Brenner v. Metro. Life Ins. Co., CIVIL ACTION NO. 11-12096-GAO

LYNN BRENNER, Plaintiff, v. METROPOLITAN LIFE INSURANCE COMPANY and SOUTHBORO MEDICAL GROUP, INC., Defendants.

CIVIL ACTION NO. 11-12096-GAO

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

March 6, 2013

March 29, 2013

ORDER

O'TOOLE, D.J.

The magistrate judge to whom this matter was referred has filed a Report and Recommendation with respect to the defendants' motions to dismiss. The plaintiff and the defendant Southboro Medical Group ("SMG") have each filed objections to the Report and Recommendation. The defendant Metropolitan Life Insurance Company ("MetLife") does not object.

I. Counts I. II. III. IV. VII. VIII (State Law Claims)

The plaintiff objects to the dismissal of her state law claims for two reasons.

First, she contends that the magistrate judge failed to recognize that her state law claims and ERISA claims arise from different facts. While I agree that it is appropriate to distinguish between the two sets of facts, I find no indication that the magistrate judge did otherwise.

Second, the plaintiff claims that the magistrate judge failed to conduct a proper ERISA preemption analysis. While it may be true that the facts of Zipperer v. Raytheon Co., Inc. are distinguishable from the facts of this case, the First Circuit's ruling that preemption isappropriate when state law claims are "inseparably connected" to the ERISA plan at issue because they "ultimately depend on an analysis" of the plan is controlling precedent and consistent with Supreme Court preemption jurisprudence. 493 F.3d 50, 54 (1st Cir. 2007) (citing Carlo v. Reed Rolled Thread Die Co., 49 F.3d 790, 795 (1st Cir. 1995)). The cases cited by the plaintiff, while somewhat persuasive, are not controlling.

Further, as the court noted in Rogers v. Rogers and Partners. Architects. Inc., No. 08-11730-NG, 2009 WL 5124652 (D. Mass. July 27, 2009), the First Circuit's decisions in Carlo and Vartanian v. Monsanto Co., 14 F.3d 697 (1994), holding that misrepresentation claims were preempted because they required analysis of an ERISA plan, remain unaffected by the Supreme Court's ruling in N. Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995). This is especially true in a case like this one, where a plaintiff has brought claims against an insurer and plan administrator, not against an independent third party. See Giannetti v. Mahoney, 218 F. Supp. 2d 8, 14 (D. Mass. 2002).

The magistrate judge properly concluded that the assessment of the plaintiff's state law claims and damages would depend on an analysis of the Plan. First, as the magistrate judge notes, Massachusetts law requires a showing of justifiable reliance to prevail on a claim for negligent misrepresentation, and in this case, whether or not the plaintiff's reliance was justifiable requires examination of the Plan. The plaintiff's objections concerning consensus that SMG's representations were incorrect are impertinent.

The plaintiff also argues unconvincingly that assessment of damages would not require analysis of the Plan because the full amount of benefits due under the Plan was already disclosed in email correspondence. Such reasoning is entirely misleading. This is not a case where a plan administrator misrepresented the nature of the benefits under a plan such that damages wouldconsist of the particular benefits erroneously promised. Here the allegations are that SMG misrepresented to the plaintiff that coverage still existed and that the same Plan benefits continued. It is irrelevant that Plan terms were quoted in emails between the parties. In assessing damages, the Court would need to examine the Plan to determine to what benefits the plaintiff would have been entitled had the Plan been in effect at the time of her husband's death. Cf. Rogers, 2009 WL 5124652 at *14 ("[T]he amount of benefits payable under the policy would have varied depending upon the circumstances of the individual insured," for example, "whether the individual was 70 years old or more. . . . Consequently, any determination as to the death benefits that Rogers would have been entitled to under the Contract at the time of her husband's death would depend on an analysis of the Insurance Contract.") (citing Hampers v. W.R. Grace & Co., Inc., 202 F.3d 44, 52 ("ERISA preempts state law causes of action for damages where the damages must be calculated using the terms of an ERISA plan.")).

II. Count V (Section 1132 (a)(1)(B))

The plaintiff objects to the magistrate judge's recommendation to dismiss Count V because it is based on the erroneous understanding that the plaintiff seeks extra-contractual damages. However, the magistrate judge was correct in making such a finding.

The plaintiff claims that she is seeking to "enforce [her] rights," pursuant to 29 U.S.C. § 1132(a)(1)(B), to have received notice of her right to convert and to have chosen to convert to a new policy. She contends that because the right to convert is included in the policy terms, she technically seeks a benefit due to her under the contract, but this is nothing more than an unsuccessful attempt to alter her claim as pled so as to avoid dismissal. (See Am. Compl. ¶ 62 (dkt. no. 16) ("Plaintiff suffered damages in an amount equal to the benefits she . . . would have received under a new individual policy had Dr. Brenner converted to an individual policy.").)Entitlement to benefits under a new policy is precisely the kind of extra-contractual relief that is unavailable under Section 1132(a)(1)(B). Furthermore, at the time she filed suit, the plaintiff had no right under the Plan to receive notice of the option to convert because the Application Period had long passed.

