Smith v. Life Insurance Company of North America et al

Filing 42

MEMORANDUM OPINION AND ORDER GRANTING 11 MOTION to Dismiss and Honda Plan is HEREBY DISMISSED WITHOUT PREJUDICE from Ms. Smith's lawsuit. GRANTING 19 MOTION to Dismiss and Cigna is HEREBY DISMISSED WITHOUT PREJUDICE for lack of personal jurisdiction. GRANTING 20 MOTION to Dismiss Count II of Plaintiff's Amended Complaint and Count II of Ms. Smith Amended Complaint is HEREBY DISMISSED WITHOUT PREJUDICE. Cigna Corporation and Honda Manufacturing Health & Welfare Benefits Plan (Plan No. 501) terminated.(JLC)

FILED
2014 Mar-31 PM 12:51
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
EASTERN DIVISION
DOROTHY SMITH,

)
)
Plaintiff,
)
)
v.
) Case No.: 1:13-CV-2047-VEH
)
LIFE INSURANCE COMPANY OF )
NORTH AMERICA, et al.,
)
)
Defendants.
)

MEMORANDUM OPINION AND ORDER
I.

Introduction
This lawsuit arises under the Employee Retirement Income Security Act of

1974 (“ERISA”). (Doc. 1 at 1). Plaintiff Dorothy Smith (“Ms. Smith”) filed an
amended complaint on November 19, 2013. (Doc. 7). The defendants named in Ms.
Smith’s lawsuit are Life Insurance Company of North America (“LINA”); Cigna
Corporation (“Cigna”); and Honda Manufacturing Health & Welfare Benefits Plan
No. 501(“Honda Plan”). (Id. at 1; id. at 2 ¶ 1; id. at 4-9 ¶¶ 9-42).
Pending before the court are three motions: (1) Honda Plan’s Motion To
Dismiss (Doc. 11) (“Honda Plan’s Motion”) filed on November 26, 2013; (2) Cigna’s
Motion To Dismiss (Doc. 19) (“Cigna’s Motion”) filed on December 30, 2013; and

(3) LINA’s Motion To Dismiss Count II of Plaintiff’s Amended Complaint (Doc. 20)
(“LINA’s Partial Motion”) filed on December 30, 2013. The parties have briefed
these motions (Docs. 22, 23, 24, 28, 30, 32), and they are all ready for disposition.
For the reasons explained below, they are all GRANTED.
II.

Standards
A.

Rule 12(b)(2)

In Madara v. Hall, 916 F.2d 1510 (11th Cir. 1990), the Eleventh Circuit
described the framework for evaluating personal jurisdiction challenges under Rule
12(b)(2) of the Federal Rules of Civil Procedure:
When a district court does not conduct a discretionary evidentiary
hearing on a motion to dismiss for lack of jurisdiction, the plaintiff must
establish a prima facie case of personal jurisdiction over a nonresident
defendant. Morris v. SSE, Inc., 843 F.2d 489, 492 (11th Cir.1988). A
prima facie case is established if the plaintiff presents enough evidence
to withstand a motion for directed verdict. Id. The district court must
accept the facts alleged in the complaint as true, to the extent they are
uncontroverted by the defendant’s affidavits. Id. Finally, where the
plaintiff's complaint and the defendant's affidavits conflict, the district
court must construe all reasonable inferences in favor of the plaintiff. Id.
The determination of personal jurisdiction over a nonresident
defendant requires a two-part analysis. Cable/Home Communication
Corp. v. Network Productions, Inc., 902 F.2d 829, 855 (11th Cir.1990);
Alexander Proudfoot Co., 877 F.2d at 919. First, we consider the
jurisdictional question under the state long-arm statute. Cable/Home
Communication Corp., 902 F.2d at 855; Alexander Proudfoot Co., 877
F.2d at 919. If there is a basis for the assertion of personal jurisdiction
under the state statute, we next determine whether sufficient minimum
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contacts exist to satisfy the Due Process Clause of the Fourteenth
Amendment so that “maintenance of the suit does not offend ‘traditional
notions of fair play and substantial justice.’”
Madara, 916 F.2d at 1514 (emphasis added) (citing International Shoe Co. v.
Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945)).
B.

