Ginsberg v. Unum Group Corporation

Filing 59

Magistrate Judge Marianne B. Bowler: ORDER entered. MEMORANDUM AND ORDER PLAINTIFFS MOTION TO DIMISS THE DEFENDANTS COUNTERCLAIMS (DOCKET ENTRY # 48)is DENIED. The deadline to file a dispositive motion case was four months ago in this 2011 case. Accordingly, this court will have a hearing on December 2, 2013, at 3:00 p.m. to set a trial date and hear argument on the motion to compel. (Docket Entry # 57).(Feeney, Eileen)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

ROBERT GINSBERG,
Plaintiff,

v.

CIVIL ACTION NO.
11-10416-MBB

PROVIDENT LIFE AND ACCIDENT
INSURANCE COMPANY,
Defendant.

MEMORANDUM AND ORDER RE:
PLAINTIFF’S MOTION TO DIMISS THE DEFENDANT’S COUNTERCLAIMS
(DOCKET ENTRY # 48)
November 7, 2013
BOWLER, U.S.M.J.
Pending before this court is a motion to dismiss filed by
plaintiff Robert Ginsburg (“plaintiff” or “Insured”).
Entry # 48).

(Docket

Plaintiff seeks to dismiss the counterclaims filed

by defendant Provident Life and Accident Insurance Company 1
(“defendant” or “Insurer”) for failure to state a claim upon
which relief can be granted pursuant to Rule 12(b)(6),
Fed.R.Civ.P. (“Rule 12(b)(6)”).

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(Docket Entry # 48).

After

On October 3, 2013, this court allowed a motion to substitute
Provident Life and Accident Insurance Company for Unum Group
Corporation, the original defendant.

conducting a hearing on August 1, 2013, this court took the
motion to dismiss (Docket Entry # 48) under advisement.
STANDARD OF REVIEW
When considering a motion to dismiss pursuant to Rule
12(b)(6), a court “accept[s] as true all well pleaded facts in
the complaint and draw[s] all reasonable inferences in favor of
the plaintiffs.”

Gargano v. Liberty International Underwriters,

Inc., 572 F.3d 45, 48 (1st Cir. 2009).

“The general rules of

pleading require ‘a short and plain statement of the claim
showing that the pleader is entitled to relief.’”

Id.

“This

short and plain statement need only ‘give the defendant fair
notice of what the . . . claim is and the grounds upon which it
rests.’”

Id.

“To survive a motion to dismiss, the complaint must allege
‘a plausible entitlement to relief.’”
F.3d 46, 52 (1st Cir. 2008).

Fitzgerald v. Harris, 549

While “detailed factual

allegations” are not required, “a plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitlement for relief’ requires
more than labels and conclusions, and a formulaic recitation of
the elements of a cause of action will not do.”

Bell Atlantic

v. Twombly, 550 U.S. 554, 555 (2007); Maldonado v. Fontanes, 563
F.3d 263, 266 (1st Cir. 2009); Thomas v. Rhode Island, 542 F.3d
944, 948 (1st Cir. 2008).

Additionally, “a well-pleaded

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complaint may proceed even if . . . actual proof of those facts
is improbable.”

Bell Atlantic v. Twombly, 550 U.S. at 556.
FACTUAL BACKGROUND

Plaintiff obtained a disability insurance policy in 1989
from defendant.

As set out in a May 1994 “statement of claim,”

plaintiff last worked on January 25, 1994.

Defendant began

providing disability benefits based on a diagnosis of
fibromyalgia and chronic fatigue syndrome on or about January
25, 2994.

The statement of claim identifies plaintiff’s

employer as “Riverworks Corporation,” his job title as property
manager and his job duties as “[d]emolition, repair and
reconstruction.”

(Docket Entry # 47, Ex. B).

Plaintiff sought

disability benefits for a “Total Disability,” meaning that he
could no longer perform the “substantial and material duties of
(his) occupation” and was being treated by a physician for the
disability.

(Docket Entry # 47, Ex. A).

To continue receiving benefits, the insurance policy
required plaintiff to submit periodic reports of his activity.
(Docket Entry # 47).

The periodic reports of plaintiff’s

activities from 1994 to February 2008 uniformly depict his
activities at the time as reading, sleeping and eating.
Beginning in September 2002, the Insurer required plaintiff to
complete an additional form concerning his work activities and
income, if any.

These forms asked plaintiff if he had been at

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his place of business or engaged in any work activity for
payment during his claimed period of disability.

From the

outset and continuing to February 2008, plaintiff checked the
“No” box on each form.
Facts in the counterclaim demonstrate that the statements
were not true.

