TALLEY v. UNITED STATES OF AMERICA et al

Filing 51

OPINION. Signed by Judge Robert B. Kugler on 1/24/2014. (dmr)

NOT FOR PUBLICATION

(Doc. No. 47)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
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Plaintiff,
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v.
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UNITED STATES OF AMERICA, et al.
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Defendants.
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ANN MARIE TALLEY

Civil No. 11-01180 (RBK/KMW)
OPINION

KUGLER, United States District Judge:
This matter comes before the Court on the motion of the United States of America
(“United States”) to dismiss the amended complaint of Anne Marie Talley (“Plaintiff”) for lack
of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1), or
alternatively, for summary judgment, pursuant to Federal Rule of Civil Procedure 56. Plaintiff
alleges that she was wrongfully denied the proceeds of her deceased husband’s life insurance
policy due to the United States’ negligent handling of his Designation of Beneficiary form. The
United States argues that Plaintiff’s negligence claims are not cognizable under the Federal Tort
Claims Act (“FTCA”) because, among other reasons, Plaintiff has not identified a local law
under which a private individual or entity could be held liable for the acts alleged in the
complaint. Because the Court finds that Plaintiff has not identified such a local law in her
amended complaint, the motion of the United States will be GRANTED.

I.

BACKGROUND AND PROCEDURAL HISTORY

Walter E. Talley, III began working as a civilian employee of the United States
Department of the Navy on January 21, 1981. United States’ Statement of Material Facts Not in
Dispute (“SUMF”) ¶ 1. In 1992, Mr. Talley executed a Designation of Beneficiary Form for the
Federal Employees’ Life Insurance (“FEGLI”) Program, which designated his son, Walter E.
Talley, IV, as the sole beneficiary of his life insurance policy. Id. ¶ 3. On August 26, 2005, Mr.
Talley married Plaintiff. Id. ¶ 6. In 2009, he sought to change three beneficiary forms relating to
his benefits and pay as a federal employee. Id. ¶ 7. On or about May 4, 2009, he completed the
three forms, known as Designation of Beneficiary forms. Id. ¶¶ 8-10. On two occasions in May,
2009, Mr. Talley went to the Financial Management Office for the Norfolk Naval Shipyard
Detachment, Naval Foundry and Propeller Center, in Philadelphia, Pennsylvania, and sought
assistance with the forms. Id. ¶ 11. On the first occasion, he presented two of the forms that
required witness signatures, and two employees of the Financial Management office signed as
witnesses. The two forms sought to designate Plaintiff as the beneficiary for unpaid
compensation of a deceased civilian employee, and as the beneficiary of a Civil Service
Retirement System account. Id. ¶¶ 8, 9, 13, 14. Plaintiff alleges that Mr. Talley left those forms
with the Financial Management Office for filing, while the United States contends that Mr.
Talley took the documents with him. Id. ¶ 15; Pl. Opp’n at 2. Those two forms were required to
be filed with Mr. Talley’s “employing agency” prior to his death in order to be valid. SUMF, ¶
17. Each was received in May, 2009, by the Civilian Benefits Center (“CBC”) in Philadelphia,
Pennsylvania, and certified as valid. Id. ¶¶ 20, 23. Plaintiff was paid benefits as a result of the
filing of these two forms, and neither of these are in dispute.

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The form that is at issue in this matter is the Designation of Beneficiary for Mr. Talley’s
life insurance policy provided through FEGLI. This Designation of Beneficiary form is known
as form SF 2823 (“SF 2823”). Id. ¶ 10. On May 13, 2009, the CBC received the SF 2823, but
noted that it lacked the required witness signatures, and therefore it returned the form to Mr.
Talley. Id. ¶ 26.
Upon receipt of the returned form, Mr. Talley completed a second SF 2823 form, and
again went to the Financial Management Office and asked Navy personnel to witness his
signature on the second SF 2823 form. Id. ¶¶ 27-28. The United States contends that two
employees signed as witnesses, and they then returned the witnessed form to Mr. Talley, who
took it with him. Id. ¶¶ 29-30. Plaintiff again alleges that Mr. Talley left the form to be
forwarded by the Financial Management Office to CBC. See Pl. Opp’n at 2-3. The SF 2823
specifically stated that the insured “must sign this form. Two people must witness the signature
and sign as witnesses. The Insured’s agency . . . must receive the designation before the
Insured’s death.” Id. ¶ 41. The United States indicates that the CBC was Mr. Talley’s
“employing agency,” while Plaintiff denies that the CBC was the sole employing agency. Id.
¶32; Pl. Response to SUMF ¶ 32.
On January 30, 2010, Mr. Talley died. SUMF ¶ 37. Because the new SF 2823 form was
not received by the CBC before his death, the only form in Mr. Talley’s official personnel file
considered valid by the United States was the one from 1992 that designated his son as his sole
beneficiary. See id. ¶ 38. The insurance proceeds were disbursed accordingly.
On March 2, 2011, Plaintiff filed her complaint, naming both the United States and
Metropolitan Life Insurance Company (“Metlife”) as defendants for their roles in her “being
wrongfully denied and deprived of the insurance proceeds to which she was due.” Compl. ¶20.

