LANEGAN v. UNUM LIFE INSURANCE COMPANY OF AMERICA et al

Filing 45

MEMORANDUM/OPINION THAT DEFENDANTS' MOTIONS TO DISMISS PLAINTIFF'S COMPLAINT ARE GRANTED AND THIS MATTER IS DISMISSED. SIGNED BY HONORABLE JEFFREY L. SCHMEHL ON 2/10/17. 2/13/17 ENTERED AND COPIES MAILED TO UNREPS AND E-MAILED.(ky, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
WILLIAM KEITH LANEGAN, individually
and/or in his capacity as ADMINISTRATOR
and/or EXECUTOR of the ESTATE OF ROGER
RAY LANEGAN,

CIVIL ACTION
NO. 16-1706

Plaintiff,
v.
UNUM LIFE INSURANCE COMPANY OF
AMERICA, a/k/a UNUM GROUP, a/k/a UNUM
PROVIDENT, et al,
Defendants.
MEMORANDUM OPINION

Schmehl, J.

/s/ JLS

February 10, 2017

Before the Court are the motions to dismiss, or in the alternative, for summary
judgment, of Defendants, Unum Life Insurance Company of America, Ruth Freeman and
Advance Billing, LLC and Daimler Trucks North America, LLC, and Freightliner
Affiliates Retirement Savings Plan. Plaintiff, William Keith Lanegan, individually and/or
in his capacity as Administrator and/or Executor of the Estate of Roger Ray Lanegan
(“Lanegan” or “Plaintiff”) has opposed the motions, Defendants have filed replies and
supplemental briefing was permitted. Having read the parties’ extensive briefs and after
oral argument on the motions, I will grant Defendants’ motions to dismiss and dismiss
Plaintiff’s Complaint with prejudice.
I.

BACKGROUND
Plaintiff filed this action against Defendants to contest a claim determination

under an ERISA-governed life insurance benefits plan. Plaintiff takes issue with Unum’s
determination that his two sons, rather than Lanegan himself, were the proper

beneficiaries of two life insurance policies insuring the life of Lanegan’s father, a Plan
participant who died in January of 2005. In short, Lanegan alleges that Unum incorrectly
relied on a beneficiary designation form naming his two sons that was allegedly
fraudulently created by his former wife, Defendant Ruth Freeman.
II.

STATEMENT OF FACTS
Lanegan’s father, Roger Ray Lanegan, passed away on or before January 15,

2005. (Compl. at ¶¶ 16-19.) At the time of his death, Roger Lanegan was employed by
Freightliner LLC and/or American LaFrance and participated in an ERISA-governed plan
(the “Plan”) that provided life insurance benefits through two Unum Life polices, policy
numbers 28915 and 28916 (the “Policies”). (Compl. at ¶¶ 20-21.)
According to the Complaint, on February 12, 2005, after Roger Lanegan’s death,
Unum sent Lanegan a letter confirming that a claim for benefits under Policy 28915 had
been submitted “on behalf of minor child, Aaron Lanegan.” (Compl. at ¶ 25, Exh. E.)
This letter set out that benefits were approved for Aaron, but that Unun would hold the
proceeds until Aaron reached 18 or a court-appointed guardian requested the benefits.
(Id.)
Lanegan did not arrange for nor direct these benefits to be distributed to his son
Aaron. (Compl. at 26, 29.) Lanegan claims that he should have received the benefits in
question, but that they were improperly awarded to his sons. (Id. at ¶¶ 29, 46, 47 and 50.)
Thereafter, in September of 2009, Lanegan contacted Unum and requested clarification
on the distribution of benefits to his sons, as Lanegan believed that he alone was the
beneficiary on the policies as designated by Roger Lanegan. (Id. at ¶ 31.) On September
11, 2009, Tracy McKenzie, an employee of Unum, informed Lanegan via email that the

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benefits were paid according to a January 20, 2005 on-line beneficiary designation form
from Roger Lanegan’s employer. (Compl. at ¶ 32, Exh. G.) Lanegan alleges that his
former spouse, Defendant Freeman, fraudulently prepared the January 2005 beneficiary
designation using his father’s online account passwords for his employer’s online system.
(Compl. at ¶¶ 33-37, 40.)
On March 13, 2015, Unum sent Lanegan a letter confirming its decision that
Lanegan was not the beneficiary under the Policies, and denying his claim for benefits.
(Compl. at ¶ 41, Ex. K.) On March 19, 2015, Lanegan appealed Unum’s decision, and his
appeal was denied on April 14, 2015 because it was untimely. (Compl. at ¶¶ 42-43, Exs.
L and M.) Lanegan then filed the instant action on April 11, 2016.
III.