Rule 12(b)(6)

A Rule 12(b)(6) motion attacks the legal sufficiency of the complaint. See Fed.
R. Civ. P. 12(b)(6). The Federal Rules of Civil Procedure require only that the
complaint provide “‘a short and plain statement of the claim’ that will give the
defendant fair notice of what the plaintiff’s claim is and the grounds upon which it
rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957), abrogated by Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 545 (2007); see also Fed. R. Civ. P. 8(a).
While a plaintiff must provide the grounds of his entitlement to relief, Rule 8
does not mandate the inclusion of “detailed factual allegations” within a complaint.
Twombly, 550 U.S. at 545 (quoting Conley, 355 U.S. at 47). However at the same
time, “it demands more than an unadorned, the-defendant-unlawfully-harmed-me
accusation.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). “[O]nce a claim has
been stated adequately, it may be supported by showing any set of facts consistent
with the allegations in the complaint.” Twombly, 550 U.S. at 563.
“[A] court considering a motion to dismiss can choose to begin by identifying
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pleadings that, because they are no more than conclusions, are not entitled to the
assumption of truth.” Iqbal, 129 S. Ct. at 1950. “While legal conclusions can provide
the framework of a complaint, they must be supported by factual allegations.” Iqbal,
129 S. Ct. at 1950. “When there are well-pleaded factual allegations, a court should
assume their veracity and then determine whether they plausibly give rise to an
entitlement to relief.” Id. (emphasis added). “Under Twombly’s construction of Rule
8 . . . [a plaintiff’s] complaint [must] ‘nudge[] [any] claims’ . . . ‘across the line from
conceivable to plausible.’ Ibid.” Iqbal, 129 S. Ct. at 1950-51.
A claim is plausible on its face “when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 129 S. Ct. at 1949. “The plausibility standard is not akin
to a ‘probability requirement,’ but it asks for more than a sheer possibility that a
defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556).
III.

Analysis
A.

Honda Plan’s Motion

Ms. Smith’s amended complaint contains three counts. Count I is a claim for
benefits under 29 U.S.C. § 1132(a)(1)(B). (Doc. 7 at 30-32 ¶¶ 164-175). Count II is
a claim for breach of fiduciary duty under 29 U.S.C. §§ 1104 and 1105 and is brought
under 29 U.S.C. § 1132(a)(3). (Doc. 7 at 32-33 ¶¶ 176-181). Count III is a claim for
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failure to provide documents under 29 U.S.C. § 1132(c). (Doc. 7 at 33-35 ¶¶ 182190).
Honda Plan asserts that it is due to be dismissed from this action because it is
not a properly named defendant. More specifically, Honda Plan points out that
nowhere within these three counts does Ms. Smith make any allegations about the
actions of Honda Plan or explain how Honda Plan is liable to her.
Ms. Smith has indicated in her amended complaint that the sole reason she
named Honda Plan as a defendant was to address any potential argument that she had
neglected to name a necessary party to secure her disability benefits under Count I.
(Doc. 7 at 7 n.2). This undoubtedly means that no plausible claim is asserted against
Honda Plan under Counts II or III of her lawsuit.
As for Count I, co-defendant LINA has filed a stipulation (Doc. 29) “that the
Honda Plan [i]s not a necessary party . . . .” with respect to Ms. Smith’s claim for
disability benefits. (Id. at 2). Further, the court agrees with Honda Plan that because
Count I lacks any allegation of wrongdoing on its part, Ms. Smith has not stated a
plausible claim for ERISA benefits against it in that count. Under these
circumstances, Honda Plan’s Motion is GRANTED, and Honda Plan is HEREBY
DISMISSED WITHOUT PREJUDICE from Ms. Smith’s lawsuit.

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B.

