Canlas v. Metropolitan Life Insurance Company
Filing
12
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 12/22/2015. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
ERNEST H. CANLAS
:
v.
:
Civil Action No. DKC 15-0702
:
METROPOLITAN LIFE INSURANCE
COMPANY
:
MEMORANDUM OPINION
Presently pending and ready for review in this insurance
case is a motion to dismiss filed by Defendant Metropolitan Life
Insurance Company (“Defendant”).
(ECF No. 9).
The relevant
issues have been briefed, and the court now rules, no hearing
being deemed necessary.
reasons,
the
motion
Local Rule 105.6.
to
dismiss
will
be
For the following
granted
in
part
and
denied in part.
I.
Background
Ernest
technician
Canlas
for
two
(“Plaintiff”)
separate
previously
employers,
the
worked
as
a
Metropolitan
Washington Airports Authority (“MWAA”) and the Kaiser Permanente
Foundation
Health
Plan.
(ECF
No.
1
¶
10).
Each
employer
provided Plaintiff with a group long-term disability insurance
plan (the “Plans”).
1
(ECF Nos. 1 ¶ 8; 9-2; 9-3).1
Although the
In reviewing a motion to dismiss, courts may consider
documents referenced or relied upon in the complaint.
Abelman
v. Wells Fargo Bank, N.A., 976 F.Supp.2d 660, 662 n.1 (D.Md.
2013) (citing Phillips v. LCI Int’l, Inc., 190 F.3d 609, 618 (4th
Plans are independent from each other, Defendant is the claim
administrator for both.
After
receiving
suffering
payments
a
under
retroactively to 2013.
Plaintiff
later
total
disability,
the
Plans
in
Plaintiff
2014
that
began
applied
(ECF Nos. 1 ¶¶ 11-12; 1-4, at 1-2).
applied
for
and
received
Disability Income (“SSDI”) benefits.
Social
Security
(ECF No. 1-5).
On or
around November 8, 2014, Plaintiff received a $30,651.00 lump
sum for back payment of SSDI benefits owed.
This lump SSDI sum
accounted for monthly payments Plaintiff was owed beginning in
August
2013.
$2,397.90
The
from
monthly
August
rate
through
for
his
November
SSDI
2013;
payments
was:
$2,433.80
for
December 2013; and $2,463.50 beginning in January 2014.
No. 1-5, at 2).
(ECF
In December 2014, Defendant notified Plaintiff
that it would reduce the amount he received under each Plan by
the amount of his SSDI benefits.
(ECF No. 1 ¶ 15).
Defendant
sent Plaintiff a letter stating that the “Total Amount” due as a
result of overpayment on the two Plans was $73,367.63.
1-4, at 3).
(ECF No.
Defendant denied Plaintiff’s administrative appeal
of its determination.
(ECF No. 1-3).
On March 12, 2015, Plaintiff filed a complaint alleging
that Defendant wrongly denied payment of his benefits under the
Cir. 1999)). Here, Plaintiff attaches part of the Plans to the
complaint and relies on their provisions.
Thus, it is
appropriate for the court to rely on the Plans in adjudicating
Defendant’s motion to dismiss.
2
Plans.
(ECF No. 1).
On July 15, 2015, Defendant filed the
pending motion to dismiss.
to
respond
timely
in
(ECF No. 9).
opposition,
the
After Plaintiff failed
court
sent
notice
to
Plaintiff’s counsel requesting that he promptly file a response
or advise the court if no opposition will be filed.
11).
II.
(ECF No.
To date, Plaintiff has not responded.
Standard of Review
The purpose of a motion to dismiss under Rule 12(b)(6) is
to test the sufficiency of the complaint.
Presley v. City of
Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006).
A complaint
need only satisfy the standard of Rule 8(a), which requires a
“short and plain statement of the claim showing that the pleader
is entitled to relief.”
Fed.R.Civ.P. 8(a)(2).
“Rule 8(a)(2)
still requires a ‘showing,’ rather than a blanket assertion, of
entitlement to relief.”
544, 555 n.3 (2007).
Bell Atl. Corp. v. Twombly, 550 U.S.
That showing must consist of more than “a
formulaic recitation of the elements of a cause of action” or
“naked
assertion[s]
devoid
of
further
factual
enhancement.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted).
At this stage, all well-pleaded allegations in a complaint
must be considered as true, Albright v. Oliver, 510 U.S. 266,
268 (1994), and all factual allegations must be construed in the
light
most
favorable
to
the
plaintiff.
