Slim v. Life Insurance Company et al

Filing 40

OPINION AND ORDER granting in part and denying in part 23 Motion to Dismiss. See attached. The First and Second Causes of Actions survive dismissal as to Plaintiff's Section 502(a)(1)(B) claims against LINA. Plaintiff's Third Cause of Action is dismissed with prejudice. Signed by Judge Gina R. Mendez-Miro on 11/22/2024. (GMN)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
Jack J. Slim,
Plaintiff
v.

Civil No. 24-1162(GMM)

Life Insurance Company of North
America, Royal Blue Hospitality,
LLC d/b/a El Conquistador ResortPuerto Rico, et al,
Defendants.
OPINION AND ORDER
Before the Court is Defendant Life Insurance Company of North
America’s (“LINA” or “Defendant”) Motion to Dismiss. (Docket No.
23). For the following reasons, the Court GRANTS IN PART AND DENIES
IN PART the Motion to Dismiss.
I.

BACKGROUND

The following facts, drawn from the Amended Complaint, are
accepted as true for purposes of the Motion to Dismiss. Jack Javier
Slim (“Plaintiff”) is a citizen of the United States employed by
Royal Blue Hospitality, LLC, d/b/a El Conquistador Resort-Puerto
Rico (“Royal Blue”) since August 16, 2021, in the Municipality of
Fajardo, Puerto Rico. (Docket No. 13). As part of his employment,
Plaintiff qualified and was a beneficiary under Royal Blue’s Group
Term Dependent Life Insurance

(“the Plan”) in the amount of

Civil No. 24-1162 (GMM)
Page – 2 –
$250,000.00. (Id. at 3). The Plan was underwritten and administered
by LINA. (Id. ¶13).
The Plan provided for a Spouse Guaranteed Issue Amount of
$30,000.00, but employees could elect to purchase supplemental
coverage in amounts higher than the guaranteed life coverage limit
for

their

eligible

dependent

(“supplemental

coverage”)

up

to

$250,000.00. This, if they paid the premium for such supplemental
coverage, for which Royal Blue deducts premiums from the employees’
pay. Under the Plan, employees who purchase supplemental coverage
are required to provide evidence of insurability (“EOI”) to the
LINA Medical Underwriter as a condition for coverage. (Id.)
Plaintiff

alleges

that

he

opted

benefits for his wife, Stephanie Slim

for

supplemental

(“Mrs. Slim”),

Plan

in the

additional supplemental amount of $250,000.00, effective as of
November 16, 2021. To that extent, Plaintiff avers that on November
17, 2021 he completed, executed and submitted a signed EOI Form to
Royal

Blue.

(Id.

at

4).

Thereafter,

over

the

course

of

the

following fifteen (15) months, LINA collected premiums which Royal
Blue

deducted

from

the

Plaintiff’s

pay

destined

for

the

supplemental coverage of $250,000.00 acquired by the plaintiff for
his spouse. (Id.).
On February 16, 2023, Mrs. Slim passed away without having
any children. Following the death of his spouse, Plaintiff filed
a claim for benefits under the Plan, including the supplemental

Civil No. 24-1162 (GMM)
Page – 3 –
coverage.

(Id.).

Royal

Blue

processed

Plaintiff’s

claim

for

benefits under the Plan, including the supplemental coverage for
his deceased wife, with LINA. (Id. at 5). Plaintiff alleges that
through a letter dated October 4, 2023, LINA informed him that he
would

receive

the

Guaranteed

Issue

Amount

of

$30,000.00,

representing the Spouse Guaranteed Issue Amount, but denied the
claim for supplemental coverage of $250,000.00, because: (a) no
proof was received that Mrs. Slim satisfied the EOI requirement;
and (b) the Insurer never agreed to insure Mrs. Slim in writing
for any amount over $30,000.00. (Id.).
On October 11, 2023, LINA allegedly advised Royal Blue by email that they had completed the spousal claim for Plaintiff, but
a portion of his claim was denied because of lack of EOI on file.
(Id. at 5). By letter of the same date, LINA allegedly asked Royal
Blue to refund the premiums paid by Plaintiff for the supplemental
spousal coverage. (Id.).
Plaintiff filed an administrative appeal with LINA on October
26, 2023. He claimed that Royal Blue had been serving upon LINA
the

premiums

deducted

by

Royal

Blue

from

his

pay

for

the

supplemental coverage, and LINA had been receiving them throughout
without

objection.