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She sought damages in the amount of $235,000.00, the amount she would have received as the
beneficiary of her husband’s life insurance policy. On March 28, 2013, this Court granted
Metlife’s motion for summary judgment, finding that Plaintiff’s claim that Metlife had paid the
policy benefits too quickly to the beneficiary, Walter Talley IV, lacked merit and did not support
a finding of negligence as a matter of law. On the same date, the Court granted the motion of the
United States to dismiss the complaint on jurisdictional grounds. The Court found that Plaintiff
did not identify an analogous local law under which she could recover, as required by the FTCA.
However, the Court dismissed the claim without prejudice and gave Plaintiff leave to amend her
complaint within 30 days of the issuance of the Order dismissing the case. See ECF Doc. No.
39.
On April 24, 2013, Plaintiff filed an amended complaint. The United States answered the
amended complaint on May 7, 2013, and now moves to dismiss the amended complaint on
jurisdictional grounds, reiterating many of the arguments set forth in its previous motion. The
United States argues that no jurisdiction exists because Plaintiff has not identified an analogous
cause of action under local law, and because no such case of action would exist against a private
employer due to ERISA preemption. It also argues that the Federal Employees’ Group Life
Insurance Act of 1954 (“FEGLIA”) provides the exclusive remedy for claims founded upon
FEGLIA, that FEGLIA preempts state law negligence claims, and that Congress has not waived
the sovereign immunity of the United States for the type of action brought by Plaintiff. The
United States also moves for summary judgment, arguing that the United States did not breach
any duty owed to Plaintiff.
II.

LEGAL STANDARD

1.

Motion to Dismiss

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The United States moves to dismiss Plaintiff’s complaint for lack of subject matter
jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). A motion to dismiss for lack
of subject matter jurisdiction may be brought at any time and may either (1) “attack the
complaint on its face” or (2) “attack the existence of subject matter jurisdiction in fact, quite
apart from any pleadings.” Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d
Cir. 1977); see also Gould Elecs., Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000). “In
reviewing a facial attack, the court must only consider the allegations of the complaint and
documents referenced therein and attached thereto, in the light most favorable to the plaintiff.”
Id. (citing PBGC v. White, 998 F.2d 1192, 1196 (3d Cir. 1993)). “In reviewing a factual attack,
the court may consider evidence outside the pleadings.” Id. (citing Gotha v. United States, 115
F.3d 176, 178-79 (3d Cir. 1997)); see United States ex rel. Atkinson v. Pa. Shipbuilding Co., 473
F.3d 506, 514 (3d Cir. 2007). A district court has “substantial authority” to “weigh the evidence
and satisfy itself as to the existence of its power to hear the case.” Mortensen v. First Fed. Sav.
& Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977). “[N]o presumptive truthfulness attaches to
plaintiff’s allegations, and the existence of disputed material facts will not preclude the trial court
from evaluating for itself the merits of jurisdictional claims.” Id. If a court lacks subject matter
jurisdiction, it must dismiss the case without prejudice. In re Orthopedic “Bone Screw” Prods.
Liab. Litig., 132 F.3d 152, 155-56 (3d Cir. 1997).
2.