See
Harrison
v.
Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir.
3
1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134
(4th Cir. 1993)).
In evaluating the complaint, unsupported legal
allegations
not
need
be
accepted.
Revene
Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989).
v.
Charles
Cnty.
Legal conclusions
couched as factual allegations are insufficient, Iqbal, 556 U.S.
at 678, as are conclusory factual allegations devoid of any
reference to actual events.
United Black Firefighters v. Hirst,
604 F.2d 844, 847 (4th Cir. 1979).
III. Analysis
A.
Defendant’s Ability to Reduce SSDI From Each Plan
The
primary
argument
in
Plaintiff’s
complaint
is
that
Defendant incorrectly reduced payment under both Plans by the
amount of SSDI benefits he received, effectively doubling the
reduction.
(ECF No. 1 ¶ 16).
Plaintiff asserts that applying
the reduction to both Plans is “contrary to the plan provisions,
. . . and is on its face arbitrary and capricious.”
(Id. ¶ 27).
Defendant contends that the reductions were proper because the
unambiguous
language
in
each
Plan
separately
allows
for
a
reduction in benefits based on SSDI payments.
Administrators of plans governed by the Employee Retirement
Income Security Act of 1974 (“ERISA”) must “look solely at ‘the
directives of the plan documents’ in determining how to disburse
benefits.
. . .
In other words, a claim for benefits must
4
‘stand [] or fall[] by the terms of the plan.’”2
Boyd v. Metro.
Life Ins. Co., 636 F.3d 138, 140 (4th Cir. 2011) (quoting Kennedy
v.
Plan
(2009)).
Adm’r
A
for
plan
DuPont
Savs.
&
Inv.
such
administrator,
Plan,
as
555
U.S.
Defendant,
285
must
administer each plan in accordance with its respective language.
See Renfro v. Funky Door Long Term Disability Plan, 686 F.3d
1044 (9th
Cir. 2012);
Isner v. Minnesota Life Ins. Co., 677
F.Supp.2d 950 (E.D.Mich. 2009).
Indeed, a plan administrator
has a separate fiduciary duty to each plan it administers.
29
U.S.C. § 1104(a)(1).
Defendant
cites
two
cases
that
support
reduce Plaintiff’s benefits under both Plans.
its
decision
to
In Renfro, the
United States Court of Appeals for the Ninth Circuit upheld the
district court’s grant of summary judgment for a defendant that,
as
here,
deducted
separate plans.
the
plaintiff’s
SSDI
686 F.3d at 1052-54.
benefits
from
two
Much like Plans here,
“[n]either of the Plans contains any language that makes an
exception for this deduction in a case where an employee is
covered under two separate plans.
2
The plain language of the
The MWAA plan is not governed by ERISA because it is a
“governmental plan.”
29 U.S.C. § 1002(32); see also Canady v.
Washington Metro. Area Transit Auth., 909 F.Supp. 324, 327
(D.Md. 1995) (holding that ERISA does not apply to a Washington
Metropolitan Area Transit Authority employee’s insurance plan).
This distinction is irrelevant for the current discussion.
Under Maryland law, the interpretation of the plan similarly
would be governed by the plain meaning of its unambiguous terms.
See Nova Research, Inc. v. Penske Truck Leasing Co., 405 Md.
435, 448 (2008).
5
Plans expressly mandates the actions that [the defendant] took.”
Id. at 1053.
The Ninth Circuit also held that the fact that one
entity administered both plans “does not detract from the fact
that [the plaintiff] was covered under two different plans,”
each of which must be read separately.
Id. at 1054.
Similarly,
in Isner, the district court granted the defendant’s motion to
dismiss
a
suit
alleging
F.Supp.2d at 957-58.
may
be
insurance
severe,
similar
“double-offset.”
677
The court noted that, although the result
“courts
contracts
a
in
do
not
order
have
to
the
palliate
power
the
to
redraft
effects
considered language on the occasional hard case.”
of
Id. at 957
(citations and internal quotation marks omitted).
The court
granted the motion to dismiss because “[t]he plans expressly
authorize [reduction] of all Social Security benefits, without
regard for whether any other plan [reduces] the same benefits
[and because] . . . each plan ‘has the absolute right to enforce
its contract’ with Plaintiff, even if the result is harsh.”
Id.
at 958 (quoting McBarron v. S & T Indus., Inc., 771 F.2d 94, 9899 (6th Cir. 1985)).
