Nielsen v. Unum Life Insurance Co. of America

58 F. Supp. 3d 1152, 2014 U.S. Dist. LEXIS 160643, 2014 WL 5835310
CourtDistrict Court, W.D. Washington
DecidedSeptember 2, 2014
DocketCase No. 2:13-cv-1717 RSM
StatusPublished
Cited by2 cases

This text of 58 F. Supp. 3d 1152 (Nielsen v. Unum Life Insurance Co. of America) is published on Counsel Stack Legal Research, covering District Court, W.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nielsen v. Unum Life Insurance Co. of America, 58 F. Supp. 3d 1152, 2014 U.S. Dist. LEXIS 160643, 2014 WL 5835310 (W.D. Wash. 2014).

Opinion

ORDER ON MOTIONS

RICARDO S. MARTINEZ, District Judge.

This matter comes before the Court on Motion to Strike Plaintiffs Jury Demand by Defendants Catholic Health Initiatives (“CHI”), Catholic Health Initiatives Welfare Benefits Plan (the “Plan”), and Franciscan Health System (“FHS”) (Dkt. # 18); Partial Motion to Dismiss for Failure to State a Claim, or in the Alternative, for More Definite Statement by Defendants CHI, the Plan, and FHS (Dkt. # 19); Motion to Dismiss and Joinder in CHI’s Motion to Dismiss by Defendants Unum Group Corporation and Unum Life Insurance Company of America (collectively, “Unum”) (Dkt. # 20); and Motion for Join-der in CHI Defendants’ Motion to Strike Plaintiffs Jury Demand by Defendants Unum (Dkt. #21). Upon filing of these Motions, the Court ordered Defendants Unum to show cause why this case should not be remanded to state court for lack of subject matter jurisdiction. See Dkt. # 23. Having'reviewed the parties’ briefing, the record, and relevant case law, and for the reasons stated herein, the Court determines that it possesses federal question jurisdiction over this action, grants the requests to strike Plaintiffs jury demand with respect to causes of action under ERISA, and grants the motions for partial dismissal of Plaintiffs complaint.

Background

Plaintiffs operative complaint asserts multiple state and federal causes of action, all arising out of Defendants’ decision to deny Plaintiff Dr. Ronald Nielsen short and long-term disability benefits. From May 4, 2005 to May 21, 2010, Plaintiff was employed by FHS as a physician. FHS is an affiliate of CHI, which provides employee benefits for FHS’s employees, including Plaintiff. Prior to December 2005, CHI administered welfare benefits under two separate employee benefits plans: (1) the Plan (identified as Plan No. 513), and (2) the LTD Plan (identified as Plan No. 514), which provided for Long-Term Disability (“LTD”) benefits. See Dkt. #32, ¶15. As of December 8, 2005, CHI elected to provide LTD benefits instead under the Plan and consolidated both benefit programs into Plan No. 513. The LTD benefits in the Plan are funded through an insurance policy issued by Unum, to which [1157]*1157CHI delegated authority and responsibility for making benefit determinations under the Plan. Dkt. # 15 (“Compl.”), ¶ 3; Dkt. # 17, ¶ 6. In addition, CHI provides Short Term Disability (“STD”) benefits to eligible FHS employees through a separate salary continuation program (the “STD Program”). CHI also delegated claims administration authority under the STD Program to Unum. Id. Plaintiff participated in both the Plan and the STD Program as a consequence of his employment.

On May 21, 2010, at the age of 55, Plaintiff was terminated by FHS. Compl. at ¶ 16. Plaintiff contends that he was fired due to difficulties with attention, concentration, and working memory, and for inability to complete work in a timely manner. Id. In June 2010, following his termination, Dr. Nielsen made a claim for STD benefits under the STD Program, which was denied on June 25, 2010. Id. at ¶¶ 21, 30. On June 27, 2011, Unum denied Plaintiff’s appeal, determining that Dr. Nielsen was not “disabled” as defined under the STD Program. Id. at ¶ 31. Plaintiff then applied for LTD benefits under the Plan, but his claim was also denied on April 20, 2012. Again Unum determined that Dr. Nielsen was not “disabled” as defined under the Plan. Id. at ¶ 42. On March 18, 2013, Unum denied Plaintiff’s appeal of the denial of his LTD benefits. Id. at ¶ 54.

Plaintiff filed this action in the Superior Court of Washington for King County on August 22, 2013, asserting claims against Defendants under Washington law as well as Title III of the Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12182(a). Plaintiffs first and second causes of action allege breach of contract by CHI, FHS, and Unum arising out of the denial of Plaintiffs STD benefits. The remaining causes of action seek relief for the denial of Plaintiffs LTD benefits, including the provision of past and future LTD benefits, a declaration that the term “mental illness” is unenforceable as defined in the Plan, a declaration that Plaintiff is entitled under the Plan to LTD benefits until age 65, and injunctive relief prohibiting Defendants from enforcing the Plan definition of “mental illness.”

On September 23, 2013, Unum removed the Complaint to this Court on the basis of federal question jurisdiction. See- Dkt. # 1. Following removal, Plaintiff filed an Amended Complaint, which added a Thirteenth Cause of Action for improper denial of LTD benefits under the Employee Retirement Security Act (“ERISA”), 29 U.S.C. § 1001 et seq. Though the Amended Complaint expressly disclaims that ERISA governs the Plan, it asserts claims under ERISA in the event that the Court should determine that “ERISA applies to this action and that it preempts any of Dr. Nielsen’s claims.” Compl. at ¶ 151. Defendants contend that the Complaint principally seeks a monetary award for disability benefits under the Plan, which they assert is governed by ERISA, thereby providing grounds for this Court’s jurisdiction over the action and preempting Plaintiffs state law claims. Plaintiff, however, maintains that the Plan is exempt from ERISA as a “church plan” and because CHI did not properly elect to have the Plan governed by ERISA.

Following Plaintiffs filing of an Amended Complaint, Defendants filed the instant motion to strike Plaintiffs jury demand and to partially dismiss the complaint for failure to state claims on which relief can be granted, pursuant to Fed.R.Civ.P. 12(b)(6). The Court sought and received supplemental briefing on the jurisdictional question through an Order to Show Cause (Dkt. # 23) and now finds and orders as follows.

[1158]*1158 Analysis

a) Federal Question Jurisdiction

As an initial matter, the Court considers whether it possesses subject matter jurisdiction over Plaintiffs Complaint on the grounds that ERISA governs Plaintiffs claims for long-term disability-benefits. Pursuant to 28 U.S.C. § 1331, district courts possess “original jurisdiction of all civil actions arising under the Constitution, law, or treaties of the United States.” Generally, and in accordance with the well-pleaded complaint rule, a defendant may only remove a case to federal courts if “the plaintiffs complaint establishes that the case ‘arises under’ feder'al law.” Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983). However, an exception to the well-pleaded complaint rule exists where “a federal statute wholly displaces the state-law cause of action through complete preemption.” Aetna Health Inc. v. Davila, 542 U.S. 200, 207, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004) (quoting Beneficial Nat. Bank v. Anderson,

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58 F. Supp. 3d 1152, 2014 U.S. Dist. LEXIS 160643, 2014 WL 5835310, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nielsen-v-unum-life-insurance-co-of-america-wawd-2014.