Peters v. Reliance Standard Life Ins. Co.

238 F.Supp.3d 905

Reginald PETERS, Plaintiff,

v.RELIANCE STANDARD LIFE INSURANCE COMPANY, Defendant.

CIVIL ACTION NO. 3:16–CV–60

United States District Court, S.D. Texas, Galveston Division.

Signed February 23, 2017

Michael Elton Pierce, Pierce Skrabanek Bruera, PLLC, Houston, TX, for Plaintiff.

Claire Winniford Parsons, Wilson Elser et al, Houston, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

George C. Hanks Jr., United States District Judge

Before the Court is Defendant Reliance Standard Life Insurance Company's Motion to Dismiss Pursuant to FED. R. CIV. P. 12(b)(6). Dkt. 8. This case stems from Reliance's decision to discontinue long-term disability payments to Peters. It did so after learning that Peters had entered a settlement agreement ("Agreement") with his employer. The Agreement allegedly released his employer and its insurers from liability. Peters claims that the Agreement did not release Reliance from its responsibility to continue paying disability benefits. For the reasons that follow, the Court GRANTS the motion to dismiss.

I. Statement of the Undisputed Facts

The undisputed facts, in the light most favorable to plaintiff as the non-moving party, are as follows. Reginald Peters ("Peters") was employed with Averitt Express, Inc. ("Averitt"). Peters obtained disability insurance with the defendant, Reliance Standard Life Insurance Company ("Reliance"), through his employment with Averitt. In 2011, Peters sustained injuries when he was struck by a tractor-trailer driven by another Averitt employee. Averitt was not a subscriber to the Texas Workers' Compensation System. Peters brought a suit in negligence against Averitt in the 152nd Judicial District Court of Harris County, Texas. Pursuant to this litigation, Peters and Averitt entered into the Agreement in which Peters received $2,500,000 in exchange for releasing Averitt from any future liability.

A. The Agreement

The following sections of the Confidential Settlement, Indemnity and Release Agreement are relevant to this case:

I. Definitions

....

B. "Releasees" means Averitt Express, Inc. and Averitt Properties Texas, L.P., and all of their past, present and future, affiliated, related, successor, predecessor, subsidiary and parent companies and corporations, and with respect to each of the foregoing, their contractors, subcontractors, joint venturers, partners, officers, directors, shareholders, agents, representatives, employees, attorneys, insurers and indemnitors (specifically including, but not limited to, Lexington Insurance Company, American International Group, Inc.), and all parties in privity therewith.

....

III. General Release

1. Releasors, in exchange for the Consideration ... do fully and finally RELEASE, ACQUIT and FOREVER DISCHARGE Releasees of and from any and all past, present and future claims, suits, demands, liabilities, damages, debts, dues, liens, actions, and/or causes of action of whatsoever nature, known or unknown, accrued or unaccrued, foreseen or unforeseen, proximate or remote, whether permanent, temporary or residual, whether in law, in equity, in admiralty, in tort, in contract, by statute or otherwise, including, but not limited to, all: ... long term disability benefits ... any insurance policy ... and any and all other damages or other items of possible recovery whatsoever to which Releasors may be or might be entitled at the time of this Agreement, arising out of, resulting from, or that are in any way related, directly or indirectly, to the Incident, Reginald Peters' employment with Averitt Express, Inc., and/or the Lawsuit.

....

6. Releasors acknowledge, understand and agree that by accepting the Consideration they may be waiving rights to benefits such as social security, death and/or disability, Medicare and/or Medicaid benefits, whether provided by ... any insuring company, providing health, hospitalization, disability or other insurance payments or benefits. Releasors agree and understand that by entering into this Agreement they are releasing any and all claims against the Releasees related in any way to the aforementioned benefits....

....

VI. Representations and Warranties

....

3. Plaintiffs Reginald and Joyce Peters represent and warrant that they are executing this Agreement on their own judgment and upon advice of counsel of their own choosing.

....

10. Plaintiffs Reginald and Joyce Peters represent and warrant that this Agreement is fully and forever binding on Releasors.

11. Plaintiffs Reginald and Joyce Peters represent and warrant that they have not filed and are not a party to any lawsuits, claims or other legal proceedings arising out of, or related, directly or indirectly, to the Incident other than [this] suit ....

....

X. Choice of Law

This Agreement shall be construed in accordance with and governed by the laws of the State of Texas.