(Id.).

On

December

21,

2023,

LINA

denied

Plaintiff’s appeal. It alleged that Mrs. Slim was never effective
for

Group

Term

Dependent

Life

$30,000.00 paid. (Id. at 5-6).

Insurance

benefits

above

the

Civil No. 24-1162 (GMM)
Page – 4 –
On April 3, 2024, Plaintiff filed a Complaint before this
Court pursuant to the Employee Retirement Income Security Act
(“ERISA”), 29 U.S.C. 1001 et seq. On July 19, 2024, upon leave
from the Court, Plaintiff filed an Amended Complaint. (Docket No.
13). Therein, Plaintiff alleges that LINA has a fiduciary duty,
pursuant

to

ERISA

Sections

404(a)(l)(A)

and

404(a)(l)(B),

to

ensure that it makes eligibility determinations for each employee
or their eligible dependent for supplemental coverage at or near
the time LINA receives premiums for such coverage. Consequently,
Plaintiff cites Section 502 (a)(1)(B) and posits that LINA violated
the provisions of ERISA for coverage, by requiring EOI, to accept
the premiums deducted by Royal Blue from Plaintiff’s pay for the
supplemental coverage, without timely ensuring they had received
EOI from the participant, to then deny his claim on the basis that
he lacked EOI. (Id. at 8). In addition, Plaintiff argues that Royal
Blue and LINA are jointly liable. This, since Blue, as Plaintiff’s
employer and recordkeeper for LINA in connection to the Plan
benefits and supplemental spousal benefits, allegedly failed to
properly administrate Plaintiff’s supplemental spousal coverage
plan. He adds that Blue failed to ensure that all records of the
premiums collected and all necessary information and documents,
including, but not limited to an EOI, were timely submitted to
LINA on behalf of the plaintiff. (Id. at 9). Plaintiff also claims
damages for the alleged ERISA violations. (Id. at 10).

Civil No. 24-1162 (GMM)
Page – 5 –
On August 29, 2024, LINA filed the Motion to Dismiss that is
now

before

the

Court.

(Docket

No.

23).

LINA

alleges

that

Plaintiff’s Amended Complaint fails to state a claim upon which
relief can be granted. Particularly, LINA posits that Plaintiff
cannot recover benefits or damages for a breach of fiduciary duties
claim under ERISA as a matter of law, because while mentioning
Section 502(a)(1)(B) in passing, Plaintiff is really bringing
forth a breach of fiduciary duties claim under Section 502(a)(2).
LINA argues that Plaintiff “is clearly articulating a breach of
fiduciary duties claim, but demanding plan benefits as a remedy.”
(Id. at 7). In addition, LINA contends that “it is settled law
that that compensatory and punitive damages are unavailable for
any claims under ERISA.” (Id.). Furthermore, LINA claims that jury
trial is not available under ERISA. (Id. at 8).
On September 19, 2024, Plaintiff filed his Opposition to
Motion to Dismiss. (Docket No. 30). Therein, Plaintiff argues that
his claims are validly brought under Section 502(a)(1)(B) of ERISA.
According to Plaintiff, Section 502(a)(1)(B) of ERISA “empowers a
beneficiary like Slim to bring a civil action to recover benefits
due to him under the terms of his plan and to enforce his rights
under the terms of the plan”. (Id. at 5). However, Plaintiff
“concedes that damages are not available under ERISA and desists
from any such claim as asserted in ¶ 50 of the Third Cause of
Action insofar as LINA is concerned.” (Id. at 2, Footnote 2). Also,

