Vanmark Strickland v. AT&T West Disability Benefits Program

Filing 24

ORDER GRANTING 16 MOTION TO DISMISS by Hon. William Alsup. (whalc2, COURT STAFF) (Filed on 8/24/2017)

Download PDF
1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 VANMARK STRICKLAND, 11 For the Northern District of California United States District Court 10 12 13 No. C 17-01393 WHA Plaintiff, v. 14 15 ORDER GRANTING MOTION TO DISMISS AT&T WEST DISABILITY BENEFITS PROGRAM, Defendant. / 16 17 INTRODUCTION 18 In this action for disability benefits, defendant insurer moves to dismiss plaintiff’s 19 20 complaint. The motion is GRANTED. STATEMENT 21 Plaintiff Vanmark Strickland brought this action against defendant AT&T West 22 Disability Benefits Program (the “Plan”) to “seek[] review of a failure to extend benefits under 23 a disability plan which may be covered by ERISA” (Dkt. No. 1 ¶ 1). Plaintiff refuses, however, 24 to limit his complaint to the Employee Retirement Income Security Act of 1974. He asserts 25 three state law claims for breach of contract, intentional infliction of emotional distress, and bad 26 faith in addition to a claim for benefits under ERISA. In his opposition to the instant motion, 27 plaintiff agrees that ERISA preempts his state law claims if it governs the Plan (Dkt. No. 21 at 28 1). He insists, however, that whether ERISA applies cannot be ascertained at this time. 1 The first paragraph of the complaint states, “if the plan would otherwise be subject to time, and it is possible that once the plan documents have been produced that the program will, 4 in part, prove to be exempt from ERISA under the payroll practice exception” (Dkt. No. 1 ¶ 1 5 (all errors in original)). Plaintiff’s opposition brief adds that “[d]efendant has produced about 6 2000 pages which purport to be plan documents [but] many of these are summaries 7 unaccompanied by complete documents,” and contends that “[b]ecause none of the plan 8 documents are now before the Court, it is impossible to tell whether the plan is subject to 9 ERISA, or whether it falls within the ‘payroll exemption’” (Dkt. No. 21 at 1). Despite having in 10 his possession approximately two thousand pages of documents that would ostensibly shed light 11 For the Northern District of California ERISA, it is exempt as a payroll practice because there is no trust is not entirely clear at this 3 United States District Court 2 on the question of whether or not ERISA governs the plan in question, plaintiff did not append 12 any documents to either the complaint or the opposition brief, leaving it up to the following 13 well-pled allegations in the complaint to state his four claims for relief (see Dkt. No. 1). 14 On June 3, 2013, while employed by non-party AT&T Inc., plaintiff “became disabled.” 15 At the time, he participated in the Plan, which “provide[d] for payment in the event of 16 disability” (id. ¶¶ 2–3). The Plan initially paid plaintiff disability benefits but terminated those 17 benefits effective May 1, 2016, allegedly claiming (id. ¶ 4 (all errors in original)): 18 19 20 21 22 In order to review your claim for ongoing disability benefits, a biannual review of your medical information is needed. On December 22, 2015, we mailed you a questionnaire, a release of information form, and a request for updated medical information which was due by February 15, 2016. A second request was mailed to you January 25, 2016 warning you of the termination of your [long-term disability] benefits if the requested information was not received by February 15, 2016. As a courtesy, a third request was mailed to you on March 22, 2016 and asked that the requested information be provided as soon as possible. 23 24 25 26 The determination to deny benefits is based on the fact that as of the date oft his letter, we have not received any medical documentation to establish your continued inability to perform active service with a Program Employer as a result of sickness or injury. The Plan received plaintiff’s appeal from this determination on May 25, 2016, and 27 denied it on July 1, 2016, based on “the failure of the plan to receive medical records from the 28 treating physician. The plan had told [plaintiff] that it was obtaining the records but failed to 2 1 obtain them” (id. ¶ 5). “Following the denial of the appeal, [plaintiff] retained counsel who 2 submitted the missing medical records to the plan. However, the plan did not respond to this 3 submission” (id. ¶ 6). 4 The complaint “alleges in the alternative that the plan is not subject to ERISA because it 5 is a payroll practice and is not funded by any trust or insurance” (id. ¶ 9). The complaint is 6 silent on what alternative funding the Plan might have. The second claim for breach of contract 7 rests on defendant’s decision to terminate plaintiff’s benefits, as described above (see id. ¶¶ 8 10–12). The third claim for intentional infliction of emotional distress adds (id. ¶¶ 14–17): 9 11 For the Northern District of California United States District Court 10 12 14. The acts of defendant in terminating payment of benefits was intentional and outrageous as defendant knew that it had undertaken to procure the record from the treating physician and failed to notify [plaintiff] that it had not procured the record and was relying upon him to do so. Further, defendant failed to act reasonably in obtaining the record in that it failed to comply with the reasonable request of the treating physician to request the record properly. 13 14 15. Defendant conducts its disability claims function in an arbitrary and capricious fashion, and has been held to so act by this Court. 