Jansen v. The Lincoln Financial Group et al

Filing 15

MEMORANDUM OPINION AND ORDER denying as moot 5 MOTION to Dismiss for Failure to State a Claim filed by The Minute Clinic Group of Employers, The Lincoln National Life Insurance Company, Group Long Term Disability Insurance For The Employees of The Minute Clinic Group of Employers, The Lincoln Financial Group; denying 7 MOTION to Amend Complaint filed by Janelle Jansen. Signed by U. S. District Judge Roberto A. Lange on 11/14/13. (CMS)

FILED
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA

SOUTHERN DIVISION

JANELLE JANSEN,
Plaintiff,
vs.
THE LINCOLN FINANCIAL GROUP,
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY, GROUP
LONG TERM DISABILITY
INSURANCE FOR THE EMPLOYEES
OF THE MINUTE CLINIC GROUP OF
EMPLOYERS, and THE MINUTE
CLINIC GROUP OF EMPLOYERS,
Defendants.
I.

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CIV 13-4068-RAL

NOV 14 20f3

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OPINION AND ORDER
REGARDING MOTION TO
DISMISS AND PROPOSED
AMENDED COMPLAINT

INTRODUCTION

Plaintiff Janelle Jansen ("Jansen") filed a Complaint, Doc. 1, against Defendants the
Lincoln Financial Group, the Lincoln National Life Insurance Company, Group Long Term
Disability Insurance for the Employees ofthe Minute Clinic Group ofEmployers, and the Minute
Clinic Group ofEmployers (collectively "Defendants"). Defendants filed a Motion to Dismiss,
Doc. 5, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a
claim upon which relief can be granted arguing that the claims alleged in the Complaint relate
to a plan governed by the Employee Retirement Income Security Act of 1974,29 U.S.C. § 1001,

et seq. ("ERISA") and therefore are preempted by ERISA's exclusive avenues for recovery.
Doc. 6 at 1-2. The Motion to Dismiss also requested that this Court order Jansen to re-plead her
claims to allege a cause of action under ERISA. Doc. 6 at 5.
Jansen opposed the Motion to Dismiss, Doc. 7, and attached a proposed Amended
Complaint, Doc. 7-1. Defendants objected to the filing of the proposed Amended Complaint

because it still contained claims, including a tort claim, that are preempted by ERISA. Doc. 10
at 1. Defendants argued that amendment would be futile because even the Amended Complaint
would be subject to dismissal. Doc. 10 at 1. Jansen then filed a proposed Second Amended
Complaint, Doc. 11-1, which deleted the tort claim and cast the contract claim as an ERISAgoverned claim. Doc. 11-1. Because the proposed Second Amended Complaint appears to state
only an ERISA-governed claim, this Court grants Jansen leave to serve and file the Second
Amended Complaint and denies Defendants' Motion to Dismiss as moot.

II.

BACKGROUND
According to her Complaint, Jansen was an employee of the Minute Clinic, which is

based in Minnesota, while she resided in South Dakota. Doc. 1 at

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2, 8, 12. Through her

employment, Jansen participated in the Minute Clinic's Long-Term Disability Plan ("the Plan")'
that was obtained through Defendants. Doc. 1 at ~~ 2,3, 12.
Jansen's original Complaint first stated that it was a civil enforcement action brought
pursuant to ERISA seeking to establish her right to benefits under an ERISA-governed plan in
which she participated. Doc. 1 at ~ 1. She alleged that plan administrators wrongfully denied
her long-term benefits that she was entitled to under the Plan. Doc. 1 at ~~ 8-9. The original
Complaint, however, contained two additional claims: (1) a "contract claim" and (2) a "tort
claim." Doc. 1 at 3-4. The "contract claim" alleged that Jansen purchased the Plan, she became
disabled and unable to work, and that Defendants violated the contract-the Plan-by
discontinuing her long-term disability coverage. Doc. 1 at ~~ 16-26. Defendants' failure to pay

J The Plan's full title is the Group Long Term Disability Insurance for Employees of the
Minute Clinic Group of Employers. Doc. 1 at ~ 4.