Civil No. 24-1162 (GMM)
Page – 6 –
Plaintiff recognizes that the majority of circuits, including the
First Circuit, have found there is no right to a jury trial under
ERISA,

but

suggests

that

“any

trial

for

a

claim

under

§

502(a)(1)(B)[—that is, a claim for plan benefits—] would be a bench
trial”. (Id. at 10).
On October 4, 2024, LINA filed a Reply to Opposition to Motion
to Dismiss. (Docket No. 34). LINA posits that Plaintiff’s Amended
Complaint fails at the second step of the 12(b)(6) analysis, since
his allegations of breach of fiduciary duty under Section 502(a)(2)
do not give rise to a right to recover benefits under ERISA. (Id.).
LINA reiterates that “it is clearly established that a Plaintiff
cannot recover benefits or, for that matter, damages for a breach
of fiduciary duty claim”. (Id. at 2). To this point, LINA sustains
that

Plaintiff

conceded

that

damages

are

not

available

and

withdraws that claim in his Opposition to Motion to Dismiss. (Id.
at 3). As to the jury trial request, LINA also argues that
Plaintiff conceded that it is not available. (Id.).
On October 21, 2024, Plaintiff filed a Surreply to Reply to
Opposition

to

Motion

to

Dismiss.

(Docket

No.

39).

Plaintiff

sustains that he has stated a cognizable claim upon which relief
may be granted against LINA under Section 502(a)(1)(B) of ERISA.
He further posits that that dismissal of his suit to recover
benefits is not warranted at this stage because he must be afforded

Civil No. 24-1162 (GMM)
Page – 7 –
the opportunity to provide a complete evidentiary record for the
Court to rule upon. (Id. at 2-5).
II.
A.

LEGAL STANDARD

Motion to Dismiss Standard Rule 12(b)(6)
In evaluating a motion to dismiss under Federal Rule of Civil

Procedure 12(b)(6), the Court must determine “whether, construing
the well-pleaded facts of the complaint in the light most favorable
to the plaintif[f], the complaint states a claim for which relief
can be granted.” Cortés-Ramos v. Martin-Morales, 956 F.3d 36, 41
(1st Cir. 2020) (quoting Ocasio-Hernández v. Fortuño-Burset, 640
F.3d 1, 7 (1st Cir. 2011)). The complaint must allege “a plausible
entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
559 (2007). “A claim has facial plausibility 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).

“While

legal

conclusions can provide the framework of a complaint, they must be
supported by factual allegations.” Id. at 679.
III.
A.

APPLICABLE LAW AND ANALYSIS

Background on ERISA
ERISA governs “employee benefit plans” that cover employees’

retirement benefits, health benefits, and, as relevant for this
case, death benefits. ERISA sets forth several civil enforcement

Civil No. 24-1162 (GMM)
Page – 8 –
provisions. See 29 U.S.C. § 1132(a)1; See also Varity Corp. v.
Howe, 516 U.S. 489, 496 (1996).
If an ERISA fiduciary breaches their fiduciary duty, Section
409 makes them liable to the plan. Further, Section 502(a)(2)
allows plan participants to bring a derivative action to enforce
Section 409. However, recovery under Section 502(a)(2) goes to the
plan, not to the beneficiary bringing the action. Mass. Mut. Life
Ins. Co. v. Russell, 473 U.S. 134, 140 (1985). Certainly, a single
beneficiary might benefit indirectly by increasing their plan’s
assets. Yet, if the beneficiary wants to recover directly, as
Plaintiff does, then he would need to sue under a different
provision of Section 502’s enforcement scheme.
There are two major provisions to pick from. Subparagraph
502(a)(1)(B) allows a “beneficiary” to bring suit “to recover
benefits due to him under the terms of his plan, to enforce his
rights under the terms of the plan, or to clarify his rights to
future benefits under the terms of the plan.” If that doesn’t
provide the beneficiary with the relief that he seeks, then he can
resort to Section 502(a)(3), the enforcement scheme’s “catchall”
provision, which allows a beneficiary to sue “to enjoin any act or
practice which violates [ERISA] or the terms of the plan,” or “to

Subparagraph 502(a)(1)(B) and § 502(a)(3) of ERISA are codified at 29 U.S.C.
§ 1132(a)(1)(B) and (a)(3), respectively. But, in keeping with the trend in
this practice area, we refer to them and the other statutory provisions by their
ERISA designation, not by their place in the U.S. Code.
1

Civil No. 24-1162 (GMM)
Page – 9 –
obtain other appropriate equitable relief (i) to redress such
violations or (ii) to enforce [ERISA] or the terms of the plan.”
see Varity, 516 U.S. at 512.
With this background in mind, the Court analyzes Plaintiff’s
claims.
1.

