Neubarth v. Hartford Life and Accident Insurance Company
Filing
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OPINION AND ORDER granting 8 Motion to Dismiss. Signed by Judge Kenneth A. Marra on 6/20/2011. (ir)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 11-80148-CIV-MARRA/JOHNSON
EDWARD NEUBARTH,
Plaintiff,
vs.
HARTFORD LIFE AND ACCIDENT
INSURANCE COMPANY,
Defendant.
____________________________________/
OPINION AND ORDER
This cause is before the Court upon Defendant Hartford Life and Accident Insurance
Company’s Motion to Dismiss (DE 8). The motion is fully briefed and ripe for review. The
Court has carefully considered the motion and is otherwise fully advised in the premises.
I. Background
According to the allegations of the Complaint, Plaintiff Edward Neubarth (“Plaintiff”)
was an employee of the Leukemia & Lymphoma Society. (Compl. ¶ 5.) During his employment,
Plaintiff was a participant in the Leukemia & Lymphoma Disability Plan (“Plan”) underwritten
by Defendant Hartford Life and Accident Insurance Company (“Defendant”). (Compl. ¶ 6.) As
a plan participant, Plaintiff was entitled to receive disability benefits under the Plan if he met the
definition of disability. (Compl. ¶ 9.) The Plan provides in pertinent part:
Disability or Disabled means that during the Elimination Period, and for the next 36
months you are prevented by:
1. Accidental bodily injury;
2. Sickness;
3. Mental Illness;
4. Substance Abuse; or
5. Pregnancy;
from performing one or more of the Essential Duties of Your Occupation, and as a result
your Current Monthly Earnings are no more than 80% of your Indexed Pre-Disability
Earnings.
After that, you must be so prevented from performing one or more of the Essential Duties
of Any Occupation.
Your failure to pass a physical examination required to maintain a license to perform the
duties of Your Occupation does not alone mean that you are Disabled.
Essential Duty means a duty that:
1. is substantial, not incidental;
2. is fundamental or inherent to the occupation; and
3. can not be reasonably omitted or changed.
To be at work for the number of hours in your regularly scheduled workweek is also an
Essential Duty.
Your Occupation, if used in this Booklet-certificate, means your occupation as it is
recognized in the general workplace. Your Occupation does not mean the specific job
you are performing for a specific employer or at a specific location.
Any Occupation means an occupation for which you are qualified by education, training
or experience, and that has an earnings potential greater than an amount equal to the
lesser of the product of your Indexed Pre-Disability Earnings and the Benefit Percentage
and the Maximum Monthly Benefit shown in the Schedule of Insurance.
Indexed Pre-disability Earnings when used in this policy means your Pre-disability
Earnings adjusted annually by adding the lesser of:
1. 10% or the percentage change in the Consumer Price Index (CPI-W).
(Compl. ¶ 10.)
Plaintiff became disabled on November 30, 2007 due to “post-traumatic brain injury,
severe sleep disorder, chronic headaches, thalamo-cortical dysrhythmia, Gastrioparesis, chronic
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neck and back injuries and pain, nausea, noise in head and ears (tinnitus), and constant fatigue as
a result of a severe automobile accident.” (Compl. ¶ 13.) As a result, Plaintiff filed a claim for
disability benefits under the Plan, which Defendant approved. (Compl. ¶ 14.) Subsequently,
Defendant asserted that Plaintiff’s social security disability benefits were an offset to the Plan
benefits and demanded immediate repayment of said monies, to which Plaintiff complied.
(Compl. ¶ 18.) On or about March 4, 2009, Defendant terminated Plaintiff’s disability benefits
pursuant to the Plan. (Compl. ¶ 20.) Plaintiff appealed that decision, but Defendant upheld its
denial of benefits. (Compl. ¶ 21.)