The plaintiff again claims that the magistrate judge conflates the facts underlying her state law claims and those underlying her ERISA claim. She points to a reference to Varity Corp. v. Howe, 516 U.S. 489, 515 (1996), where the Supreme Court held that the plaintiffs, who had been terminated from their employee welfare benefit plan prior to filing suit, could not proceed under Section 1132(a)(1) because they had no benefits due to them. The relevant time period is when the claims were brought. It is not, as plaintiff seems to assert, when the plaintiff should have received notice of her right to convert.

As the magistrate judge indicates, the analysis of Count V applies to MetLife. Therefore, although MetLife has not moved to dismiss Count V, this Count will be dismissed as to both SMG and MetLife.

III. Count VI (Section 1132(a)(3))

SMG objects to the magistrate judge's recommendation to deny its motion to dismiss Count VI on the basis that the plaintiff has failed to adequately plead that SMG is a fiduciary. I agree fully with the magistrate judge's analysis concerning this Count. The plaintiff's factual allegations, as well as the Plan language, are sufficient to support a plausible claim that SMG acted as a fiduciary.

IV. Conclusion

After careful review of the pleadings, submissions, and the parties' objections to the Report and Recommendation, I approve and ADOPT the magistrate judge's recommendation in its entirety, including the recommendation to dismiss Count V as to MetLife.

Accordingly, the defendants' Motions to Dismiss (dkt. nos. 18, 20) are GRANTED as to Counts I, II, III, IV, V, VII, and VIII, and DENIED as to Count VI.

It is SO ORDERED.

George A. O'Toole. Jr.

United States District Judge

LYNN BRENNER, Plaintiff,

v.

METROPOLITAN LIFE INSURANCE CO.

SOUTHBORO MEDICAL GROUP, INC., Defendants.

CIVIL ACTION NO. 11-12096-GAO

REPORT AND

RECOMMENDATION

ON DEFENDANT SOUTHBORO

MEDICAL GROUP'S MOTION TO DISMISS

AMENDED COMPLAINT PURSUANT TO

F.R.C.P. 12(B)(6) (#18) AND DEFENDANT

METROPOLITAN LIFE INSURANCE

COMPANY'S MOTION TO DISMISS (#20)

COLLINGS, U.S.M.J.

I. Introduction

This action arises from a life insurance plan that the deceased, Dr. AlanBrenner ("Dr. Brenner"), held through his employer Southboro Medical Group, Inc. ("SMG"). On November 28, 2011, Dr. Brenner's wife, Lynn Brenner ("Brenner"), filed a Complaint (#1), later amended (#16), against Metropolitan Life Insurance Co. ("MetLife") and SMG (collectively, "the defendants"). The amended complaint alleges claims of breach of contract (Count V) and breach of fiduciary duty (Count VI) under the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., along with several state law claims: misrepresentation (Count I); promissory estoppel (Count II); breach of contract (Count III); breach of the implied duty of good faith and fair dealing (Count IV); violation of Mass. Gen. Laws ch. 176D (Count VII); and violation of Mass. Gen. Laws ch. 93A (Count VIII).

On May 17, 2012, the defendants filed separate motions to dismiss the amended complaint pursuant to Fed. R. Civ. P. 12(b)(6): SMG filed its Motion to Dismiss Amended Complaint Pursuant to F.R.C.P. 12(B)(6) (#18), along with a supporting memorandum of law (#19), and attached exhibits; MetLife filed its Motion to Dismiss (#20), along with a supporting memorandum of law (#21), to which it has appended as an exhibit a copy of the Certificate of Insurance (#21-1). On June 7, 2012, Brenner filed her Opposition to Defendant Southboro Medical Group, Inc.'s Motion to Dismiss AmendedComplaint (#24), and her Opposition to Defendant Metropolitan Life Insurance Company's Motion to Dismiss (#25). On January 23, 2013, the Court held a hearing on the motions. With the record complete, the motions to dismiss are poised for resolution.

II. Factual Background

The Court states the following facts as pleaded in the amended complaint. See Zipperer v. Raytheon Co., Inc., 493 F.3d 50, 51 (1st Cir. 2007), cert. denied, 552 U.S. 1184 (2008).

On or about March 19, 2009, Dr. Brenner was employed by SMG and was a participant in SMG's life insurance plan ("the Plan"). (#16 ¶ 9) The Plan is an employee welfare benefit plan regulated by ERISA. (#16 ¶ 7) The insurer of the plan is MetLife. (#16 ¶ 7) The amended complaint alleges that SMG, at...