Allen v. First Unum Life Ins. Co.

1

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

No. 2:18-cv-69-JES-KCD

United States District Court, M.D. Florida, Fort Myers Division

February 6, 2023

OPINION AND ORDER

JOHN E. STEELE, SENIOR UNITED STATES DISTRICT JUDGE.

This case comes before the Court on defendants First Unum Life Insurance Company and Unum Group's Motion for Summary Judgment with Supporting Memorandum of Law (Doc. #271). Plaintiff filed a Response in Opposition (Doc. #274), to which defendants filed a Reply. (Doc. #275.) The Court heard oral arguments on December 7, 2022. For the reasons set forth, the motion is GRANTED.

I.

Dr Marcus Allen (Plaintiff or Dr. Allen) filed a Second Amended Complaint (Doc. #87) claiming that defendants First Unum Life Insurance Company (First Unum), Provident Life and Casualty Insurance Company (Provident), and Unum Group (Unum Group) (collectively Defendants) improperly terminated the disability benefits he was receiving pursuant to four individual “own- occupation” disability insurance policies (the Individual Policies) and one hybrid “own-occupation”/”any gainful occupation” group disability insurance policy (the Amended Group Policy). Defendants' response included that Dr. Allen was no longer entitled to these disability benefits because he was no longer totally disabled within the meaning of any policy.

The Court determined that Dr. Allen's state law breach of contract claim based on his Individual Polices (Count I) was not preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA). (Doc. #205, p. 24.) The Court also determined, however, that ERISA did preempt Dr. Allen's state law claim under the Amended Group Policy (Count II). (Id., p. 37.) The Court severed Dr. Allen's claims and granted leave for Dr. Allen to amend his Second Amended Complaint to assert claims pursuant to ERISA. (Id., pp. 45, 47.)

In March 2022, a jury trial was held regarding Dr. Allen's claim for breach of the four Individual Policies (the IP Litigation). The jury determined that defendants Provident and Unum Group had proven by a preponderance of the evidence that Dr. Allen was no longer totally disabled within the meaning of any of the four Individual Policies as of August 22, 2015. (Doc. #243, pp. 1-2.) Accordingly, there was no breach of the Individual Policies by either defendant.

On May 2, 2022, Dr. Allen filed a Fourth Amended Complaint (FAC) setting forth his claims under the Amended Group Policy against defendants First Unum and Unum Group (the ERISA Litigation). (Doc. #250.) Count I of the FAC asserts a claim for ERISA plan disability benefits (plus interest) pursuant to 29 U.S.C. § 1132(a)(1)(B), alleging that Dr Allen's Amended Group Policy disability benefits had been improperly terminated. (Id., ¶ 212.) Count II sets forth a claim for attorney's fees and costs pursuant to 29 U.S.C. § 1132(g)(1). (Id., ¶¶ 213-215.) Defendants filed their Answer on June 3, 2022 (Doc. #270), and now move for summary judgment as to each of the two ERISA claims asserted in the FAC.

II.

“Summary judgment is appropriate ‘if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'” In re NRP Lease Holdings, LLC, 50 F.4th 979, 982 (11th Cir. 2022)(quoting Fed.R.Civ.P. 56(a)). “The court must draw all reasonable inferences in favor of the non-moving party.” Robinson v. Sauls, 46 F.4th 1332, 1340 (11th Cir. 2022).

III.

While the Summary Judgment Motion is a bit vague, Defendants' Reply makes clear that the Motion is based on issue preclusion (collateral estoppel) principles. (Doc. #275, p. 2.) Defendants argue that the ERISA claims are precluded by the jury verdicts in the IP Litigation, i.e., that the jury's factual determination that as of August 22, 2015, Dr. Allen was no longer totally disabled within the meaning of the Individual Policies precludes Dr. Allen from asserting ERISA disability benefits claims under the Amended Group Policy. (Doc. #271.) Defendants argue the jury determined that at the time benefits were terminated Dr. Allen was capable of performing the duties of his own occupation, a factual finding which is binding on this Court and precludes any contrary judicial determination under the Amended Group Policy. (Id., pp. 4-8.)

A. General Issue Preclusion Principles

“The preclusive effect of a judgment is defined by claim preclusion and issue preclusion, which are collectively referred to as ‘res judicata.'” Taylor v. Sturgell, 553 U.S. 880, 892 (2008). “By ‘preclud[ing] parties from contesting matters that they have had a full and fair opportunity to litigate,' these two doctrines protect against ‘the expense and vexation attending multiple lawsuits, conserv[e] judicial resources, and foste[r] reliance on judicial action by minimizing the possibility of inconsistent decisions.'” Id. (quoting Montana v. United States, 440 U.S. 147, 153-154 (1979)).

