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Suzanne Moncrief v. Standard Insurance Company

January 13, 2011

SUZANNE MONCRIEF, PLAINTIFF,
v.
STANDARD INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Presently before the Court is a motion for summary judgment filed by Defendant Standard Insurance Company ("Standard"). Standard seeks a judicial determination from the Court that the group insurance plan at issue in this litigation is governed by the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. ("ERISA"). In seeking that determination, Standard's objective is to limit Plaintiff Suzanne Moncrief's potential remedies here to those available under ERISA as opposed to remedies pertaining to the common law "bad faith" claim, for breach of the implied covenant of good faith and fair dealing, that Plaintiff has currently alleged. As set forth below, Standard's motion will be granted.

BACKGROUND

This matter arises from the June 23, 2008 death of Rick Moncrief in San Francisco. An autopsy revealed, in addition to alcohol, the presence of numerous drugs in Mr. Moncrief's body, including Soma, a muscle relaxant, Vicodin and dyhydrocodeine (both narcotic painkillers), Ambien, a sleeping aid, and Celexa, an anti-depressant. Medical examiner ruled that Moncrief died of acute mixed drug intoxication. Moncrief's medical records revealed drug abuse issues over the previous two years, including a self-referral in December of 2006 to address Vicodin abuse issues, and an assessment as a "substance abuser" just five months before his death.

At the time of his death, Moncrief worked for the Glenn-Colusa Irrigation District ("District"). As an employee of the District, Moncrief was a participant in a group insurance policy issued by Standard on January 1, 2001 to the Association of California Water Agencies ("ACWA") Service Corporation. ACWA is a private not-for-profit mutual benefit corporation engaged in advocacies and lobbying on behalf of its member water agencies.

The Glenn-Colusa Irrigation District had been a participating employer in the policy issued by Standard to the ACWA Service Corporation since its inception. It is undisputed that when Standard's policy was issued, it included both public and private employers.

The life and accidental drug and dismemberment ("AD&D") coverage available under the policy was "noncontributory", meaning that all premium payments were made by the employer as opposed to the employees themselves. Moreover, by its terms the coverage was mandatory rather than voluntary for all eligible employees.

Standard paid Moncrief's life insurance benefit, but denied an additional AD&D claim made by his widow, Plaintiff Suzanne Moncrief ("Plaintiff") on grounds that such benefits were not payable when death was caused by "[t]he voluntary use of consumption of any position, chemical compound or drug, unless used or consumed according to the directions of a physician." See Ex. A, p. 4 to the Aff. of Holly Keeton in Support of Mot. for Summ. J.

Although it appears undisputed that the policy accrued to the benefit of both public and private employers at the time of its issuance in 2001, by amendment dated March 1, 2007, the named policyholder was changed from ACWA Service Corporation to ACWA Health Benefits Authority, which the ACWA website claims is a public agency responsible for the administration of employee benefit plans available to public agency members. Standard claims that the policy still allowed multiple employers to participate, however, with no requirement that employee participants be governmental employees.

Plaintiff nevertheless alleges that before her husband's death Standard was notified that the ACWA plan no longer included any private employees. Although Standard changed certain ERISA disclosures as a result of that notification, it takes issue with the contention that no private employers remained covered under the ACWA plan. It points out the fact that ACWA itself, a California corporation, remains a participating employer under the plan.

Standard's rejection of Plaintiff's AD&D claim led to the filing of the instant lawsuit, which is predicated on a common law claim (for breach of the implied covenant of good faith and fair dealing) as a result of that denial. Standard now asks the Court to determine as a matter of law that Plaintiff's common law claim in that regard is preempted by the provisions of ERISA, and that Plaintiff's complaint must accordingly be amended to delete the claim as unavailable for a policy subject to ERISA.

STANDARD

The Federal Rules of Civil Procedure provide for summary judgment when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with 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." Fed. R. Civ. P. 56(c).

One of the principal purposes of Rule 56 is to dispose of factually unsupported claims or defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Under summary judgment practice, the moving party "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file together ...


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