On February 4, 2011, Plaintiff filed his one-count Complaint pursuant to the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. Specifically,
Plaintiff brings a claim entitled “Action to Recover Plan Benefits, Enforce Rights Under the Plan
& Clarify Entitlement to Plan Benefits Pursuant to 29 U.S.C. § 1132(a)(1)(B)” against
Defendant. Plaintiff seeks a declaratory judgment, an award for all benefits due under the terms
of the Plan, “disgorgement of any profits or gain by Defendant [ ] as a result of the wrongful
action(s) alleged,” “an award of an equitable distribution of any profits or gain as a result of the
Court’s order of disgorgement” and reasonable costs and attorney’s fees. (Compl. at 8-9.)
II. Legal Standard
Rule 8(a) of the Federal Rules of Civil Procedure requires “a short and plain statement of
the claims” that “will give the defendant fair notice of what the plaintiff's claim is and the ground
upon which it rests.” Fed. R. Civ. P. 8(a). The Supreme Court has held that “[w]hile a complaint
attacked by a Rule 12(b) (6) motion to dismiss does not need detailed factual allegations, a
plaintiff's obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than
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labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.
Factual allegations must be enough to raise a right to relief above the speculative level.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted).
"To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 129 S.
Ct. 1937, 1949 (2009) (quotations and citations omitted). "A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged." Id. Thus, "only a complaint that states a
plausible claim for relief survives a motion to dismiss." Id. at 1950. When considering a motion
to dismiss, the Court must accept all of the plaintiff's allegations as true in determining whether a
plaintiff has stated a claim for which relief could be granted. Hishon v. King & Spalding, 467
U.S. 69, 73 (1984).
III. Discussion
Defendant moves to dismiss Plaintiff’s requests for disgorgement and equitable
distribution on the basis that these remedies are not available pursuant to 29 U.S.C. §
1132(a)(1)(B). Furthermore, Defendant contends that the ERISA provision that would allow for
this relief (i.e., section 1132(a)(3)) is a provision of ERISA that may only be invoked when a
plaintiff has no other available remedy under ERISA. (Mot. at 3-4.) In response, Plaintiff likens
the request for disgorgement of profits to a request for pre-judgment interest to be awarded on
past due benefits, which is appropriately brought under section 1132(a)(1)(B). Plaintiff also
contends that the request for disgorgement should not be dismissed prior to discovery.
The Court begins its analysis by observing that ERISA is a “comprehensive and
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reticulated statute, the product of a decade of congressional study of the Nation's private
employee benefit system.” Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 209
(2002) (internal quotation marks omitted). ERISA's “carefully crafted and detailed enforcement
scheme provides strong evidence that Congress did not intend to authorize other remedies that it
simply forgot to incorporate expressly” and courts are therefore “reluctant to tamper with [the]
enforcement scheme embodied in the statute by extending remedies not specifically authorized
by its text.” Id. (internal quotation marks omitted).
Section 1132(a)(1)(B) authorizes a participant to 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. § 1132(a)(1)(B); see
Heffner v. Blue Cross and Blue Shield of Alabama, 443 F.3d 1330, 1338 (11th Cir. 2006); Jones
v. American General Life and Accident Ins. Co., 370 F.3d 1065, 1069 (11th Cir. 2004). In other
words, this statutory provision provides for contract-based causes of action. See Ervast v.
Flexible Prods. Co., 346 F.3d 1007, 1014 (11th Cir. 2003) (section 1132(a)(1)(B) claims are
“essentially contract claims”); Jones, 370 F.3d at 1069 (remedies available under section
1132(a)(1)(B) are akin to common law breach of contract causes of action). As such, courts are
“reluctant . . . to imply benefits into the terms of . . . [a] plan where such benefits are not
expressly designated.” Green v. Holland, 480 F.3d 1216, 1223 (11th Cir. 2007); see Flint v. ABB,
Inc., 337 F.3d 1326, 1329 (rejecting a stand-alone claim for interest on past-due benefit payment
when the plan did not so provide); Godfrey v. Bellsouth Telecomms., Inc., 89 F.3d 755, 761 (11th
Cir. 1996) (section 1132(a)(1)(B) does not provide for “extra-contractual or punitive damages”).
