Guzman De Mascorro v. Cigna Health and Life Insurance Company
ORDER denying 9 Motion to Dismiss; granting 13 Motion for Leave to File.(Signed by Judge Nelva Gonzales Ramos) Parties notified.(mserpa, 2)
United States District Court
Southern District of Texas
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
February 21, 2017
David J. Bradley, Clerk
YAIDILH Y GUZMAN DE MASCORRO, §
§ CIVIL ACTION NO. 2:16-CV-499
CIGNA HEALTH AND LIFE
INSURANCE COMPANY; dba LIFE
INSURANCE COMPANY OF NORTH
After the death of her husband, Plaintiff Yaidilh Y. Guzman de Mascorro filed this
action against CIGNA Health and Life Insurance Company d/b/a Life Insurance
Company of North America (CIGNA), seeking accidental death benefits allegedly due
from two employer-based life insurance policies, along with damages for the company’s
failure to timely pay her claim. In her original petition filed in state court, she alleged
only state law claims of breach of contract, deceptive trade practices, and violations of
the Texas Insurance Code. D.E. 1-3.
CIGNA removed the case to this Court and filed its Motion to Dismiss (D.E. 9)
alleging preemption of all of the state law claims under the Employee Retirement Income
Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq. Plaintiff responded, contending
that the policies are not governed by ERISA and thus ERISA preemption does not apply.
Additionally, Plaintiff filed a Motion for Leave to File First Amended Petition (D.E. 13),
continuing to allege her state law claims and seeking to add an alternative claim for
policy benefits under 29 U.S.C. § 1132(a)(1)(B). For the reasons set out below, the Court
DENIES the motion to dismiss the state law claims and GRANTS Plaintiff’s motion for
leave to file an amended complaint.
STANDARD OF REVIEW
The test of pleadings under Rule 12(b)(6) is devised to balance a party’s right to
redress against the interests of all parties and the court in minimizing expenditure of time,
money, and resources devoted to meritless claims. Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 558 (2007). Federal Rule of Civil Procedure 8(a)(2) requires only “a short and
plain statement of the claim showing that the pleader is entitled to relief.” Furthermore,
“[p]leadings must be construed so as to do justice.” Fed. R. Civ. P. 8(e). The Court
further construes the facts alleged in the complaint as true.
A motion to dismiss for failure to state a claim upon which relief can be granted
can be based not only on a plaintiff’s claims but on matters that support an affirmative
defense, such as limitations or preemption. E.g., Adobbati v. Guardian Life, 213 F.3d
638 (5th Cir. 2000) (evaluating ERISA preemption in 12(b)(6) context). Even if some
allegations support a claim, if other allegations negate the claim on its face, then the
pleading does not survive the 12(b)(6) review.
A complaint is subject to dismissal for failure to state a claim
if the allegations, taken as true, show the plaintiff is not
entitled to relief. If the allegations, for example, show that
relief is barred by the applicable statute of limitations, the
complaint is subject to dismissal for failure to state a claim;
that does not make the statute of limitations any less an
affirmative defense, see Fed. Rule Civ. Proc. 8(c). Whether a
particular ground for opposing a claim may be the basis for
dismissal for failure to state a claim depends on whether the
allegations in the complaint suffice to establish that ground,
not on the nature of the ground in the abstract.
Jones v. Bock, 549 U.S. 199, 215 (2007).
A. The Court May Consider the Policies
Plaintiff objects to the Court’s consideration of the group accident policies (D.E.
9-1, 9-2), which are attached to the motion to dismiss. Yet these are the same policies on
which she has based this action, referring to them by their policy numbers in her
pleading. D.E. 1-3, p. 3.
In a Federal Rule of Civil Procedure 12(b)(6) context, the Court may consider: (a)
documents attached to the complaint or identified as central to the claims made therein;
(b) documents attached to the motion to dismiss that are referenced in the complaint; and
(c) documents that are subject to judicial notice as public record. Funk v. Stryker Corp.,
631 F.3d 777, 783 (5th Cir. 2011); Collins v. Morgan Stanley Dean Witter, 224 F.3d 496,
498–99 (5th Cir. 2000).
