Englert v. Prudential Insurance Co. of America

186 F. Supp. 3d 1044, 2016 U.S. Dist. LEXIS 63733, 2016 WL 2770526
CourtDistrict Court, N.D. California
DecidedMay 13, 2016
DocketCase No. 15-cv-04814-HSG
StatusPublished
Cited by4 cases

This text of 186 F. Supp. 3d 1044 (Englert v. Prudential Insurance Co. of America) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Englert v. Prudential Insurance Co. of America, 186 F. Supp. 3d 1044, 2016 U.S. Dist. LEXIS 63733, 2016 WL 2770526 (N.D. Cal. 2016).

Opinion

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS PLAINTIFF’S SECOND CLAIM FOR RELIEF

Re: Dkt. No. 20

HAYWOOD S. GILLIAM, JR., United States District Judge

Pending before the Court is Defendant The Prudential Insurance Company of America’s motion to dismiss Plaintiff Peter Englert’s second claim for relief. Dkt. No. 20. Having considered Defendant’s motion to dismiss, Plaintiffs opposition, and all related papers, the Court finds the matter appropriate for decision without oral argument. See Civil L.R. 7-l(b). For the reasons articulated below, the motion is GRANTED IN PART and DENIED IN PART.

[1046]*1046LBACKGROUND

On October 19, 2015, Plaintiff filed this action against The Prudential Insurance Company of America (“Defendant”) and Does 1-20. Dkt. No. 1 (“Compl.”). The complaint articulates two claims for relief under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (“ERISA”): (1) a § 502(a)(1)(B) claim for recovery of wrongfully withheld long-term disability (“LTD”) benefits, prejudgment interest, attorneys’ fees, and costs; and (2) a § 502(a)(3) claim for equitable relief in the form of a permanent injunction preventing Defendant and Does 1-20 from serving as fiduciary with respect to Plaintiffs LTD plan, full payment of LTD benefits due, prejudgment interest, disgorgement of profits, surcharge, an injunction against termination of benefits during the maximum benefit period, attorneys’ fees, costs, and other make-whole relief. Id. ¶¶ 21-36.

For purposes of this motion, the Court accepts the following as true:

At all relevant times, Plaintiff was employed by JP Morgan Chase Bank as a Sales Associate and participated in a group LTD plan sponsored by JP Morgan Chase Bank and underwritten by Defendant (the “Plan”). Id. ¶¶ 6-7. The Plan qualifies as a welfare benefit plan governed by ERISA, and Defendant was and is the Plan’s de facto co-plan administrator and co-claims fiduciary. Id. ¶9. While Plaintiff was an employee of JP Morgan Chase Bank and a recipient under the Plan, Plaintiff experienced severe chronic back pain forcing him to take medical leave effective October 18, 2011. Id. ¶¶ 8,13.

Plaintiff received short-term disability benefits for about seven months, and on November 20, 2012, Defendant sent Plaintiff a letter informing him that his LTD benefits claim had been approved. Id. ¶¶ 14-15. However, on September 16, 2013, Defendant terminated Plaintiffs LTD benefits. Id. ¶ 16. Plaintiff appealed the termination, and on June 2, 2014, Defendant paid Plaintiff back benefits, but only to May 21, 2014. Id. On November 25, 2014, Plaintiff submitted another appeal, and on January 14, 2015, Defendant again conceded its error and paid Plaintiff back benefits, but only to December 6, 2014. Id. On July 9, 2015, Plaintiff filed his third appeal, and Defendant denied the appeal on September 15, 2015. Id. ¶¶ 16-17.

Defendant’s “vexatious method of reinstating only back benefits instead of acknowledging ongoing disability put Plaintiff in the stressful position of being in a constant and perpetual state of appeal” and caused Plaintiff “severe economic hardship and emotional distress.” Id. ¶¶ 19, 21. Meanwhile, Defendant “benefit-ted significantly through reduction of the statutory loss reserve previously maintained on Plaintiffs claim.” Id. As a result of Defendant’s conduct, JP Morgan Chase Bank terminated Plaintiffs leave of absence and employment, “causing Plaintiff to incur unanticipated costs for individual health insurance and other benefits.” Id. ¶ 23.

On December 31, 2015, Defendant filed the pending motion to dismiss Plaintiffs § 502(a)(3) claim for equitable relief in its entirety. Dkt. No. 20 (“MTD”).

II. DISCUSSION

A. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. To survive á Rule 12(b)(6) motion to dismiss, the plaintiff must allege “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). This “facial plausibility” standard requires the plaintiff to allege facts that [1047]*1047add up ,to “more than, a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1987, 178 L.Ed.2d 868 (2009). A plaintiff must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. On a motion to dismiss, the court •accepts as true a plaintiffs well-pleaded factual allegations and construes, all factual inferences in the light most, favorable to the plaintiff. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir.2008). But, the plaintiff must allege facts sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955.

B. Analysis

Defendant urges the Court to dismiss Plaintiffs § 502(a)(3) claim for four reasons: (1) equitable relief is not available under § 502(a)(3) because adequate relief •is available under § 502(a)(1)(B); (2) disgorgement of profits constitutes impermissible extracontractual damages; (3) allowing a § 502(a)(3) breach of fiduciary duty claim based on denial of benefits would frustrate ERISA’s key policy, of promoting the efficient and inexpensive resolution of benefits disputes; and (4) Plaintiffs allegations fail to meet Twombly ⅛ pleading requirements.

i. Adequate Relief Available Elsewhere

Defendant contends that Plaintiffs § 502(a)(3), claim, for equitable relief “is nothing more than a repackaging of his ERISA § 502(a)(1)(B) claim,” and thus, Plaintiff does not allege a claim for “appropriate equitable relief’ under ERISA § 502(a)(3). See MTD at 4-5.

ERISA § "502(a)(1)(B) permits an ERISA participant" or beneficiary to bring an action “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). ERISA’s catch-all provision, § 502(a)(3), permits an action “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.” 29 U.S.C. § 1132(a)(3).

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186 F. Supp. 3d 1044, 2016 U.S. Dist. LEXIS 63733, 2016 WL 2770526, Counsel Stack Legal Research, https://law.counselstack.com/opinion/englert-v-prudential-insurance-co-of-america-cand-2016.