The
courts’
reasoning
identical facts is persuasive.
expressly
states
that
in
Renfro
and
Isner
on
nearly
Here, the language of both Plans
Defendant
“will
reduce
[Plaintiff’s]
Disability benefit by the amount of All Other Income.”
Nos. 9-2, at 44; 9-3, at 41).
6
(ECF
“Other Income” includes any
benefits that Defendant receives because of his disability, such
as benefits under the “Federal Social Security Act.”
The
clear,
unambiguous
language
of
each
Plan
(Id.).
mandates
that
Defendant reduce Plaintiff’s benefit by the amount he receives
in SSDI.
Accordingly, Plaintiff has not stated a claim that
Defendant
improperly
administered
the
Plans
by
improperly
reducing the amount of SSDI benefits from each Plan.
B.
Calculation of Reduction
Plaintiff
reduction
also
asserts
incorrectly
or
that
Defendant
negligently.
(ECF
calculated
No.
1
¶
the
16).
Plaintiff contends that the alleged overpayment of $73,367.00 is
more than he received in SSDI benefits from August 2013 through
October 2014.
(ECF Nos. 1 ¶ 18; 1-4, at 1).
Defendant counters
that this “fails to account for additional SSDI benefits that
Plaintiff
SSDI.”
received
after
the
initial
(ECF No. 9-1, at 4 n.4).
lump
sum
payment
from
Rounding down to the nearest
dollar, Defendant asserts that it reduced Plaintiff’s benefits
under each Plan by the following: $2,397 from August through
December
2013
January 2014.
and
$2,427
each
month
thereafter
starting
in
(ECF No. 1-3, at 3).3
Defendant sent Plaintiff a letter regarding the reduction
of benefits under both Plans.
3
Although the letter distinguishes
Defendant did not include the cost-of-living adjustment in
its reduction calculation (ECF No. 9-1, at 4 n.3), but these
amounts otherwise comport with the amounts Plaintiff received in
SSDI (see ECF No. 1-5, at 2).
7
between two different claim and group numbers, it is not clear
to which Plan each section of the letter refers because both
sections
reference
the
Disability Group Plan.”
“Metropolitan
Wash.
Airports
(See ECF No. 1-4, at 1, 2).
Ath
Claim
number 611305216861 appears to be calculated correctly.
Each
month is reduced by the appropriate amount of SSDI benefits that
Plaintiff
received.
Defendant
provides
a
clear,
detailed
calculation as to how it reached the $28,609.53 reduction under
this
Plan.
Defendant’s
701306216840
are
not
as
calculations
clear.
This
for
section
claim
of
number
the
letter
initially states that Plaintiff was overpaid by the gross amount
of $25,973.30.
(Id. at 3).
This sum is not, however, supported
by the rest of Defendant’s letter, which appears to include
incorrect calculations and contradicts the initial figure.
For
example, a chart used for calculations asserts that Plaintiff
was
paid
$3,411.44
under
through October 2014.
this
(Id.).
Plan
each
month
from
January
In this chart, Defendant seeks to
reduce the monthly amount by $3,070.43, significantly more than
the amount that Plaintiff received in SSDI benefits.
In all, this portion of the letter indicates that Defendant
seeks
to
$44,758,10.
the
second
$28,609.53
reduce
Plaintiff’s
benefits
under
this
plan
by
It appears that the initial $25,973.30 figure for
plan
may
calculation
be
for
correct,
the
8
which
first
when
Plan,
added
would
to
mean
the
that
Plaintiff was actually overpaid by $54,582.83.
However, the
letter itself notes that the “Total Amount Due” is $73,367.63,
and
the
chart
indicates
that
Defendant
applied
reduction to Plaintiff’s monthly payments.
an
(Id.).
excessive
Taking the
factual allegations in the complaint as true, and examining the
record
before
Plaintiff
has
the
court
stated
a
at
the
claim,
motion
under
29
to
dismiss
U.S.C.
§
stage,
1132,
that
Defendant incorrectly calculated the amount of overpayment and
thus
withheld
benefits.
the
incorrect
amount
from
Plaintiff’s
monthly
Accordingly, Defendant’s motion to dismiss will be
denied as to its calculation of the reductions in benefits under
Plaintiff’s plans.
IV.
Conclusion
For the foregoing reasons, the motion to dismiss filed by
Defendant
will
be
granted
in
part
and
denied
in
part.
separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
9
A
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