Unum Life v. Schaffer CV-02-342-JD 11/22/02 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Unum Life Insurance Company of America
v. Civil No. 02-342-JD Opinion No. 2002 DNH 207 Stephen J. Schaffer
O R D E R
The plaintiff, Unum Life Insurance Company of America,
brings an action against Stephen J. Schaffer under the Employee
Retirement Income Security Act ("ERISA"), alleging that Schaffer
failed to repay Unum for disability benefits reimbursed by the
Social Security Administration. Schaffer alleged a counterclaim
under ERISA and five state law counterclaims against Unum. Unum
moves to dismiss Schaffer's counterclaims. Although Schaffer's
motion for an extension of time to file a response to the
plaintiff's motion was granted, Schaffer has not filed a response
to date.1
1Schaffer is represented by counsel. In Schaffer's motion for an extension of time, counsel referred to an amended counterclaim which also has not been filed. Standard of Review
In considering a motion to dismiss, pursuant to Federal Rule
of Civil Procedure 12(b) (6), the court accepts the facts alleged
in the complaint as true and draws all reasonable inferences in
favor of the plaintiff. Calderon-Ortiz v. Laboy-Alvarado, 300
F.3d 60, 63 (1st Cir. 2002); see also Andrx Pharms., Inc. v.
Biovail Corp. Int'l, 256 F.3d 799, 805 (1st Cir. 2002) (applying
Rule 12(b)(6) standard in motion to dismiss counterclaims). The
court must determine whether the complaint, construed in the
proper light, "alleges facts sufficient to make out a cognizable
claim." Carroll v. Xerox Corp., 294 F.3d 231, 241 (1st Cir.
2002). All that is reguired is a short and plain statement of
the claim. See Gorski v. N.H. Dep't of Corrections, 290 F.3d
466, 473 (1st Cir. 2002) (citing Swierkiewicz v. Sorema N.A., 534
U.S. 506 (2002) ) .
Background
Schaffer was insured in an employee welfare benefit plan
under his employer's long term disability policy issued by Unum.
Schaffer began receiving benefits under the plan in June of 1997.
Schaffer applied for social security benefits, based on his
disability. In January of 1999, the Social Security
Administration determined that he was eligible for benefits,
2 including retroactive benefits.
The Unum policy included a provision in which the
beneficiary promised to repay Unum any overpayment resulting from
a Social Security Administration award. In addition, Schaffer
signed a payment option form on January 20, 1998, in which he
elected to receive disability benefits from Unum while his social
security application was pending and agreed to repay Unum any
amount he received. Unum claims that Schaffer owes more than
$26,000 in overpayments from Unum and has refused Unum's demands
for repayment, except for monthly amounts of $100.
Schaffer alleges that he was "non-copus-mentus" when he
signed the payment option form due to a medical condition
diagnosed by gualified medical personnel. He states that Unum
began to harass him in May of 1999 to get him to return to work.
He also states that Unum representatives said that Unum would
reimburse him for the costs of retraining to return to work.
Schaffer alleges that he incurred retraining costs in order to
return to work and that he began to work again in January of
2000. Due to his disability, he left work in March of 2000. He
was able to return to work permanently in May of 2000. He
contends that Unum owes him $17,747.07 to reimburse him for the
costs of retraining and related expenses.
Schaffer reguested long term disability benefits from Unum
3 for February and March of 2000 under the "Recurrent Disability"
provision of the policy. In May of 2000, Unum responded that
Schaffer had not provided adequate information to substantiate
his claim and asked him to submit information. Schaffer contends
that it was the same information that he submitted with his
request for benefits. Unum has not paid Schaffer benefits for
the period of February and March of 2000.
Discussion
Unum brinqs its claim aqainst Schaffer under ERISA, 29
U.S.C. § 1132, seekinq restitution and an award of attorneys'
fees. Schaffer brinqs an ERISA counterclaim under § 1132,
seekinq an award of disability benefits for the period of
February and March of 2000. Schaffer also alleqes counterclaims
of intentional and neqliqent misrepresentation, breach of
contract and of the implied duty of qood faith and fair dealinq,
and violation of the Connecticut Unfair Insurance Practices Act.
Unum moves to dismiss Schaffer's counterclaims.
A. ERISA Counterclaim
Unum moves to dismiss Schaffer's ERISA counterclaim on the
qround that he did not exhaust the administrative remedies
available to him. The First Circuit requires exhaustion of
4 available administrative remedies as a prerequisite for contract-
based ERISA claims. See Drinkwater v. Metro. Life Ins. Co., 846
F.2d 921, 825-26 (1st Cir. 1988); accord Tompkins v. United
Healthcare of New England, Inc., 203 F.3d 90, 94 (1st Cir. 2000)
(citing Terry v. Baver Corp., 145 F.3d 28, 35-36 (1st Cir.