For example, in 1997 plaintiff formed Riverworks

Investment Company (“Riverworks”) or, at a minimum, signed the
company’s articles of incorporation as the incorporator.

The

company provided property management services for two, large
apartment complexes in North Carolina.

Plaintiff owned 100% of

the company and was the president, treasurer and director.
Since 1997, he regularly traveled to North Carolina and, from
2002 through 2006, earned wages ranging from $61,500 to $85,500.
A representative of the Insurer interviewed plaintiff in
September 2005.

During the interview, plaintiff denied

involvement with two other companies and did not disclose his
involvement in Riverworks.

After the interview, the Insured

requested copies of plaintiff’s business and personal tax
returns on 12 different occasions from May 2007 to March 2008.
Plaintiff refused to provide the tax returns.

In April 2008,

defendant ceased distributing disability benefits because
plaintiff refused to cooperate with defendant by failing to
submit the requested information.
Ex. D).

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(Docket Entry # 47, ¶ 18 &

Plaintiff filed suit on March 10, 2011.
out three counts:

The complaint sets

breach of contract, breach of contract in bad

faith and breach of the implied covenant of good faith and fair
dealing.

(Docket Entry # 1).

Defendant filed a counterclaim on

June 6, 2013, to recover $534,041 in disability benefits paid to
plaintiff.

The counterclaim sets out two causes of action, one

for breach of contract and the other for misrepresentation.
(Docket Entry # 47).
counterclaim because:

Plaintiff seeks to dismiss the
(1) the insurance policy does not provide

for counterclaims; and (2) Massachusetts General Laws chapter
175, section 110A (“section 110A”) bars legal action from the
insurer.

Defendant opposes the motion.

(Docket Entry # 50).

DISCUSSION
A.

Disability Insurance Contract
In seeking to dismiss the counterclaim, plaintiff argues

that defendant cannot file a counterclaim because the insurance
contract does not provide for legal action against the Insured.
Plaintiff points to language under “Legal Actions” in the
insurance policy:
You may not start a legal action to recover on this policy
within 60 days after you give us required proof of loss.
You may not start such action after three years from the
time proof of loss is required.

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Plaintiff submits that this language bars a counterclaim from
defendant because it does not explicitly reserve the right to
bring suit.

(Docket Entry # 49).

Massachusetts courts utilize general rules of contract
interpretation to construe an insurance policy.

Brazas Sporting

Arms, Inc. v. American Empire Surplus Lines Ins. Co., 220 F.3d
1, 4 (1st Cir. 2000) (“[u]nder Massachusetts law, we construe an
insurance policy under the general rules of contract
interpretation”).

A policy’s actual language is “given its

plain and ordinary meaning” considering “‘what an objectively
reasonable insured, reading the relevant policy language, would
expect to be covered.’”

Id.; accord Fid. Co-op. Bank v. Nova

Cas. Co., 726 F.3d 31, 36-37 (1st Cir. 2013) (courts “begin with
the actual language of the policies, given its plain and
ordinary meaning” and enforce provisions “according to their
terms and interpreted in a manner consistent with what an
objectively reasonable insured would expect to be covered”)
(internal citations omitted); see also Gargano v. Vigilant Ins.
Co., 2011 WL 3420423, at *6 (D.Mass. Aug. 4, 2011) (court
“‘construe[s] the words of the policy according to the fair
meaning of the language used, as applied to the subject
matter’”).
In the event words of a policy “are not ambiguous, ‘they
must be construed in their usual and ordinary sense.’”

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Scottsdale Ins. Co. v. Torres, 561 F.3d 74, 77 (1st Cir. 2009);
accord Nascimento v. Preferred Mut. Ins. Co., 513 F.3d 273, 276
(1st Cir. 2008) (absent an ambiguity, words of insurance policy
are construed “in their usual and ordinary sense”).

An

“[a]mbiguity exists when the policy language is susceptible to
more than one meaning.”

Scottsdale Ins. Co. v. Torres, 561 F.3d

at 77; Genuine Bukuras v. Mueller Group, LLC, 592 F.3d 255, 262
(1st Cir. 2010) (“ambiguity requires language susceptible of more
than one meaning so that reasonably intelligent persons would
differ as to which meaning is the proper one”).

An ambiguity

does not exist “simply because the parties offer different
interpretations of the policy language.”

Scottsdale Ins. Co. v.

Torres, 561 F.3d at 77.
The language in the insurance policy sets out restrictions
but not a total bar upon an Insured’s ability to file a legal
action.

It does not address or mention the Insurer’s ability to

file a legal action against an Insured.

