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Zelhofer v. Metropolitan Life Insurance Co.

United States District Court, E.D. California

August 2, 2016




         Plaintiff brings a complaint in pro se against his former employer, Technicolor USA, Inc. (“Technicolor”) and Metropolitan Life Insurance Co. (“MetLife”) for breach of contract and breach of fiduciary duty arising from the denial of long term disability benefits. This matter was referred to the undersigned by Eastern District of California Local Rule 302(c)(21). Several motions came before the undersigned for hearing on July 27, 2016. Plaintiff appeared at the hearing in pro se, and defendants were represented by attorney Robert E. Hess. The following were argued and submitted for decision: (1) Defendants’ Motion to Dismiss and to Strike, ECF No. 10; (2) Plaintiff’s Motion to Remand, ECF No. 12; (3) Plaintiff's Motion to Amend his Complaint, ECF No. 15; and (4) Plaintiff's Motion for Summary Adjudication, ECF No. 30.

         I. BACKGROUND

         Technicolor’s predecessor company, Thomson Inc., created a Disability Plan for its employees on or about January 1, 2008. The Plan was funded through insurance with MetLife. ECF Nos. 10-2, 10-3 at 4. Technicolor is the Plan administrator and MetLife is the Claim administrator. ECF 10-3 at 4.

         Plaintiff alleges that he suffered from a serious heart disease that required him to undergo two consecutive bypass and stent surgeries in September and October 2009, when he was an employee covered by the Plan. ECF No. 1-1 at 20-26. Plaintiff was subsequently found by his psychologist to suffer from a secondary mental disorder of severe depression, anxiety and hopelessness with suicidal thoughts while attempting to rehabilitate from the surgeries and their side effects. ECF 1-3 at 12:3-11. He was afforded disability benefits by defendants on March 27, 2010, and was paid $5, 336.72 per month, id. at 11:20-27, for approximately two years. In March of 2012, plaintiff attempted to enroll in the Plan’s “Return to Work” program, and was told that he was being terminated because benefits related to mental illness were limited to a two-year period. ECF No. 1-2 at 10-12.

         Plaintiff’s complaint was filed in Nevada County Superior Court on March 7, 2016. ECF 1-1 at 3. Defendants removed the action to federal court on April 15, 2016. ECF No. 1. Insofar as the court has concluded for the reasons which follow that the Disability Plan at issue is indeed governed by ERISA, jurisdiction is established under 28 U.S.C. § 1331.


         The Employee Retirement Income Security Act (ERISA) was enacted to provide a uniform regulatory regime over employee benefit plans and, in order to assure success in that effort, it includes “expansive preemption provisions ... which are intended to ensure that employee benefit plan regulation would be ‘exclusively a federal concern.’” Aetna Health. Inc. v. Davila, 542 U.S. 200, 208 (2004) (quoting Pilot Life Ins. Co. v. Deadeaux, 482 U.S 41 (1987)). “Therefore, any state law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore preempted.” Aetna, 542 U.S. at 209.

         The criteria for establishing that a disability plan is ERISA regulated are: (1) a plan, fund or program; (2) established or maintained; (3) by an employer; (4) for the purpose of providing benefits; (5) to its employees. 29 U.S.C. § 1002(2)(A); Kanne v. Connecticut General Life Ins. Co., 867 F.2d 489, 492 (9th Cir. 1988). Criterion (1) “implies the existence of intended benefits, intended beneficiaries, a source of funding, and a procedure to apply for and collect benefits.” Donovan v. Dillingham, 688 F.2d 1367, 1371 (11th Cir. 1982). The Plan at issue here meets all these criteria. The Plan was instituted by Thompson Inc. for the benefit of its employees and was designed to provide them with benefits when they suffered a disability that precluded them from working. Plaintiff argues that this is not an ERISA controlled plan since it is funded solely by insurance. But, as the Ninth Circuit has determined, “[a]n employer . . . can establish an ERISA plan rather easily. Even if an employer does no more than arrange for a ‘group-type insurance program, ’ it can establish an ERISA plan, unless it is a mere advisor who makes no contributions on behalf of its employees.” Credit Managers Ass’n of So. Cal. v. Kennesaw Life and Accident Ins. Co., 809 F.2d 617, 625 (9th Cir. 1986).

         The Plan here meets all of the ERISA criteria. Because plaintiff’s complaint seeks relief from an ERISA regulated Plan, the federal courts have exclusive jurisdiction over this dispute and removal was proper. See Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (1987); Marin General Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 945 (9th Cir. 2009). Plaintiff’s framing of his claims in state law terms (breach of contract and breach of fiduciary duty) does not defeat removal, because those claims are preempted by ERISA. Id. Accordingly, plaintiff’s Motion to Remand will be denied.


         A. Standards Under Rule 12(b)(6)

         A motion to dismiss under Fed.R.Civ.P. 12(b)(6) tests the sufficiency of a complaint. Ileto v. Glock, Inc., 349 F.3d 1191, 1199-1200 (9th Cir. 2003). A complaint may be dismissed as a matter of law for two reasons: (1) lack of a cognizable legal theory, or (2) insufficient facts under a cognizable theory. See Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).

         In reviewing a Rule 12(b)(6) motion, the Court will only ascertain whether the nonmoving party has sufficiently alleged claims that would entitle him or her to relief. Jackson v. Carey, 353 F.3d 750, 756 (9th Cir. 2003). In doing so, the Court assumes the truth of all factual allegations and construes factual allegations in the light most favorable to the nonmoving party. See Gompper v. VISX. Inc., 298 F.3d 893, 895 (9th Cir. 2002). However, the court is not bound to accept as true a legal conclusion couched as a factual allegation. “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009). However, the conclusions contained in the pleading “are not entitled to the assumption of truth.” Id.

         “Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). In order to survive dismissal for failure to state a claim, a complaint must contain more than a “formulaic recitation of the elements of a cause of action;” it must contain factual allegations sufficient to “raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). It is insufficient for the pleading to contain a statement of facts that “merely creates a suspicion” that the pleader might have a legally cognizable right of action. 5 C. Wright & A. Miller, Federal Practice and Procedure§ 1216, pp. 235-36 (3d ed. 2004) (citing Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal¸ 556 U.S. at 678.

         In reviewing a complaint under this standard, the court “must accept as true all of the factual allegations contained in the complaint, ” Erickson v. Pardus, 551 U.S. 89, 94 (2007), construe those allegations in the light most favorable to the plaintiff, Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 960 (9th Cir. 2010), and resolve all doubts in the plaintiffs’ favor. Hebbe v. Pliler, 627 F.3d 338, 340 (9th Cir. 2010). The court need not accept as true, legal conclusions “cast in the form of factual allegations.” Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).

         Moreover, pro se pleadings are held to a less stringent standard than those drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520 (1972). “Pro se complaints are construed ‘liberally’ and may only be dismissed ‘if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.’” Nordstrom v. Ryan, 762 F.3d 903, 908 (9th Cir. 2014) (quoting Wilhelm v. Rotman, 680 F.3d 1113, 1121 (9th Cir. 2012)). However, the conclusions contained in the pleading “are not entitled to the assumption of truth.” Id.

         B. The ...

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