Hopper v . Standard Ins. C o . 06-CV-010-SM 02/07/07 UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Wayne E . Hopper, Plaintiff
v. Civil N o . 06-cv-10-SM Opinion N o . 2007 DNH 016 Standard Insurance Company; William Gallagher Associates; and Cubic Wafer, Inc., Defendants
O R D E R
Wayne Hopper brings this suit against Standard Insurance
Company (“Standard”), William Gallagher Associates (“WGA”), and
Cubic Wafer, Inc. (“Cubic Wafer” or “the Company”), formerly
known as Xanoptix, Inc., claiming that he relied, to his
detriment, upon incorrect representations made by the defendants
regarding Cubic Wafer’s group disability insurance plan. Hopper
also alleges that Cubic Wafer violated his rights under the
Americans with Disabilities Act (“ADA”).
Defendant Cubic Wafer answered and cross-claimed against
Standard and WGA (document n o . 1 7 ) . Specifically, against WGA,
Cubic Wafer claims breach of fiduciary duty (Count I ) , negligence
(Count I I ) , negligent misrepresentation (Count I I I ) , and
promissory estoppel (Count I V ) . Cubic Wafer also seeks indemnification (Count V ) and contribution (Count V I ) from W G A in
the event it is held liable to Hopper. Against Standard, Cubic
Wafer asserts negligence (Count V I I ) , negligent misrepresentation
(Count V I I I ) , promissory estoppel (Count I X ) , indemnification
(Count X ) , and contribution (Count X I ) .
Cross-claim Defendants Standard and W G A move to dismiss
cross-claim Counts I through X I . For the reasons set forth
below, Standard’s motion is granted and WGA’s motion is denied.
STANDARD OF REVIEW
F E D . R . C I V . P . 12(b)(6) permits a court to dismiss a claim
when the plaintiff “fail[s] to state a claim upon which relief
can be granted.” Under this rule, the court must conduct a
limited inquiry, focused not on “whether a plaintiff will
ultimately prevail but whether the claimant is entitled to offer
evidence to support the claims.” Scheuer v . Rhodes, 416 U . S .
232, 236 (1974). When reviewing a motion to dismiss, the court
must accept all facts pleaded in the complaint as true and any
inferences must be drawn in the light most favorable to the
plaintiff. See, e.g., Citibank v . Grupo Cupey, Inc., 382 F.3d
2 9 , 31 (1st Cir. 2004) (quoting T A G / I C I B Servs., Inc. v . Pan Am.
Grain Co., 215 F.3d 1 7 2 , 175 (1st Cir. 2000)). The court may,
2 however, “reject claims that are made in the complaint if they
are ‘bald assertions’ or ‘unsupportable conclusions.’” United
States ex rel. Karvelas v . Melrose-Wakefield Hosp., 360 F.3d 2 2 0 ,
224 (1st Cir. 2004) (quoting Arruda v . Sears, Roebuck & Co., 310
F.3d 1 3 , 18 (1st Cir. 2002)). “A district court may grant a
12(b)(6) motion to dismiss for failure to state a claim upon
which relief can be granted only if ‘it clearly appears,
according to the facts alleged, that the plaintiff cannot recover
on any viable theory.’” Pomerleau v . W . Springfield Pub. Sch.,
362 F.3d 143, 145 (1st Cir. 2004) (quoting Correa-Martinez v .
Arrillaga-Belendez, 903 F.2d 4 9 , 52 (1st Cir. 1990)).
DISCUSSION
The relevant facts and applicable legal framework are
described in the court’s contemporaneous order (document n o . 42)
granting Standard’s and granting in part WGA’s Motions to
Dismiss.
I. Breach of Fiduciary Duty.
Count I of Cubic Wafer’s cross-claims alleges that WGA owed
Cubic Wafer a fiduciary duty to properly advise the Company with
regard to the scope of insurance and employee benefit products
and services sold by WGA. Because WGA is not an ERISA entity,
3 see Hampers v . W.R. Grace & Co., Inc., 202 F.3d 4 4 , 53 (1st Cir.
