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Jobe v. Prudential Insurance Company of America

September 23, 2010

CAROLYN JOBE, PLAINTIFF,
v.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA DEFENDANT,



The opinion of the court was delivered by: Conti, District Judge

MEMORANDUM OPINION AND ORDER

Pending before the court is the motion to dismiss (the "Motion") (Docket No. 4) filed pursuant to Federal Rule of Civil Procedure 12(b)(6), by defendant Prudential Insurance Company of America ("defendant" or "Prudential"). In the Motion defendant seeks to dismiss the complaint (the "Complaint")(Docket No. 1-2) filed by plaintiff, Carolyn Jobe ("plaintiff" or Jobe") . The Complaint was filed on April 27, 2010, in the Court of Common Pleas of Westmoreland County, Pennsylvania and that civil action was removed to this court on May 19, 2010, by defendant (Docket No. 1), pursuant to 28 U.S.C. § 1441. Defendant alleged federal jurisdiction exists under 28 U.S.C. § 1331, on the basis that plaintiff's claims are preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq., and under 28 U.S.C. § 1332, on the basis of diversity between the parties.

In the Complaint Jobe sets forth four claims based upon state law claims: 1) court I -- breach of contract; 2) count II -- breach of duty of good faith and fair dealing; 3) count III -- violations of Pennsylvania's insurance bad faith statute, 42 PA. CONS. STAT. § 8371; and 4) count IV -- violations of Pennsylvania's Unfair Trade Practices in Consumer Protection Law ("UTPCPL"), 73 PA. CONS. STAT. §§ 201-1 et seq., and Pennsylvania's Unfair Insurance Practices Act, 40 PA. CONS. STAT. §§ 1171.1 et seq.

On June 2, 2010, defendant filed the Motion and a brief in support (Docket No. 5), seeking dismissal with prejudice of all claims on the basis that plaintiff failed to state a claim upon which relief can be granted. On July 2, 2010, plaintiff filed a brief in opposition to the Motion. (Docket No. 11.) On August 26, 2010, the court held a hearing on the Motion. At the hearing the court ruled that all claims asserted in the Complaint are preempted under ERISA. Plaintiff did not dispute the court's rulings on its claims for breach of contract at count I, breach of duty of good faith and fair dealing at count II, or for violations of the UTPCPL at count IV. Plaintiff disputed the court's ruling, however, with respect to the insurance bad faith claim at count III. The court permitted plaintiff until September 15, 2010, to amend the complaint by asserting any claims plaintiff might have under ERISA. Plaintiff did not file an amended complaint. For the reasons set forth below, which were also set forth on the record at the hearing on August 26, 2010, defendant's Motion will be granted.

I.Background

Plaintiff claims that she is entitled to damages resulting from an alleged delay in approving her claim for long-term disability benefits. The delay related to the amount of time it took defendant to process her claim. Plaintiff was employed by NiSource Inc., which provided a disability insurance plan to its employees for lost wages in the event that they become disabled. (Comp. ¶¶ 4-7.) Plaintiff purchased disability insurance under that plan through her employer. (Id. ¶ 6.) The insurance policy was provided by Prudential. (Id. ¶¶ 6-8.)

On or about October 29, 2007, plaintiff's treating physician diagnosed her with longstanding relapsing multiple sclerosis causing fatigue and lack of endurance that interfered with her cognition and ability to work. (Id. ¶ 12.) On November 19, 2007, Jobe filed a disability claim. (Id. ¶ 13.) On or about March 6, 2008, Prudential sent a letter to plaintiff initiating a review of plaintiff's long-term disability claim. (Id. ¶ 28.) On May 8, 2008, defendant denied plaintiff's long-term disability claim, based upon defendant's determination, after reviewing plaintiff's medical records, that Jobe was not disabled. (Id. ¶ 37.) On or about June 9, 2008, Jobe sent a letter to Prudential advising of the appeal of the denial of her claim. (Id. ¶ 46.) On or about November 6, 2008, Prudential approved plaintiff's claim. (Id. ¶ 71.)

II.Standard for Motion to Dismiss

A motion to dismiss tests the legal sufficiency of the complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). In deciding a motion to dismiss the court is to view the facts alleged in the complaint as true and to draw reasonable inferences in favor of the plaintiff. Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). The court does not base its decision on whether it appears likely that the plaintiff will prevail on the merits. Id. The factual allegations pleaded by a plaintiff need only be a short and plain statement of the claim showing that the pleader is entitled to relief and giving fair notice to the defendant of what the claim is and the grounds upon which it rests. Id. (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

Though detailed factual allegations are not required to survive a Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)") motion to dismiss, a complaint must provide "more than labels and conclusions" and a "formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. "Factual allegations must be enough to raise a right to relief above the speculative level" and sufficient to state a claim for relief that is plausible on its face. Id. at 555-56. "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." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 556).

This "plausibility standard" does not, however, heighten the pleading requirements of Federal Rule of Civil Procedure 8(a)(2). Twombly, 550 U.S. at 569 n.14. But it does ask "for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 129 S.Ct. at 1949. In order to cross over the "line between possibility and plausibility" the complaint must plead facts that are more than "merely consistent with" a defendant's liability. Twombly, 550 U.S. at 557. "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]'-'that the pleader is entitled to relief.'" Iqbal, 129 S.Ct. at 1950 (quoting FED. R. CIV. P. 8(a)(2)).

Two principles underlie Twombly, and this court's assessment of a motion to dismiss. First, a court need not accept as true allegations that amount to legal conclusions. Iqbal, 129 S.Ct. at 1949. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555). Second, a complaint must state a plausible claim for relief in order to survive a Rule 12(b)(6) motion. Id. at 1950. Ascertaining whether a plausible claim for relief has been pled is a context-specific task that requires the court to draw on its judicial experience and common sense. Id.

Generally, courts are to notify plaintiffs that they have leave to amend their complaints unless the amendment would be inequitable or futile. Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002) (reversing district court for failing to grant plaintiff right to amend when the district court did not specifically find that granting leave to amend would be inequitable or futile). Allowing for amendment is consistent with Rule 15(a) of the Federal Rules of Civil Procedure, which provides "leave [to amend] shall be freely given when justice so requires." A court, however, may decide to deny leave to amend for reasons such as undue delay, bad faith, dilatory motive, prejudice, and futility. In re Burlington Coat Factory Litig., 114 F.3d 1410, 1434 (3d Cir. 1997). The standard of legal sufficiency set forth in Federal Rule of Civil Procedure 12(b)(6) determines whether a proposed amendment would be futile. Id. An amendment is futile where the complaint, as amended, would fail to state a claim upon which relief could be granted. Id.

III.Discussion

A.Arguments Presented

Defendant argues that plaintiff's state law claims are preempted by ERISA and are not exempt from preemption under ERISA's savings clause, 29 U.S.C. § 1144(b)(2)(A). Defendant contends that ERISA does not provide any remedy for plaintiff's claims based upon state law because the plan through which plaintiff purchased her disability insurance policy is an employee welfare benefit plan within the meaning of ERISA.

Plaintiff argues that the actions complained of arise independently of ERISA and the terms of the employee benefit plan. In the alternative, plaintiff argues that even if her claims fall under the terms of the employee benefit plan, her insurance bad faith claim, filed pursuant to 42 PA. CONS. STAT. § 8371, is exempt from preemption under the provisions of ERISA's savings clause, 29 U.S.C. § 1144(b)(2)(A).

B.Statutory Framework

Congress enacted ERISA to protect . . . participants in employee benefit plans and their beneficiaries, . . . by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for ...


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