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Bell v. Guardian Life Insurance Co.

November 6, 2008

DAVID BELL, PLAINTIFF,
v.
GUARDIAN LIFE INSURANCE COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Joel Schneider United States Magistrate Judge

[Doc. No.18]

OPINION AND ORDER

This matter is before the Court on the Motion for Leave to File an Amended Complaint [Doc. No. 18] filed by Thomas J. Hagner, Esquire on behalf of Plaintiff, David Bell. Plaintiff filed his motion in response to Defendant Greyhawk North America, LLC's ("Greyhawk") Motion to Dismiss [Doc. No. 15]. Plaintiff, a former Greyhawk employee, asserts that Defendant, as administrator of Greyhawk's Long-Term Disability Benefits Plan, engaged in activities which resulted in the wrongful denial of his disability benefits in violation of the Employee Retirement Income Security Act ("ERISA"). (Pl. Br. 2-4). In his proposed amended complaint, Plaintiff seeks relief under three statutory sections, (1) recovery of benefits pursuant to ERISA §502(a)(1)(B), (2) equitable relief pursuant to §502(a)(3), and (3) statutory penalties pursuant to §502(c). Defendant opposes Plaintiff's Motion to Amend as futile. [Doc. No. 20]. For the following reasons, Plaintiff's Motion to Amend is GRANTED in part and DENIED in part without prejudice.

Background

Plaintiff filed this action against his former employer, Greyhawk, and the insurer of its employee benefits plan, Guardian Life Insurance Company ("Gaurdian"), seeking to recover long term disability benefits, attorneys' fees and interest. [Doc. No. 1]. Plaintiff alleges he was employed by Greyhawk until January 2005, when he could no longer continue to work due to a back problem. (Original Complaint ¶43.) At that time, Plaintiff notified Greyhawk that he wished to file a claim for long-term disability benefits and sought information regarding those benefits. (Id.) Plaintiff contends that Greyhawk erroneously informed him that Standard Security Life Insurance Company provided the benefits when, in fact, Gaurdian was the actual provider. (Id. at ¶44.) For more than a year, Plaintiff unsuccessfully sought benefits from Standard Security, until April 2006 when Plaintiff learned that Guardian was the correct provider. (Id. at ¶¶45-46.) Greyhawk then erroneously informed Guardian that Plaintiff last worked in January 2004, instead of January 2005. (Id. at ¶¶52-53.) In October 2006, Guardian denied Plaintiff's claim, finding that Plaintiff was not covered when his disability began. (Id. at ¶52.) Plaintiff appealed the denial clarifying his last day of work. (Id. at ¶54.) In April 2006, Guardian again denied Plaintiff's claim for benefits based upon lack of medical information and because Plaintiff was laid off. (Id. at ¶75.) Plaintiff contends that Greyhawk caused this denial alleging that Greyhawk sent a letter to Guardian indicating that he had been fired even though Greyhawk had previously told Standard Security Life that Plaintiff had not been fired. (Pl. Br. at 3.)

In his original complaint, Plaintiff alleged (1) that Guardian wrongfully denied him employment benefits, in violation of ERISA §502(a)(1)(B), 29 U.S.C. §1132(a)(1)(B) (2006); (2) that Greyhawk breached its fiduciary duty to Plaintiff and sought recovery under ERISA §502 (a)(3), 29 U.S.C. §1132(a)(3) (2006); and that (3) Greyhawk engaged tortious interference and made material misrepresentations to Guardian regarding Plaintiff's eligibility for disability benefits.

Soon after Plaintiff filed his original complaint, Guardian entered into a confidential settlement with Plaintiff. (Pl. Br. at 3.) Guardian was subsequently dismissed as a defendant. [Doc. No. 16]. According to Plaintiff, Guardian refused to pay interest or attorneys' fees as part of the settlement because (1) Guardian had relied on the erroneous information provided by Greyhawk when it denied Plaintiff benefits and (2) Guardian did not cause Plaintiff's initial 18 month delay in receiving benefits, resulting from Greyhawk's mis-identification of the correct insurance company. (Pl. Br. at 3-4.)

Greyhawk, the only remaining defendant, subsequently filed a Motion to Dismiss Plaintiff's Complaint. [Doc. No. 15]. In its motion Defendant argues (1) that Plaintiff failed to state a claim against Greyhawk under §502(a)(1)(B) because Plaintiff alleged that Guardian, not Greyhawk, wrongfully denied him benefits; (2) that Plaintiff's fiduciary duty claim under §502(a)(3) is precluded because the relief sought is duplicative of that available under §502(a)(1)(B); and (3) that Plaintiff's state law claims are preempted by ERISA. (See Def. Motion to Dismiss [Doc. No. 15] at 1-3.)

In response to Defendant's motion, Plaintiff seeks leave to amend his complaint. In his proposed amended complaint Plaintiff makes two material changes to his original complaint. In the first count of his proposed amended complaint Plaintiff re-alleges the claim for recovery of benefits under ERISA §502(a)(1)(B) and adds language asserting that Greyhawk, as an administrator of the benefits plan, delayed the processing of Plaintiff's claim, made material misrepresentations to Guardian, and breached its fiduciary duty to Plaintiff. In his second count Plaintiff re-alleges the claim from his original complaint seeking recovery for breach of fiduciary duty under §502(a)(3) against Greyhawk. In his third count, Plaintiff adds a claim seeking statutory penalties under §502(c), and drops his misrepresentation and tortious interference claims.

Standard of Review

Pursuant to Fed. R. Civ. P. 15(a), leave to amend pleadings "shall be freely given when justice so requires." Leave shall be freely given in the absence of undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies in previous amendments, undue prejudice or futility of the amendment. Foman v. Davis, 372 U.S. 178, 182 (1962); Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000). "[A]bsent substantial or undue prejudice, denial must be grounded in bad faith or dilatory motives, truly undue or unexplained delay, repeated failure to cure deficiency by amendments previously allowed or futility of amendment." Long v. Wilson, 393 F.3d 390, 400 (3d Cir. 2004) (quoting Lundy v. Adamar of New Jersey, Inc., 34 F.3d 1173, 1196 (3d Cir. 1994)). An amendment sought pursuant to Rule 15(a) shall be permitted unless it would be inequitable or futile. Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002).

In determining the futility of an amendment, the Court "applies the same standard of legal sufficiency as applies under Rule 12(b)(6)." Medpointe Healthcare, Inc. v. Hi-Tech Pharmacal Co., Inc., 380 F.Supp.2d 457, 462 (D.N.J. 2005) (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1434 (3d. Cir. 1997)); Alvin v. Suzuki, 227 F.3d 107, 121 (3d Cir. 2000).

The Court must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)); Brown v. Phillip Morris, Inc., 250 F.3d 789, 796 (3d Cir. 2001). A motion to dismiss may be granted, or in this case a proposed amendment deemed futile, only if it is clear that "if, in view of what is alleged, it can reasonably be conceived that the plaintiffs... could, upon a ...


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