Seekatz v. Metropolitan Life Insurance Company

Filing 45

ORDER Regarding Motion to Dismiss at Docket 28 and Vacating Oral Argument. (CC: DQA)(Jan, Chambers Staff)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
Case No. 3:15-cv-00017-RRB
KAREN SEEKATZ,
ORDER REGARDING
DEFENDANT’S MOTION TO
DISMISS AT DOCKET 28

Plaintiff,
v.
METROPOLITAN LIFE INSURANCE
COMPANY,
Defendant.

Before the Court at Docket 28, Defendant Metropolitan Life Insurance Company moves
for dismissal of Plaintiff Karen Seekatz's First, Second, and Fourth Causes of Action. Plaintiff
opposes at Docket 30 and Defendant replies at Docket 38.
BACKGROUND
Plaintiff alleges that in the fall of 2011, as an employee of British Petroleum, she enrolled
for dependent life insurance in the amount of $250,000 for her husband, Matt Seekatz. 1 This was
the maximum allowable through BP’s Group Universal Life Plan (the Plan), and Plaintiff began
making premium payments on November 15, 2011, which continued bi-weekly until Mr. Seekatz
passed away on May 6, 2012. 2 Plaintiff submitted a claim for the $250,000 death benefit in
September 2012. 3 Although Plaintiff maintains that all necessary paperwork was completed under

1

Docket 30 at 4.
Id.
3
Docket 25.
2

ORDER REGARDING DEFENDANT’S
MOTION TO DISMISS- 1
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the Plan, Defendant denied her claim based on purported failure to submit a statement of health
and instead paid out the basic death benefit of $20,000 per the Plan. 4
Plaintiff has asserted four causes of action against Defendant: breach of fiduciary duties,
equitable relief under 29 U.S.C. § 1132(a)(3), breach of contract, and tortious breach of contract.
STANDARD OF REVIEW
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) may be granted “only
if it is clear that no relief could be granted under any set of facts that could be proven consistent
with the allegations.” 5 In deciding the motion, not only must a court accept all material allegations
in the complaint as true, but the complaint must be construed, and all doubts resolved, in the light
most favorable to the plaintiff. 6
“While legal conclusions can provide the framework of a complaint, they must be
supported by factual allegations.” 7 Additionally, although a complaint "need not contain detailed
factual allegations, it must plead enough facts to state a claim of relief that is plausible on its face." 8
A court should not look to “whether a plaintiff will ultimately prevail but whether the claimant is
entitled to offer evidence to support the claims.” 9

4

Docket 28 at 2.
Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).
6
Holden v. Hagopian, 978 F.2d 1115, 1118 (9th Cir. 1992) (citing Usher v. City of Los
Angeles, 828 F.2d 556, 561 (9th Cir. 1987)).
7
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009) (internal citations omitted).
8
Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009).
9
Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Gilligan v. Jamco Development Corp., 108
F.3d 246, 249 (9th Cir. 1997).
5

ORDER REGARDING DEFENDANT’S
MOTION TO DISMISS - 2
3:15-cv-00017-RRB

DISCUSSION
The Employee Retirement Income Security Act of 1974 (ERISA) establishes minimum
standards and extensive rules to protect the interests of employee benefit plan participants and their
beneficiaries. 10 ERISA includes civil enforcement provisions under 29 U.S.C. § 1132, which are
"the exclusive vehicle for actions by ERISA-plan participants and beneficiaries asserting improper
processing of a claim for benefits." 11 Under Section 1132(a)(1), a civil action can be brought by a
plan participant or beneficiary "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." Section 1132(a)(2) allows for a civil suit for appropriate relief on behalf of the
plan for breach of fiduciary duty. 12 Of final relevance to the present case, Section 1132(a)(3)
allows for a civil suit to enjoin any actions or practices in violation of ERISA or the terms of the
plan or "to obtain other appropriate equitable relief to redress such violations or to enforce any
provisions of [ERISA] or the terms of the plan."
A. Preemption
The parties do not dispute that ERISA supersedes "any and all State laws insofar as they
may now or hereafter relate to any employee benefit plan." 13 Defendant therefore argues that
Plaintiff's first and fourth causes of action, breach of fiduciary duty and tortious breach of contract
respectively, fall under State law claims specifically preempted by ERISA and should be
dismissed. Plaintiff effectively concedes as much in her opposition, acknowledging that all

10

29 U.S.C. § 1001.
Pilot Life Ins. Co. v. Dedeauc, 481 U.S. 41, 52 (1987).
12
See 29 U.S.C. § 1109.
13
29 U.S.C. § 1144(a).
11

