Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cv-05865/USCOURTS-cand-4_06-cv-05865-2/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.: Employee Benefits

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United States District Court

For the Northern District of California

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1

 Because the other Defendants are not sued by Plaintiff in his

second cause of action, they are not parties to this motion.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

DAVID CAPLAN,

Plaintiff,

 v.

CNA SHORT TERM DISABILITY PLAN; CNA

LONG TERM DISABILITY PLAN; and

HARTFORD LIFE GROUP INSURANCE

COMPANY,

Defendants. /

No. C06-05865 CW

ORDER DENYING

DEFENDANT HARTFORD'S

MOTION TO DISMISS

PLAINTIFF'S SECOND

CLAIM FOR EQUITABLE

RELIEF

Defendant Hartford Life Group Insurance Company (Hartford)

moves pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss the second

claim in Plaintiff's first amended complaint.1 Plaintiff's second

claim is for injunctive or other equitable relief against Defendant

Hartford pursuant to 29 U.S.C. § 1132(a)(3). Plaintiff opposes the

motion. The matter was decided on the papers. Having considered

all of the papers filed by the parties on the motion, the Court

DENIES the motion to dismiss. 

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BACKGROUND

Plaintiff David Caplan alleges that he was a participant in

both the CNA Short Term Disability (STD) Plan and the CNA Long Term

Disability (LTD) Plan (the Plans) which offered benefits to

employees of CNA, including Plaintiff. The Plans provided benefits

through an insurance policy issued by Continental Assurance Company

which was administered by Hartford.

Plaintiff alleges that he filed for short-term disability

benefits and Hartford denied his claim. He alleges that his

attorney requested review of Hartford's decision and submitted a

claim for long-term disability benefits. 

Plaintiff alleges that Hartford informed him that it would

refer his request for review to University Disability Consortium

(UDC) for a comprehensive medical review of his claim. He alleges

that UDC has a financial conflict of interest because it relies

heavily on Hartford for financial gain and therefore was not a

neutral evaluator of his claim. Plaintiff alleges that he

requested that Hartford obtain a medical review from a more neutral

party, but that Hartford stayed with UDC which upheld its decision

to deny Plaintiff's claim for short-term disability benefits, and

therefore also denied his claim for long-term disability benefits. 

Plaintiff brings two causes of action under the Employee

Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001-1461. In

the first cause of action against the Plans, Plaintiff seeks

recovery of his plan benefits under 29 U.S.C. § 1132(a)(1)(B). 

Plaintiff prays that the Court grant the following relief as to his

first cause of action:

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A. Declare that Defendant STD Plan violated the terms of

the STD Plan by denying Mr. Caplan’s claims for

short-term disability benefits;

B. Order Defendant STD Plan to pay short-term disability

benefits to Plaintiff pursuant to the terms of the STD

Plan from March 7, 2005, through August 28, 2005,

together with prejudgment interest on each and every such

monthly payment through the date judgment is entered

herein;

C. Declare that Defendant LTD Plan violated the terms of

the LTD Plan by denying Mr. Caplan’s claims for long-term

disability benefits;

D. Order Defendant LTD Plan to pay long-term disability

benefits to Plaintiff pursuant to the terms of the LTD

Plan from August 29, 2005, through the date judgment is

entered herein, together with prejudgment interest on

each and every such monthly payment through the date

judgment is entered herein;

E. Declare Plaintiff’s right to continuing medical,

dental and vision benefits pursuant to the terms of the

Plans from March 7, 2005, through the date judgment is

entered herein;

F. Declare Plaintiff’s right to receive future long-term

disability benefit payments under the terms of the LTD

Plan;

G. Declare Plaintiff’s right to receive future medical,

dental and vision benefits under the terms of the Plans;

H. Award Plaintiff reasonable attorneys’ fees and costs

of suit incurred herein pursuant to ERISA § 502(g), 29

U.S.C. § 1132(g);

I. Provide such other relief as the Court deems equitable

and just.

In the second cause of action against Hartford, Plaintiff

seeks injunctive or other equitable relief under 29 U.S.C.

