Stewart v. Hartford Life and Accident Insurance Company

Filing 38

MEMORANDUM OPINION Signed by Chief Judge Karon O Bowdre on 5/30/18. (SAC )

FILED
2018 May-30 AM 09:58
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
CAROL H. STEWART,
Plaintiff,
v.
HARTFORD LIFE & ACCIDENT
INSURANCE COMPANY,
Defendant.

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2:17-cv-01423-KOB

MEMORANDUM OPINION
Plaintiff Carol Stewart sues Defendant Hartford Life & Accident Insurance Company
based on Hartford’s denial of her applications for long term disability benefits and waiver of life
insurance premiums, which she contends violates the Employee Retirement Income Security Act
of 1974 (“ERISA”). (Doc. 1). She seeks recovery of the long term disability and waiver of
premium benefits (“Count One”); damages for breach of fiduciary duty (“Count Two”); and
reinstatement of her waiver of premium benefits (“Count Three”).
Hartford moves to dismiss Count Two. (Doc. 13). Ms. Stewart opposes the motion to
dismiss but moves, in the alternative, to amend the complaint. (Doc. 18). The court WILL
GRANT the motion to dismiss Count Two because ERISA does not permit a plaintiff to seek
equitable relief if the allegations supporting the claim for equitable relief would also support a
claim for recovery of benefits. The court WILL DENY AS FUTILE the alternative motion to
amend.
I.

BACKGROUND

Because this motion seeks to dismiss a claim, the court must accept as true the allegations
in the complaint and construe them in the light most favorable to the plaintiff. Butler v. Sheriff of

Palm Beach Cty., 685 F.3d 1261, 1265 (11th Cir. 2012). Ms. Stewart alleged in her complaint
that, from 1983 until March 2013, she worked as an attorney for the law firm Burr & Forman
LLP. Burr & Forman provides employees like Ms. Stewart a welfare benefit plan that includes
long term disability benefits and life insurance benefits. By 2013, Hartford was administering
Burr & Forman’s benefits plan.
In 2007, while working for Burr & Forman, Ms. Stewart was diagnosed with Parkinson’s
disease. She alleges that, in 2012, she became “totally disabled” as that term is defined by the
long term disability policy. In the same year, she applied for two benefits under the plan:
(1) long term disability benefits, and (2) waiver of life insurance premium benefits. Hartford
denied her application for long term disability benefits. As to Ms. Stewart’s application for
waiver of life insurance premiums, Hartford initially denied the application, later determined that
she was eligible for that benefit, and finally terminated her waiver of premium benefits.
Ms. Stewart contends that Hartford erroneously denied her application for long term
disability benefits and engaged in improper claims procedures in denying her application for, and
appeal from the denial of, waiver of premium benefits. She also contends that Hartford breached
its fiduciary duties by failing to follow the claims review procedure and by wrongfully denying
Ms. Stewart’s claim for waiver of premium benefits.
She asserts three causes of action under ERISA: (1) recovery of benefits, pursuant to
ERISA § 502(a)(1)(B) (“Count One”); (2) breach of fiduciary duty, pursuant to ERISA
§ 502(a)(3) (“Count Two”); and (3) reinstatement of her waiver of premium benefits, pursuant to
ERISA § 502(a)(1)(B). 1

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Section 502 of ERISA is codified at 29 U.S.C. § 1132. Section 502(a)(1)(B) of ERISA
is 29 U.S.C. § 1132(a)(1)(B); ERISA § 502(a)(3) is 29 U.S.C. § 1132(a)(3). For simplicity’s
sake, the court will, wherever possible, refer to ERISA § 502 instead of 29 U.S.C. § 1132.
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II.

DISCUSSION

Hartford moves to dismiss Count Two of Ms. Stewart’s complaint. (Doc. 13).
Ms. Stewart opposes that motion, but requests, in the alternative, that this court grant her leave to
amend the complaint. (Doc. 18). The court will address each motion in turn.
1.