Breach of fiduciary duty claims against LINA

In his Amended Complaint, Plaintiff includes three causes of
actions in connection to the denial of certain supplemental spousal
life insurance benefits. To that extent, Plaintiff cites Section
502 (a)(1)(B), although he makes allegations that LINA breached
its fiduciary duties by, among others, accepting premiums from him
for the additional $250,000.00 in supplemental life insurance
coverage,

without

ensuring

to

make

a

timely

eligibility

determination to make the policy effective. Plaintiff asserts that
“LINA is liable under ERISA to the plaintiff for the supplemental
coverage of $250,000.00 acquired by the plaintiff for his spouse,
Mrs. Slim.” (Docket No. 13 at 8). Elsewhere in the Complaint,
Plaintiff posits that LINA is liable for that whole amount of the
supplemental

coverage,

in

addition

to

“all

damages

arising

thereof, and all the reasonable attorney’s fees and costs incurred
by the plaintiff to obtain relief.” (Id. at 10). However, in his
Opposition to Motion to Dismiss, Plaintiff desisted from any claim
for damages “as asserted in ¶ 50 of the Third Cause of Action
insofar as LINA is concerned.” (Docket No. 30 at 2, Footnote 2).

Civil No. 24-1162 (GMM)
Page – 10 –
ERISA recognizes two avenues through which a plan participant
may maintain a breach of fiduciary duty claim: (1) a Section
502(a)(2) claim to obtain plan-wide relief,

see 29 U.S.C. §

1132(a)(2); and (2) an individual suit under Section 502(a)(3) to
obtain equitable relief, see 29 U.S.C. § 1132(a)(3). Section
502(a)(2)

enables

a

plan

“participant,

beneficiary

[,]

or

fiduciary” to bring a civil action “for appropriate relief under
Section [409 of ERISA].” Section 409 provides as follows:
Any person who is a fiduciary with respect to a plan who
breaches any of the responsibilities, obligations, or
duties imposed upon fiduciaries by this subchapter shall
be personally liable to make good to such plan any losses
to the plan resulting from each such breach, and to
restore to such plan any profits of such fiduciary which
have been made through use of assets of the plan by the
fiduciary, and shall be subject to such other equitable
or remedial relief as the court may deem appropriate,
including removal of such fiduciary.
29 U.S.C. § 1109(a). Therefore, suits brought pursuant to Section
502(a)(2) are derivative in nature and those who bring suit do so
on behalf of the plan. Evans v. Akers, 534 F.3d 65, 70 n.4 (1st
Cir. 2008) (citing Massachusetts Mut. Life Ins. Co. v. Russell,
473 U.S. at 141). Parties bringing Section 502(a)(2) claims must
seek relief as to the plan rather than to any given individual
beneficiary. In fact, the Supreme Court in LaRue v. DeWolff, Boberg
& Assocs., Inc., 552 U.S. 248, 254 (2008), stated that, although
Section

502(a)(2)

individual

allows

participant

in

for
a

suits

based

defined

on

injuries

contribution

to

an

plan,

Ҥ

Civil No. 24-1162 (GMM)
Page – 11 –
502(a)(2)

does

not

provide

a

remedy

for

individual

injuries

distinct from plan injuries.” Id. at 256.
It is clear from the pleadings that Plaintiff does not seek
plan-wide relief. He does not indicate in his Amended Complaint or
opposition filings that he brings this claim on behalf of the Plan
or seeks that a remedy as to the Plan. Since Plaintiff seeks
remedies paid to himself, and not to the Plan, he does not state
a claim for relief under Section 502(a)(2).
Consequently, ERISA authorizes him a breach of fiduciary duty
claim only if he seeks “appropriate equitable relief” under Section
502(a)(3). 29 U.S.C. § 1132(a)(3); Varity Corp. v. Howe, 516 U.S.
at 512; Watson v. Deaconess Waltham Hosp., 298 F.3d 102, 109–10
(1st Cir.2002); LaRocca v. Borden, Inc., 276 F.3d at 27–28. The
Supreme Court has described Section 502(a)(3) as a “safety net”
that

provides

appropriate

equitable

relief

for

injuries

that

Section 502 does not elsewhere adequately remedy. Varity, 516 U.S.
at

512.

