United States District Court, D. Arizona
[Re: Motions at Docket 14 & 27]
ORDER AND OPINION
JOHN W. SEDWICK SENIOR UNITED STATES DISTRICT JUDGE
I. MOTION PRESENTED
At docket 14, Defendants The Prudential Insurance Company of America (“Prudential”), Long Term Disability Coverage for All Active Full-Time and Part-Time Employees, other than those classified by the Employer as Pilots, who are U.S. residents and whose Total Annual Cash Compensation is between $60, 000 and $199, 999, excluding temporary and seasonal Employees, an ERISA benefit plan (the “Plan”), and JPMorgan Chase Bank (“JPMorgan”) (collectively, “Defendants”) move to dismiss all counts in the complaint submitted by Plaintiff Mark McGlasson (“Plaintiff”), pursuant to Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief can be granted. Plaintiff responds at docket 23. Defendant replies at docket 26. Plaintiff requests oral argument, but it would not be of additional assistance to the court.
At docket 27, Plaintiff filed a Motion to Strike Portion of Defendants’ Reply in Support of Their Motion to Dismiss, arguing that Defendants raised an immaterial matter in their motion to dismiss when they asserted that Plaintiff’s LTD benefits are not exempt from Plaintiff’s bankruptcy estate. Defendants respond at docket 33. Plaintiff replies at docket 34.
This action arises under the Employment Retirement Income Security Act of 1974 (“ERISA”). Plaintiff worked as a manager for JPMorgan. He participated in and was a beneficiary of the Plan, which is an ERISA benefit plan offering short-term disability (“STD”) and long-term disability (“LTD”) benefits for certain JPMorgan employees. Prudential insures and administers the claims for JPMorgan under the Plan.
In 2009, following back surgery, Plaintiff applied for and received STD benefits under the Plan. He returned to work, but then had to have neck surgery in April 2011 and again received STD benefits. Due to continuing difficulties with his back and neck, Plaintiff stopped working on August 29, 2011, and applied for LTD benefits. He was approved for such benefits effective February 27, 2012, and continued to receive them until September 18, 2013. Plaintiff’s claim for LTD benefits beyond that date was denied by Prudential in a letter dated April 7, 2014. After an appeal, Prudential upheld the decision to terminate LTD benefits by letter dated August 18, 2014. Plaintiff submitted a voluntary second appeal by letter dated February 13, 2015. Prudential denied the appeal by letter dated April 27, 2015. During the appeal process, in July of 2014, Plaintiff filed for bankruptcy.
Plaintiff filed the lawsuit against Defendants in August of 2015. The Complaint alleges three causes of action. Count I is for the recovery of plan benefits against Prudential and the Plan pursuant to 29 U.S.C. § 1132(a)(1)(B). Counts II and III are for breach of fiduciary duty against Prudential and JPMorgan, respectively, pursuant to 29 U.S.C. § 1132(a)(3).
Defendants seek dismissal of Count I based upon judicial estoppel because Plaintiff failed to disclose his claim for LTD benefits in his bankruptcy petition. After Defendants filed the motion to dismiss, highlighting Plaintiff’s failure to disclose, Plaintiff reopened the bankruptcy petition and therefore argues that judicial estoppel should not be applied because the omission was not intentional. Defendants also seek dismissal of Counts II and III arguing that Plaintiff is not seeking “appropriate equitable relief” but, rather, is improperly repackaging his benefits-denial claim. Plaintiff argues that there is no categorical bar to raising both a claim for benefits under § 1132(a)(1)(B) and a claim for equitable relief, including monetary surcharges, for a breach of fiduciary duty under §1132(a)(3) and that he should be allowed to proceed with both claims, particularly at this early stage in the litigation.
III. STANDARD OF REVIEW
Rule 12(b)(6) tests the legal sufficiency of a plaintiff’s claims. In reviewing such a motion, “[a]ll allegations of material fact in the complaint are taken as true and construed in the light most favorable to the nonmoving party.” To be assumed true, the allegations “may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Dismissal for failure to state a claim can be based on either “the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” “Conclusory allegations of law . . . are insufficient to defeat a motion to dismiss.”
To avoid dismissal, a plaintiff must plead facts sufficient to “‘state a claim to relief that is plausible on its face.’” “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.” “The plausibility standard is not akin to a ‘probability requirement, ’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” “Where a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.’” “In sum, for a complaint to ...