1998)). Therefore, an ERISA claimant is required to exhaust
internal administrative remedies before bringing suit unless the
available remedies would be futile or inadequate. Terry, 145
F .3d at 4 0.
Schaffer alleges that he requested benefits for the February
and March of 2000 period, based on recurrent disability, and that
he supplied sufficient medical evidence of the disability. He
does not allege that he responded to Unum's notice in May of 2000
that he had not provided enough information to support his claim
or that he otherwise pursued his claim through Unum's internal
processes. He does not allege that he ever received a final
determination on his claim from Unum. Based on the allegations
in his complaint, it appears that Schaffer failed to exhaust
administrative remedies, as required. Therefore, Schaffer's
ERISA counterclaim is dismissed.
5 B. State Law Counterclaims
ERISA "supersede[s] any and all State laws insofar as they
may now or hereafter relate to any employee benefit plan . . .
29 U.S.C. § 1144(a). The preemption is modified by a savings
clause that exempts state laws regulating insurance, banking, or
securities. § 1144(b)(2)(A). ERISA is construed to preempt "any
state law claim that relates to an employee benefit plan, and
[the preemption provision] has been applied widely to bar state
claims seeking damages for alleged breach of obligations
pertaining to an ERISA plan." Hotz v. Blue Cross & Blue Shield,
292 F.3d 57, 60 (1st Cir. 2002).
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Unum Life v. Schaffer CV-02-342-JD 11/22/02 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Unum Life Insurance Company of America
v. Civil No. 02-342-JD Opinion No. 2002 DNH 207 Stephen J. Schaffer
O R D E R
The plaintiff, Unum Life Insurance Company of America,
brings an action against Stephen J. Schaffer under the Employee
Retirement Income Security Act ("ERISA"), alleging that Schaffer
failed to repay Unum for disability benefits reimbursed by the
Social Security Administration. Schaffer alleged a counterclaim
under ERISA and five state law counterclaims against Unum. Unum
moves to dismiss Schaffer's counterclaims. Although Schaffer's
motion for an extension of time to file a response to the
plaintiff's motion was granted, Schaffer has not filed a response
to date.1
1Schaffer is represented by counsel. In Schaffer's motion for an extension of time, counsel referred to an amended counterclaim which also has not been filed. Standard of Review
In considering a motion to dismiss, pursuant to Federal Rule
of Civil Procedure 12(b) (6), the court accepts the facts alleged
in the complaint as true and draws all reasonable inferences in
favor of the plaintiff. Calderon-Ortiz v. Laboy-Alvarado, 300
F.3d 60, 63 (1st Cir. 2002); see also Andrx Pharms., Inc. v.
Biovail Corp. Int'l, 256 F.3d 799, 805 (1st Cir. 2002) (applying
Rule 12(b)(6) standard in motion to dismiss counterclaims). The
court must determine whether the complaint, construed in the
proper light, "alleges facts sufficient to make out a cognizable
claim." Carroll v. Xerox Corp., 294 F.3d 231, 241 (1st Cir.
2002). All that is reguired is a short and plain statement of
the claim. See Gorski v. N.H. Dep't of Corrections, 290 F.3d
466, 473 (1st Cir. 2002) (citing Swierkiewicz v. Sorema N.A., 534
U.S. 506 (2002) ) .
Background
Schaffer was insured in an employee welfare benefit plan
under his employer's long term disability policy issued by Unum.
Schaffer began receiving benefits under the plan in June of 1997.
Schaffer applied for social security benefits, based on his
disability. In January of 1999, the Social Security
Administration determined that he was eligible for benefits,
2 including retroactive benefits.
The Unum policy included a provision in which the
beneficiary promised to repay Unum any overpayment resulting from
a Social Security Administration award. In addition, Schaffer
signed a payment option form on January 20, 1998, in which he
elected to receive disability benefits from Unum while his social
security application was pending and agreed to repay Unum any
amount he received. Unum claims that Schaffer owes more than
$26,000 in overpayments from Unum and has refused Unum's demands
for repayment, except for monthly amounts of $100.
Schaffer alleges that he was "non-copus-mentus" when he
signed the payment option form due to a medical condition
diagnosed by gualified medical personnel. He states that Unum
began to harass him in May of 1999 to get him to return to work.
