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Terry v. Northrop Grumman Health Plan

United States District Court, M.D. Pennsylvania

January 9, 2013


Order Filed: December 3, 2012

For Anna Mae Terry, Plaintiff: Kirk L. Wolgemuth, Devine Law Offices, LLC, Lancaster, PA.

For Northrop Grumman Health Plan, Defendant: Emily H. Bensinger, Saul Ewing LLP, Harrisburg, PA; James A. Keller, Saul Ewing LLP, Philadelphia, PA.


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CHRISTOPHER C. CONNER, United States District Judge.

AND NOW, this 9th day of January, 2013, upon consideration of the Report and Recommendation of United States Magistrate Judge Mildred E. Methvin (Doc. 29), recommending (1) that defendant's motion to dismiss (Doc. 7) be granted on Count IV and denied on Count II, and (2) that plaintiff's motion for leave to

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file an amended complaint be denied, and, following an independent review of the record, it appearing that neither party has objected to the magistrate judge's report and recommendation, and that there is no clear error on the face of the record, [1] see Nara v. Frank, 488 F.3d 187, 194 (3d Cir. 2007) (explaining that " failing to timely object to [a report and recommendation] in a civil proceeding may result in forfeiture of de novo review at the district court level" ), it is hereby ORDERED that:

1. The Report and Recommendation of Magistrate Judge Methvin (Doc. 29) are ADOPTED.

2. Defendant's motion to dismiss is GRANTED as to Count IV and DENIED as to Count II.

3. Plaintiff's motion for leave to file an amended complaint (Doc. 12) is DENIED as moot.
3. A pretrial/trial schedule shall issue by separate order.



Anna Mae Terry filed this ERISA action on February 10, 2012. (Doc. 1). She brings claims for life insurance benefits (Count I), breach of fiduciary duty (Count II), statutory penalties (Count III), and a state claim for life insurance benefits (Count IV). Named as defendant is Northrop Grumman Health Plan, a health and welfare benefit plan as defined by ERISA. This court has jurisdiction pursuant to 29 U.S.C. § 1132 and 28 U.S.C. § 1367.

Before the court are two motions: 1) Northrop's motion to dismiss Counts II and IV; [1] and 2) Terry's motion for leave to file an amended complaint. [2] Both motions are opposed. They have been referred to the undersigned for a report and

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recommendation and are now ripe for disposition.


I. Background

For purposes of the motion to dismiss, Terry's factual averments will be accepted as true. Terry makes the following allegations in her complaint:

Terry's husband, David Terry, was employed by Northrop, which sponsored the Northrop Grumman Health Plan as an employee benefit. Through the life insurance portion of the plan, David obtained both basic life insurance coverage of $50,000 and optional coverage of $60,000. (Doc. 1 ¶ ¶ 5-10). Plaintiff is the beneficiary of the policies. ( Id. ¶ 16). The insurance plan also provides continuation of coverage through conversion or portability. [3] ( Id. ¶ 11). The terms of the insurance plan provide that conversion or portability must be applied for within 31 days of the date coverage ends. ( Id. ¶ 14).

On September 1, 2010, David was informed that his basic life insurance would be effective from that date until June 30, 2011 and that the cost for the optional insurance was $424.80. ( Id. ¶ 17). On October 18, 2010, David was informed he would be laid off from work, effective October 29, 2010. ( Id. ¶ 18). Prior to his layoff and extending 31 days after coverage ended, David did not receive notice of his rights to convert or port his insurance. ( Id. ¶ 19). David died on January 2, 2011 as the result of a heart attack. ( Id. ¶ 21).

After Terry inquired about the life insurance benefits, Northrop sent the required notice of conversion/portability rights on February 23, 2011. ( Id. ¶ 22). Northrop denied Terry's claim for life insurance benefits on February 22, 2011. Terry appealed on June 23, 2011. ( Id. ¶ ¶ 23, 24). Northrop upheld the denial of benefits on September 12, 2011, asserting that David had never completed the necessary forms to convert or port his life insurance benefits. ( Id. ¶ 25).

Terry requested copies of all relevant documents regarding her claim for life insurance on October 12, 2011, and she claims she had still not received the actual plan documents as of February, 2012. ( Id ...

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