Larkin v. UnitedHealthcare Insurance Company

Filing 18

ORDER AND REASONS finding as moot 6 Motion to Dismiss for Failure to State a Claim; Granting 9 Motion to Dismiss for Failure to State a Claim. Plaintiff's claims for short term disability benefits, statutory penalties under Louisiana Revised Statutes §§ 22:658 and 22:1892, and nonpecuniary damages arising out of a breach of contract are DISMISSED WITH PREJUDICE. Signed by Judge Sarah S. Vance on 10/3/2017. (cg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
LAURA M. LARKIN

CIVIL ACTION

VERSUS

NO. 17-2061

UNITEDHEALTHCARE
INSURANCE COMPANY

SECTION “R” (2)

ORDER AND REASONS
Before the Court are defendant’s two partial motions to dismiss.1 For
the following reasons, the Court denies as moot the first motion to dismiss2
and grants the second motion to dismiss. 3
I.

BACKGROUND
This case arises out of a dispute over the payment of disability

insurance benefits.4

Defendant UnitedHealthcare Insurance Company

issued a group disability insurance policy to Louisiana State University and
Agricultural and Mechanical College.5

Plaintiff Laura Larkin was an

employee of Louisiana State University and participated in this group

1
2
3
4
5

R. Doc. 6; R. Doc. 9.
R. Doc. 6.
R. Doc. 9.
R. Doc. 1.
Id. at 1 ¶ 5; R. Doc. 6-3 at 2.

disability plan.6

Plaintiff alleges that she has been diagnosed with

fibromyalgia and scleredema and that she suffers from chronic pain, fatigue,
muscle weakness, numbness, debilitating headaches, malaise, and cognitive
impairment. 7 On or around January 4, 2016, plaintiff took disability leave
from her job and applied for benefits under defendant’s policy.8 Defendant
denied plaintiff’s claim for long term disability benefits.9 Plaintiff filed an
appeal with accompanying medical evidence, which was also denied. 10
Plaintiff asserts that defendant based its denial of benefits on outdated
criteria, an incorrect diagnosis, and the opinions of non-specialist
physicians. 11
On March 10, 2017, plaintiff filed a complaint against defendant for
short term and long term disability benefits, statutory penalties, physical and
emotional distress damages, costs, and attorneys’ fees. 12 Plaintiff invoked
diversity jurisdiction under 28 U.S.C. § 1332. 13 On July 28, 2017, defendant
filed its first partial motion to dismiss under Federal Rule of Civil Procedure

6
7
8
9
10
11
12
13

R. Doc. 1 at 1 ¶ 3.
R. Doc. 7 at 3 ¶ 44.
Id. at 3 ¶ 45.
Id. at 3-4 ¶ 46.
Id. at 4.
Id. at 2-3 ¶ 43.
R. Doc. 1.
Id. at 1.
2

12(b)(6).14

Plaintiff timely amended her complaint, incorporating the

contents of her original complaint and including additional allegations.15 In
response, defendant filed a second partial motion to dismiss. 16
II.

LEGAL STANDARD
To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead

“sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially
plausible when the plaintiff pleads facts that allow the court to “draw the
reasonable inference that the defendant is liable for the misconduct alleged.”
Id. at 678. A court must accept all well-pleaded facts as true and must draw
all reasonable inferences in favor of the plaintiff. See Lormand v. US
Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009).
A legally sufficient complaint must establish more than a “sheer
possibility” that the plaintiff’s claim is true. Iqbal, 556 U.S. at 678. It need
not contain detailed factual allegations, but it must go beyond labels, legal
conclusions, or formulaic recitations of the elements of a cause of action. Id.

14
15
16

R. Doc. 6.
R. Doc. 7.
R. Doc. 9.
3

In other words, the face of the complaint must contain enough factual matter
to raise a reasonable expectation that discovery will reveal relevant evidence
of each element of the plaintiff’s claim. Lormand, 565 F.3d at 257. The claim
must be dismissed if there are insufficient factual allegations to raise a right
to relief above the speculative level, Twombly, 550 U.S. at 555, or if it is
apparent from the face of the complaint that there is an insuperable bar to
relief, Jones v. Bock, 549 U.S. 199, 215 (2007).