§ 1132(a)(3). Plaintiff alleges that Hartford's reliance on UDC as

a medical records reviewer constituted a failure to provide a full

and fair review of the denial of his claim, and a breach of the

ERISA-imposed fiduciary duty. Plaintiff prays that the Court grant

the following relief as to his second cause of action:

A. Declare that Defendant Hartford’s use of UDC as

medical records reviewer constituted a breach of

fiduciary duty to the Plans and to Mr. Caplan;

B. Enjoin Defendant Hartford from utilizing UDC as a

medical record reviewer for a period of five years;

C. Remove Defendant Hartford as Plan Fiduciary of the

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Plans for a period of five years;

D. Appoint an Independent Fiduciary as Plan Fiduciary of

the Plans to replace Defendant Hartford for a period of

five years;

E. Award Plaintiff reasonable attorneys’ fees and costs

of suit incurred herein pursuant to ERISA § 502(g), 29

U.S.C. § 1132(g);

F. Provide such other relief as the Court deems equitable

and just.

LEGAL STANDARD

A motion to dismiss for failure to state a claim will be

denied unless it is "clear that no relief could be granted under

any set of facts that could be proved consistent with the

allegations." Falkowski v. Imation Corp., 309 F.3d 1123, 1132 (9th

Cir. 2002) (citing Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514

(2002)). All material allegations in the complaint will be taken

as true and construed in the light most favorable to the claimant. 

NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). 

Furthermore, a motion to dismiss will not be granted merely because

a plaintiff requests a remedy to which he is not entitled. Massey

v. Banning Unified Sch. Dist., 256 F. Supp. 2d 1090, 1092 (C.D.

Cal. 2003).

 A complaint must contain a "short and plain statement of the

claim showing that the pleader is entitled to relief." Fed. R.

Civ. P. 8(a). "Each averment of a pleading shall be simple,

concise, and direct. No technical forms of pleading or motions are

required." Fed. R. Civ. P. 8(e). These rules "do not require a

claimant to set out in detail the facts upon which he bases his

claim. To the contrary, all the Rules require is 'a short and

plain statement of the claim' that will give the defendant fair

notice of what the plaintiff's claim is and the grounds on which it

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rests." Conley v. Gibson, 355 U.S. 41, 47 (1957). 

DISCUSSION

Hartford argues that Plaintiff cannot maintain his claim for

relief under 29 U.S.C. § 1132(a)(3) as a matter of law on the

ground that Plaintiff has adequate relief under 29 U.S.C.

§ 1132(a)(1)(B). Hartford further argues that 29 U.S.C.

§ 1132(a)(3) does not provide for the equitable relief sought by

Plaintiff.

I. Claims Under 29 U.S.C. § 1132(a)

Under 29 U.S.C. § 1132(a), 

a plan participant or beneficiary may sue to recover

benefits due under the plan, to enforce the participant's

rights under the plan, or to clarify rights to future

benefits. Relief may take the form of accrued benefits

due, a declaratory judgment on entitlement to benefits,

or an injunction against a plan administrator's improper

refusal to pay benefits.

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 53 (1987).

Title 29 U.S.C. § 1132(a)(1)(B) provides: "A civil action may

be brought - (1) by a participant or beneficiary - . . . (B) to

recover benefits due to him under the terms of his plan, to enforce

his rights under the terms of the plan, or to clarify his rights to

future benefits under the terms of the plan." Title 29 U.S.C.

§ 1132(a)(1)(B) provides for relief only for the loss of past and

future benefits. See Mass. Mut. Life Ins. Co. v. Russell, 473 U.S.

134, 144 (1985). Section 1132(a)(1)(B) "says nothing about the

recovery of extracontractual damages." Id. However, in addition

to the recovery of benefits, the statute also allows the plan

participant to bring a civil action "to enforce his rights under

the terms of the plan," without reference to whether the relief

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sought is legal or equitable. Great-West Life & Annuity Ins. Co.

v. Knudson, 534 U.S. 204, 221 (2002). 

Law suits under 29 U.S.C. § 1132(a)(1)(B) can be brought

against the plan as an entity and against the plan's

administrators. Ford v. MCI Communs. Corp. Health & Welfare Plan,

399 F.3d 1076, 1081 (9th Cir. 2005). However, a claimant may not

sue the plan's insurer for additional plan benefits. Id.

Title 29 U.S.C. § 1132(a)(3) provides: 

A civil action may be brought - . . . (3) by a

participant, beneficiary, or fiduciary (A) to enjoin any

act or practice which violates any provision of this

title or the terms of the plan, or (B) to obtain other

appropriate equitable relief (i) to redress such

violations or (ii) to enforce any provisions of this

title or the terms of the plan.

In Varity Corp. v. Howe, 516 U.S. 489, 515 (1996), the Supreme

Court held that 29 U.S.C. § 1132(a)(3) authorizes ERISA

beneficiaries to bring lawsuits for "'appropriate' equitable

relief" for breach of fiduciary obligations, where ERISA does not

"elsewhere provide[] adequate relief for a beneficiary's injury." 

