STEINER v. CIGNA LIFE INSURANCE COMPANY OF NEW YORK et al

Filing 37

MEMORANDUM OPINION and ORDER denying 13 Motion to Dismiss. Signed by Judge Kevin McNulty on 3/10/16. (sr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
PAUL STEINER,
•

Civ. No. 15-cv--0391 (KM)

.

Plaintiff,
V.

MEMORANDUM OPINION & ORDER

CIGNA LIFE INSURANCE COMPANY
OF NEW YORK and CITIGROUP
LONG TERM DISABILITY PLAN,
Defendants.
This matter comes before the court on the motion (FDCF no. 13) of the
plaintiff, Paul Steiner, to dismiss the Counterclaim (ECF no. 10) filed by the
defendants, Cigna Life Insurance Company (“CLICNY”) and Citigroup Long
Term Disability Plan (the “Plan”), for failure to state a claim. For the reasons
expressed herein, the motion will be denied.
The motion is filed pursuant to Fed. R. Civ. P. 12(b)(6). Rule 12(b)(6)
provides for the dismissal of a complaint, in whole or in part, if it fails to state a
claim upon which relief can be granted. The defendant, as the moving party,
bears the burden of showing that no claim has been stated. Hedges v. United
States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a Rule 12(b)(6) motion, a
court must take the allegations of the complaint as true and draw reasonable
inferences in the light most favorable to the plaintiff. Phillips v. County of
Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (traditional “reasonable inferences”
principle not undermined by Twombly, see infra).
Federal Rule of Civil Procedure 8(a) does not require that a complaint
contain detailed factual allegations. Nevertheless, “a plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will
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not do.” Bell Ati. Corp. v. Twornbly, 550 U.S. 544, 555 (2007). Thus, the
complaint’s factual allegations must be sufficient to raise a plaintiff’s right to
relief above a speculative level, so that a claim is “plausible on its face.” Id. at
570; see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008).
That facial-plausibility standard is met “when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (citing Twombly, 550 U.S. at 556). While “[tihe plausibility standard
is not akin to a ‘probability requirement’.

.

.

it asks for more than a sheer

possibility.” Iqbal, 556 U.S. at 678.
In light of that standard, it is never a good sign where, as here, a motion
to dismiss attaches an affidavit relating the contents of a phone conversation,
an attorney’s conversations with a client, correspondence, and other matters.
Some 10 exhibits are proffered as well. (ECF nos. 13-2 through 12). In reply to
the Defendants’ response, Plaintiffs’ counsel doubled down, filing an affidavit
purporting to transcribe counsel’s own voice mail message to opposing counsel
several days before, attaching further correspondence, and so on. (ECF no. 211)
Of course, certain documents may be considered without converting a
Rule 12(b)(6) motion into one for summary judgment (which, to anticipate an
argument, I will not do here). See Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir.
2014) (“However, an exception to the general rule is that a ‘document integral
to or explicitly relied upon in the complaint’ may be considered ‘without
converting the motion to dismiss into one for summary judgment.’

“)

(quoting In

re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997));
Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d
Cir. 1993). These documents, however—letters, an attorney’s notes of a phone
call, a cancelled check—are too far afield. I will consider, for example, a
contract or a securities prospectus (even if not attached to the complaint),
where the action is one for breach of that contract or a false statement in that
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prospectus. But I will not attempt to interpret a months-long course of dealing
based on notes, factual averments in an affidavit, and letters.
This motion may be disposed of briefly.
The complaint, brought under ERISA, 29 U.S.C.

§ 1 132(a)(1)(B), alleges

that the Plan wrongfully determined, after eleven years of payments, that Mr.
Steiner was no longer disabled as of May 10, 2014. Although it paid benefits
for another five months, the payments ceased thereafter. Steiner sues for
disability benefits that he claims he is owed.
CLICNY determined that it was no longer required to pay disability
benefits after May 10, 2014. Steiner appealed. During the appeal, Steiner
agreed to undergo an independent medical exam, and CLICNY agreed in return
to continue paying benefits in the interim. CLICNY did pay benefits from May
11, 2014, through November 25, 2014, when the appeal was denied. (I’ll call
these the “interim benefits.”)
CLICNY’s Counterclaim is fairly simple. It says that it paid the interim
benefits pursuant to a reservation of rights. In plain English, CLICNY contends
that the arrangement was that it could recoup these interim benefits in the
event the appeal was denied.
The Complaint asks the court to “determine and declare that the
Reservation of Rights attached to the payment of disability benefits from May
11, to November 25, 2014 [be] hereby removed.” (Cplt., prayer for relief,

¶ 1)

The Counterclaim asserts that “[if] the Court determines that Plaintiff is not
entitled to LTD benefits beyond May 10, 2014, CLICNY is entitled to repayment
and/or restitution of the amount of LTD benefits that CLICNY paid to him
under a reservation of rights for the period of May 1,, 2014 through November
25, 2014, plus interest.” (Counterclaim

¶ 1)

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The issue of whether there was a reservation of rights is fairly presented
by the pleadings. CLICNY says yes; Steiner says no. That factual issue is no fit
subject for a motion to dismiss.
Steiner’s contention that any reservation of rights must appear in the
Plan documents is too broad. CLICNY says that to avoid hardship, by
agreement with Steiner’s counsel it paid interim benefits while the claim was
being investigated in connection with the appeal. See, e.g., Tannenbaum v.
Unum Life Ins. Co. of America, No. CIV.A. 03-1410, 2010 WL 2649875, at *2
(E.D. Pa. June 30, 2010). The cases cited deal with a different sort of claim: an
alteration to the plan itself, not an ad hoc agreement to pay benefits while a
claim is being investigated. See, e.g., Local 56 v. Campbell Soup Co., 898 F.
Supp. 1118, 1123 (D.N.J. 1995). At the very least, an issue of fact, unsuitable
for resolution without development of a record in discovery, is presented. See
Grove v. Johnson Controls, Inc., No. 1:12-CV-02622, 2013 WL 3049114, at *8
(M.D. Pa. June 17, 2013).
ORDER
The Plaintiff having filed a motion (ECF no. 13) to dismiss the
Counterclaim (ECF no. 10); and Defendants having filed a response (ECF no.
17); and Plaintiff having filed a reply (ECF no. 21); and the court having
considered the matter without oral argument; for the reasons expressed in the
foregoing Opinion, and good cause appearing therefor;
IT IS this

th
10

day of March, 2016,

ORDERED the Plaintiff’s motion (ECF no. 13) under Fed. R. Civ. P.
12(b)(6) to dismiss the counterclaim is DENIED.

/

K VINMCNULTY
United States District J dge

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