The absence of a

provision restricting the Insurer’s ability to file or pursue a
“Legal Action” does not protect plaintiff from a counterclaim.
Indeed, such a restriction is illogical because it would result
in an inability by the Insurer to raise or challenge any issues
in court.

Accordingly, the contract language does not restrict

or bar a counterclaim filed by an Insurer in response to a
“Legal Action” filed by the Insured.

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B.

Section 110A
Plaintiff next moves to dismiss the counterclaim because

section 110A protects plaintiff’s insurance benefits.

Section

110A reads as follows:
So much of any benefit under a policy of insurance insuring
against disability from injury or disease as does not
exceed four hundred dollars for each week during any period
of disability covered thereby shall not be liable to
attachment, trustee process or other process, or to be
seized, taken, appropriated or applied by any legal or
equitable process or by operation of law, either before or
after payment of such benefit, to pay any debt or
liabilities of the person insured under such policy, but
this exemption shall not apply where an action or suit is
brought to recover for necessaries contracted for during
said period and the writ or bill of complaint contains a
statement to that effect.
Mass.Gen.L. ch. 175, § 110A.
Statutory interpretation “always starts with the language
of the statute itself.”

Matamoros v. Starbucks Corp., 699 F.3d

129, 134 (1st Cir. 2012) (interpreting Massachusetts law).
Typically, “the ordinary meaning of the statutory language”
applies.

Id.

“[R]esort to extrinsic aids to statutory

construction (such as legislative history)” is appropriate “only
when the wording of the statute is freighted with ambiguity or
leads to an unreasonable result.”

Id.

Interpreting the

particular words in a statute is further guided by the statutory
framework and the purpose of the statute.

See Dolan v. U.S.

Postal Service, 546 U.S. 481, 486 (2006) (“[i]nterpretation of a
word or phrase depends upon reading the whole statutory text,

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considering the purpose and context of the statute” and
“precedents or authorities that inform the analysis”); Lawson v.
FMR LLC, 670 F.3d 61, 68 (1st Cir. 2012) (circuit “and Supreme
Court precedent require” examination of “broader statutory
framework, including particularly the nearby language and the
title and caption”); United States v. Dowdell, 595 F.3d 50, 71
(1st Cir. 2010) (“‘[i]t is a well-established canon of statutory
construction that a court should go beyond the literal language
of a statute if reliance on that language would defeat the plain
purpose of the statute’”) (brackets in original).

“[S]ettled

principles of statutory construction” also dictate examining and
first determining “whether the statutory text is plain and
unambiguous.”

Hernandez-Miranda v. Empresas Diaz Masso, Inc.,

651 F.3d 167, 171 (1st Cir. 2011).
Section 110A creates an exemption 2 from attachment or
trustee process for “any benefit under a policy of insurance
insuring against disability” up to $400 “each week during any
period of disability covered thereby . . ..”

Mass.Gen.L. ch.

175, § 110A; see Rosenthal v. Maletz, 78 N.E.2d 652, 654 (Mass.
1948) (section 110A creates “partial exemption of disability
insurance from legal or equitable process”) (dicta).

The term

“period of disability covered thereby” refers back to the

2

The language of the statute expressly refers to “this
exemption.” Mass. Gen. L. ch. 175, § 100A.
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“policy of insurance.”

Consequently, in order to invoke the

exemption there must be “a policy of insurance” and a “period of
disability covered thereby” during which the insured received a
benefit.
In opposing summary judgment, defendant argues that
plaintiff was not entitled to disability benefits under the
policy.

The facts in the counterclaim, taken as true, support

defendant’s position.

Because the statutory language of section

110A applies to “any period of disability covered” by the
insurance policy, defendant’s argument in light of the facts in
the counterclaim bar a Rule 12(b)(6) dismissal of the
counterclaim.

In addition, plaintiff was receiving a monthly

disability benefit in excess of the $400 per week exemption.
(Docket Entry # 47).
Plaintiff’s reliance on Liberty Mutual Ins. Co. v.
Rosenthal, 204 F.Supp.2d 140, 143 (D.Mass. 2002), is also
misplaced.

Rosenthal involved a judgment creditor seeking to

recover a jury verdict in a civil RICO case.

This case involves

an insurance company seeking to terminate future benefits as
well as recoup benefits paid under the company’s disability
policy.
CONCLUSION
For the foregoing reasons, the motion to dismiss (Docket
Entry # 30) is DENIED.

The deadline to file a dispositive

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motion case was four months ago in this 2011 case.

Accordingly,

this court will have a hearing on December 2, 2013, at 3:00 p.m.
to set a trial date and hear argument on the motion to compel.
(Docket Entry # 57).

/s/ Marianne B. Bowler
MARIANNE B. BOWLER
United States Magistrate Judge

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