Therefore, the Court may consider the policies CIGNA
submitted without converting the motion to a summary judgment motion under Rule 56.
B. Whether the Policies are Governed by ERISA is a Fact Question
Whether there is an ERISA plan is a question of fact when there is conflicting
evidence. Shearer v. Sw. Serv. Life Ins. Co., 516 F.3d 276, 278 (5th Cir. 2008). ERISA
qualification is demonstrated by showing: (1) the plan exists; (2) the plan falls outside
the safe harbor exclusion because, in this case, the employer contributes to the plan; and
(3) the plan is established by the employer for the purpose of providing benefits to its
employees. McNeil v. Time Ins. Co., 205 F.3d 179, 189 (5th Cir. 2000); Meredith v. Time
Ins. Co., 980 F.2d 352, 355 (5th Cir. 1993).
The purchase of insurance, while
constituting substantial evidence of an ERISA plan, is not conclusive. Mem’l Hosp. Sys.
v. Northbrook Life Ins. Co., 904 F.2d 236, 242 (5th Cir. 1990); see also Kidder v. H&B
Marine, Inc., 932 F.2d 347, 353 (5th Cir. 1991).
Plaintiff argues that the policies are not governed by ERISA because they were
issued to “Trustee of the Group Insurance Trust for Employers in the Construction
Industry,” as policyholder.
Kiewit Offshore Services, Ltd is listed as one of four
affiliates covered by the policies, along with three Nebraska companies. D.E. 9-2, p. 28;
D.E. 9-3, p. 47. The term “affiliates” is not defined by the policies. Consequently,
Plaintiff argues that the policy has been issued to a Multiple Employer Trust (MET) and
cannot constitute an ERISA plan, citing Taggart Corp. v. Life & Health Benefits Admin.,
617 F.2d 1208, 1211 (5th Cir. 1980) and Northbrook, supra. However, Peter Kiewit
Sons’, Inc.—decedent’s alleged employer—is listed as subscriber throughout the policies
and their amendments. D.E. 9-2, 9-3. Furthermore, the Fifth Circuit has determined that
purchasing a policy through a MET does not necessarily take it outside of ERISA
coverage. Northbrook, 904 F.2d at 242.
The scenario under which these policies were purchased does not appear to be
equivalent to the Taggart scenario.
In Taggart, the company employing a single
employee sought to purchase a single-employee policy at a discount by pooling with
other employers. Here it appears that there is a much larger number of employees
covered by the policies. Nonetheless, there is a fact issue whether the employer here
purchased the insurance for the benefit of the employees.
The Court further observes that there are no allegations addressing the requirement
that the employer be engaged in interstate commerce. McNeil, 205 F.3d at 191. And the
policies, being the only evidence before the Court, are not conclusive of any issues.
If “an employer does no more than purchase insurance for its
employees and has no further involvement with the collection of premiums,
administration of the policy, or submission of claims, the employer has not established an
ERISA plan.” Shearer, 516 F.3d at 279.
The Court declines to convert the motion to dismiss to a summary judgment
motion because Plaintiff has not had an opportunity to conduct discovery. Fed. R. Civ. P.
56(d). In addition, Plaintiff’s desire to add an ERISA claim in the alternative—an
amendment the Court is inclined to allow—indicates that the motion to dismiss would not
be dispositive of the case at any rate. Therefore, without reaching the question of
whether the state claims would be preempted if ERISA applies, the Court DENIES the
motion to dismiss (D.E. 9) because CIGNA has not demonstrated that Plaintiff’s claim is
conclusively defeated by the pleadings, even when the policies are considered along with
the pleading. The Court GRANTS Plaintiff’s motion for leave to amend and instructs the
Clerk to file the amended complaint (D.E. 13-1) as an independent document on the
docket of this case.
ORDERED this 21st day of February, 2017.
NELVA GONZALES RAMOS
UNITED STATES DISTRICT JUDGE
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