United States District Court, N.D. California
For John Zisk, Plaintiff: Richard Johnston, Richard Johnston Attorney At Law, Santa Rosa, CA.
For Gannett Company Income Protection Plan, Defendant: Aldo Emmanuel Ibarra, LEAD ATTORNEY, Nixon Peabody, One Embarcadero Ctr, San Francisco, CA; David Andrew Kolek, LEAD ATTORNEY, Restoration Hardware, Corte Madera, CA.
For Life Insurance Company of North America, Defendant: Adrienne Clare Publicover, Laura E. Fannon, Wilson Elser Moskowitz Edelman & Dicker LLP, San Francisco, CA.
ORDER DENYING MOTION TO DISMISS
SECOND CAUSE OF ACTION Re: Dkt. No. 19
YVONNE GONZALEZ ROGERS, UNITED STATES DISTRICT JUDGE.
Plaintiff John Zisk (" Zisk" ) filed suit bringing two causes of action under the Employee Retirement Income Security Act of 1974, as amended (" ERISA" or " the Act" ), 29 U.S.C. § 1001 et seq. The first cause of action seeks to recover long-term disability (" LTD" ) benefits from the Gannett Company Income Protection Plan (" the Plan" ) pursuant to section 1132(a)(1)(B). The second cause of action is brought pursuant section 1132(a)(3) against Defendant Life Insurance Company of North America (" LINA" ) as the fiduciary that administers claims against the Plan. In this cause of action Zisk seeks to recover equitable relief in the form of an equitable surcharge on account of LINA's alleged breach of fiduciary duty and mishandling of his claim. With respect to this second cause of action, LINA has filed a Motion to Dismiss on the grounds that such a claim is not actionable against it and that the remedy Zisk seeks is unavailable as a matter of law.
Having carefully considered the papers submitted and the pleadings in this action, as well as the oral arguments of the parties at the October 14, 2014 hearing, and for the reasons set forth below, the Court finds that the plaintiff is not precluded from asserting his claim at this juncture and Denies the Motion to Dismiss.
I. Summary of Allegations
What follows is a summary of the allegations of Zisk's First Amended Complaint (" FAC" ), which the Court accepts as true for purposes of this motion to dismiss. See Diaz v. International Longshoremen's and Warehousemen's Union, 474 F.3d 1202, 1205 (9th Cir. 2007). The FAC alleges that Zisk was an employee of Gannett Company and participated in the Plan. (FAC ¶ 2.) Zisk suffers from symptoms of metastatic cancer and the treatment he has undergone for that condition. The condition rendered him disabled and eligible for LTD benefits according to the terms of the Plan. (FAC ¶ 3.)
Zisk alleges that when he claimed disability in May 2000, the Plan approved his claim and began paying him LTD benefits. (FAC ¶ ¶ 4, 5.) In July 2012, LINA, acting
as claim fiduciary, terminated Zisk's benefits on the stated ground that LINA had not been provided with updated medical records. LINA advised Zisk that his continued satisfaction of the Plan's definition of disability could not be established and that benefits would be terminated. (FAC ¶ 5.) Zisk alleges that in fact LINA did have the information necessary to establish his disability, but nevertheless withheld benefits. (FAC ¶ ¶ 5-8.) Zisk appealed the termination of benefits on March 13, 2013, pointing out that LINA had the information it needed to contact his providers for additional medical information. (FAC ¶ 9.) On June 14, 2013, LINA advised Zisk its attempts to secure updated medical information from his providers had been unsuccessful. Zisk alleges he subsequently sent LINA updated medical records himself, but his benefits were still not reinstated. (FAC ¶ ¶ 11, 12.)
On June 13, 2014, Zisk filed the instant action. In his claim for breach of fiduciary duty against LINA, Zisk alleges that LINA breached its fiduciary duties by: (1) providing misleading information about the status of his claim and its attempts to secure information from his medical providers; and (2) failing to investigate, fully and adequately, the facts and circumstances surrounding its determination to terminate his benefits, including the information already in its possession. As a consequence of the alleged breaches, Zisk seeks " other appropriate equitable relief" under 29 U.S.C. section 1132(a)(3) in the form an equitable surcharge to make him whole for his losses occasioned by that breach. More particularly, Zisk alleges that he seeks, as an equitable surcharge remedy: (i) attorneys' fees incurred in connection with the administrative appeal; (ii) penalties and interest that plaintiff incurred when he used his retirement account funds in lieu of disability benefits; (iii) losses incurred from the sale of assets as a source of funds; (iv) losses ...