STANDARD OF REVIEW
To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must allege facts

that “ ‘raise a right to relief above the speculative level.’ ” Victaulic Co. v. Tieman, 499
F.3d 227, 234 (3d Cir.2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127
S.Ct. 1955, 167 L.Ed.2d 929 (2007.) In determining whether a complaint is sufficient, the
court must accept all factual allegations as true, construe the complaint in the light most
favorable to the plaintiff, and determine whether, under any reasonable reading, the
plaintiff may be entitled to relief. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.
2009) (citing Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)).
Although “conclusory” or “bare-bones allegations” will not survive a motion to
dismiss, Fowler, 578 F.3d at 210, a complaint may not be dismissed merely because it
appears unlikely that the plaintiff can prove those facts or will ultimately prevail on the
merits. Phillips, 515 F.3d at 231. Nonetheless, to survive a Rule 12(b)(6) motion, the

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complaint must provide "enough facts to raise a reasonable expectation that discovery
will reveal evidence of the necessary element." Id. at 234 (quoting Twombly, 550 U.S. at
556) (internal quotations omitted).
IV.

DISCUSSION
Defendants move to dismiss Plaintiff’s Complaint as time-barred by the statute of

limitations and the Policies’ contractual limitation of action provisions. Defendant
Freeman also moves to dismiss the Complaint because she and her company, Advanced
Billing, LLC, are not fiduciaries under ERISA and are not the ERISA plan. For the
reasons that follow, I will grant Defendants’ motions and will dismiss Plaintiff’s
Complaint with prejudice.
A. Claim for Denial of Benefits
ERISA does not contain a statute of limitations for non-fiduciary claims. For
claims such as these, the applicable statute of limitations is that of the forum state claim
most analogous to the ERISA claim at issue. Miller v. Fortis Benefits Ins. Co., 475 F.3d
516, 520 n.2 (3d Cir. 2007); Gluck v. Unisys Corporation, 960 F.2d 1168, 1179-1180 (3d
Cir. 1992). A claim for denial of benefits under ERISA is most analogous to a breach of
contract claim, therefore Pennsylvania’s four year statute of limitations for breach of
contract claims will apply here. Christian v. Honeywell Retirement Benefit Plan, 582
Fed. Appx. 103, 104 (3d Cir. 2014).
In the ERISA context, a non-fiduciary cause of action will generally accrue when
a party's claim for benefits has been formally denied. See Romero v. Allstate Corp., 404
F.3d 212, 222 (3d Cir.2005). Under the “clear repudiation” rule, however, an “event other
than a denial” can trigger the statute of limitations, “as long as it is (1) a repudiation (2)

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that is clear and made known to the beneficiary.” Miller v. Fortis Benefits Ins. Co., 475
F.3d 516, 521 (3d Cir.2007). “Under this rule, a statute of limitations begins to run when
a plaintiff discovers or should have discovered the injury that forms the basis of his
claim.” Id. at 520 (citing Romero, 404 F.3d at 222). “Some ‘event other than a denial of a
claim’ may trigger the statute of limitations by clearly alerting the plaintiff that his
entitlement to benefits has been repudiated.” Miller, 475 F.3d at 521 (citation omitted). In
Miller, the court concluded that a plaintiff who had been underpaid for fifteen years
before discovering the error was sufficiently made aware that he was underpaid and that
his right to a greater award had been repudiated when he received the first check for the
lower amount. Id. at 520-23; see also Christian v. Honeywell Retirement Benefit Plan,
582 Fed. Appx. 103, 104 (3d Cir. 2014) (finding that a clear repudiation occurred at the
time of a full termination of benefits); Hill v. Connecticut General Life Ins. Co., 2008
WL 4200161 at *4 (W.D Pa., Sept. 8, 2008) (finding that a defendant's alleged failure to
make any payment for plaintiff's benefit qualifies as a repudiation).
Therefore, to determine whether Lanegan’s claim was filed after the expiration of
the statute of limitations, I must determine when a “clear repudiation” of his claim to
benefits occurred. Based solely on the complaint, there are several possibilities as to
when Lanegan received a clear repudiation of his claim for benefits. Under any one of
these possibilities, Lanegan failed to initiate the instant matter in time to avoid the
application of the statute of limitations.
The first possibility for when Lanegan’s claim accrued was in February of 2005
when he received a letter from Unum telling him that one of his sons was a beneficiary,
and Lanegan failed to receive any death benefits under either Policy. The second

