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Majka v. Prudential Insurance Co. of America

November 27, 2001


The opinion of the court was delivered by: Irenas, District Judge.



This matter having appeared before the Court upon Defendants' Motion for Summary Judgment, the Court having reviewed the submissions of the parties, and it appearing that:

1. Plaintiff Marijean Majka was employed by the William Wrigley, Jr. Company ("Wrigley") as a sales representative when, in January 2000, she left her employment due to physical disability;

2. At all times relevant to this litigation, Wrigley employees, including Plaintiff, were covered by the Wrigley Disability Income Benefit Plan ("the Plan"), an employee benefit plan offered by Defendant Prudential Insurance Company of America, Inc. ("Prudential") and administered by Defendant Prudential Disability Management Services ("Prudential Services"), a Prudential subsidiary;

3. Pursuant to the terms of the Plan, Plaintiff was paid short-term disability benefits for a one-year period beginning after the onset of her condition in January 2000. Plaintiff also submitted a claim to Prudential for long-term disability benefits. (Compl. at ¶ 14). This request was denied in January 2001. (Id.). The stated reason for this denial was that Plaintiff had been "released to return to work" before becoming qualified for long-term benefits. (See Cert. of Andrew K. Craig, Ex. D);

4. In connection with the denial of her request, Plaintiff was sent a letter, dated January 8, 2001, explaining the basis for Defendants' denial of her claim. (See Craig Cert., Ex. D). The letter informed Plaintiff that she was entitled, by the terms of the Plan, to appeal the initial denial of benefits. The letter then stated that any such appeal would need to be in writing and could be accompanied by "comments or additional evidence [Plaintiff] wish[ed] considered as well as any pertinent documents." The letter concluded by providing an address to which Plaintiff's appeal should be sent. (Certification of Andrew Craig, Ex. D);

5. One piece of information not contained in the letter was the time limit, if any, applicable to Plaintiff's appeal. In order to clarify this issue and others, Plaintiff contacted Prudential by telephone on a number of occasions. (See Prudential's Telephone Call Logs, attached as Ex. A to the Cert. of Jane A. Kenney). On January 29, 2001, Plaintiff spoke with Helen Lopez, a Prudential Services employee who told Plaintiff that she was entitled to appeal the decision against her and a that "a letter will be sent out." (Id.). According to Plaintiff, she understood Ms. Lopez's statements as indicating that Plaintiff would be receiving another letter, in addition to the one sent on January 8, 2001, describing her appeal rights. (See Pl. Stmt. of Mat. Facts, ¶ 14). No additional letter was received. On February 15, 2001, Plaintiff's attorney sent a letter to Tammy Pisano, a Prudential Services Disability Claim Manager, requesting information about the time limits applicable to Plaintiff's appeal. On February 21, 2001, Plaintiff again called Prudential Services to inquire about the issue of time limits and to request any necessary "appeal forms." According to the phone records and Statement of Material Facts submitted by Plaintiff, Tammy Pisano responded to this inquiry by leaving a message, on Plaintiff's answering machine, indicating that there was no time limit for Plaintiff's appeal and that Plaintiff would need to send a written letter of appeal. (See id. at ¶ 12);

6. Plaintiff did not file an appeal, however. Instead, on April 23, 2001, Plaintiff filed the instant lawsuit pursuant to § 502 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1132(a)(1)(B), (g)(1), claiming that Defendants impermissibly refused to provide her with long-term disability benefits to which she was entitled under the Plan. In addition, Plaintiff asserted state common law claims for breach of contract (Count II) and breach of the implied covenant of good faith and fair dealing (Count III);

7. On October 23, 2001, Defendants filed the instant Motion for Summary Judgment, arguing that Plaintiff's state law claims are preempted by ERISA and should therefore be dismissed and that Plaintiff's ERISA claim should be dismissed because Plaintiff failed to exhaust the administrative remedies available to her under the Plan;

8. "[S]ummary judgment is proper `if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting Fed. R. Civ. P. 56(c));

9. There is no question that ERISA preempts Plaintiff's state law claims for breach of contract and breach of the implied duty of good faith and fair dealing. The parties agree that the Plan is an "employee benefit plan" covered by ERISA. (See Def. Stmt. Mat. Facts, ¶ 7, Pl. Response to Def.'s Stmt. Mat. Facts, ¶ 7). Section 514(a) of ERISA provides that the Act shall, with certain limited exceptions, "supercede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan...." 29 U.S.C. 1144(a). The Supreme Court has given the phrase "relates to" its "broadest common-sense meaning," holding that a state law relates to an employee benefit plan if it "has a connection with or reference to such a plan." Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724,739 (1985). In particular, the Court has determined that ERISA's preemption clause is "not limited to state laws specifically designed to affect employee benefit plans." Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47-48 (1987) (quoting Shaw v. Delta Airlines, 463 U.S. 85, 98 (1983));

10. As the Third Circuit recently noted, "suits against... insurance companies for denial of benefits, even when the claim is couched in terms of common law negligence or breach of contract, have been held to be preempted by § 514(a)." Pryzbowski v. U.S. Healthcare, Inc., 245 F.3d 266, 278 (3d Cir. 2001) (citation omitted). Indeed, the issue was squarely addressed in Pilot Life, in which the Supreme Court held that a plaintiff's common law claims for "tortious breach of contract" and "bad faith" "undoubtedly meet the criteria for pre-emption under § 514(a)". 481 U.S. at 48. The basis for such holdings is that "the decision whether a requested benefit or service is covered by the ERISA plan falls within the scope of the administrative responsibilities of the... insurance company and therefore `relates to' the employee benefit plan." Pryzbowski, 245 F.3d at 278; *fn1

11. Plaintiff claims that she was entitled to long-term disability benefits under the terms of the Plan and that Prudential's failure to provide those benefits constituted breach of contract and of the duty of good faith and fair dealing. Under the rationale discussed above, such claims undoubtedly "relate to" Plaintiff's ERISA plan and are therefore preempted. Indeed, Plaintiff appears to concede this point as she does not address the issue at all in her opposition ...

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