Issue preclusion, otherwise referred to as collateral estoppel, “means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit.” United States v. Lewis, 40 F.4th 1229, 1237 (11th Cir. 2022) (quoting Ashe v. Swenson, 397 U.S. 436, 443 (1970)). Issue preclusion “bars ‘successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination essential to the prior judgment.'” Kordash v. United States, 51 F.4th 1289, 1294 (11th Cir. 2022) (quoting Taylor, 553 U.S. at 892).

Issue preclusion requires that the parties be identical or in privity with each other. “In order for issue preclusion to apply, both cases must involve the same parties or their privies.” In re Hazan, 10 F.4th 1244, 1251 n.5 (11th Cir. 2021). In such a situation, issue preclusion is applied when four additional conditions are established:

(1) the issue at stake is identical to the one involved in the prior litigation; (2) the issue was actually litigated in the prior suit; (3) the determination of the issue in the prior litigation was a critical and necessary part of the judgment in that action; and (4) the party against whom the earlier decision is asserted had a full and fair opportunity to litigate the issue in the earlier proceeding.

Kordash, 51 F.4th at 1294 (quoting Miller's Ale House, Inc. v. Boynton Carolina Ale House, LLC, 702 F.3d 1312, 1318 (11th Cir. 2012)).^[1]

B. Application of Issue Preclusion Principles (1) Identical Parties or Privies

The threshold requirement^[2] for issue preclusion is that the two cases involved the same parties or their privies. Lewis, 40 F.4th at 1238. "A person who was not a named party to [a prior] action will nonetheless be subject to collateral estoppel arising from that action if that person was in privity with a party" in that action. Cook v. State, 921 So.2d 631, 635 (Fla. 2d DCA 2005). In general terms, “privity” is a relationship between two parties who both have a legally recognized, mutual interest in the same subject matter. Lewis, 40 F.4th at 1238. Privity is a "flexible legal term" that applies "when a person, although not a party, has his interests adequately represented by someone with the same interests who is a party." Pemco Aeroplex, Inc., 383 F.3d at 1286.

Dr. Allen argues that the privity requirement is not satisfied (Doc. #274, pp. 9-10), but the Court finds otherwise. The IP Litigation involved defendants Provident and Unum Group (Docs. ##235, 236, 243), whereas the ERISA Litigation involves defendants First Unum and Unum Group. (Doc. #250, p. 1.) Thus, Unum Group is a party in each litigation, while First Unum was not a named party in the IP Litigation.

Privity nevertheless has been established as to First Unum. Dr. Allen stated in the Second Amended Complaint that First Unum, Provident and Unum Group “currently operate under the alter-ego ‘Unum' . . ..” (Doc. #87, ¶ 10.) Additionally, the Second Amended Complaint alleges that “Unum Group operated as a holding and parent company of First Unum, Paul Revere and Provident, and is responsible for all claims handling for its subsidiaries including First Unum, . . . and Provident.” (Id., ¶ 14.) In their Answer to the Second Amended Complaint, Defendants admitted that “Unum Group is a holding company for all of its subsidiary companies, including, but not limited to, Provident Life and First Unum.” (Doc. #105, ¶ 14.) These are sufficient to establish the privity required for issue preclusion purposes.

(2) Lack of Judgment

As stated above, issue preclusion ordinarily refers to “an issue of ultimate fact that has once been determined by a valid and final judgment.” Lewis, 40 F.4th at 1237. Another threshold type issue is the admitted lack of a judgment, final or otherwise, in this case. Dr. Allen asserts that a jury verdict is insufficient, and the lack of a judgment is fatal to Defendants' issue preclusion argument. (Doc. #274, pp. 3, 5.)

“Claim preclusion applies only when there is a final judgment, but issue preclusion requires only that the adjudication of an issue ‘be sufficiently firm to be accorded conclusive effect.'” Powrzanas v. Jones Util. &amp Contracting Co., 822 Fed.Appx. 926, 92829 (11th Cir. 2020) (quoting Pleming v. Universal-Rundle Corp., 142 F.3d 1354, 1359 (11th Cir. 1998))^[3]. Thus, “[t]he finality requirement is less stringent for issue preclusion than for claim preclusion." Id. (quoting Christo v. Padgett, 223 F.3d 1324, 1339 (11th Cir. 2000)). “When an issue is properly raised, by the pleadings or otherwise, and is submitted for determination, and is determined, the issue is actually...