III. DISCUSSION
A. First Motion to Dismiss
Defendant’s first motion to dismiss is directed at plaintiff’s original
complaint. 17 The filing of an amended complaint does not necessarily moot
a pending motion to dismiss. See 6 Wright & Miller, Federal Practice and
Procedure § 1476 (3d. ed. 2017). But defendant has filed a second motion to
dismiss directly addressing the amended complaint.18 Defendant’s second
motion reiterates its original request that the Court dismiss plaintiff’s claims
for short term disability benefits, certain statutory penalties, and
nonpecuniary damages. 19 Because defendant’s two motions make the same

17
18
19

R. Doc. 6.
R. Doc. 9.
Id.
4

arguments and seek the same relief, the Court finds that defendant’s first
motion to dismiss is moot. 20 See Melson v. Vista World Inc. and Assoc., No.
12-135, 2012 WL 6002680, at *12 (E.D. La. 2012) (explaining that, “[w]hen
a new Rule 12(b)(6) motion is filed that specifically addresses an amended
complaint, ‘it surely makes sense to disregard’” the original motion) (quoting
Steven Gensler, 1 Federal Rules of Civil Procedure, Rules and Commentary
Rule 15).
B. Short Term Disability Benefits and Statutory Penalties
Defendant argues that plaintiff’s claim for short term disability
benefits must be dismissed because these benefits are not covered by the
policy.21 The Court has reviewed the insurance policy, and finds that it covers
only long term disability benefits.22 Plaintiff concedes that she is not entitled
to short term disability benefits.23 Thus, the Court dismisses this claim.

Defendant admits that its first motion is effectively moot. See R. Doc.
9 at 2. Defendant’s second motion to dismiss and plaintiff’s second
memorandum in opposition each incorporate the arguments contained in
their original pleadings. See R. Doc. 9; R. Doc. 10. Accordingly, the Court
will refer back to the first motion to dismiss and the first memorandum in
opposition in considering the current motion.
21
R. Doc. 6-1 at 5; R. Doc. 9-1 at 2.
22
R. Doc. 6-3. The Court may consider this document on a Rule
12(b)(6) motion because the insurance policy is referenced in plaintiff’s
complaint and is central to her claim. See In re Katrina Canal Breaches
Litig., 495 F.3d 191, 205 (5th Cir. 2007).
23
R. Doc. 10 at 1.
5
20

Defendant also contends that Louisiana Revised Statutes § 22:1821
provides the sole possible basis for statutory penalties in this matter, and
asks the Court to dismiss plaintiff’s claims under § 22:658 and § 22:1892.24
Plaintiff concedes that § 22:1821 is the appropriate statutory penalty
provision, and consents to the dismissal of her other statutory penalty
claims.25 Accordingly, the Court dismisses plaintiff’s claims under § 22:658
and § 22:1892.
C. Nonpecuniary Damages
Plaintiff asserts that she is entitled to damages for emotional distress
and other nonpecuniary loss under Louisiana Civil Code articles 1998 and
1997. 26 Article 1998 permits nonpecuniary damages in a breach of contract
action under two circumstances: (1) “when the contract, because of its
nature, is intended to gratify a nonpecuniary interest and, because of the
circumstances surrounding the formation or the nonperformance of the
contract, the obligor knew, or should have known, that his failure to perform
would cause that kind of loss”; or (2) “when the obligor intended, through