Here, Plaintiff seeks disgorgement of profits and equitable distribution. Noticeably
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absent from Plaintiff’s response memorandum is any indication that the Plan contains a provision
supporting such an award. Moreover, based upon the foregoing precedent, there is no legal basis
to allow for disgorgement and equitable distribution pursuant to section 1132(a)(1)(B), when the
Plan does not so provide. See Howard v. Hartford Life & Accident Ins. Co., — F. Supp. 2d —,
2011 WL 1458655, at * 4 (M.D. Fla. Mar. 31, 2011).
Despite the fact that Plaintiff brings his claim pursuant to section 1132(a)(1)(B), Plaintiff
points to an Eighth Circuit case that addresses disgorgement of profits pursuant to section
1132(a)(3). (Resp. at 5-6 citing Parke v. First Reliance Standard Life Ins. Co., 368 F.3d 999 (8th
Cir. 2004).) Plaintiff, however, does not bring a claim pursuant to this provision, nor does
Plaintiff seek to do so. (Resp. at 6.) Significantly, section 1132(a)(3) claims, which authorizes
plan participants to bring suit for equitable relief, is a “catchall” provision that may only be
invoked when a plaintiff has no “other available remedy” under ERISA. Katz v. Comprehensive
Plan of Group Ins., 197 F.3d 1084, 1088-89 (11th Cir. 1999).
Next, Plaintiff contends that section 1132(a)(1)(B) claims cannot be likened to contract
claims because they are “equitable in nature.” (Resp. at 4 quoting Hunt v. Hawthorne Assocs.,
Inc., 119 F.3d 888, 907-08 (11th Cir. 1997).) In Hunt, the Court identified the plaintiff’s claim
for plan benefits as an equitable claim in contrast to an action for a money judgment. Id. (“The
nature of an action under section 1132(a)(1)(B) is for the enforcement of the ERISA plan.”)
Nothing in Hunt, however, suggested that a plaintiff may seek remedies outside the terms of the
plan.
Equally unpersuasive is Plaintiff’s contention that his “claim for disgorgement of profits
is akin to his claim for interest on benefits owed” and thus properly brought under section
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1132(a)(1)(B). To be sure, the Eleventh Circuit permits an award of prejudgment interest, even
if a plan does not specifically provide for such interest, because “[t]he award of an amount of
prejudgment interest in an ERISA case is a matter committed to the sound discretion of the trial
court.” Green, 480 F.3d at 1224 n.4 (quoting Florence Nightingale Nursing Serv., Inc. v. Blue
Cross/Blue Shield of Ala., 41 F.3d 1476, 1484 (11th Cir.1995)); see Smith v. Am. Int'l Life
Assurance Co. of N.Y., 50 F.3d 956, 957 (11th Cir.1995). But unlike an award of prejudgment
interest, there is no authority permitting disgorgement under section 1132(a)(1)(B).
Lastly, Plaintiff’s assertion that his request for disgorgement should not be dismissed
because “discovery has not been held on this issue” (Resp. at 8.) is unavailing. Whether
disgorgement is permitted under section 1132(a)(1)(B) is a question of law. Therefore, discovery
would not shed any light on this issue.1 See Chadasama v. Mazda Motor Corp., 123 F.3d 1353,
1367 (11th Cir. 1997) (“[f]acial challenges to the legal sufficiency of a claim or defense . . .
should . . . be resolved before discovery begins [since] [s]uch a dispute always presents a purely
legal question.”)
For the foregoing reasons, the Court grants the motion to dismiss on the basis that
Plaintiff cannot seek disgorgement of profits under count one of the Complaint.
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In so ruling, the Court chooses not to follow Johnson v. Hartford Life & Acc. Ins. Co.,
No. 10-60347-CIV-ZLOCH (S.D. Fla. Jan. 5, 2011) as urged by Plaintiff.
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IV. Conclusion
Accordingly, it is hereby ORDERED AND ADJUDGED that Defendant Hartford Life
and Accident Insurance Company’s Motion to Dismiss (DE 8) is GRANTED with respect to
Plaintiff’s request in the Complaint for any disgorgement of profits or gain by Defendant.
DONE AND ORDERED in Chambers at West Palm Beach, Palm Beach County,
Florida, this 20th day of June, 2011.
______________________________________
KENNETH A. MARRA
United States District Judge
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