2000) (citing Stetson v . PFL Ins. Co., 16 F. Supp. 2d 2 8 , 33 (D.
M e . 1998)) (explaining that the “primary ERISA entities are the
employer, the plan, the plan fiduciaries, and the beneficiaries
of the plan”), and because WGA played no role in administering
plan benefits provided under Standard’s insurance policy, any
fiduciary duty WGA allegedly owed Cubic Wafer arose, if at all,
independently of the ERISA plan. The claim is therefore not
sufficiently “related” to an ERISA plan to justify preemption,
and, accordingly, WGA’s motion to dismiss Count I is denied.
II. Negligence and Negligent Misrepresentation.
Counts VII and VIII of Cubic Waver’s cross-complaint allege
that Standard negligently misrepresented the scope of disability
insurance coverage available under Standard’s policy. Counts II
and III assert the same against WGA.
As against Standard, both counts “relate to” the ERISA plan,
since adjudication of those claims necessarily requires
comparison of the representations made to Cubic Wafer with the
coverage provided under the plan. See Carlo v . Reed Rolled
Thread Die Co., 49 F.3d 7 9 0 , 794-95 (1st Cir. 1995) (claims that
required review of an ERISA-governed plan were preempted).
4 Accordingly, Cubic Wafer’s negligence claims against Standard are
preempted by ERISA and Standard’s motion to dismiss is granted.
Cubic Wafer’s negligence and negligent misrepresentation
claims against WGA, however, are different. As discussed in the
contemporaneous order (document n o . 4 2 ) , WGA’s role was that of
“a seller of insurance, not as an administrator of an employee
benefits plan.” Woodworker’s Supply, Inc. v . Principal Mut. Life
Ins. Co., 170 F.3d 985, 991 (10th Cir. 1999). Because claims
relating to the sale and marketing of benefit plans are
traditionally not preempted by ERISA, see Hampers, 202 F.3d at 53
(citing cases), Cubic Wafer’s negligence and negligent
misrepresentation cross-claims against WGA are not preempted by
ERISA. WGA’s motion to dismiss Counts II and III is denied.
III. Promissory Estoppel, Indemnification, and Contribution.
Counts IV and I X , against WGA and Standard, respectively,
seek to enforce the promised insurance coverage upon which Cubic
Wafer and Hopper allegedly relied. Counts V and X seek
indemnification from WGA and Standard, respectively, and Counts
VI and XI seek contribution from WGA and Standard, respectively.
5 As against Standard, all three claims are dismissed. In
denying benefits to Hopper, Standard plainly acted in its
capacity as an ERISA entity, determining benefit eligibility.
Moreover, like the negligence claims, Cubic Wafer’s promissory
estoppel, indemnification, and contribution claims are
sufficiently related to the ERISA-governed benefits plan that
adjudication of those claims would require the court to review
and construe the plan. To allow Cubic Wafer to recover from
Standard would essentially provide an “‘alternative enforcement
mechanism[]’ to ERISA’s enforcement regime,” Hampers, 202 F.3d at
51 (quoting N.Y. State Conference of Blue Cross & Blue Shield
Plans v . Travelers Ins. Co., 514 U.S. 645, 646 (1995)), which is
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Hopper v . Standard Ins. C o . 06-CV-010-SM 02/07/07 UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Wayne E . Hopper, Plaintiff
v. Civil N o . 06-cv-10-SM Opinion N o . 2007 DNH 016 Standard Insurance Company; William Gallagher Associates; and Cubic Wafer, Inc., Defendants
O R D E R
Wayne Hopper brings this suit against Standard Insurance
Company (“Standard”), William Gallagher Associates (“WGA”), and
Cubic Wafer, Inc. (“Cubic Wafer” or “the Company”), formerly
known as Xanoptix, Inc., claiming that he relied, to his
detriment, upon incorrect representations made by the defendants
regarding Cubic Wafer’s group disability insurance plan. Hopper
also alleges that Cubic Wafer violated his rights under the
Americans with Disabilities Act (“ADA”).
