McLendon v. Liberty National Life Insurance Company et al
MEMORANDUM OPINION AND ORDER that Dfts' 25 Motion to Dismiss or in the Alternative for Summary Judgment is GRANTED in part and DENIED in part as follows: (1) With regard to Plf's ERISA claims, the court GRANTS summary judgment on behalf o f Dfts (Count I); (2) The motion is otherwise DENIED; further ORDERED that Plf's 27 Motion for Leave to Amend is DENIED; further ORDERED that Dfts SHOW CAUSE on or before 10/23/2012, why this matter should not be remanded to state court; Plf shall file a response on or before 10/30/2012; Dfts may file a reply on or before 11/6/2012. Signed by Chief Judge William Keith Watkins on 10/16/2012. (Attachments: # 1 Civil Appeals Checklist) (wcl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
LIBERTY NATIONAL LIFE
SAMI NIZAM, TORCHMARK
CASE NO. 3:11-CV-1018-WKW
MEMORANDUM OPINION AND ORDER
Before the court are Defendants’ motion (Doc. # 25) to dismiss for failure to
state claim or, in the alternative, for summary judgment, as well as Plaintiff’s motion
(Doc. # 27) to amend her complaint. Defendants opposed Plaintiff’s effort to amend
her complaint (Doc. # 28), and Plaintiff filed a response opposing Defendants’ motion
to dismiss and replying to Defendants’ opposition to her motion to amend (Doc.
# 30). After careful consideration of the arguments of counsel, the appropriate law,
and the allegations set forth in the complaint, Defendants’ motion for summary
judgment is due to be granted in part and denied in part, while Plaintiff’s motion to
amend is due to be denied.
I. JURISDICTION AND VENUE
The court exercises subject matter jurisdiction over Plaintiff’s ERISA claim
pursuant to 28 U.S.C. § 1331 and § 1441(b). The controversy between Plaintiff and
Defendants involves one or more federal questions under the Employee Retirement
Income Security Act of 1974 (“ERISA”), over which the court has original
jurisdiction pursuant to 29 U.S.C. § 1132(e). Personal jurisdiction and venue are not
contested, and allegations sufficiently support both.
The court addresses
jurisdictional questions regarding Plaintiff’s claim under state law in Part III.B.
II. STANDARD OF REVIEW
Motion to Dismiss for Failure to State a Claim
A Rule 12(b)(6) motion tests the sufficiency of the complaint against the legal
standard articulated by Rule 8: “a short and plain statement of the claim showing that
the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To survive a motion to
dismiss brought under Rule 12(b)(6), a complaint must contain sufficient factual
allegations, “accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). While detailed factual allegations are unnecessary, the
standard demands something “more than labels and conclusions,” something beyond
a “formulaic recitation of the elements of the cause of action.” Twombly, 550 U.S.
at 555. It is not enough for a plaintiff to allege that she is entitled to relief; she must
plead facts that “permit the court to infer more than the mere possibility of
misconduct.” Iqbal, 556 U.S. at 679.
Motion for Summary Judgment
To succeed on summary judgment, the movant must demonstrate “that there is
no genuine dispute as to any material fact and the movant is entitled to judgment as
a matter of law.” Fed. R. Civ. P. 56(a). The court must view the evidence and the
inferences from that evidence in the light most favorable to the nonmovant. JeanBaptiste v. Gutierrez, 627 F.3d 816, 820 (11th Cir. 2010). The court should grant the
motion if the pleadings, together with supporting materials in the record, show that
the movant is entitled to judgment as a matter of law. Greenberg v. BellSouth
Telecomms., Inc., 498 F.3d 1258, 1263 (11th Cir. 2007) (per curiam).
