly authentic and central to the claim. Horsley v. Feldt, 304 F.3d 1125, 1134-35 (11th Cir. 2002); Eisenberg v. City of Miami Beach, 54 F. Supp. 3d 1312, 1319 (S.D. Fla. 2014). All facts alleged in the complaint are viewed in the light most favorable to the nonmoving party. Cunningham v. Dist. Attorney's Office for Escambia Cnty., 592 F.3d 1237, 1255 (11th Cir. 2010). "Legal conclusions without adequate factual support are entitled to no assumption of truth." Mamani v. Berzain, 654 F.3d 1148, 1153 (11th Cir. 2011).¹

III.

Plaintiff Marcus Allen (Plaintiff or Dr. Allen) is a former Diagnostic Radiologist and partner in Prospect Hill Radiology Group, P.C. located in Syracuse, New York. From 1986 through 1989, Plaintiff purchased four individual disability insurance policies (the Individual Policies) from Provident Life & Casualty Insurance Company (Provident). (Doc. #87, ¶¶ 21-28; Docs. ##87-1, 87-2, 87-3, 87-4.) In 2005, Plaintiff became part of a work-related group disability insurance policy (the Group Policy) issued by First Unum Life Insurance Company (First Unum). (Id., ¶¶ 36-37; Doc. #87-5.) All five policies (collectively "the Policies") provided "own occupation" disability income insurance coverage during the relevant time periods.² Claims made under the Policies were administered by Unum Group (Doc. #87, ¶ 14), and Plaintiff alleges in summary fashion that the three defendants are alter egos of each other. (Id., ¶ 10).

In May 2010, Dr. Allen began suffering changes in his vision which prevented him from performing the acute visual analysis required of a diagnostic radiologist. (Doc. #87, ¶¶ 47-49.) Dr. Allen was examined by three separate physicians and was ultimately diagnosed with ocular degeneration, posterior vitreous detachment with retinal tear, and bleeding in his left eye, as well as significant floaters and visual disturbances in both eyes detrimentally impacting his visual field. (Id., ¶ 50.) Dr. Allen resigned from his radiology practice on June 23, 2010, and filed a claim for disability benefits with Defendants asserting that he became totally disabled as of May 1, 2010. (Id., ¶¶ 51-55.)

Defendants agreed Plaintiff was totally disabled, and paid Dr. Allen monthly benefits pursuant to the Policies for the next five years. On August 31, 2015, however, Defendants determined that Dr. Allen failed to support the continued existence of his permanent disability with objective medical findings. (Id., ¶¶ 56-57, 59, 113.) While continuing to pay disability benefits, Defendants requested Dr. Allen's medical records as part of periodic medical reviews, and Dr. Allen was required to apply for Social Security disability benefits. (Id., ¶¶ 70, 72, 76, 105.) The Social Security Administration (SSA) determined that Dr. Allen was incapable of performing the occupation of diagnostic radiologist since June 2010, but that he could perform other work. (Doc. #87, ¶¶ 77, 101-102.)

Defendants thereafter required plaintiff to undergo independent medical examinations (IMEs) with its chosen physicians. Defendants used the IMEs to find that Dr. Allen was no longer disabled. (Id., ¶¶ 105 106, 110, 113-114.) Although Dr. Allen's field of vision never improved, Defendants determined that he could return to his own occupation as a Diagnostic Radiologist, and therefore terminated his benefits under the Policies. (Id., ¶¶ 114, 129, 134.)

In Count I, Dr. Allen sues Provident and the Unum Group for breach of the Individual Policies contracts. (Doc. #87, ¶¶ 198-218.) In Count II, Dr. Allen sues First Unum and the Unum Groupfor breach of the Group Policy contract. (Id., ¶¶ 219-240.) Neither of these claims are currently before the Court.

In Count III, Dr. Allen alleges that the termination of his benefits under the Policies constituted a breach of Defendants' fiduciary duty to him. (Doc. #87, ¶¶ 246-248.) Specifically, Plaintiff asserts that he had a fiduciary relationship with all three Defendants, and that this fiduciary relationship required all Defendants to place Plaintiff's interests above their own in handling his claim for benefits under the Policies. (Id., ¶ 244.) Plaintiff asserts that the fiduciary duties included the duty to ethically handle the claims, which in turn included the duty to disclose all facts under which benefits could be available and all facts known to Defendants that would support a finding of benefits coverage.³ (Id., ¶ 245.)

IV.

A federal court exercising diversity jurisdiction applies the choice of law rules for the state in which it sits. Manuel v. Convergys Corp., 430 F.3d 1132, 1139 (11th Cir. 2005) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941)). Thus, Florida choice of law rules apply to determine the governing state law for the state lawclaims, including Count Three. Grupo Televisa, S.A. v. Telemundo Commc'ns Grp., Inc., 485 F.3d 1233, 1240 (11th Cir. 2007).

Plaintiff and Defendants identify New York and Florida as the two States whose substantive law may govern, but none of the parties take a firm position as to which State's law should be applied. Rather, the parties assert either that there is a fiduciary duty established under either Florida and New York law (Plaintiff's position), or that a fiduciary duty does not exist under either New York or Florida law (Defendants' position).

The Court agrees that the determination of the existence of a fiduciary duty for purposes of a motion for judgment on the pleadings will be the same under Florida and New York law. Therefore, the Court need not at this time determine whether New York or Florida law governs the state law claims. E.g., United States v. Cont'l Cas. Co., 512 F.2d 475, 477 (5th Cir. 1975); Bonar v. Dean Witter Reynolds, Inc., 835 F.2d 1378, 1388 (11th Cir. 1988).

V.

Defendants contend that Plaintiff has failed to state a claim for breach of fiduciary duty because under either Florida or New York law neither an insurer nor an insurance holding company has a fiduciary duty to an insured in connection with a first-party claim. (Doc. #114, p. 6.) Plaintiff responds that while this is the general rule, the operative pleadings sufficiently allegefacts which establish a "special relationship of trust and confidence" between Dr. Allen and Defendants, and therefore a fiduciary duty has been established for purposes of the motion. (Doc. #121, p. 2.)

In Florida, a cause of action for breach of fiduciary duty requires "the existence of a fiduciary duty and the breach of that duty such that it is the proximate cause of the plaintiff's damages." Gracey v. Eaker, 837 So. 2d 348, 353 (Fla. 2002). Similarly, in New York "'the elements of a cause of action to recover damages for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly caused by the defendants misconduct.'" Palmetto Partners, L.P. v. AJW Qualified Partners, LLC, 2011 NY Slip Op. 3043, 83 A.D.3d 804, 807, 921 N.Y.S.2d 260 (App. Div. 2nd Dept.), quoting Rut v. Young Adult Inst., Inc., 2010 NY Slip Op. 4764, 74 A.D.3d 776, 777, 901 N.Y.S.2d 715 (App. Div. 2nd Dept.). Therefore, the laws of both States require Plaintiff to demonstrate the existence of a fiduciary duty.

New York law describes a fiduciary relationship as follows:

A fiduciary relationship arises when one is under a duty to act for or to give advice for the benefit of another upon matters within the scope of the relation. It is grounded in a higher level

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