Jantos v. Prudential Life Insurance Company of America

Filing 44

ORDER granting in part and denying in part defendant Prudential Life Insurance Co's 38 Motion to Dismiss by Judge Richard A Jones.(RS)

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THE HONORABLE RICHARD A. JONES

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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LAURA D. JANTOS,

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Plaintiff,
Case No. 2:15-cv-01530-RAJ
v.
ORDER
THE PRUDENTIAL LIFE INSURANCE
COMPANY OF AMERICA,
Defendant.

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This matter comes before the Court on Defendant The Prudential Life Insurance

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Company of America’s Motion to Dismiss. Dkt. # 38. Plaintiff Laura Jantos opposes

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the motion. Dkt. # 40. For the reasons that follow, the Court GRANTS in part and

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DENIES in part Defendant’s motion.

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I.

ORDER-1

BACKGROUND

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Plaintiff is a beneficiary to a Long Term Disability (LTD) Plan that Defendant
administers. Dkt. # 33 (Amended Complaint) at ¶¶ 2, 3. After suffering a traumatic

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brain injury, Plaintiff submitted a claim for benefits under the LTD Plan. Id. at ¶ 5.
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Defendant approved her claim and paid her benefits pursuant to the Plan. Id. Plaintiff

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never contested the amount of her monthly benefit.

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At some point, Defendant terminated Plaintiff’s benefits. Id. at ¶ 12. Plaintiff

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appealed the decision, and Defendant ultimately agreed to reinstate her benefits. Id.
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Plaintiff now claims that Defendant has been underpaying her benefits and brings this

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lawsuit under the Employee Retirement Income Security Act of 1974 (ERISA).

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II.

LEGAL STANDARD

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Fed. R. Civ. P. 12(b)(6) permits a court to dismiss a complaint for failure to state
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a claim. The rule requires the court to assume the truth of the complaint’s factual

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allegations and credit all reasonable inferences arising from those allegations. Sanders

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v. Brown, 504 F.3d 903, 910 (9th Cir. 2007). A court “need not accept as true

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conclusory allegations that are contradicted by documents referred to in the complaint.”
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Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The

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plaintiff must point to factual allegations that “state a claim to relief that is plausible on

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its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 568 (2007). If the plaintiff

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succeeds, the complaint avoids dismissal if there is “any set of facts consistent with the

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allegations in the complaint” that would entitle the plaintiff to relief. Id. at 563;
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).

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ORDER-2

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A court typically cannot consider evidence beyond the four corners of the
complaint, although it may rely on a document to which the complaint refers if the

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document is central to the party’s claims and its authenticity is not in question. Marder
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v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006). A court may also consider evidence

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subject to judicial notice. U.S. v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).

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III.

DISCUSSION

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A. Exhaustion of Remedies
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Plaintiff’s first claim arises under 29 U.S.C. § 1132(a)(1)(B). Dkt. # 33

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(Amended Complaint) at ¶ 16. She alleges that Defendant underpaid her LTD benefits,

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and she seeks to enforce her rights under the Plan as well as clarify her right to future

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benefits under the terms of the Plan. Id. To bring such a claim, Plaintiff “must avail . . .
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herself of a plan’s own internal review procedures before bringing suit in federal court.”

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Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620, 626 (9th Cir. 2008);

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Diaz v. United Agr. Employee Welfare Ben. Plan and Trust, 50 F.3d 1478, 1483 (9th

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Cir. 1995); Amato v. Bernard, 618 F.2d 559, 568 (9th Cir. 1980). Though this
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exhaustion requirement is a court-created doctrine, it is long settled that Congress

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intended for plaintiffs to exhaust their remedies prior to bringing suit in a federal forum.

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Diaz, 50 F.3d at 1483. Doing so reduces frivolous litigation, promotes consistent

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treatment of claims, minimizes costs of claim settlement, and allows for “proper

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reliance on administrative expertise.” Id.

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ORDER-3

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Plaintiff’s Plan provided that it would pay sixty-percent of Plaintiff’s monthly
earnings up to $15,000. Dkt. # 39 at p. 18. Accordingly, when the Plan approved

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Plaintiff’s LTD benefits, it multiplied her monthly earnings by sixty-percent to calculate
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her scheduled benefit of $9,500. Id. at p. 54. In addition to approving her benefits,

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Defendant directed Plaintiff to contact a claims handler or other representative should

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she have any questions regarding her scheduled benefits. Id. at pp. 54-55. Moreover,

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the Plan provided information on how to file a claim, and authorized Plaintiff to “start
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legal action regarding [her] claim 60 days after proof of claim has been given and up to

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3 years from the time proof of claim is required, unless otherwise provided under

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federal law.” Id. at pp. 36-38.

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Plaintiff claims an exception to her exhaustion requirement. See, generally, Dkt.
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# 40. Plaintiff explains that if Defendant’s approval letter is not an “adverse benefit

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determination,” and it is not, then she may sidestep any exhaustion requirement and

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bring a lawsuit within the time frame noted in the Plan. Id. at pp. 24-25. The Court

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disagrees. Plaintiff must attempt to utilize Defendant’s internal resources before
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venturing into a federal forum. Diaz, 50 F.3d at 1484 (“If the denial letters left Diazes

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in the dark . . ., a toll-free telephone call could have shed light on the matter. Diazes fail

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to explain why that phone call was not made, nor have they suggested that the call

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would have been unproductive.”). Had Plaintiff called her claims handler or any other

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representative—information that Defendant provided in its benefits approval letter—to
seek clarification regarding her scheduled benefits, she may have had the opportunity

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ORDER-4

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for an internal review. In fact, Defendant proved that it could resolve Plaintiff’s issues
both internally and in her favor based on Plaintiff’s appeal in 2016. Dkt. # 33

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(Amended Complaint) at ¶ 12. Internal resolution and judicial economy are not mere
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details in ERISA’s construction, and the Court takes Plaintiff’s exhaustion requirement

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seriously. Accordingly, the Court GRANTS Defendant’s motion to dismiss Plaintiff’s

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first claim under 29 U.S.C. § 1132(a)(1)(B) without prejudice.

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B. Plaintiff’s Second Claim under 29 U.S.C. § 1132(a)(3)
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Plaintiff alleges that Defendant violated its obligations as a fiduciary “by failing

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to act in accordance with the documents and instruments governing the LTD Plan”

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when calculating Plaintiff’s monthly benefit. Dkt. # 33 (Amended Complaint) at ¶ 20.

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However, Plaintiff does not allege any plausible facts to show that Defendant
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miscalculated her benefit.
The Plan clearly states that it will pay sixty-percent of Plaintiff’s monthly
earnings, not to exceed $15,000. Dkt. # 39 at p. 7. Defendant found that Plaintiff

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earned $15,833.33 per month. Dkt. # 39 at p. 54. Defendant agreed to pay Plaintiff
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sixty-percent of this amount, which equals approximately $9,500. Id. Plaintiff

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therefore fails to allege facts indicating Defendant breached its duties under the Plan.

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Because Plaintiff’s second claim turns on whether Defendant miscalculated Plaintiff’s

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monthly benefit—and it is not clear from the Amended Complaint that this occurred—

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the Court GRANTS Defendant’s motion to dismiss this claim without prejudice.

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ORDER-5

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IV.

CONCLUSION

For all the foregoing reasons, the Court GRANTS in part and DENIES in part

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Defendant’s Motion to Dismiss. Dkt. # 38. The Court dismisses Plaintiff’s Amended
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Complaint without prejudice.
Dated this 20th day of April, 2017.

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A

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The Honorable Richard A. Jones
United States District Judge

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ORDER-6