The party moving for summary judgment “always bears the initial
responsibility of informing the district court of the basis for its motion.” Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986). This responsibility includes identifying
the portions of the record illustrating the absence of a genuine dispute of material
fact. Id. If the movant meets its evidentiary burden, the burden shifts to the
nonmoving party to establish – with evidence beyond the pleadings – that a genuine
dispute material to each of its claims for relief exists. Id. at 324.
A genuine dispute of material fact exists when the nonmoving party produces
evidence allowing a reasonable factfinder to return a verdict in its favor. Waddell v.
Valley Forge Dental Assocs., 276 F.3d 1275, 1279 (11th Cir. 2001). The modern
standard requires more than a “mere scintilla” of favorable evidence. Walker v.
Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (internal quotation marks omitted). The
nonmoving party “must do more than simply show that there is some metaphysical
doubt as to the material facts,” Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986). Conclusory allegations based on subjective beliefs are
likewise insufficient to create a genuine issue of material fact and do not preclude
summary judgment. Holifield v. Reno, 115 F.3d 1555, 1564 (11th Cir. 1997) (per
Motion to Amend the Pleadings
Rule 15(a) of the Federal Rules of Civil Procedure governs amendments to a
complaint. As a matter of course, a party may amend a pleading to which a
responsive pleading is required once within “21 days after service of a responsive
pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever
Fed. R. Civ. P. 15(a)(1).1 Otherwise, a party wishing to amend its
Though the distinction is unimportant for this case, Defendants misstated the standard
for a motion to amend complaint, referencing the version of Rule 15 that preceded the 2009
amendments. (Doc. # 28 ¶ 1.) Service of a responsive pleading no longer immediately
pleadings before trial must seek the opposing party’s written consent or leave of the
court. Fed. R. Civ. P. 15(a)(2). Though “[t]he court should freely give leave when
justice so requires,” id., the court may deny a motion to amend on the grounds that
amendment would be futile to the claim’s survival. Fla. Evergreen Foliage v. E.I.
DuPont De Nemours & Co., 470 F.3d 1036, 1041 (11th Cir. 2006).
Viewing the evidence and the inferences from that evidence in the light most
favorable to the Plaintiff, as the court must do when considering a motion for
summary judgment, Jean-Baptiste, 627 F.3d at 820, the pertinent factual background
is as follows.
Plaintiff Lisa McClendon worked as a field agent with Defendant Liberty
National Life Insurance Company (“Liberty”) for ten years. (Doc. # 1 ¶ 5.) Plaintiff
held her position subject to an employment contract. (Doc. # 23, Ex. 1.) That
contract included a provision which read, “YOUR EMPLOYMENT MAY BE
TERMINATED BY YOU OR BY THE COMPANY AT ANY TIME.” (Doc. #
23, Ex. 1 ¶ 9) (emphasis in original). The three paragraphs covering termination in
the contract included no other information regarding when or on what terms Plaintiff
could be terminated.
terminates the right to amend.
As part of her employee benefits package, Plaintiff had both a short-term
medical disability policy and a long-term medical disability policy. (Doc. # 1 ¶¶ 8,
14.) Defendant Torchmark Corporation (“Torchmark”) is the policyholder for the
long-term plan, while Standard Insurance Company (“Standard”) issued the policy.
Standard was also the third party claims administrator for the short-term plan. (Doc.
# 23, Ex. 6 at 17.) Plaintiff has filed a motion to amend her complaint to add
Standard – not currently a party to this case – as a defendant. (Doc. # 23, Exs. 4, 5.)
As of March 2011, Plaintiff was medically disabled and limited in her activities
as a field agent. (Doc. # 1 ¶ 6.) Plaintiff alleges that Defendant Patti Herring refused
Plaintiff her benefits under the short-term policy, violating the plan’s provisions.
(Doc. # 1 ¶ 10.) Similarly, Plaintiff alleges that she is entitled to benefits under the
long-term plan but has yet to receive them. (Doc. # 1 ¶ 14.)
Both plans are subject to the provisions of ERISA. (Doc. # 23, Ex. 4 at 2, Ex.