Defendant Cubic Wafer answered and cross-claimed against
Standard and WGA (document n o . 1 7 ) . Specifically, against WGA,
Cubic Wafer claims breach of fiduciary duty (Count I ) , negligence
(Count I I ) , negligent misrepresentation (Count I I I ) , and
promissory estoppel (Count I V ) . Cubic Wafer also seeks indemnification (Count V ) and contribution (Count V I ) from W G A in
the event it is held liable to Hopper. Against Standard, Cubic
Wafer asserts negligence (Count V I I ) , negligent misrepresentation
(Count V I I I ) , promissory estoppel (Count I X ) , indemnification
(Count X ) , and contribution (Count X I ) .
Cross-claim Defendants Standard and W G A move to dismiss
cross-claim Counts I through X I . For the reasons set forth
below, Standard’s motion is granted and WGA’s motion is denied.
STANDARD OF REVIEW
F E D . R . C I V . P . 12(b)(6) permits a court to dismiss a claim
when the plaintiff “fail[s] to state a claim upon which relief
can be granted.” Under this rule, the court must conduct a
limited inquiry, focused not on “whether a plaintiff will
ultimately prevail but whether the claimant is entitled to offer
evidence to support the claims.” Scheuer v . Rhodes, 416 U . S .
232, 236 (1974). When reviewing a motion to dismiss, the court
must accept all facts pleaded in the complaint as true and any
inferences must be drawn in the light most favorable to the
plaintiff. See, e.g., Citibank v . Grupo Cupey, Inc., 382 F.3d
2 9 , 31 (1st Cir. 2004) (quoting T A G / I C I B Servs., Inc. v . Pan Am.
Grain Co., 215 F.3d 1 7 2 , 175 (1st Cir. 2000)). The court may,
2 however, “reject claims that are made in the complaint if they
are ‘bald assertions’ or ‘unsupportable conclusions.’” United
States ex rel. Karvelas v . Melrose-Wakefield Hosp., 360 F.3d 2 2 0 ,
224 (1st Cir. 2004) (quoting Arruda v . Sears, Roebuck & Co., 310
F.3d 1 3 , 18 (1st Cir. 2002)). “A district court may grant a
12(b)(6) motion to dismiss for failure to state a claim upon
which relief can be granted only if ‘it clearly appears,
according to the facts alleged, that the plaintiff cannot recover
on any viable theory.’” Pomerleau v . W . Springfield Pub. Sch.,
362 F.3d 143, 145 (1st Cir. 2004) (quoting Correa-Martinez v .
Arrillaga-Belendez, 903 F.2d 4 9 , 52 (1st Cir. 1990)).
DISCUSSION
The relevant facts and applicable legal framework are
described in the court’s contemporaneous order (document n o . 42)
granting Standard’s and granting in part WGA’s Motions to
Dismiss.
I. Breach of Fiduciary Duty.
Count I of Cubic Wafer’s cross-claims alleges that WGA owed
Cubic Wafer a fiduciary duty to properly advise the Company with
regard to the scope of insurance and employee benefit products
and services sold by WGA. Because WGA is not an ERISA entity,
3 see Hampers v . W.R. Grace & Co., Inc., 202 F.3d 4 4 , 53 (1st Cir.
2000) (citing Stetson v . PFL Ins. Co., 16 F. Supp. 2d 2 8 , 33 (D.
M e . 1998)) (explaining that the “primary ERISA entities are the
employer, the plan, the plan fiduciaries, and the beneficiaries
of the plan”), and because WGA played no role in administering
plan benefits provided under Standard’s insurance policy, any
fiduciary duty WGA allegedly owed Cubic Wafer arose, if at all,
independently of the ERISA plan. The claim is therefore not
sufficiently “related” to an ERISA plan to justify preemption,
and, accordingly, WGA’s motion to dismiss Count I is denied.
II. Negligence and Negligent Misrepresentation.
Counts VII and VIII of Cubic Waver’s cross-complaint allege
that Standard negligently misrepresented the scope of disability
insurance coverage available under Standard’s policy. Counts II
and III assert the same against WGA.