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pursuant to the contract, Jansen alleged, was "vexatious and without reasonable cause, entitling
Plaintiff to attorney's fees pursuant to SDCL 58-12-3 ERISA." Doc. 1 at

~

27.

Jansen's

"contract claim" sought the monthly payments wrongfully withheld, future payments, and
attorney's fees. Doc. 1 at 4- 5. Jansen's tort claim alleged thatthe Defendants denied Jansen her
benefits in "bad faith." Doc. 1 at ~ 29. Jansen's "tort claim" then sought to recoup an amount
equaling "past payments due [to] the Plaintiff plus present value of all future payments due [to]
the PlaintifiI,] ... punitive and exemplary damages in an amount equal to 1% of the assets" of
Defendants, and costs, interest, and any additional relief the court deems appropriate. Doc. 1 at
4-5.
Defendants moved to dismiss arguing that Jansen's contract and tort claims were
preempted by ERISA. Doc. 6 at 1. Defendants requested that Jansen be ordered to amend her
Complaint to seek relief only under ERISA. Doc. 6 at 5. Jansen resisted the Motion to Dismiss
and attached a proposed Amended Complaint to her response to the Defendants' Motion to
Dismiss. Doc. 7; Doc. 7-1. Jansen's Amended Complaint clarified that the "contract claim" was
"governed by ERISA 29 U.S.C[.] § 1003" and was brought to recover wrongfully withheld plan
benefits. Doc. 7-1 at 3-6. The proposed Amended Complaint retained the "tort claim" alleging
"bad faith" but citing ERISA's civil enforcement provision as its source.

Doc. 7-1 at 5.

Curiously, Jansen did not file a separate motion for leave to amend under Rules 7(b) and 15(a)
of the Federal Rules of Civil Procedure, but it is clear that Jansen wished to amend her
Complaint.
Defendants filed a brief in response to Jansen's opposition and Amended Complaint
arguing that dismissal of any claim that was not brought pursuant to ERISA was required and
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objected to the Amended Complaint. Doc. 10 at 1. Defendants' position was:
Defendants have no objection to the Motion to Amend to the
extent it seeks leave to file an amended pleading that states claims
for relief under [ERISA], rather than state law. Defendants,
however, oppose Jansen's request for leave to file the proposed
Amended Complaint [] that includes state law claims and
remedies against Defendants because the amendment is futile.
Doc. 10 at 1.
Pursuant to Local Rule 7.1, the briefing schedule was to terminate with Defendants' reply
brief. However, after Defendants' reply brief, Jansen filed Plaintiffs Reply to Defendants'
Renewed Motion to Dismiss, Doc. 11, and attached to that document her proposed Second
Amended Complaint, Doc. 11-1.

Again, Jansen did not file a separate motion to amend

complaint under Rules 7(b) and 15(a) ofthe Federal Rules ofCivil Procedure, but her intentions
to seek leave to amend are obvious here. Her proposed Second Amended Complaint avers that

it is a civil enforcement action under ERISA and that its "contract claim" is "governed by ERISA
29 U.S.C[.] § 1003." Doc. 11-1. The proposed Second Amended Complaint omits the "tort
claim" and any request for punitive damages. Doc. 11-1. Defendants did not respond, nor were
they called upon to do so by the local rules. The Second Amended Complaint fairly can be read
as seeking to recover exclusively under ERISA. See Doc. 11-1.

III.