Cigna’s Motion

Cigna maintains that it is due to be dismissed for jurisdictional reasons as well
as the absence of any plausibly pleaded claims under Rule 12(b)(6). (See Doc. 19 at
1 (seeking a dismissal “based upon the lack of jurisdiction over any subject matter …,
the lack of personal jurisdiction . . . , and failure to state a claim upon which relief can
be granted.”)). In sum, Cigna contends that the appropriate party defendant in this
lawsuit is its subsidiary and claims administrator for the Honda Plan, LINA, and that
Cigna’s mere status as a holding company of LINA neither subjects it to the
jurisdiction of this court nor renders it plausibly liable to Ms. Smith under ERISA.
Ms. Smith’s opposition centers upon and attaches a Middle District of Alabama
decision in the ERISA lawsuit of Spivey v. Life Insurance Company of North
America, et al., No. 2:13-CV-461-WHA, entered by Judge Albritton on December 12,
2013. (Doc. 23-2).1 As Judge Albritton explained the true nature of the plaintiff’s
motion:
Although Spivey labels his filing as a “Motion to Suspend, Alter
or Vacate,” the court interprets this to be a motion to reconsider its
previous ruling that personal jurisdiction does not exist over Cigna in
this case. A motion to reconsider may fall within either Federal Rule of
Civil Procedure 59(e) (motion to alter or amend a judgment) or Federal
Rule of Civil Procedure Rule 60(b) (motion for relief from judgment).
All page references to Doc. 23-2 correspond with the court’s CM/ECF
numbering system.
1

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“A motion to reconsider is not a vehicle for rehashing arguments the
court has already rejected or for attempting to refute the basis for the
court's earlier decision.” Parker v. Midland Credit Mgmt., Inc., 874 F.
Supp. 2d 1353, 1359 (M.D. Fla. 2012).
(Doc. 23-2 at 3).
In rejecting the plaintiff’s efforts in Spivey to have Judge Albritton reconsider
his dismissal of Cigna without prejudice for lack of personal jurisdiction and permit
him an opportunity to conduct jurisdictional discovery, Judge Albritton explained:
At this point in the litigation, arguments that Spivey will not be able to
obtain other discovery he needs to prove standard of review and specific
conflict are premature, and in any event, do not demonstrate that there
is a basis for finding that discovery will establish personal jurisdiction
over Cigna in this case.
While Spivey has forecast that there will be discovery disputes,
those disputes can be settled in the normal course of the litigation of this
case. Furthermore, while he states that LINA has not been responsive to
the proposed discovery attached to the Motion to Vacate, the court does
not consider the attached requests as a discovery request within the
meaning of the Federal Rules of Civil Procedure. Discovery will
proceed in accordance with the Rules, and the Uniform Scheduling
Order to be entered by the court.
Although conflict and standard of review discovery issues are not
before the court at this time, the court does note that LINA has shown
that it issued the insurance policy and that it is the entity responsible for
adjudicating and paying claims for benefits under the policy. Counsel
for Spivey has never made it clear to the court why full discovery
relating to standard of review and conflict of interest cannot be obtained
through appropriate discovery, and any relief to which Spivey may be
entitled under applicable ERISA law recovered, without having Cigna
as a named party, even if there were personal jurisdiction over Cigna. In
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any event, there is no personal jurisdiction over Cigna, it has been
dismissed without prejudice, and it is time for this case to move on.
(Doc. 23-2 at 7).
As Ms. Smith sums up the relief sought by way of her opposition:
Plaintiff asks that this Court take notice of Cigna Corporation’s and/or
LINA’s representation made to Judge Albritton in Spivey, which Judge
Albritton then cited as part of his December 13, 2013 ruling, and that the
same be accorded the same effect here. In short, Plaintiff asks that this
case be put in the same posture as Spivey, where this same issue has
already been exhaustively litigated leading to such a result. This posture
includes a “without prejudice” dismissal only.
In the alternative, if the Court does not find this resolution
appropriate, Plaintiff requests the opportunity under Eleventh Circuit
precedent to conduct limited jurisdictional discovery on her allegations
and on the matters raised in the affidavit Cigna Corporation attaches to
its motion.
(Doc. 23 at 6-7). The apparent concession made by counsel referred to in Spivey was
that certain discovery requests would not be resisted by LINA on the grounds that its
corporate parent, Cigna, was the party in possession, custody, and control of such
information.
However, while Judge Albritton did reference a representation made by LINA
(see Doc. 23-2 at 6-7 (“LINA has stated that ‘to the extent Plaintiff seeks
compensation information for the individuals involved in the termination of Plaintiff's
claim, narrowly tailored and designed to elicit the information produced in Melech,