6 at 1.) Each plan has specific administrative procedures for filing claims and
seeking review of decisions made on those claims. (Doc. # 23, Ex. 4 at 17–18, Ex.
6 at 13–15.) Plaintiff makes no allegations regarding whether she filed claims in
accordance with the procedure required by the plans. Plaintiff does, however, allege
that she did not receive the benefits to which she was entitled under each plan.
(Doc. # 1 ¶ 16.)
Defendants argue that Plaintiff’s complaint is subject to dismissal pursuant to
Rule 12(b)(6) and 12(b)(7). (Doc. # 25.) In the alternative, they move for summary
judgment under Rule 56, arguing that there is no genuine dispute as to any material
Where, as here, a defendant files a motion for summary judgment in the
alternative to a motion to dismiss, it is unnecessary to convert the motion to dismiss
under Rule 12(d) of the Federal Rules of Civil Procedure to consider matters outside
the pleadings. Converting a motion to dismiss under such circumstances would
render the alternative motion for summary judgment superfluous. Ventrassist Pty Ltd.
v. Heartware, Inc., 377 F. Supp. 2d 1278, 1286 n.7 (S.D. Fla. 2005). The court will
consider matters outside the pleadings in conjunction with Defendants’ alternative
summary judgment motion. Because summary judgment is appropriate for Plaintiff’s
ERISA claim, the court does not reach the motion to dismiss on that claim.
Because there is no dispute of material fact as to whether Plaintiff exhausted
the requisite administrative remedies under the terms of both the short and long-term
disability plans before filing this suit, Defendants are entitled to judgment as a matter
of law. The Summary Plan Descriptions for each policy make clear that both policies
have specific administrative procedures both for filing a claim and for appealing
denial of a claim. (Doc. # 23, Ex. 4 at 17–18, Ex. 6 at 13–15.) Exhausting
administrative remedies is a strict prerequisite to filing suit in this Circuit and under
the terms of the policies. Perrino v. S. Bell Tel. & Tel. Co., 209 F.3d 1309, 1315
(11th Cir. 2000); (Doc. # 23, Ex. 4 at 20, Ex. 6 at 12). Plaintiff exhausted the
procedures for neither her short-term disability policy nor her long-term disability
policy and thus has no cause of action under ERISA.
Short-term Disability Claim
The record shows that Plaintiff did file a short-term disability claim, which
Standard denied on August 10, 2011 (Doc. # 24, Ex. 1.), but Plaintiff never appealed
the denial via the specific administrative procedures set forth in the plan. (Doc. # 24
¶ 12, Exs. 1–5.) In e-mails to a disability benefits examiner employed by Standard,
Plaintiff exhibited an understanding of the necessary steps for appeal. On August 18,
2011, she wrote, “[D]oes [sic] the appeal, the medical not reviewed and the letter all
need to be sent at the same time?” (Doc. # 24, Ex. 2.) The benefits examiner
responded affirmatively, instructing Plaintiff to send her request-for-review letter
accompanied by additional medical evidence. Id. Plaintiff’s last communication with
Standard, an e-mail dated August 24, 2011, requested additional information from
Standard regarding both the short- and long-term disability plans. (Doc. # 24, Ex. 5.)
These e-mails support an inference that Plaintiff intended to appeal the determination,
but her intention does not amount an actual exhaustion of the available administrative
remedies. Despite the examiner’s instructions and the policy’s consistent procedures
as outlined in the Summary Plan Description, Plaintiff did not file an appeal with
Standard. (Doc. # 24 ¶12.)
In her opposition to Defendants’ motion, Plaintiff asserts that she “request[ed]
. . . reconsideration” of the short-term disability benefits determination on July 22,
2011. (Doc. # 30 at 2, Ex. 1.) She also indicates that she sent additional medical
records supporting her claim on August 8, 2011. (Doc. # 30 at 2, Ex. 2.) Standard
did not deny Plaintiff’s claim, however, until August 10, 2011. Even assuming a
request for reconsideration in an e-mail would satisfy the plan’s required claims
procedure for filing an appeal, the communications to which Plaintiff points came
before Standard denied Plaintiff’s claim.
