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George J. Zacharkiw v. the Prudential Insurance Company of America

January 5, 2011


The opinion of the court was delivered by: Legrome D. Davis, J.


AND NOW, this 5th day of January, 2011, upon consideration of Defendant's Motion to Dismiss Plaintiff's Complaint (Doc. No. 14) and Plaintiff's response thereto (Doc. No. 17), it is hereby ORDERED that said motion to dismiss (Doc. No. 14) is GRANTED. The Clerk of Court is directed to close this matter for statistical purposes.

However, this Court retains limited equitable jurisdiction solely to decide the collateral issue of attorney's fees and costs. Any motion for fees and costs, e.g., a motion pursuant to 29 U.S.C. § 1132(g)(1), shall be filed on or before January 19, 2012. Responses to said motion(s), if any, shall be filed on or before February 2, 2012.

I. Factual Background and Procedural History This action involves Defendant Prudential Insurance Company of America's

("Prudential" or "Defendant") allegedly improper termination of Plaintiff George J. Zacharkiw's ("Zacharkiw" or "Plaintiff") long-term disability ("LTD") benefits. Zacharkiw suffers from Relapsing Remitting Multiple Sclerosis ("MS"). (Doc. No. 1 ¶¶ 7-9). At the time of his MS diagnosis in December of 2003, Zacharkiw worked as an Associate Director for Navigant Consulting ("Navigant"). (Doc. No. 1 ¶¶ 9-11). As a Navigant employee, Zacharkiw received disability insurance coverage through a plan sponsored by Navigant and insured by Prudential. (Doc. No. 1 ¶ 12).

According to the complaint, Zacharkiw ceased working on July 23, 2007, due to the progression of his MS. (Doc. No. 1 ¶ 14). Prudential initially approved Zacharkiw's LTD benefits claim, and he began receiving such benefits on January 19, 2008. (Doc. No. 1 ¶ 16). However, Prudential terminated Zacharkiw's LTD benefits effective April 1, 2009, finding that Zacharkiw was no longer "disabled" under the plan's definition. (Doc. No. 1 ¶¶ 23-27; Ex. H). Zacharkiw appealed on June 26, 2009, but Prudential upheld its termination decision on September 25, 2009. (Doc. No. 1 ¶¶ 28-38; Ex. K).

Zacharkiw filed a second appeal with Prudential and subsequently brought this suit, before the second appeal process ran its course. (Doc. No. 9). Zacharkiw's complaint alleges that Prudential violated the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B), by acting in an "arbitrary and capricious manner in terminating [his] long-term disability benefits." (Doc. No. 1 ¶¶ 39-47). On June 1, 2010, several months after Zacharkiw filed suit, the parties jointly petitioned the Court for a stay pending Prudential's decision on Zacharkiw's second appeal, and we granted the stay on June 7, 2010. (Doc. Nos. 9, 10). On September 7, 2010, over one (1) year ago, Prudential reinstated Zacharkiw's LTD benefits. (Doc. Nos. 14, at 3; 17, at 7; 17-1). Additionally, Prudential issued Zacharkiw a check for $121,068.00, apparently as payment for back benefits owed from April of 2009. (Doc. No. 17, at 7 n.3).

Prudential has now moved to dismiss Zacharkiw's complaint under Federal Rule of Civil Procedure 12(b)(1), contending that the case or controversy that once existed has become moot in light of Prudential's reinstatement of Zacharkiw's LTD benefits. (Doc. No. 14). Zacharkiw opposes dismissal, arguing that the case is not moot because (1) Plaintiff anticipates filing a motion for attorney's fees and costs, and (2) Plaintiff anticipates filing a motion to amend his complaint to state a claim for the wrongful termination of Zacharkiw's group life insurance benefits. (Doc. No. 17). For the reasons discussed below, we dismiss Plaintiff's complaint as moot, but we retain limited equitable jurisdiction to decide the collateral issue of attorney's fees and costs.

II. Legal Analysis

As a preliminary matter, Plaintiff asserts that we should treat Prudential's Rule 12(b)(1)

motion to dismiss as a motion for summary judgment because Prudential has already answered, the pleadings are closed, and Prudential relies on materials outside the scope of the pleadings in its motion. (Doc. No. 17, at 3-4). Plaintiff is mistaken. As Plaintiff correctly points out, "mootness is the essential basis for Defendant's argument that Plaintiff's Complaint should be dismissed." (Doc. No. 17, at 3). Importantly, a court has no subject matter jurisdiction over a controversy that has become moot. See Weiss v. Regal Collections, 385 F.3d 337, 340 (3d Cir. 2004) ("When the issues presented in a case are no longer 'live' or the parties lack a legally cognizable interest in the outcome, the case becomes moot and the court no longer has subject matter jurisdiction.") (citation omitted). In other words, a court lacks the jurisdictional authority to adjudicate a now-moot controversy.

Under Third Circuit precedent, factual challenges to subject matter jurisdiction under Rule 12(b)(1), such as Prudential's mootness challenge here, may be raised at any point in the litigation process. Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891-92 (3d Cir. 1977) (noting that the "12(b)(1) factual evaluation may occur at any stage of the proceedings, from the time the answer has been served until after the trial has been completed."); see also Dorsey v. Daub, Civil Action No. 09-CV-3879, 2011 WL 322887, at *2 (E.D. Pa. Feb. 2, 2011) (recognizing that "[u]nder Rule 12(b)(1), a motion to dismiss for lack of subject matter jurisdiction may be raised at any time.") (citation omitted). In fact, "[b]ecause subject matter jurisdiction is central to a court's authority, a court can raise issues of subject matter jurisdiction sua sponte at any time." Constitutional Guided Walking Tours, LLC v. Independence Visitor Ctr. Corp., Civil Action No. 09--3083, 2011 WL 1234744, at *3 (E.D. Pa. March 31, 2011).

To answer the subject matter jurisdiction question, a court may consider evidence outside the pleadings, and doing so does not transform the Rule 12(b)(1) inquiry into an issue of summary judgment. See Mortensen, 549 F.2d at 891 ("Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction...there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case."); Dorsey, 2011 WL 322887, at *2 (agreeing that "when a court reviews a complaint under a factual attack, the allegations have no presumptive truthfulness, and the court that must weigh the evidence has discretion to allow affidavits, documents, and even a limited evidentiary hearing to resolve disputed jurisdictional facts.") (citation omitted). Finally, the plaintiff bears the burden of persuading the court that subject matter jurisdiction does, in fact, exist. Mortensen, 549 F.2d at 891; see also Gould Elecs. Inc. v. United States, 220 F.3d 169, 178 (3d Cir.2000) ("The plaintiff has the burden of persuasion to convince the court it has jurisdiction.").

Here, Defendant Prudential undoubtedly relies on facts outside the pleadings to support its mootness motion. Specifically, Prudential avers, and Plaintiff confirms, that Prudential has reinstated Plaintiff's LTD benefits. (Doc. Nos. 14, at 3; 17, at 7; 17-1). Unsurprisingly, this information does not appear in either Plaintiff's complaint or Defendant's answer because Prudential's reinstatement decision occurred after the parties' pleadings. However, as discussed supra, Prudential's reliance on such information does not convert Prudential's 12(b)(1) challenge to this Court's subject matter jurisdiction into a summary judgment motion. When it comes to mootness, which is an aspect of subject matter jurisdiction, we have an independent obligation to ...

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