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possibility would be Unum’s September 11, 2009 email confirming that the claim had
been processed and paid according to the January of 2005 Beneficiary Designation.
Pursuant to this email, Unum was refusing to pay Lanegan benefits to which he believed
he was entitled. Certainly, this was a “clear repudiation” of his claim to benefits. Under
either scenario, Lanegan should have filed suit by February of 2009 or September of
2013, which he failed to do, as he did not institute this suit until April 11, 2016.
In his attempts to avoid the application of the statute of limitations, Plaintiff first
argues that there was no clear repudiation of his claim until April 14, 2015 when Unum
refused to consider Lanegan’s administrative appeal. Plaintiff bases this argument upon
his belief that “actionable harm did not befall the Plaintiff until Defendant Unum
wrongfully distributed money to someone else – in this case, on or about March 23, 2015
at the earliest, when Plaintiff’s oldest son, Sean Lanegan, finally turned 18 years old.”
(See Docket No. 18, p. 8.) Plaintiff argues that under relevant Third Circuit case law, the
statute of limitations does not begin to run until the actual provision of money was made,
claiming that in Miller v. Fortis Ins. Co. and its progeny, the courts ruled that “Plaintiffs
were blatantly repudiated because they had explicit notice that they were receiving less
money than they should have been.” (Docket No. 18, p. 8.) Lanegan’s argument is that
since he did not receive any money at all, no actionable harm occurred until Unum
distributed the proceeds of the policies to his oldest son. I find this argument to be very
unpersuasive.
First, as discussed above, the clear repudiation rule does not require a formal
denial of benefits; rather, it only requires a clear repudiation of Lanegan’s claims. Miller,
475 F.3d at 521. Courts have held that a clear repudiation under ERISA can occur long

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before any benefits are actually distributed. See Bamgbose v. Delta-T Group, Inc., 638
F.Supp.2d 432 (E.D. Pa. 2009) (finding that the claim of plaintiffs who sought ERISA
benefits claiming they were wrongfully characterized as independent contractors who
were not entitled to benefits was time-barred because the independent contractor
agreements that they signed ten years earlier had clearly repudiated any claim to
benefits.)
Further, Lanegan’s argument that an actual payment of benefits is necessary
before a claim can be repudiated also conflicts with the underlying goals of the statute of
limitations. Specifically, the Miller court stated:
[A] statute of limitations not based on reasonable discovery is effectively
no limitation at all. Such would be the case if we held that Miller’s cause
of action accrued only upon Fortis’ formal denial of his adjustment claim.
Under this rule, a plaintiff could receive benefit checks for decades before
deciding to investigate the accuracy of his award – a plaintiff could
thereby trigger the statute of limitations at his own discretion, creating an
indefinite limitations period. We decline to invite such a result.
Miller, 475 F.3d at 522. Clearly, Lanegan’s argument in this matter that the statute of
limitations on his claim was tolled until his oldest son actually received benefits under the
Policies is in conflict with Miller and its desire to avoid an indefinite limitations period.
That argument in light of the facts of this case clearly lacks merit.
Further, I find that Lanegan’s argument fails as it misinterprets the harm that he
allegedly suffered as a result of Unum’s actions. Plaintiff claims the actionable harm is
the wrongful distributions of money under the Policies that occurred in March of 2015.
The receipt of benefits by his son is not the “harm” that Lanegan allegedly suffered. To
the contrary, the “harm” was Unum’s decision that Lanegan was not a beneficiary under
the Policies and should not receive any benefits. This indeed was the ultimate harm.

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Unum’s decision in this regard was communicated to Lanegan in February of 2005 and
again in September of 2009. Lanegan’s lawsuit was filed over ten years after the “harm”
in this case (Unum’s decision to award benefits to his sons), and is certainly untimely.
Lanegan next argues that his cause of action cannot accrue until his administrative
remedies are fully exhausted, which he claims did not occur until April 14, 2015, when
Unum denied his appeal as untimely. However, this argument must fail, as Lanegan
cannot be permitted to profit from his delay, procrastination and failure to timely exhaust
and pursue administrative remedies.
Because he did not attempt to appeal Unum’s 2005 (or 2009) denial of his claim
to benefits until 2015, Lanegan argues the statute of limitations did not begin to run until
2015 when Unum denied his appeal. This argument is contrary to the terms of the
Policies which require “written notice and proof of claim must be sent no later than 90
days after the date of death.” (App. at 6 and 44.) The Policies also provide “[i]f it is not
possible to give proof within these time limits, it must be given no later than 1 year after
the proof is required as specified above.” (Id.) Lanegan neither claimed benefits nor
objected to Unum’s decision to award benefits to his sons within the deadline. Therefore,
he cannot use his own failure to comply with the Policies and supply a timely proof of
claim as a means to toll the statute of limitations. See Stallings v. IBM Corp., 2009 WL
2905471 (D.N.J. Sept. 8, 2009) (finding that a plaintiff who claimed the statute of
limitations never began to run because “proof” of disability had not been submitted as
required by the policy could not avoid application of the statute of limitations.)
In support of his argument that administrative remedies must be exhausted before
the statute of limitations begins to run, Lanegan cites to Rumpf v. Metropolitan Life Inc.