Section

502(a)(3),

therefore,

does

not

authorize

an

individualized claim where the plaintiff’s injury finds adequate
relief in another part of ERISA’s statutory scheme. Id. at 512,
515; see also LaRocca, 276 F.3d at 27–28; Turner v. Fallon Cmty.
Health Plan, 127 F.3d 196, 200 (1st Cir.1997). Following Varity,
“federal courts have uniformly concluded that, if a plaintiff can
pursue benefits under the plan pursuant to Section [502(a)(1)(B)],

Civil No. 24-1162 (GMM)
Page – 12 –
there is an adequate remedy under the plan which bars any further
remedy under Section [502(a)(3)].” LaRocca, 276 F.3d at 28.
Furthermore, the First Circuit has decided that payment of
life insurance benefits is not “equitable relief” under ERISA.
Todisco v. Verizon Commc’ns, Inc., 497 F.3d 95,

99-100 (1st

Cir.2007); see also Great–West Life & Annuity Ins. Co. v. Knudson,
534 U.S. 204, 210, (2002) (enforcement of contractual obligation
to pay money is not relief “typically available in equity” as
required under section 502(a)(3)).
Therefore, the Court deems that Plaintiff fails to state claim
for breach of fiduciary duties under Section 501 (a)(2) and (a)(3).
2.

Claim Under ERISA Section 502(a)(1)(B)

Section 502(a)(1)(B) of the ERISA statute provides, in part,
that a participant or beneficiary may bring a civil action to
“recover benefits due to him under the terms of his plan.” 29
U.S.C. § 1132(a)(1)(B). Metro. Life Ins. Co. v. Taylor, 481 U.S.
58, 62–63(1987).
As discussed supra, LINA seeks to dismiss Plaintiff’s claims
arguing that he cannot recover benefits or damages for a breach of
fiduciary duty claim under ERISA as a matter of law, because while
mentioning Section 502(a)(1)(B) in passing, Plaintiff is really
bringing forth a breach of fiduciary duties claim under Section
502(a)(2). Indeed, Plaintiff alleges on three occasions throughout
his pleadings that LINA breached its fiduciary duties to him as a

Civil No. 24-1162 (GMM)
Page – 13 –
plan beneficiary. Although Plaintiff appears to at times conflate
a breach of fiduciary duties claim with a denial of benefits
claims, the fact is that the Amended Complaint contains more
factual allegations to support a standard denial of benefits
dispute. First, as part of his factual allegations Plaintiff: 1)
posits that LINA is the Plan administrator (Docket No. 13 at 3
¶13); that he opted for supplemental plan benefits for his wife in
the additional amount of $250,000.00 and to that end he alleges he
submitted an EOI Form to his employer (Id. at 4 ¶15-16); that
following the death of his spouse, he filed a claim for benefits
under

the

Plan,

which

was

processed

and

denied

due

to

the

inexistence of proof that Mrs. Slim satisfied the EOI requirement
(Id. at 5 ¶¶20-22); and that he appealed the denial of benefits
(Id. at 5-6 ¶¶24-26). Second, as part of his First Cause of Action,
he only cites Section 502(a)(1)(B) in connection to recovering
benefits. (Id. at 7 ¶35). Third, in his request for relief he
requests that LINA “honor and pay the supplemental Plan benefits
that he acquired in the name of his wife.” (Id. at 10 ¶50).
Furthermore, LINA concedes in two separate filings that even
though based on the Amended Complaint he cannot recover benefits
for breach of fiduciary duties under Section 502(a)(2), “Plaintiff
can certainly recover benefits due to him under the terms of the
plan under section 502(a)(1)(B).” (Docket No. 34 at 2-3); see also
(Docket No. 23 at 6-7).

Civil No. 24-1162 (GMM)
Page – 14 –
After

construing

the

well-pleaded

facts

of

the

Amended

Complaint in the light most favorable to Plaintiff, the Court finds
that Plaintiff sufficiently pleads a claim pursuant to Section
502(a)(1)(B)

against

LINA.