As against Standard, both counts “relate to” the ERISA plan,
since adjudication of those claims necessarily requires
comparison of the representations made to Cubic Wafer with the
coverage provided under the plan. See Carlo v . Reed Rolled
Thread Die Co., 49 F.3d 7 9 0 , 794-95 (1st Cir. 1995) (claims that
required review of an ERISA-governed plan were preempted).
4 Accordingly, Cubic Wafer’s negligence claims against Standard are
preempted by ERISA and Standard’s motion to dismiss is granted.
Cubic Wafer’s negligence and negligent misrepresentation
claims against WGA, however, are different. As discussed in the
contemporaneous order (document n o . 4 2 ) , WGA’s role was that of
“a seller of insurance, not as an administrator of an employee
benefits plan.” Woodworker’s Supply, Inc. v . Principal Mut. Life
Ins. Co., 170 F.3d 985, 991 (10th Cir. 1999). Because claims
relating to the sale and marketing of benefit plans are
traditionally not preempted by ERISA, see Hampers, 202 F.3d at 53
(citing cases), Cubic Wafer’s negligence and negligent
misrepresentation cross-claims against WGA are not preempted by
ERISA. WGA’s motion to dismiss Counts II and III is denied.
III. Promissory Estoppel, Indemnification, and Contribution.
Counts IV and I X , against WGA and Standard, respectively,
seek to enforce the promised insurance coverage upon which Cubic
Wafer and Hopper allegedly relied. Counts V and X seek
indemnification from WGA and Standard, respectively, and Counts
VI and XI seek contribution from WGA and Standard, respectively.
5 As against Standard, all three claims are dismissed. In
denying benefits to Hopper, Standard plainly acted in its
capacity as an ERISA entity, determining benefit eligibility.
Moreover, like the negligence claims, Cubic Wafer’s promissory
estoppel, indemnification, and contribution claims are
sufficiently related to the ERISA-governed benefits plan that
adjudication of those claims would require the court to review
and construe the plan. To allow Cubic Wafer to recover from
Standard would essentially provide an “‘alternative enforcement
mechanism[]’ to ERISA’s enforcement regime,” Hampers, 202 F.3d at
51 (quoting N.Y. State Conference of Blue Cross & Blue Shield
Plans v . Travelers Ins. Co., 514 U.S. 645, 646 (1995)), which is
the very sort of redress that the ERISA preemption clause seeks
to eliminate. See Travelers, 514 U.S. at 646. Cubic Wafer’s
claims against Standard all seek, substantively, some form of
relief defined by coverage (benefits) claimed to be owed Hopper
under the plan, or the plan as described. Accordingly, Cubic
Wafer’s promissory estoppel, indemnification, and contribution
claims are preempted, and Standard’s motion to dismiss is
granted.
As against WGA, Cubic Wafer’s claims remain viable for the
same reasons its negligence and breach of fiduciary duty claims
6 remain viable. The conduct about which Cubic Wafer complains
relates only to the sale of benefit plans and insurance policies.
WGA played no role in the administration of the benefit plan and
did not determine coverage eligibility for plan participants. As
noted above, that type of conduct is not sufficiently “related”
to the ERISA plan to justify preemption of claims arising from
such conduct. Accordingly, WGA’s motion to dismiss Counts IV, V ,
and VI is denied.
CONCLUSION
For the foregoing reasons, Defendant Standard Insurance
Company’s Motion to Dismiss Cubic Wafer’s Cross-Claims (document
n o . 22) is granted as to all claims asserted against i t .
Defendant William Gallagher Associates’s Motion to Dismiss Cubic
Wafer’s Cross-Claims (document n o . 34) is denied.
SO ORDERED.
Steven J./McAuliffe :hief Judge
February 7 , 2007
cc: Edwinna C . Vanderzanden, Esq. Byrne J. Decker, Esq. William D. Pandolph, Esq. Charles P. Bauer, Esq. Stephen A . Duggan, Esq.