Motion to Dismiss Count Two

Hartford moves to dismiss only Count Two of Ms. Stewart’s complaint. (Doc. 13). It
contends that Count Two, the claim for breach of fiduciary duty under § 502(a)(3), is a claim for
equitable relief that a plaintiff cannot sustain when she can also seek recovery of benefits under
§ 502(a)(1)(B) based on the same factual allegations.
This case arises under ERISA, which “protects employee pensions and other benefits . . .
by setting forth certain general fiduciary duties applicable to the management of both pension
and nonpension benefit plans.” Varity Corp. v. Howe, 516 U.S. 489, 496 (1996). The two
paragraphs of ERISA relevant to this case are § 501(a)(1)(B) and § 501(a)(3). Section
501(a)(1)(B) provides that a participant or beneficiary of a plan may bring a civil action “to
recover benefits due to him under the terms of his plan, to enforce his rights under the terms of
the plan, or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C.
§ 1129(a)(1)(B). Section 501(a)(3) provides that a participant, beneficiary, or fiduciary may
bring a civil action “to obtain other appropriate equitable relief (i) to redress [violations of any
provision of this subchapter or the terms of the plan], or (ii) to enforce any provisions of this
subchapter or the terms of the plan.” 29 U.S.C § 1132(a)(3).
The Supreme Court has explained that § 501(a)(3) is a “catchall” provision that offers
“appropriate equitable relief for injuries caused by violations that § 502 does not elsewhere

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adequately remedy.” Varity, 516 U.S. at 512. The Eleventh Circuit has interpreted Varity to
mean that the only question in determining whether a plaintiff may bring a § 502(a)(3) claim for
equitable relief is “whether the allegations supporting the Section 502(a)(3) claim [are] also
sufficient to state a cause of action under Section 502(a)(1)(B), regardless of the relief sought.”
Jones v. Am. Gen. Life & Acc. Ins. Co., 370 F.3d 1065, 1073 (11th Cir. 2004).
If the claims are based on different factual allegations, a plaintiff may raise both a
§ 502(a)(1)(B) claim for recovery of benefits and a § 502(a)(3) claim for equitable relief, as long
as no other section of ERISA provides an adequate remedy for the facts supporting the
§ 502(a)(3) claim. See id. at 1073–74. But a plaintiff may not raise both a § 502(a)(1)(B) and a
§ 502(a)(3) claim based on the same factual allegations, even as alternatives to each other.
Ogden v. Blue Bell Creameries U.S.A., Inc., 348 F.3d 1284, 1287 (11th Cir. 2003); Katz v.
Comprehensive Plan of Group Ins., 197 F.3d 1084, 1088–89 (11th Cir. 1999); see also Jones,
370 F.3d at 1073.
Ms. Stewart’s complaint raises two § 502(a)(1)(B) claims: Count One, seeking recovery
of the long term disability benefits and the waiver of life insurance premium benefits; and Count
Three, seeking reinstatement of her waiver of premium benefits. (Doc. 1 at 77–80). Both of
those claims relate to Hartford’s purportedly erroneous denial of those benefits. The complaint
raises one § 502(a)(3) claim: Count Two, seeking monetary damages for breach of fiduciary
duty. That claim relates to Hartford’s purportedly improper termination of Ms. Stewart’s waiver
of life insurance premiums after having approved that benefit.
The court agrees with Hartford that ERISA § 502(a)(1)(B) provides an adequate remedy
for the violations alleged in Count Two. The factual allegations underlying all three counts are
the same—Ms. Stewart contends that Hartford used improper claims handling processes,

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resulting in the erroneous denial and termination of benefits to which she was entitled. Section
502(a)(1)(B) provides an adequate remedy for all of those allegations by permitting a plan
beneficiary “to recover benefits due to [her] under the terms of his plan, to enforce [her] rights
under the terms of the plan, or to clarify [her] rights to future benefits under the terms of the
plan.” 29 U.S.C. § 1129(a)(1)(B).
Ms. Stewart asserts that Counts One and Three are based on different factual allegations
than Count Two because Counts One and Three stem from Hartford’s erroneous interpretation
of the plan and the policies, while Count Two stems from Hartford’s manner of processing
claims. (Doc. 17 at 8–10). The court finds that argument unpersuasive. At their base, all of
Ms. Stewart’s claim stem from the same factual allegations—that she qualifies for benefits that
Hartford wrongfully denied. Whether the wrongful denial was based on an erroneous
interpretation of Hartford’s policies or improper claims handling makes no difference in
determining whether § 502(a)(1)(B) provides an adequate remedy for those denials.
Ms. Stewart also argues that, because she seeks different forms of relief under each count
(recovery of benefits in Count One, monetary damages in Count Two, and reinstatement of
waiver of premiums in Count Three), § 502(a)(1)(B) fails to provide an adequate remedy for
Count Two. (Doc. 17 at 16–27). The Eleventh Circuit has rejected the argument that, for
ERISA purposes, “relief” corresponds to “remedy.” See Jones, 370 F.3d at 1073.
In Jones, the Eleventh Circuit stated that “the relevant concern . . . was whether the
plaintiffs also had a cause of action, based on the same allegations, under Section 502(a)(1)(B) or
ERISA’s other more specific remedial provisions. . . . The relief that the plaintiffs sought in
their complaint was not relevant to this inquiry.” Jones, 370 F.3d at 1073. Because the factual
allegations supporting Count Two are sufficient to state a cause of action under § 502(a)(1)(B)