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Co., 2010 WL 2902543 (E.D. Pa., July 23, 2010). The district court in Rumpf believed
that running the statute of limitations before the plaintiff exhausted her administrative
appeals would be “a miscarriage of justice.” 2010 WL 2902543, at *8. The Rumpf court,
however, conceded that other cases in the Third Circuit do not provide such equitable
relief and stated that “[c]aselaw within the Third Circuit ... suggests that the exhaustion of
administrative remedies ... may not likewise be required before such a claim can accrue.”
Id. at * 7; see Klimowicz v. Unum Life Ins. Co. of America, 296 F. App'x 248, 251 (3d
Cir. 2008) (finding that claim accrued either at the time specified by contractual
limitations or at the time the plaintiff was first notified of his benefits, both of which
occurred before the plaintiff's appeals); Grasselino v. First Unum Life Ins. Co, 2008 WL
5416403, at * 4–5 (D.N.J. Dec.22, 2008) (finding that claim accrued either on the date of
first denial of benefits or date of later approval of some benefits even though the plaintiff
had not exhausted his administrative remedies). It also appears that the conclusions of the
Rumpf court were rejected by the Supreme Court in Heimeshoff v. Hartford Life & Acc.
Ins. Co., 134 S.Ct. 604 (2013), where the Court found that a Plan’s limitations period was
not tolled while administrative remedies were being pursued, holding that that a
participant and an ERISA plan may agree by contract to a particular limitations period,
even one that starts to run before the cause of action accrues, as long as the period is
reasonable. 134 S. Ct. 604, 610 (2013).
Lastly, Rumpf is distinguishable from the current matter as Plaintiff in that case
pursued administrative remedies before the statute of limitations expired. Here, Lanegan
submitted his appeal in 2015, long after Unum’s clear repudiation of his claim in 2005 or
2009. The mere fact that Unum considered Lanegan’s appeal in 2015, long after the

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statute of limitations had run, does nothing to toll the statute of limitations. See Stafford
v. E.I. Dupont De Nemours, 27 Fed. Appx. 137, 140 (3d Cir. 2002) (finding that plan’s
limitation period was not tolled due to the fact that administrator’s procedure allowed
participants to attempt to reopen their cases if new information came to light.) In fact,
under Plaintiff’s argument, once could try to defeat the statute of limitations by filing
some sort of administrative process after the statute had run.
At oral argument in this matter, Lanegan for the first time argued that even if the
claims brought on behalf of himself individually are untimely, the claims brought on
behalf of his father’s Estate are not. I requested supplemental briefing on this issue, and
after a review of the briefs and relevant case law, find that Plaintiff’s suit, whether
brought individually or on behalf of his father’s estate, is barred by the applicable statute
of limitations.
Basically, Plaintiff argues that the estate of a plan participant, such as the Estate
of Plaintiff’s father, is a proper plaintiff in this matter and that in his capacity as
Administrator/Executor of his father’s estate, Plaintiff’s suit was timely filed because
“the Estate is entitled to have its rights under ERISA clarified by this Court.” (See Docket
No. 38, p. 2.) However, I find that even if the Estate is a plan participant or beneficiary
under ERISA, its claims are still time-barred.
Courts routinely require estates acting as plaintiffs in ERISA cases to satisfy the
applicable statutes of limitations. For example, in Stallings v. IBM Corp., 2009 WL
2905471 (D.N.J. Sept. 8, 2009), plaintiffs, co-executrixes of the estate of their mother,
brought suit alleging, inter alia, violations of ERISA based on Defendants’ denial of the
decedent’s disability benefits. The court found plaintiffs’ claim to be time-barred because