ORDER REGARDING DEFENDANT’S
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remedies must lie within ERISA and making no defense of the first cause of action. 14 The Court
concurs that Plaintiff's Tortious Breach of Contract cause of action is clearly a State law claim, but
recognizes that a breach of fiduciary duty cause of action could be raised under Section 1132(a)(2)
for injuries to the Plan as a whole. However, Plaintiff has failed to assert this basis for her first
cause of action in her opposition to the motion to dismiss. Even if Plaintiff had not abandoned this
cause of action, the Court finds no support in Plaintiff’s Amended Complaint for a breach of
fiduciary duty claim under ERISA beyond her Section 1132(a)(3) claim addressed below.
Accordingly, the Court dismisses Plaintiff's first and fourth causes of action for Breach of
Fiduciary Duties and Tortious Breach of Contract.
B. Section 1132 Claims
Plaintiff's remaining causes of action, breach of contract and equitable relief, align with
Sections 1132(a)(1) and 1132(a)(3) respectively. As discussed above, a state law breach of contract
claim would be preempted. However, Defendant does not oppose the conversion of Plaintiff’s
breach of contract claim into a denial of benefits claim under Section 1132(a)(1) claim and the
Court agrees. Under such a conversion, Plaintiff's second cause of action is therefore undisputed
in the present motion to dismiss as a claim for wrongful denial of benefits.
1. Duplicative Claims
Defendant does take issue with Plaintiff's second cause of action. Defendant asserts that
Sections 1132(a)(2) is a safety net or "catchall" that only allows for relief otherwise unavailable
elsewhere under Sections 1132. 15 The "appropriate equitable relief" provided under Section
1132(a)(2), according to Defendant, is unavailable to Plaintiff where the relief sought is available

14
15

Docket 30 at 1.
Wise v. Verizon Commc'ns, Inc. 600 F.3d 1180, 1190 (9th Cir. 2010).

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under Section 1132(a)(1). On this basis, Defendant moves for Plaintiff’s Second Cause of Action
to be dismissed as well.
Plaintiff responds that it is too early at this stage of the litigation to preclude her from
pursuing her "catchall" Section 1132(a)(3) claim and she should be allowed to preserve both her
Section 1132(a)(1) and 1132(a)(3) claims. 16
The Ninth Circuit has recently recognized that under the Supreme Court’s decision in
CIGNA Corp. v. Amara a litigant is not prohibited from seeking equitable remedies under Section
1132(a)(3) if Section 1132(a)(1)(B) provides adequate relief. 17 Rather, a plaintiff is allowed to
simultaneously present Section 1132(a)(1)(B) and Section 1132(a)(3) as alternative—rather than
duplicative—theories of liability. 18 This comports not only with alternative forms of relief allowed
under the Federal Rules of Civil Procedure, but also existing precedent that allows Plaintiff to
bring multiple causes of action under Section 1132, but prohibits such claims from providing
duplicative relief. 19
Viewing this motion in the light most favorable to the Plaintiff, the Court is not prepared
at this early stage of litigation to determine whether or not recovery under Section 1132(a)(1) alone
would provide "appropriate adequate relief" for Plaintiff. In other words, it is too early to tell if
Plaintiff's Section 1132(a)(3) claim is effectively a repackaged Section 1132(a)(1) claim or if the
relief available is truly duplicative. Accordingly, Defendant's Motion to Dismiss Plaintiff's Second
Cause of Action is DENIED.

16

Docket 30 at 3.
Moyle v. Liberty Mut. Ret. Ben. Plan, 823 F.3d 948, 961 (9th Cir. 2016), as amended on
denial of reh'g and reh'g en banc (Aug. 18, 2016); 563 U.S. 421 (2011).
18
Id.
19
Fed.R.Civ.P. 8(a)(3); Wise, 600 F.3d at 1190.
17

ORDER REGARDING DEFENDANT’S
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2. Surcharge
Defendant argues that Plaintiff is precluded from recovering extra-contractual,
compensatory, and/or punitive damages under ERISA, as Plaintiff is limited to recovery of benefits
under the Plan. 20 Defendant also notes that Plaintiff's use of the term "exemplary" damages in the
Amended Complaint is synonymous with "punitive" damages. 21
Plaintiff relies on Amara to argue that "equitable relief" under Section 1132(a)(3) of ERISA
includes monetary relief in the form of an "equitable surcharge" to compensate plaintiffs for
financial losses cause by reliance on omissions or nondisclosures by a fiduciary. 22 Plaintiff asserts
that while traditional punitive damages are not historically available under ERISA, a surcharge
theory does allow for the pursuit of consequential damages, exemplary, and/or punitive damages
because she has alleged malice and fraud. 23
Because Plaintiff is allowed to maintain both Section 1132 claims as discussed above, the
Court need not reach the issue of Plaintiff's surcharge theory or the types of damages that may be
awarded at this stage. The Court does note that surcharge in the context of Section 1132 is intended
as "make-whole relief" and the remedial goal of ERISA is not to put a plaintiff in a better position
than they would be but for the defendant’s wrongdoing. 24

20

Docket 28 at 7.
Id.
22
563 U.S. at 421.
23
Docket 30 at 12; see D'Iorio v. Winebow, Inc. 68 F. Sup. 3d 334 (E.D.N.Y. 2014);
McCravy v. Metro Life Ins. Co., 690 F.3d 176, 181 (4th Cir. 2012).
24
Amara, 563 U.S. at 441-42; Rochow v. Life Ins. Co. of N. Am., 780 F.3d 364, 376 (6th
Cir. 2014).
21

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MOTION TO DISMISS - 6
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CONCLUSION
For the reasons set forth above, the Court hereby GRANTS Defendant's motion to dismiss
Plaintiff’s First and Fourth Causes of Action, and DENIES Defendant’s motion to dismiss
Plaintiff’s Second Cause of Action at Docket 28. Plaintiff’s motion for hearing at Docket 39 is
therefore DENIED as moot and the hearing scheduled for October 19, 2016, is hereby VACATED.
IT IS SO ORDERED this 26th day of September, 2016.
S/ RALPH R. BEISTLINE
U.S. DISTRICT COURT JUDGE

ORDER REGARDING DEFENDANT’S
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