Summary Judgment

The United States also moves for summary judgment pursuant to Federal Rule of Civil
Procedure 56. Summary judgment is appropriate where the Court is satisfied that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). A genuine dispute

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as to a material fact exists only if the evidence is such that a reasonable jury could find for the
nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When the Court
weighs the evidence presented by the parties, the Court is not to make credibility determinations
regarding witness testimony. Sunoco, Inc. v. MX Wholesale Fuel Corp., 565 F. Supp. 2d 572,
575 (D.N.J.2008). “The evidence of the non-movant is to be believed, and all justifiable
inferences are to be drawn in his favor.” Anderson, 477 U.S. at 255.
However, to defeat a motion for summary judgment, the nonmoving party must present
competent evidence that would be admissible at trial. See Stelwagon Mfg. Co. v. Tarmac
Roofing Sys., 63 F.3d 1267, 1275 n. 17 (3d Cir.1995). The nonmoving party “may not rest upon
the mere allegations or denials of” its pleadings and must present more than just “bare assertions
[or] conclusory allegations or suspicions” to establish the existence of a genuine issue of material
fact. Fireman's Ins. Co. of Newark, N.J. v. DuFresne, 676 F.2d 965, 969 (3d Cir.1982) (citation
omitted); see Fed. R. Civ. P. 56(e). “A party's failure to make a showing that is ‘sufficient to
establish the existence of an element essential to that party's case, and on which that party will
bear the burden of proof at trial,’ mandates the entry of summary judgment.” Watson v. Eastman
Kodak Co., 235 F.3d 851, 857–58 (3d Cir.2000) (quoting Celotex Corp., 477 U.S. at 322).
In deciding the merits of a party’s motion for summary judgment, the Court’s role is not
to evaluate the evidence and decide the truth of the matter, but to determine whether there is a
genuine issue for trial. Anderson, 477 U.S. at 249. Credibility determinations are the province
of the fact finder, not the district court. BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358,
1363 (3d Cir. 1992).
III. DISCUSSION

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Under the doctrine of sovereign immunity, the United States “is immune from suit save
as it consents to be sued, and the terms of its consent to be sued in any court define that court's
jurisdiction to entertain the suit.” CNA v. United States, 535 F.3d 132, 140–41 (3d Cir. 2008)
(quoting United States v. Sherwood, 312 U.S. 584, 586 (1941)). The FTCA provides a limited
waiver of sovereign immunity, making the Federal Government liable to the same extent that
“the United States, if a private person, would be liable to the claimant in accordance with the law
of the place where the act or omission occurred.” 28 U.S.C. § 1346(b)(1); see also United States
v. Olson, 546 U.S. 43, 46 (2005). Thus, to establish jurisdiction under the FTCA, a litigant must
identify a cause of action recognized in the relevant jurisdiction under which an analogous
private individual would be liable. See Cecile Indus., Inc. v. United States, 793 F.2d 97, 100 (3d
Cir. 1986); Indian Towing Co. v. United States, 350 U.S. 61, 75 (1955). This “local law”
requirement, as some courts have coined it, must be satisfied before the United States can be
considered to have waived its sovereign immunity. See Olson, 546 U.S. at 44; see also Cecile,
793 F.2d at 100. If a litigant fails to do so, a district court lacks subject matter jurisdiction. See
Wake v. United States, 89 F.3d 53, 57 (2d Cir. 1996) (“[s]overeign immunity is jurisdictional in
nature.”); United States v. Spelar, 338 U.S. 217, 218 n.3 (1949) (“Local law must be pleaded
since the Federal Tort Claims Act permits suit, only where the United States, if a private person,
would be liable . . . in accordance with the law of the place where the act or omission
occurred.”). Plaintiff has failed to satisfy this threshold requirement.
Because the United States’ jurisdictional challenge is a facial one, the Court must limit its
review to Plaintiff’s operative pleading. In Plaintiff’s amended complaint, she alleges:
Employees of the Personnel Office servicing the NFPC owed a duty of care to
insureds under the FEGLI program to render accurate advice concerning the
method necessary to amend a civilian employee’s designation of beneficiary for