Next, Plaintiff asserts that she “requested an appeal” via e-mail to Patti Herring
on August 26, 2011, after she received her denial. (Doc. # 30 at 2.) Review of the
e-mail, however, reveals only that Plaintiff “request[ed] a meeting” with Defendant
Herring, “in person and not by phone.” The Summary Plan Description provides that
appeals must “be sent to the address specified in [the] claim denial” within 180 days
of receiving notice of the claim denial. (Doc. # 23, Ex. 6 at 14.) This comports with
the instructions the benefits examiner gave Plaintiff days after she received her
denial. An e-mailed request for an in-person meeting – like the pre-denial e-mails
requesting reconsideration – does not amount to an appeal under the policy’s
specified procedures. Because Plaintiff failed to file a proper administrative appeal,
she did not exhaust her remedies for the denial of her short-term disability claim.
Long-term Disability Claim
Plaintiff’s cause of action resting on her entitlement to long-term disability
benefits fails because the record indicates Plaintiff never filed a proper claim for
long-term benefits. Put simply, Plaintiff did not exhaust her administrative remedies
because she never properly initiated the administrative process for a claim. The
Summary Plan Description for Plaintiff’s long-term disability plan lays out the
requirements for filing a long-term benefits claim. Among the requirements,
claimants must use specific forms provided by Standard. (Doc. # 24, Ex. 4 at 17.)
If a claimant requests the forms and does not receive them within fifteen days, the
claimant may then submit her claim in a letter. (Doc. # 24, Ex. 4 at 17.) “The letter
should include the date the disability began, and the cause and nature of the
disability.” (Doc. # 24, Ex. 4 at 17.)
First, though Standard received an employer statement from Liberty indicating
that Plaintiff intended to file a long-term disability claim, that statement does not
represent an actual claim filed by Plaintiff. (Doc. # 24, Ex. 6.) It did not come from
Plaintiff. It was not on one of Standard’s form. It did not take the form of a letter and
lacked the necessary information regarding when the disability began and its cause
and nature. Plaintiff asserts in her opposition to the motion for summary judgment
that this form represented her claim for long-term disability benefits (Doc. # 30 at 2),
but allowing an employer’s statement to constitute a claim stands contrary to the clear
language of the policy terms. Last, assuming that the employer statement was a claim
on Plaintiff’s behalf, the inescapable conclusion based on Plaintiff’s complaint is that
she believed Standard denied her claim. If so, the appropriate response was to seek
administrative review of that denial before resorting to action in court.
Plaintiff correctly points out that published procedures indicate that Standard
will initiate long-term disability benefits claims for some beneficiaries. The language
that Plaintiff points to, however, applies on its face only to those receiving short-term
disability benefits. (Doc. # 30, Ex. 5 at 2.) Standard denied Plaintiff’s claim for
short-term benefits, a fact of which she was well aware. (Doc. # 24, Ex. 5.) Thus,
based on the terms of the long-term policy’s Summary Plan Description, Plaintiff had
to file a separate claim, and as shown above, the employer statement did not suffice.
Not only did plaintiff fail to properly file a long-term disability claim, she was
ineligible to receive long-term benefits. Claimants must receive at least 180 days of
short-term disability to fulfill the 180-day benefits waiting period required for longterm disability benefits. (Doc. # 24, Ex. 4 at 2.) When Standard denied Plaintiff’s
claim for short-term benefits, she had received fewer than 180 days of benefits. (Doc.