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LINA will agree to provide non-privileged responsive information regarding
compensation of those individuals who were involved in the termination at issue if
an appropriate Confidentiality Agreement and Protective Order is in place.’”)), he did
so by way of framing the issues on reconsideration and nowhere does the opinion
suggest that this attempt by counsel to resolve an anticipated discovery dispute with
the plaintiff drove his jurisdictional decision. To the contrary, Judge Albritton made
it clear that “[a]t this point in the litigation, arguments that Spivey will not be able to
obtain other discovery he needs to prove standard of review and specific conflict are
premature, and in any event, do not demonstrate that there is a basis for finding that
discovery will establish personal jurisdiction over Cigna in this case.” (Doc. 23-2 at
7).
Therefore, the court disagrees with Ms. Smith that Spivey supports her
dismissal of Cigna contingent upon any discovery-driven position. Instead, akin to
Judge Albritton’s decision in Spivey, the court rejects Ms. Smith’s discovery-based
opposition to Cigna’s in personam jurisdictional contentions. Further, in the absence
of Ms. Smith’s establishing a prima facie case of in personam jurisdiction over Cigna
as mandated by Madara, or formulating some other jurisdictional argument in her
favor, Cigna’s Motion is GRANTED, and Cigna is HEREBY DISMISSED
WITHOUT PREJUDICE for lack of personal jurisdiction.
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C.

LINA’s Motion

LINA seeks to dismiss Count II of Ms. Smith’s amended complaint on the basis
that her “claim for breach of fiduciary duty is incompatible with [her] claim for
benefits and is foreclosed by the controlling case authority.” (Doc. 20 at 1). LINA
relies primarily upon the Supreme Court’s decision in Varity Corp. v. Howe, 516 U.S.
489, 116 S. Ct. 1065, 134 L. Ed. 2d 130 (1996), and its progeny. (See Doc. 20 at 4-8
¶¶ 9-12 (explaining that because Ms. Smith is seeking an individualized claim for
ERISA benefits under § 502(a)(1)(B) in Count I, a claim for breach of fiduciary duty
relating to those same benefits under § 502(a)(3) in Count II is not available to her));
see also Hammond, et al. v. Reynolds Metals Company, et al., No. 3:01-CV-0811VEH, (Doc. 147 at 6-13) (N.D. Ala. Jan. 26, 2006) (dismissing ERISA breach of
fiduciary claims consistent with Varity’s establishment of the proper scope of
equitable relief afforded under § 1132(a)(3)).
In opposition, Ms. Smith maintains that her Count II is not duplicative of Count
I in the Varity sense. For example, Ms. Smith counters that, as part of her relief, she
seeks “an order effecting the removal and replacement of the administrator, a
surcharge remedy, or an injunction in any form to be obtained under § 502(a)(1)(B).”
(Doc. 22 at 3); (see also Doc. 7 at 36 (seeking removal of “Cigna from its fiduciary
role in the administration of [t]he [Honda] Plan”)).
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LINA replies that this equitable relief is pled, not alternatively or
independently, but rather as an addition to Ms. Smith’s primary litigious efforts,
which are to recover ERISA plan benefits from LINA. In studying the particular
allegations of Count II, the court agrees with LINA. More specifically, Ms. Smith
expressly alleges at the end of Count II that:
As a direct and proximate result of Cigna’s failure to carry out its
duties as a fiduciary of The Plan pursuant to 29 U.S.C. § 1104, Plaintiff
has been damaged in an amount equal to the amount of the benefits to
which Plaintiff would have been entitled under The Plan, and in the
amount equal to future benefits payable while Plaintiff remains disabled
under the terms of The Plan, as well as additional damages to be proven
at the trial of this matter.
(Doc. 7 at 33 ¶ 181 (emphasis added)).
The heart of Count II is about the benefits that Ms. Smith maintains that LINA
has wrongfully withheld from her. Thus, Ms. Smith has not plausibly pled a breach
of fiduciary claim that can survive Varity scrutiny. Therefore, LINA’s Partial Motion
is granted, and Count II of Ms. Smith amended complaint is HEREBY DISMISSED
WITHOUT PREJUDICE.
IV.

Conclusion
For the reasons stated above, Honda Plan’s Motion, Cigna’s Motion, and

LINA’s Partial Motion are all GRANTED.

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DONE and ORDERED this 31st day of March, 2014.

VIRGINIA EMERSON HOPKINS
United States District Judge

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