R. Doc. 6-1 at 2. Louisiana Revised Statutes § 22:658 is unrelated to
statutory penalties, and § 22:1892 does not apply to health and accident
policies.
25
R. Doc. 10 at 1.
26
R. Doc. 8 at 4-7.
6
24

his failure, to aggrieve the feelings of the obligee.” La. Civ. Code art. 1998.
The amended complaint fails to state a claim under either criterion.
Plaintiff first argues that her disability insurance policy served the
nonpecuniary interest of providing peace of mind, and that the intent of the
contract is a question of fact for the jury. 27 But plaintiff’s argument applies
equally to all insurance contracts, and Louisiana courts have repeatedly held
that “a commercial insurance policy is not designed to gratify nonpecuniary
interests, it is meant to protect pecuniary interests.” Sher v. Lafayette Ins.
Co., 988 So. 2d 186, 202 (La. 2008); see also Bankston v. Alexandria
Neurosurgical Clinic, 583 So. 2d 1148, 1151 (La. App. 3 Cir. 1991); Nickels v.
Guarantee Trust Life Ins. Co., 563 So. 2d 924, 927 (La. App. 1 Cir. 1990);
Tano Corp. v. La. Health Serv. & Indem. Co., 355 So.2d 604, 606 (La. App.
4 Cir. 1978).
Accordingly, the Court finds that plaintiff’s disability insurance policy
was not intended to gratify a nonpecuniary interest. The state appellate
decisions cited by plaintiff are inapposite because those cases involved
contracts related to the purchase, construction, or renovation of homes,
which by the nature of the contract could involve substantial and fact-specific
nonpecuniary interests. See Heath v. Brandon Homes, Inc., 825 So. 2d 1262,

27

R. Doc. 8 at 4.
7

1268-69 (La. App. 2 Cir. 2002) (finding significant nonpecuniary interests in
the construction of plaintiff’s “dream home”); see also Cascio v. Carpet, 968
So. 2d 844, 852 (La. App. 2 Cir. 2007); Stonecipher v. Mitchell, 655 So. 2d
1381, 1384-85 (La. App. 2 Cir. 1995); Johnston v. Norcondo, 572 So. 2d 203,
205 (La. App. 1 Cir. 1990).
Plaintiff further contends that, even if the disability insurance contract
does not serve a nonpecuniary interest, she has stated a claim under the
second basis for nonpecuniary damages in Article 1998. 28 See La. Civ. Code
art. 1998 (permitting nonpecuniary damages “when the obligor intended,
through his failure, to aggrieve the feelings of the obligee”). The amended
complaint alleges that “Defendant either intended to cause Plaintiff
emotional distress and mental anguish when denying her benefits or acted
with such reckless disregard that it should have known that such mental
anguish and emotional distress would result from its actions.”29
Plaintiff’s assertion that defendant intended to cause her emotional
distress is merely a “formulaic recitation of the elements of a cause of action”
without factual support in the complaint. See Iqbal, 556 U.S. at 678. To
recover under this theory, plaintiff must show that defendant’s actions were

R. Doc. 8 at 7.
R. Doc. 7 at 1 ¶ 36. Plaintiff’s original complaint makes the same
allegations. See R. Doc. 1 at 3 ¶ 20; Id. at 4 ¶ 23.
8
28
29

“calculated to inflict grief, vexation, or inconvenience on the other party.”
Pinero v. Jackson Hewitt Tax Serv., Inc., 594 F. Supp. 2d 710, 718 (E.D. La.
2009) (quoting 6 Saul Litvinoff, Louisiana Civil Law Treatise § 6.16 (2d
ed.)). The original and amended complaints contain no factual allegations
suggesting that defendant was motivated by a desire to aggrieve plaintiff’s
feelings.30 See id. Plaintiff also fails to cite any authority to support the
proposition that “reckless disregard” is sufficient to show an intent to
aggrieve under Article 1998. 31
Although plaintiff alleges that defendant acted in bad faith, bad faith is
not equivalent to an intent to aggrieve. See Wegener v. Lafayette Ins. Co, 60
So. 3d 1220, 1230 (La. 2011) (distinguishing between insurer’s breach of duty
of good faith and an intent to aggrieve plaintiffs); Sher, 988 So.2d at 202,
207 (finding sufficient evidence that insurer’s failure to pay was “vexatious,”
but no proof of an intent to aggrieve); see also Pinero, 594 F. Supp. 2d at 718;
Tomlinson v. Allstate Indem. Co., No. 06-617, 2007 WL 325361, at *2 (E.D.