Moreover,

based

on

the

factual

allegations in Plaintiff’s Amended Complaint and the insufficient
record before it, at this time the Court cannot determine at the
motion to dismiss stage whether Plaintiff will not be able to
recover on their claim under Section 502(a)(1)(B). Specifically,
when

there

are

outstanding

factual

disputes

regarding

the

submission of the EOI and other matters needed to determine if
Plaintiff is seeking to recover a benefit “under the terms of the
Plan.” Therefore, dismissal pursuant to Rule 12(b)(6) is not
appropriate and the Court declines, at this time, to dismiss
Plaintiff’s Section 502(a)(1)(B) claim against LINA.
B.

Damages and Jury Trial under ERISA
In their Motion to Dismiss, LINA argues that Plaintiff cannot

claim damages under any theory of recovery and that the claim for
damages included in the Third Cause of Action of the Amended
Complaint must be dismissed as a matter of law. (Docket No. 23 at
7). In addition, LINA contends that jury trial, as requested by
Plaintiff, is not available under ERISA. (Id. at 8)
As to the claim for damages, this matter is moot since
Plaintiff conceded that damages are not available and withdrew
that claim in his Opposition to Motion to Dismiss. (Docket No. 30

Civil No. 24-1162 (GMM)
Page – 15 –
at 2, Footnote 2). However, for clarity of the record, it is well
established in the First Circuit that compensatory and punitive
damages are unavailable under ERISA. See Massachusetts Mut. Life
Ins. Co. v. Russell, 473 U.S. at 148; Tous Fernos v. Magellan
Health Services, Inc., No. CV 08-2343 (JAG), 2009 WL 10720163, at
*7 (D.P.R. July 31, 2009) citing Drinkwater v. Metropolitan Life
Ins. Co., 846 F.2d 821, 824 (1st Cir. 1988); LaRocca v. Borden,
Inc., 276 F.3d 22, 28 n.6.
Accordingly, the Third Case of Action included in the Amended
Complaint

is

dismissed

with

prejudice

pursuant

to

applicable

caselaw.
Regarding Plaintiff’s demand for jury trial, “ERISA does not
provide for a trial by jury and the majority of courts, within and
without the First Circuit, have found no congressional intent to
provide such a right.” Gammon v. Reliance Stand. Life Ins. Co.,
444 F.Supp.3d 221, 226 (D. Mass. 2020) (quoting Turner v. Fallon
Cmty. Health Plan Inc., 953 F.Supp. 419, 423 (D. Mass 1997)
(denying plaintiff a jury trial in an ERISA case)); see also Tracey
v. Mass. Inst. of Tech., No. CV 16-11620-NMG, 2019 WL 1005488, at
*4 (D. Mass. Feb. 28, 2019), aff'd, 395 F.Supp.3d 150 (D. Mass.
2019) (“In accord with the great weight of authority in the federal
courts holding actions under ERISA to remedy alleged violations of
fiduciary duties are equitable in nature, there is no right to a
jury trial under the Seventh Amendment in this action.”); Medina

Civil No. 24-1162 (GMM)
Page – 16 –
v. Triple-S Vida, Inc., 832 F.Supp.2d 117, 119 (D.P.R. 2011). The
First Circuit has held that juries should not be used where the
district court is reviewing ERISA administrative decisions. See
Recupero v. New England Tel. & Tel. Co., 118 F.3d 820, 831-32 (1st
Cir. 1997).
In

accordance

with

this

precedent,

the

Court

denies

Plaintiff’s jury demand. The responsibility of decision will rest
on the Court based on the admissible administrative record.
IV. CONCLUSION
For the reasons stated herein, the Court GRANTS IN PART AND
DENIES IN PART LINA’s Motion to Dismiss. The First and Second
Causes of Actions survive dismissal as to Plaintiff’s Section
502(a)(1)(B)

claims

against

LINA.

Plaintiff’s

Third

Cause

Action is dismissed with prejudice.
IT IS SO ORDERED.
In San Juan, Puerto Rico, November 22, 2024.

s/Gina R. Méndez-Miró
GINA R. MÉNDEZ-MIRÓ
UNITED STATES DISTRICT JUDGE

of