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for recovery of benefits—and Count One, in fact, seeks recovery of the waiver of premium
benefits—that Ms. Stewart seeks monetary damages instead of recovery of benefits is irrelevant.
Finally, Ms. Stewart contends that the Supreme Court’s decision in CIGNA Corporation
v. Amara means that a plaintiff may bring a § 502(a)(3) claim based on the same facts, if the
injuries alleged and remedies sought are different. (Doc. 17 at 30–31). She misreads Amara.
In Amara, the district court found that a plan administrator had violated various sections
of ERISA by misrepresenting the terms of a new pension plan. 563 U.S. 421, 431–32 (2011).
The district court, citing to § 502(a)(1)(B), reformed the plan and ordered the plan administrator
to enforce the reformed plan. Id. at 435. The Supreme Court held that § 502(a)(1)(B) does not
authorize a court to reform a pension plan because that paragraph of ERISA permits only
recovery of benefits, enforcement of rights under the terms of the plan, or clarification of rights
to future benefits under the terms of the plan. Id. at 435. But the Court remanded for the district
court to consider whether it could, instead, reform the plan under § 502(a)(3). Id. at 438. In
doing so, the Court stated in dicta that equitable remedies included imposition of monetary
damages for a loss resulting from a breach of fiduciary duty. Id. at 441.
Amara does not authorize a plaintiff to seek equitable relief and recovery of benefits
based on the same factual allegations. To the contrary, the Supreme Court remanded the case for
consideration of whether equitable relief under § 502(a)(3) was appropriate because it found that
the plaintiffs lacked a remedy under § 502(a)(1)(B). See Amara, 563 U.S. at 438 (“If
§ 502(a)(1)(B) does not authorize entry of the relief here at issue, what about nearby
§ 502(a)(3)?”). Here, all of Ms. Stewart’s factual allegations support claims under
§ 502(a)(1)(B), so she cannot bring a claim under § 502(a)(3). The court WILL GRANT
Hartford’s motion to dismiss Count Two.

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2.

Motion to Amend the Complaint

Ms. Stewart requests that, if this court finds Count Two lacking, the court permit her to
amend her complaint to “cure any deficiencies.” (Doc. 18 at 2). Federal Rule of Civil Procedure
15 provides that “[t]he court should freely give leave [to amend a complaint] when justice so
requires.” Fed. R. Civ. P. 15(a)(2). But the court need not permit amendment where amendment
would be futile. Bryant v. Dupree, 252 F.3d 1161, 1163 (11th Cir. 2001). Amendment is futile
“when the complaint as amended would still be properly dismissed.” Cockrell v. Sparks, 510
F.3d 1307, 1310 (11th Cir. 2007).
The court notes that Ms. Stewart failed to file a proposed amended complaint setting out
how she would cure the deficiencies in Count Two. See United States ex rel. Atkins v. McInteer,
470 F.3d 1350, 1362 (11th Cir. 2006) (“[T]he movant must either attach a copy of the proposed
amendment to the motion or set forth the substance thereof.”). She contends that her response to
Hartford’s motion to dismiss contains the details that she would add if this court granted her
leave to amend the complaint. (Doc. 24 at 5). None of the details set out in her briefing change
this court’s conclusion that ERISA bars her claim for equitable relief in Count Two because
§ 502(a)(1)(B) provides an adequate remedy for her factual allegations. As a result, the court
WILL DENY AS FUTILE Ms. Stewart’s motion to amend the complaint.
III.

CONCLUSION

The court WILL GRANT the motion to dismiss Count Two, and WILL DENY AS
FUTILE Ms. Stewart’s motion to amend her complaint. The court will enter a separate order
consistent with this opinion.

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DONE and ORDERED this 30th day of May, 2018.

____________________________________
KARON OWEN BOWDRE
CHIEF UNITED STATES DISTRICT JUDGE

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