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the Plan had informed the decedent, who was the actual plan participant, that her claim
was denied over two years before her executors filed suit. Id. at *8. Accordingly, the
executors’ claim was clearly repudiated when their decedent received the denial from the
Plan; the executors did not receive additional time to file suit against the Plan because an
estate was involved.
Further, in Estate of Jennings v. Delta Air Lines, Inc., 2016 WL 3537197 (D.N.J.
June 28, 2016), a decedent’s widow, individually and as Administratrix, brought a breach
of fiduciary duty claim against decedent’s former employer, claiming that it breached its
fiduciary duties by failing to pay decedent’s life insurance premiums. The court found
this claim to be time-barred because the Administratrix herself had actual knowledge of
the breach more than three years before the suit was filed. Id. at *4. As pointed out by
Defendant Unum, this case is instructive because the Estate’s claim was barred based on
actual knowledge the decedent’s wife acquired before she even became Administratrix,
unlike Lanegan, who was apparently acting as Personal Representative of his father’s
estate by August 2005, at the latest (Compl at ¶ 1, Ex. O.) Therefore, the Estate was on
notice of Unum’s clear repudiation in September of 2009, at the latest, if not in February
of 2005.
It would be improper for this Court to allow Lanegan to circumvent the
application of the statute of limitations in this matter by finding that a different statute of
limitations should apply to the Estate. Notably, Lanegan has cited to no case that stands
for the proposition that a different statute of limitations should apply to ERISA actions in
which an Estate is the plaintiff. Accordingly, the claims of either Lanegan individually, or
of the Estate, are untimely and must be dismissed.

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B. Claims for Breach of Fiduciary Duty
A claim for breach of fiduciary duty under ERISA may not be commenced after
the earlier of:
(1)
Six years after (A) the date of the last action which constituted a
part of the breach or violation, or (B) in the case of an omission the latest
date on which the fiduciary could have cured the breach, or
(2)
Three years after the earliest date on which the plaintiff had actual
knowledge of the breach or violation.
29 U.S.C. § 1113. Lanegan thus had the shorter of the two periods, a six year period
measured from the violation, or a three year period if he had “actual knowledge” of the
breach, to file suit. Ranke v. Sanofi-Synthelabo Inc., 436 F.3d 197, 201 (3d Cir. 2006).
Lanegan’s breach of fiduciary duty claim is barred under either standard.
First, the “date of the last action which constituted a part of the breach or
violation” occurred in either 2005, when Unum informed Lanegan it was awarding
benefits to his son, or to be generous, in 2009, when Unum informed Lanegan that his
sons were properly named as beneficiaries pursuant to a January of 2005 beneficiary
election form. Therefore, Lanegan should have filed his breach of fiduciary duty claim by
2011, or at the latest, September of 2015. Yet he did not file the instant action until April
of 2016.
Further, Lanegan’s breach of fiduciary duty claim is barred by the three year
statute of limitations based on his “actual knowledge” of the alleged breach in either
February of 2005 or September of 2009. Unum advised Lanegan in February of 2005,
and at the latest, September of 2009, that he would not be receiving death benefits under
his father’s policies. This is sufficient to trigger “actual knowledge” under 29 U.S.C. §
1113. See Koert v. GE Group Life Assur. Co., 231 Fed. Appx. 117, 121 (3d Cir. 2007)

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(finding in a breach of fiduciary duty ERISA claim that “[w]hen a fiduciary makes an
outright repudiation of its obligation to pay its beneficiary . . . ‘it is reasonable to expect
that the statute of limitations began to run at that point.’”) Lanegan should have filed his
breach of fiduciary duty claims by September of 2012 at the very latest and instead,
waited until April of 2016. It is truly unfathomable that Plaintiff waited as long as he did
to file the instant lawsuit. Accordingly, this claim is untimely and must be dismissed.
C. State Law Claims
In addition to his ERISA claims, Lanegan asserts state law claims for breach of
fiduciary duty, tortious interference with contractual relations, and alleged violations of
the Pennsylvania Wage Payment and Collection Law and Unfair Trade Practices and
Consumer Protection Law. These state law claims are preempted by ERISA’s statutory
preemption provisions and must be dismissed.
State law claims are preempted if “they are premised on the existence of the plan
and require interpreting the plan’s terms.” Menkes v. Prudential Ins. Co. of America, 762
F.3d 285, 294 (3d Cir. 2014). As Lanegan’s state law claims “stem from how defendants
handled [his] ERISA-governed” benefits, the claims are preempted. See Friedland v.
Unum Group, 50 F.Supp. 3d 598, 603 (D.Del. 2014). As Lanegan’s state law claims
plainly relate to the Plan and its benefits, they are therefore preempted under ERISA’s
express preemption provision and must be dismissed with prejudice.

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V.

CONCLUSION
For the foregoing reasons, Defendants’ Motions to Dismiss Plaintiff’s Complaint

are granted and this matter is dismissed. 1

1

Plaintiff also filed a Motion to Disqualify Counsel for Defendant Freeman and Advanced Billing, LLC
(Docket No. 27). As this matter is being dismissed due to Lanegan’s failure to comply with the statute of
limitations, this motion is denied as moot.

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