Mitchell v. Emeritus Management, LLC, Civil No. 07-90-P-H.

524 F.Supp.2d 67

Dawnitta MITCHELL, Plaintiff v. EMERITUS MANAGEMENT, LLC dba Emeritus Assisted Living, and Hartford Life and Accident Insurance Company, Defendants.

Civil No. 07-90-P-H.

United States District Court, D. Maine.

November 29, 2007.

COPYRIGHT MATERIAL OMITTED

Sarah E. McCarthy, Thad B. Zmistowski, Eaton Peabody, Bangor, ME, for Plaintiff.

Guy P. Tully, Jackson Lewis LLP, Boston, MA, Christopher B. Branson, Murray, Plumb & Murray, Portland, ME, Neal F. Pratt, Seth W. Brewster, Verrill & Dana, Portland, ME, for Defendants.

DECISION AND ORDER ON PLAINTIFF'S MOTION TO AMEND COMPLAINT AND DEFENDANTS' MOTIONS TO DISMISS

D. BROCK HORNBY, District Judge.

If the facts as the plaintiff states them are true,¹ the outcome compelled by the governing statute and caselaw is very troubling. The plaintiff employee says that she purchased a life insurance policy on her husband through her employer's group coverage. When her husband was dying, she resigned her employment to care for him. She asked her employer for the proper forms to convert the group life insurance coverage to individual coverage, as she was entitled to do, Her employer refused or failed to provide the forms despite several in-person and telephone requests. In the meantime, the time for conversion (31 days) expired, her husband died, and now the life insurance company has denied her any benefits. Sadly, I conclude that on these allegations, she is entitled to no relief against either the life insurance company or her employer.

FACTUAL AND PROCEDURAL BACKGROUND

According to the First Amended Complaint, Emeritus Management, LLC ("Emeritus") employed the plaintiff Dawnitta Mitchell ("Mitchell") as the head cook at its assisted living facility in Englewood, Florida, beginning November 24, 2005. First Am. Compl. ¶ 8 (Docket Item 25-2). Emeritus offered employees group life insurance issued by Hartford Life and Accident Insurance Company ("Hartford Life"). Id. ¶ 9; Def. Hartford Life's Mot. to Dismiss, Ex. 1 ("The Plan") at 31 (Docket Item 14-2).² Mitchell purchased $25,000 of this life insurance on her husband, James Mitchell, naming herself the sole beneficiary. First Am. Compl. ¶¶ 9, 13; Pl.'s Mot. for Leave to Amend Compl., at 2-3 (Docket Item 25).

The Plan stated that Emeritus was the Plan Sponsor and the Plan Administrator. The Plan at 31. As Plan Administrator, Emeritus had "full authority, at its sole discretion, to terminate, suspend, withdraw, reduce, amend or modify the Plan, in whole or in part, at any time, without prior notice." Id. at 32. But simultaneously; Hartford Life had "full discretion and authority to determine eligibility for benefits and to construe and interpret all terms and provisions of the [Plan]." Id. at 17.

Under the Plan, life insurance coverage ceased at the end of employment, id. at 12, unless a conversion policy was obtained in a timely manner: "To convert life insurance, the individual must, within 31 days of the date group coverage terminates, make written application to ... Us [defined elsewhere as Hartford Life] and pay the premium required for his age and class of risk." Id. at 17.

On November 4, 2006, Mitchell left her employment at Emeritus to care for her dying husband. First Am. Compl. ¶ 14. At the time of leaving, Mitchell met with her employer's benefits administrator and requested the necessary documents to convert the life insurance policy on her husband. Id. ¶ 15. The Emeritus benefits administrator informed her "that the paperwork was not ready and that she would receive a separation package containing all appropriate forms by mail." Id. ¶ 16. At that same time, Mitchell requested a copy of the Plan documents, but Emeritus failed to respond to this request. Id. ¶ 17. Mitchell returned to Emeritus once more in person, requesting the package of documents, but again was unable to obtain the conversion documents, only an assurance that they would be mailed. Id. ¶ 18. When Mitchell did not receive any conversion documents in the mail from Emeritus, she made several telephone calls to Emeritus asking for them. Id. ¶ 19. Ultimately, Mitchell did not receive the conversion documents from Emeritus within 31 days from the last day of her employment. Id. ¶¶ 23-24.