Dkt. 8–2

B. The Instant Lawsuit

Reliance had paid Peters long-time disability benefits as required by the policy. However, Reliance ceased payments when it learned of the Agreement. When the payments stopped, Peters brought the instant suit against Reliance. Dkt. 1. According to Peters, Reliance's decision to cease paying long-term disability benefits: 1) was improper; 2) was improperly motivated by an attempt to avoid its obligations to pay benefits; and 3) interfered with his right to receive disability benefits. Id. The Complaint therefore asserted causes of action for: 1) denial of benefits; 2) breach of fiduciary duty; and 3) interference, seeking damages and injunctive relief. Id.

In its motion to dismiss, Reliance argues that Peters released it from any obligation to continue paying long-term disability benefits when he entered into the Agreement with Averitt. Dkt. 8. Its motion to dismiss points to language in the Agreement that 1) names Averitt's ‘insurers' as Releasees; and 2) discharges all Releasees from—inter alia —long-term disability or insurance claims. Id. Peters counters that Reliance was not a party to the Agreement, which did not specifically name Reliance as a Releasee—although it did expressly identify several other insurers of Averitt. Dkt. 9.

Through the Complaint, the motion to dismiss, and the parties' responsive pleadings and filings with the Court, Peters and Reliance disagree on many points of fact and law. However, two central issues have emerged: 1) the applicable law to apply and 2) whether, under the appropriate law, Peters released Reliance from its obligation to pay disability benefits.

II. Standard of Review

A. Jurisdiction

The parties agree that the Court has federal question jurisdiction over this case pursuant to 28 U.S.C. § 1331 and—specifically—the Employee Retirement Income Security Act of 1974 ("ERISA"). See 29 U.S.C. § 1132(e)(1).

B. FED. R. CIV. P. § 12(b)(6)

Pursuant to Rule 8 of the Federal Rules of Civil Procedure, a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A Rule 12(b)(6) motion tests the formal sufficiency of the pleadings and is "appropriate when a defendant attacks the complaint because it fails to state a legally cognizable claim." Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001), cert. denied sub nom. Cloud v. United States, 536 U.S. 960, 122 S.Ct. 2665, 153 L.Ed.2d 839 (2002).

To defeat a motion to dismiss pursuant to Rule 12(b)(6), a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ). The court must accept the factual allegations of the complaint as true, view them in a light most favorable to the plaintiff, and draw all reasonable inferences in the plaintiff's favor. See Ramming , 281 F.3d at 161.

Rule 12(b)(6) motions to dismiss are "viewed with disfavor and [are] rarely granted." Arnett v. Aetna Life Ins. Co., No. CV H-15-2723, 2016 WL 6883203, at *2 (S.D. Tex. Apr. 14, 2016) (citing Turner v. Pleasant , 663 F.3d 770, 775 (5th Cir. 2011) ). A complaint need not address every potential affirmative defense to survive a motion to dismiss. Am. Surgical Assistants, Inc. v. Great W. Healthcare of Texas, Inc. , No. CIV.A.H-09-0646, 2010 WL 565283, at *2 (S.D. Tex. Feb. 17, 2010) (citing Hall v. Hodgkins, 305 Fed.Appx. 224, 228 n. 1 (5th Cir.2008) ). However, "[a]n exception to this rule may apply if the plaintiff has alleged facts plainly indicating that an affirmative defense does apply." Id. Further, "where facts alleged in Plaintiff's pleadings make clear that a claim is barred, dismissal under Rule 12(b) may be granted." In re Dynegy, Inc. Securities Litigation , 339 F.Supp.2d 804, 819 (S.D. Tex. 2004).

C. ERISA Claims

Congress enacted ERISA to regulate employee benefit plans. Aetna Health, Inc. v. Davila , 542 U.S. 200, 208, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004). Any plan that is "established or maintained by an employer...for the purpose of providing for its participants or their beneficiaries...benefits in the event of sickness, accident, disability, death, or unemployment" is governed by ERISA. See 29 U.S.C. § 1002(1). The parties agree that the instant claims are governed by ERISA. Though never expressly stated, the Court finds that the Complaint's three causes of action are made pursuant to the following ERISA provisions: 1) 29 U.S.C. § 1132(a)(1)(B) and (3) for denial of benefits; 2) 29 U.S.C. §§ 1104, 1109, and 1132(a)(2) for breach of fiduciary duties; and 3) 29 U.S.C. § 1140 for interference.

The parties further agree that federal common law controls.¹ See Chaplin v. NationsCredit Corp. , 307 F.3d 368, 372 (5th Cir. 2002) ("Federal common law controls the interpretation of a release...