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life insurance. . . . The duties of care owed by United States’ employees extended
to intended beneficiaries, as it was reasonably foreseeable that a breach of said
duties would result in harm to such individuals. Under New Jersey law, such a
duty is imposed upon an individual and/or entity who is responsible for procuring
and amending insurance coverage.
Am. Compl. ¶¶ 21, 23. Plaintiff seeks to recover under theories of negligence and breach of
fiduciary duty. However, Plaintiff does not allege that any negligent act or omission took place
in New Jersey. Rather, she alleges that the acts of negligence took place at the Personnel Office
of the Naval Foundry and Propeller Center (“NFPC”), which is located in Philadelphia,
Pennsylvania. Id. ¶¶ 3, 15, 16.
The United States argues, as it did previously, that Plaintiff’s claims must be dismissed
because Plaintiff has not pleaded that under Pennsylvania law, Plaintiff would be entitled to a
tort recovery. Plaintiff acknowledges that she has not cited any Pennsylvania law in the
amended complaint, nor has she generally pleaded that she would have a cause of action against
a private defendant under Pennsylvania law. Pl. Opp’n at 6. In her opposition brief, she requests
the opportunity to add a reference to Pennsylvania law to the allegations. Id. However, a
complaint cannot be amended through the brief of a party in opposition to a motion to dismiss.
See Pennsylvania ex. rel Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir. 1988) (“[i]t is
axiomatic that the complaint may not be amended by the briefs in opposition to a motion to
dismiss.”) (quotations omitted). Plaintiff also argues that because the “place of injury” in this
case is New Jersey, that her citation to New Jersey law is sufficient to withstand a motion to
dismiss. Pl. Opp’n at 8. Her argument is that because under Pennsylvania’s choice-of-law
principles, New Jersey’s substantive law should apply, her reference to New Jersey law in her
pleading satisfies the requirement as to “local law.”

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It is not necessary to determine whether Plaintiff is correct about the choice-of-law issue.
An element of her FTCA claim is that a private person would be liable under the law of the
jurisdiction where the act or omission took place. See Speler, 338 U.S. at 217 n.3. Plaintiff does
not, and cannot, argue that the jurisdiction where the alleged act or omission took place was
anywhere other than Pennsylvania. Plaintiff does not plead in her complaint that a private person
would be liable under Pennsylvania law, whether that results from application of Pennsylvania’s
substantive law, or its choice-of-law principles. To allow Plaintiff to make an argument that
liability would exist by virtue of selection of New Jersey substantive law through Pennsylvania
choice-of-law principles would be tantamount to allowing Plaintiff to amend her complaint
through her motion briefs, which is impermissible. 1
While the Court recognizes that deciding the motion on this basis may appear to be
exaltation of form over substance, it also recognizes that jurisdiction may only be conferred by
the Constitution and by statute. Because the Court determines that it lacks subject matter
jurisdiction, it has no authority or discretion to enter rulings on the merits. In re Orthopedic
“Bone Screw” Prods., 132 F.3d at 155; see also CNA, 535 F.3d at 144 (“where jurisdiction is
intertwined with the merits of an FTCA claim . . . a district court must take care not to reach the
merits of a case when deciding a 12(b)(1) motion.”). Federal courts have long recognized that
“[w]ithout jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power to

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The Court observes that Plaintiff did not respond in her brief to the argument of the United States that no
analogous private employer could be held liable under the same circumstances because, if the defendant were a
private employer, a suit under state tort law would be preempted by the Employee Retirement Income Security Act
of 1974 (“ERISA”). Although the Court does not decide this issue at this time, the Court observes that courts in
other circuits have dismissed complaints under similar circumstances. The Court therefore requests that Plaintiff
brief this issue should she seek leave to file another amended complaint and this issue is raised before this Court on
another occasion. See Clark v. United States, Civ. No. 07-805, 2007 WL 2358630 (N.D. Cal. Aug 17, 2007), aff’d,
321 F. App’x 672 (9th Cir. 2009).

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declare the law, and when it ceases to exist, the only function remaining to the court is that of
announcing the fact and dismissing the case.” Ex parte McCardle, 74 U.S. (7 Wall.) 506, 514
(1869). The Court therefore does not reach the other arguments of the United States in deciding
this motion.
IV.

CONCLUSION

For the foregoing reasons, the United States’ motion to dismiss will be GRANTED.
Plaintiff’s claims against the United States will be DISMISSED WITHOUT PREJUDICE. An
appropriate order shall issue today.

Dated: 01/24/2014

/s/ Robert B. Kugler
ROBERT B. KUGLER
United States District Judge

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