Mitchell's husband died January 10, 2007. Id. ¶ 23. At that time, Mitchell still had not received the requested life insurance conversion documents from Emeritus. Id. ¶ 24. After January 10, Mitchell did receive the necessary documents from Emeritus, completed them, and sent them back to Emeritus. Id. ¶¶ 23-25. On February 13, 2007, Mitchell received a letter from Hartford Life stating that it had received her conversion application but that Emeritus had failed to complete certain portions. Id., Ex. B — Letter from Hartford Life to Dawnitta Mitchell (Feb. 13, 2007) (Docket Item 25-4) ("We cannot process your application because Part A[] must be completed by a representative of your former employer"). This letter from Hartford Life also stated:

The applicant is responsible for ensuring that we receive a response within 15 days from the date of this letter or 31 days from the date of group coverage termination, whichever is later. If we do not receive the necessary information within this time limit, portability will no longer be available.

Id. (emphasis in original). Mitchell contacted Emeritus to provide the missing information to Hartford Life, but Emeritus claimed it already had provided the information and refused to resubmit any information. Id, ¶¶ 27-28. Hartford Life then promised Mitchell that it would obtain the missing information from Emeritus. Id. ¶¶ 29-30.

On April 13, 2007, Hartford Life denied Mitchell's claim for life insurance benefits, stating that "the documentation submitted ... does not establish James Mitchell was covered ... at the time of his death." Id., Ex. C — Letter from Hartford Life to Dawnitta Mitchell, at 1 (April 13, 2007) (Docket Item 25-5).

Mitchell appealed this denial and received a final decision from Hartford Life on June 13, 2007, that confirmed denial of benefits. Id., Ex. D — Letter from Hartford Life to Thad B. Zmistowski (Attorney for Dawnitta Mitchell) (June 13, 2007) (Docket Item 25-6).

Mitchell then sued both Emeritus and Hartford. Life under the Employee Retirement Income Security Act ("ERISA") claiming breach of fiduciary duty and wrongful denial of benefits and information. She requested either "appropriate equitable relief' under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), or recovery of "benefits due to [her] under the terms of the plan." See First Am. Compl. ¶¶ 41-45. Emeritus and Hartford Life each moved to dismiss under Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted.

Initially, Mitchell agreed to dismiss her breach of fiduciary duty claim against both defendants. Pl.'s Mem. in Opp'n to Def. Hartford Life's Mot to Dismiss, at 6 (Docket Item 20); Pl.'s Mem. in Opp'n to Def. Emeritus's Mot. to Dismiss, at 6 (Docket Item 21). In her more recent motion to amend her complaint, however, Mitchell reasserted this claim with a more specific request for "appropriate equitable relief." Pl.'s Mot. for Leave to Amend Compl., at 1-2 (Docket Item 25); First Am. Compl. ¶¶ 41-43. Emeritus and Hartford Life have urged me to deny Mitchell's motion to amend her complaint. Objection/Opp'n of Def. Emeritus to Pl.'s Mot. to Amend Compl. (Docket Items 26); Def. Hartford Life's Opp'n to Pl.'s Mot. for Leave to Amend Compl. (Docket Item 27). Even though "[f]utility of the amendment constitutes an adequate reason to deny the motion to amend," Todisco v. Verizon Commc'ns, Inc., 497 F.3d 95, 98 (1st Cir.2007), I GRANT Mitchell's motion to amend her complaint. But the amended complaint still does not suffice to state a claim under ERISA. I therefore GRANT Emeritus's and Hartford Life's motions to dismiss.

ANALYSIS

According to the Supreme Court, ERISA's comprehensive and detailed remedial scheme is "strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly." Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985) (emphasis in original). Thus I examine each of Mitchell's claims to see whether they fit within ERISA's explicit remedial scheme.

Count I: ERISA § 502(a)(3)

ERISA section 502(a)(3) provides:

A civil action may be brought ... by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) 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.

Under this provision, Mitchell requests "appropriate equitable relief' in the form of a three-part affirmative injunction that would operate against both Hartford Life and Emeritus:

[The Plaintiff] requests that the Court enter an affirmative injunction (1) requiring Emeritus to complete the necessary paperwork in order to process Plaintiffs claim, (2) requiring Hartford to accept Plaintiffs claim as timely filed, (3) requiring Hartford to re-process Plaintiffs claim for benefits....

First Am. Compl. ¶ 43. In other words, Mitchell wants me ultimately to order Hartford Life to pay her life insurance benefits.³

Section 502(a)(3) provides a remedy that acts as a "safety net" in ERISA's remedial scheme, allowing an individual to bring a claim for equitable relief when an adequate remedy is not otherwise available under ERISA. See Varity Corp. v. Howe, 516 U.S. 489, 512, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996); Kourinos v. Interstate Brands Corp., 324 F.Supp.2d 105, 107 (D.Me.2004). This "equitable relief' is available against plan "fiduciaries" to redress violations or to enforce provisions of ERISA or an ERISA plan. Mertens v. Hewitt Assocs., 508 U.S. 248, 253, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993). Both Emeritus and...