He also states that Unum representatives said that Unum would
reimburse him for the costs of retraining to return to work.
Schaffer alleges that he incurred retraining costs in order to
return to work and that he began to work again in January of
2000. Due to his disability, he left work in March of 2000. He
was able to return to work permanently in May of 2000. He
contends that Unum owes him $17,747.07 to reimburse him for the
costs of retraining and related expenses.
Schaffer reguested long term disability benefits from Unum
3 for February and March of 2000 under the "Recurrent Disability"
provision of the policy. In May of 2000, Unum responded that
Schaffer had not provided adequate information to substantiate
his claim and asked him to submit information. Schaffer contends
that it was the same information that he submitted with his
request for benefits. Unum has not paid Schaffer benefits for
the period of February and March of 2000.
Discussion
Unum brinqs its claim aqainst Schaffer under ERISA, 29
U.S.C. § 1132, seekinq restitution and an award of attorneys'
fees. Schaffer brinqs an ERISA counterclaim under § 1132,
seekinq an award of disability benefits for the period of
February and March of 2000. Schaffer also alleqes counterclaims
of intentional and neqliqent misrepresentation, breach of
contract and of the implied duty of qood faith and fair dealinq,
and violation of the Connecticut Unfair Insurance Practices Act.
Unum moves to dismiss Schaffer's counterclaims.
A. ERISA Counterclaim
Unum moves to dismiss Schaffer's ERISA counterclaim on the
qround that he did not exhaust the administrative remedies
available to him. The First Circuit requires exhaustion of
4 available administrative remedies as a prerequisite for contract-
based ERISA claims. See Drinkwater v. Metro. Life Ins. Co., 846
F.2d 921, 825-26 (1st Cir. 1988); accord Tompkins v. United
Healthcare of New England, Inc., 203 F.3d 90, 94 (1st Cir. 2000)
(citing Terry v. Baver Corp., 145 F.3d 28, 35-36 (1st Cir.
1998)). Therefore, an ERISA claimant is required to exhaust
internal administrative remedies before bringing suit unless the
available remedies would be futile or inadequate. Terry, 145
F .3d at 4 0.
Schaffer alleges that he requested benefits for the February
and March of 2000 period, based on recurrent disability, and that
he supplied sufficient medical evidence of the disability. He
does not allege that he responded to Unum's notice in May of 2000
that he had not provided enough information to support his claim
or that he otherwise pursued his claim through Unum's internal
processes. He does not allege that he ever received a final
determination on his claim from Unum. Based on the allegations
in his complaint, it appears that Schaffer failed to exhaust
administrative remedies, as required. Therefore, Schaffer's
ERISA counterclaim is dismissed.
5 B. State Law Counterclaims
ERISA "supersede[s] any and all State laws insofar as they
may now or hereafter relate to any employee benefit plan . . .
29 U.S.C. § 1144(a). The preemption is modified by a savings
clause that exempts state laws regulating insurance, banking, or
securities. § 1144(b)(2)(A). ERISA is construed to preempt "any
state law claim that relates to an employee benefit plan, and
[the preemption provision] has been applied widely to bar state
claims seeking damages for alleged breach of obligations
pertaining to an ERISA plan." Hotz v. Blue Cross & Blue Shield,
292 F.3d 57, 60 (1st Cir. 2002).
Schaffer's counterclaims of misrepresentation, breach of
contract and of the good faith obligation, and violation of the
Connecticut Unfair Insurance Practices Act seek damages for
Unum's alleged breaches of obligations under the employee
benefits plan, of which the Unum policy is a part. Having not
responded to Unum's motion, Schaffer makes no argument that any
of the counterclaims would fall within the savings clause. See,
e.g.. Rush Prudential HMO, Inc. v. Moran, 122 S. C t . 2151, 2158-
59 (2002) (construing savings clause); Hotz, 292 F.3d at 60-61
(same). The court declines to raise and resolve arguments on
Schaffer's behalf that he has not raised himself. See Higgins v.
New Balance Athletic Shoe, Inc., 194 F.3d 252, 260 (1st Cir.
6 1999); Williams v. Drake, 146 F.3d 44, 50 (1st Cir. 1998).
Therefore, Schaffer's state law counterclaims are dismissed
based on ERISA preemption.
Conclusion
For the foregoing reasons, the plaintiff's motion to dismiss
counterclaims (document no. 6) is granted.
SO ORDERED.
Joseph A. DiClerico, Jr. United States District Judge
November 22, 2002
cc: Byrne J. Decker, Esguire William J. Phillips, Esguire