On the contrary, plaintiff repeatedly alleges that defendant acted out
of financial self-interest. See R. Doc. 1 at 4-5 ¶ 30-31; R. Doc. 7 at 1 ¶ 37; Id.
at 5 ¶ 52.
31
Nor does plaintiff allege any facts to indicate that defendant was or
should have been aware of special circumstances that would cause plaintiff
to suffer greater emotional distress from a denial of benefits than other
applicants for long term disability insurance.
9
30

La. 2007). Plaintiff therefore fails to state a claim for nonpecuniary damages
under the intent prong of Article 1998.
Finally, plaintiff argues that defendant’s alleged bad faith justifies
nonpecuniary damages under Louisiana Civil Code Article 1997. 32 Article
1997 provides that “[a]n obligor in bad faith is liable for all the damages,
foreseeable or not, that are a direct consequence of his failure to perform.”
La. Civ. Code art. 1997. But Article 1997 must be read in conjunction with
Article 1998. In Young v. Ford Motor Co., Inc., 595 So. 2d 1123 (La. 1992),
the Louisiana Supreme Court examined the structure of the Civil Code and
explained that Article 1994 sets out liability for damages for failure to
perform a conventional obligation, Article 1997 provides that an obligor in
bad faith is liable for “all the damages, foreseeable or not, that are a direct
consequence of his failure to perform,” and “Article 1998 then sets forth the
requirements for the recovery of nonpecuniary damages.” Id. at 1129
(emphasis added).

The Young court denied mental anguish damages

because the plaintiff failed to show that his contract had a nonpecuniary
purpose. Id. at 1134.
The award of nonpecuniary damages in a breach of contract action is
governed by Article 1998, and Article 1997 does not provide a standalone

32

R. Doc. 8 at 5-6.
10

basis to recover damages for emotional distress.33

See Nolan v.

Commonwealth Nat’l Ins. Co., 688 So. 2d 581, 585 (La. App. 2 Cir. 1996)
(finding that the remediation of moral damages is addressed by Article 1998,
and that Article 1997 does not cover unforeseen nonpecuniary damages); cf.
Wegener, 60 So. 3d at 1229-30 (holding that Article 1998 serves to limit
nonpecuniary damages only in breach of contract cases, and does not apply
to a separate cause of action for an insurer’s breach of its statutory duty of
good faith). Because plaintiff does not satisfy the requirements set out in
Article 1998, she cannot recover nonpecuniary damages on her breach of
insurance contract claim. This claim must therefore be dismissed.
D. Dismissal with Prejudice
Plaintiff filed an amended complaint in response to defendant’s first
motion to dismiss, and she has not requested further leave to amend.
Plaintiff also concedes that she is not entitled to short term benefits and that
she is not entitled to penalties under Louisiana Revised Statutes §§ 22:658
and 22:1892. Further, the Court finds that plaintiff has had sufficient
opportunity to cure the deficiencies in her complaint, and that another

Plaintiff relies on several state appellate decisions to argue that a
finding of bad faith supports nonpecuniary damages under Article 1997.
See R. Doc. 8 at 5-6. But those cases were decided before Young v. Ford
Motor Co., 595 So.2d 1123 (La. 1992), and are inconsistent with recent
Louisiana caselaw.
11
33

amendment would be futile. See Foman v. Davis, 371 U.S. 178, 182 (1962).
The Court therefore dismisses plaintiff’s claims at issue on the motion with
prejudice.

IV.

CONCLUSION
For the foregoing reasons, the Court DENIES defendant’s first motion

to dismiss34 as moot. The Court GRANTS defendant’s second motion to
dismiss. 35 Plaintiff’s claims for short term disability benefits, statutory
penalties under Louisiana Revised Statutes §§ 22:658 and 22:1892, and
nonpecuniary damages arising out of a breach of contract are DISMISSED
WITH PREJUDICE.

3rd
New Orleans, Louisiana, this _____ day of October, 2017.

_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

34
35

R. Doc. 6.
R. Doc. 9.
12