United States District Court, N.D. California, San Jose Division
ORDER GRANTING MOTIONS TO DISMISS WITH LEAVE TO AMEND
RE: DKT. NOS. 41, 45, 52
H. KOH United States District Judge.
Shirley Daley (“Plaintiff”) sues Defendants
Lockheed Martin Corporation and Lockheed Martin Group
Universal Life Plan (collectively, “Lockheed”),
Marsh U.S. Consumer (“Marsh”), and the Prudential
Insurance Company of America (“Prudential”) (all
Defendants collectively, “Defendants”). Before
the Court are Lockheed and Prudential's motions to
dismiss the First Amended Complaint (“FAC”), in
addition to Marsh's motion for joinder in Lockheed's
motion to dismiss. See ECF No. 41, 45, 52. The Court
finds these matters suitable for resolution without oral
argument and hereby VACATES the motions hearings set for July
6 and 13, 2017. See Civil L.R. 7-1(b). Having
considered the parties' submissions, the relevant law,
and the record in this case, the Court hereby GRANTS
Marsh's motion for joinder in Lockheed's motion to
dismiss, and GRANTS with leave to amend Lockheed and
Prudential's motions to dismiss.
is the late wife of Bruce Daley (“Mr. Daley”),
who passed away on October 7, 2015. ECF No. 16
(“FAC”), at ¶ 2, 6. Prior to his death, Mr.
Daley worked for Lockheed for forty years. Id.
During his employment, Mr. Daley acquired a life insurance
policy pursuant to Lockheed's Group Universal Life Plan
(“Plan”). The Plan was administered by Seabury
& Smith, which is the parent company of Marsh.
Id. The Plan was issued by Prudential. Id.
Daley's Plan provided his beneficiary a death benefit of
four times Mr. Daley's base pay. Id. ¶ 4.
Plaintiff was Mr. Daley's beneficiary under the Plan.
Id. ¶ 5. After Mr. Daley's death,
Defendants told Plaintiff that Mr. Daley's Plan had
lapsed and that Plaintiff would not be paid any benefits
under the Plan. Id. ¶ 7. According to the FAC,
“[a]ssuming [Mr. Daley's] [Plan] had lapsed, the
lapse was caused by Defendants' breach of their fiduciary
duty to Mr. Daley by allowing the [Plan] to lapse without Mr.
Daley's informed knowledge or consent.”
Id. Plaintiff exhausted her administrative remedies
with Lockheed prior to filing suit. Id.
14, 2016, Plaintiff filed a state court complaint against
Lockheed Martin Corporation and unnamed Doe Defendants.
See ECF No. 1-1. Plaintiff alleged three state law
causes of action: (1) breach of contract; (2) breach of the
covenant of good faith and fair dealing; and (3) breach of
fiduciary duty. Id.
December 13, 2016, Lockheed removed Plaintiff's state
court complaint to this Court. ECF No. 1. As a basis for
removal, Lockheed asserted that, because Plaintiff's
complaint sought benefits under a life insurance plan that
was governed by the Employee Retirement Income Security Act
of 1974 (“ERISA”), 29 U.S.C. § 1001,
Plaintiff's state law claims arose under ERISA and thus
Plaintiff's claims were removable to federal court.
Id. at 3.
December 20, 2016, Lockheed filed a motion to dismiss
Plaintiff's state court complaint. ECF No. 13. The motion
asserted that Plaintiff's state law claims were preempted
by ERISA and thus must be dismissed. Id. Further,
the motion argued that Plaintiff had failed to allege that
she exhausted her administrative remedies prior to filing
January 3, 2017, Plaintiff filed an opposition. ECF No. 14.
Plaintiff's opposition argued only that “the
deficits cite[d] in Lockheed's motion may be cured by
amendment.” Id. Specifically, Plaintiff
argued, Plaintiff “could allege a[n] ERISA claim,
” and Plaintiff “could allege that [Plaintiff]
exhausted her administrative remedies” prior to filing
suit in state court. Id.
January 10, 2017, Lockheed filed a reply, which again
requested dismissal of the original complaint because
Plaintiff in effect conceded in her opposition that the
original complaint was deficient. ECF No. 15.
January 10, 2017, Plaintiff filed a FAC. See FAC.
Plaintiff's FAC added Lockheed Martin Group Universal
Life Plan, Marsh, and Prudential as Defendants. Id.
Plaintiff's FAC also alleged that Plaintiff exhausted her
administrative remedies prior to filing suit against
Defendants. Id. ¶ 7. Plaintiff alleged a single
“claim for relief, ” which asserted that
“Defendants' breach[ed] their fiduciary duty to
[Plaintiff] by allowing the [Plan] to lapse without Mr.
Daley's informed knowledge or consent.”
Id. Plaintiff did not cite ERISA in her FAC. See
February 7, 2017, the Court denied as moot Lockheed's
motion to dismiss the original complaint. ECF No. 24. The
Court found that Plaintiff's FAC was a timely amendment
as of right under Federal Rule of Civil Procedure
15(a)(1)(B). Id. The Court noted that, in
Plaintiff's opposition to Lockheed's motion to
dismiss, Plaintiff recognized that her [state court]
complaint was deficient.” Id. The Court thus
stated that “if the Court grants any future motion to
dismiss the amended complaint based on” ...