# 24 ¶ 13.)
No exceptional circumstances exist here justifying a caveat to the strict
exhaustion requirement. See Perrino, 209 F.3d at 1315 (acknowledging exceptions
to the exhaustion requirement based on futility of administrative remedies and denial
of meaningful access to review scheme). Because Plaintiff has failed to meet the
exhaustion requirement for both her short- and long-term disability benefits claims,
Defendants are entitled to judgment as a matter of law.
Defined Contribution Plan
Finally, Plaintiff’s complaint references her Defined Contribution Plan and
alleges that Defendants withheld the funds therein after her termination. As shown
by the Affidavit of Defendant Patti Herring (Doc. # 23 ¶ 4), Plaintiff filed her benefit
election form for her Defined Contribution Plan on July 5, 2012, one week after she
filed her Amended Complaint in this court. She then asked that Liberty “roll over”
the balance of the Defined Contribution Plan to another company. (Doc. # 23, Ex. 3.)
Liberty complied on July 11, 2012. (Doc. # 23 ¶ 5.) To the extent this may have been
part of Plaintiff’s ERISA claim, the claim is now moot.
Claim for Wrongful Termination
Plaintiff also asserts a second count in her complaint for “wrongful discharge.”
She does not cite or appear to rely on any statutory cause of action for wrongful
discharge, federal or state. The court is left to assume that she asserts a state-law
claim for wrongful discharge.
Without federal question jurisdiction under 28 U.S.C. § 1331 or another federal
claim on which to rest subject matter jurisdiction under 28 U.S.C. § 1367, the only
possible basis for this court’s jurisdiction over plaintiff’s claim for wrongful
discharge is diversity jurisdiction under 28 U.S.C. § 1332. Based on Plaintiff’s
amended complaint and Defendants’ notice of removal, the court is unable to
determine the citizenship of Defendants Torchmark and Patti Herring. Thus, the
parties should show cause why this court should not remand this matter to state court
for resolution of Plaintiff’s state-law claim for wrongful discharge. The court will not
consider Defendants’ motion as it pertains to that claim before resolving the
jurisdictional question. Accordingly, the court denies Defendants’ motion to dismiss
as to the wrongful discharge with leave to re-file if the court has subject matter
Futility of Amending the Complaint
Defendants moved for dismissal under Rule 12(b)(7) of the Federal Rules of
Civil Procedure based on Plaintiff’s failure to join Standard, which Defendant argues
is an indispensable party for Plaintiff’s ERISA claim. (Doc. # 25.) Plaintiff
responded by moving to amend her complaint to add Standard as a defendant. (Doc.
# 27.) The court need not reach the questions of whether Standard is an indispensable
party or whether amendment is appropriate.
Amending the complaint to add Standard would be futile, and futility is a
proper ground for denying Plaintiff’s motion to amend. Fla. Evergreen Foliage, 470
F.3d at 1041. Defendants argue that Standard’s presence is only indispensable with
respect to Plaintiff’s ERISA claim, not her wrongful discharge claim. Because that
claim fails on the grounds set forth above, wholly independent from Standard’s
presence or absence in the suit, adding Standard at this point – assuming it is in fact
an indispensable party – would not prevent Plaintiff’s ERISA claim from meeting the
same fate the claim has met in Standard’s absence.
For the foregoing reasons, it is ORDERED that Defendants’ Motion to Dismiss
or in the Alternative for Summary Judgment (Doc. # 25) is GRANTED in part and
DENIED in part as follows:
(1) With regard to Plaintiff’s ERISA claims, the court GRANTS summary
judgment on behalf of Defendants (Count I);
(2) The motion is otherwise DENIED.
It is further ORDERED that Plaintiff’s Motion for Leave to Amend (Doc. # 27)
It is further ORDERED that Defendants SHOW CAUSE on or before October
23, 2012, why this matter should not be remanded to state court. Plaintiff shall file
a response on or before October 30, 2012. Defendants may file a reply on or before
November 6, 2012.
DONE this 16th day of October, 2012.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
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