DISCUSSION
A state law is preempted by ERISA if it "relate[s]" to an employee benefit plan. Pilot

Life Ins. Co. v. Dedeaux, 481 U.S. 41, 45 (1987) (quoting 29 U.S.C. § 1144(a)); see also
Parkman v. Prudential Ins. Co. of Am., 439 F.3d 767, 771 (8th Cir. 2006) ("ERISA supercedes
'any and all State laws insofar as they ... relate to any employee benefit plan.'" (quoting 29
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U.S.c. § 1144(a»). ERISA's preemption provision is "conspicuous for its breadth," Cal. Div.
of Labor Standards Enforcement v. Dillingham Constr., N.A. Inc., 519 U.S. 316, 324 (1997)
(quotations marks and citation omitted), "deliberately expansive, and designed to 'establish
pension plan regulation as exclusively a federal concern,'" Pilot Life Ins., 481 U.S. at 45-46
(quoting Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523 (1981». A law "relates to" and
is therefore preempted by, an ERISA plan ifthe law "has (1) 'a connection with' or (2) 'reference
to such a plan.'" Parkman, 439 F.3d at 771 (quoting Cal. Div. of Labor Standards, 519 U.S. at
324). Courts routinely hold that ERISA preempts state common law contract and tort claims that
allege improper processing or wrongful denial ofa claim for benefits from an ERISA plan. See
~,

Pilot Life, 481 U.S. at 47 ("There is no dispute that the common law causes of action

asserted in Dedeaux's complaint 'relate to' an employee benefit plan and therefore fall under
ERISA's express pre-emption clause, § 514(a)."); Parkman, 439 F.3d 771-72 (holding that when
"the essence of [the Plaintiffs] claim relate to the administration ofplan benefits, it falls within
the scope of ERISA"); Thompson v. Gencare Health Sys. Inc., 202 F.3d 1072, 1073 (8th Cir.
2000) (per curiam) ("ERISA remedies preempt 'state common law tort and contract actions
asserting improper processing ofa claim for benefits' under an ERISA plan." (quoting Pilot Life,
481 U.S. at 43».
Before turning to whether Jansen's claims are preempted, this Court first observes that
ERISA applies to this case because the Plan is an ERISA-governed plan.

Jansen has

acknowledged in her Complaint and proposed Amended Complaints that the Plan is governed
by ERISA. Doc. 1 at ~ 13; Doc. 7-1 at ~ 13; Doc. 11-1 at ~ 13.
Jansen's original Complaint referenced ERISA but contained a contract claim and tort
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claim seeking recovery outside of ERISA. Doc. 1. Jansen's proposed Amended Complaint,
Doc. 7-1, stated that it was a civil enforcement action under ERISA, confined the "contract
claim" to seek recovery under ERISA, yet still contained the "tort claim." Doc. 7-1.

The

Second Amended Complaint, Doc. 11-1, stated, as did the previous two complaints, that it was
a civil enforcement action, but it excised the "tort claim" and punitive damages request while
retaining the "contract claim" with ERISA as its source. Doc. 11-1.
Jansen may seek relief only pursuant to ERISA under the circumstances ofthis case. The
essence ofall ofJansen's claims are that she was improperly denied long-term disability benefits
under an ERISA-governed plan. Because the "essence of [Jansen's] claims relate to the
administration ofplan benefits, [the claims] fall within the scope ofERISA." Parkman, 439 FJd
771-72. Any state law contract or tort claims that she wishes to assert are preempted by ERISA.
With that said, this Court understands Jansen's Second Amended Complaint as asserting only
an ERISA claim. Thus, there is no need to require Jansen to re-plead her Complaint.

IV.

CONCLUSION
For the foregoing reasons, it is hereby
ORDERED that Jansen is granted leave under Rule 15(a) of the Federal Rules of Civil

Procedure to file her Second Amended Complaint and should do so forthwith in the CMlECF
system. It is further
ORDERED that the Defendant's Motion to Dismiss, Doc. 5, is denied as moot in light
of the Second Amended Complaint. It is further
ORDERED that Jansen's request to file the Amended Complaint, Doc. 7-1, is denied.

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,t.

Dated November It-/, 2013.

BY THE COURT:

ROBERTO A. LANGE
UNITED STATES DISTRICT JUDGE

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