15 16 17 18 16. [Plaintiff] suffered extreme financial and emotional distress as the reasonable and expected consequence of the acts of defendant, so as to justify an award of general damages according to proof or in the amount of $250,000. 19 17. The acts of defendant were malicious, fraudulent and oppressive so as to justify the imposition of punitive damages according to proof or in the sum of $250,000. 20 The fourth claim for bad faith echoes, “The acts of defendant were in bad faith, and as a result 21 thereof, [plaintiff] is entitled to general damages for the emotional and financial distress caused 22 by defendant, in the sum of $250,000 or according to proof” (id. ¶ 19). 23 24 25 26 Defendant moves to dismiss the complaint (Dkt. No. 16-1). This order follows full briefing and oral argument. ANALYSIS To survive a motion to dismiss, a complaint must plead “enough facts to state a claim to 27 relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A 28 claim has facial plausibility when it pleads factual content that allows a court to draw the 3 1 reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 2 556 U.S. 662, 678 (2009). A court ruling on a motion to dismiss must accept factual allegations 3 in the complaint as true and construe the pleadings in the light most favorable to the nonmoving 4 party. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1030–31 (9th Cir. 2008). 5 Conclusory allegations or “formulaic recitation of the elements” of a claim, however, are not 6 entitled to the presumption of truth. Iqbal, 556 U.S. at 681. 7 Here, the complaint fails to plead sufficient factual allegations to support a claim for 8 relief under any theory. Plaintiff’s six-page opposition to the instant motion primarily argues 9 that he is entitled to assert alternative state law claims for relief and makes virtually no attempt to defend the sufficiency of his factual allegations. In one paragraph titled “Merits of the 11 For the Northern District of California United States District Court 10 Claim,” plaintiff’s opposition adds a few sparse details about how exactly defendant “failed to 12 obtain” medical records for his claim, but none of those added details actually appear in the 13 complaint (compare Dkt. No. 21 at 6 with Dkt. No. 1 ¶¶ 4–5). 14 Under Section 1132(a)(1)(B) of Title 29 of the United States Code, a participant or 15 beneficiary of an ERISA plan may bring a civil action “to recover benefits due to him under the 16 terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to 17 future benefits under the terms of the plan.” Here, the complaint contains no factual allegations 18 supporting any plausible inference that plaintiff is owed any benefits, or has any rights to 19 enforce or clarify, under the terms of the Plan. The complaint does not even mention what the 20 relevant terms of the Plan might be, much less show that defendant is liable for any misconduct. 21 In short, the complaint fails to state a claim for benefits under ERISA. For the same reasons, 22 the complaint also fails to state a claim for breach of contract. 23 Under California law, the elements of a claim for intentional infliction of emotional 24 distress are “(1) extreme and outrageous conduct by the defendant with the intention of causing, 25 or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s 26 suffering severe or extreme emotional distress; and (3) actual and proximate causation of the 27 emotional distress by the defendant’s outrageous conduct. . . . A defendant’s conduct is 28 ‘outrageous’ when it is so ‘extreme as to exceed all bounds of that usually tolerated in a 4 1 civilized community.’” E.g., Lawler v. Montblanc North America, LLC, 704 F.3d 1235, 1245 2 (9th Cir. 2013) (quoting Hughes v. Pair, 46 Cal. 4th 1035 (2009)). Here, the complaint contains 3 no factual allegations supporting any plausible inference that defendant’s conduct satisfied the 4 foregoing elements. See Iqbal, 556 U.S. at 681 (conclusory allegations or “formulaic recitation 5 of the elements” of a claim are not entitled to the presumption of truth). 6 Under California law, a plaintiff asserting a bad faith claim in the insurance context 7 must show “(1) benefits due under the policy were withheld, and (2) the reason for withholding 8 benefits was unreasonable or without proper cause. . . . The key to a bad faith claim is whether 9 or not the insurer’s denial of coverage was reasonable.” E.g., Guebara v. Allstate Ins. Co., 237 F.3d 987, 992 (9th Cir. 2001) (citing Love v. Fire Ins. Exch., 221 Cal. App. 3d 1136 (1990)). 11 For the Northern District of California United States District Court 10 Again, the complaint here contains no factual allegations supporting any plausible inference 12 that defendant withheld “benefits due” under the Plan, or that its termination of plaintiff’s long- 13 term disability benefits was “unreasonable or without proper cause.” 14 In short, the complaint fails to state a claim for benefits under ERISA and also fails to 15 state a claim for breach of contract, intentional infliction of emotional distress, or bad faith 16 under California law. It must therefore be dismissed. 17 18 CONCLUSION To the foregoing extent, defendant’s motion to dismiss is GRANTED. Plaintiff may 19 move for leave to file an amended complaint by SEPTEMBER 1 AT NOON. Any such motion 20 should include as an exhibit a redlined version of the proposed amended complaint that clearly 21 identifies all changes from the initial complaint. In the proposed amended complaint, plaintiff 22 should be sure to plead his best case. 23 24 IT IS SO ORDERED. 25 26 Dated: August 24, 2017. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 27 28 5

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?