It is expected "that courts, in fashioning 'appropriate' equitable

relief, will keep in mind the special nature and purpose of

employee benefit plans, and will respect the policy choices

reflected in the inclusion of certain remedies and the exclusion of

others." Id. (citations and quotations omitted). Thus, it is

expected "that where Congress elsewhere provided adequate relief

for a beneficiary's injury, there will likely be no need for

further equitable relief, in which case such relief normally would

not be 'appropriate.'" Id.

Section 1132(a)(3) is "a 'catchall' provision, which provides

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relief only for injuries that are not otherwise adequately provided

for." Forsythe v. Humana, Inc., 114 F.3d 1467, 1474 (9th Cir.

1997) (citing Varity Corp., 516 U.S. at 512). The Ninth Circuit

interpreted Varity Corp. to mean that equitable relief is not

appropriate where another subsection of section 1132(a) provides an

adequate remedy. Forsythe, 114 F.3d at 1475.

II. Adequate Remedy Under 29 U.S.C. § 1132(a) 

Plaintiff's claim for breach of fiduciary duty under 29 U.S.C.

§ 1132(a)(3) stems from Hartford's use of UDC as a claim reviewer

when UDC had an alleged conflict of interest. Hartford argues that

Plaintiff cannot maintain his claim for relief under 29 U.S.C.

§ 1132(a)(3) as a matter of law because Plaintiff cannot state an

actionable claim under section 1132(a)(3) if he has an adequate

remedy for his injuries under section 1132(a)(1)(B). 

In Varity, 516 U.S. at 511, the Supreme Court stated that the

"discretionary determination about whether a claimant is entitled

to benefits under the terms of the plan documents" constitutes a

"fiduciary act." Plaintiff alleges that Hartford denied him

benefits under the Plans due to UDC's allegedly biased review of

his medical records. Therefore, Plaintiff has alleged facts

sufficient to state a claim for a breach of fiduciary duty against

Hartford. 

As noted above, Varity Corp., 516 U.S. at 515, held that

section 1132(a)(3) claims are permitted where the statute does not

"elsewhere provide[] adequate relief for a beneficiary's injury."

Plaintiff has alleged a cognizable claim for benefits under section

1132(a)(1)(B), and if he prevails, he may recover past plan

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benefits and equitable relief that will enable him to enforce his

rights under the Plans. Great-West Life & Annuity Ins. Co., 534

U.S. at 221. Therefore, Hartford is correct that Plaintiff's

section 1132(a)(3) claim must be dismissed to the extent it is

duplicative of the section 1132(a)(1)(B) claim. 

However, the equitable relief Plaintiff seeks under section

1132(a)(3), including a declaration that Hartford's use of UDC as a

medical records reviewer constituted a breath of fiduciary duty to

him and to the Plans, may be different than the relief available

under section 1132(a)(1)(B), and such relief might not be available

to Plaintiff under the section 1132(a)(1)(B) claim alone.

 The Court concludes, therefore, that it would be premature to

dismiss Plaintiff's claim under section 1132(a)(3) on the basis

that relief is available under section 1132(a)(1)(B). 

III. Removal Of Hartford As Claims Administrator And UDC As Medical

Records Reviewer

Hartford also argues that 29 U.S.C. § 1132(a)(3) does not

provide for the equitable relief sought by Plaintiff because the

removal of Hartford as the claims administrator and UDC as the

medical reviewer is not available to Plaintiff as a remedy. 

Hartford cites Beck v. Levering, 947 F.2d 639 (2nd Cir. 1991) for

the proposition that drastic relief, such as that sought by

Plaintiff, has only been found appropriate in ERISA pension cases

where plan fiduciaries have stolen plan assets or engaged in

egregious self-dealing. 

Citing Donovan v. Mazzola, 716 F.2d 1226, 1235 (9th Circuit

1983), Plaintiff argues that the court has broad discretion to

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fashion appropriate relief for the breaches he has alleged. 

Furthermore, Plaintiff argues that 29 U.S.C. § 1132(a)(3) does

provide for the relief sought.

At this early date in the case, the Court will not address the

issue of what equitable relief under 29 U.S.C. § 1132(a)(3) would

be appropriate. 

CONCLUSION

For the foregoing reasons, Hartford's motion to dismiss

Plaintiff's second claim for equitable relief under 29 U.S.C.

§ 1132(a)(3) pursuant to Fed. R. Civ. P. 12(b)(6) is DENIED. 

IT IS SO ORDERED.

Dated: 3/1/07 

CLAUDIA WILKEN

United States District Judge

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