Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_16-cv-00773/USCOURTS-caed-2_16-cv-00773-1/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 28:1441 Petition for Removal- Labor/Mgmnt. Relations

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UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA 

WALTER ZELHOFER, 

Plaintiff, 

v. 

METROPOLITAN LIFE INSURANCE 

COMPANY and TECHNICOLOR USA 

INC., 

Defendants. 

No. 2:16-cv-00773 TLN AC 

ORDER 

 Plaintiff brings a complaint in pro se against his former employer, Technicolor USA, Inc. 

(“Technicolor”) and Metropolitan Life Insurance Co. (“MetLife”) for breach of contract and 

breach of fiduciary duty arising from the denial of long term disability benefits. This matter was 

referred to the undersigned by Eastern District of California Local Rule 302(c)(21). Several 

motions came before the undersigned for hearing on July 27, 2016. Plaintiff appeared at the 

hearing in pro se, and defendants were represented by attorney Robert E. Hess. The following 

were argued and submitted for decision: (1) Defendants’ Motion to Dismiss and to Strike, ECF 

No. 10; (2) Plaintiff’s Motion to Remand, ECF No. 12; (3) Plaintiff's Motion to Amend his 

Complaint, ECF No. 15; and (4) Plaintiff's Motion for Summary Adjudication, ECF No. 30. 

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I. BACKGROUND 

 Technicolor’s predecessor company, Thomson Inc., created a Disability Plan for its 

employees on or about January 1, 2008. The Plan was funded through insurance with MetLife. 

ECF Nos. 10-2, 10-3 at 4. Technicolor is the Plan administrator and MetLife is the Claim 

administrator. ECF 10-3 at 4. 

Plaintiff alleges that he suffered from a serious heart disease that required him to undergo 

two consecutive bypass and stent surgeries in September and October 2009, when he was an 

employee covered by the Plan. ECF No. 1-1 at 20-26. Plaintiff was subsequently found by his 

psychologist to suffer from a secondary mental disorder of severe depression, anxiety and 

hopelessness with suicidal thoughts while attempting to rehabilitate from the surgeries and their 

side effects. ECF 1-3 at 12:3-11. He was afforded disability benefits by defendants on March 27, 

2010, and was paid $5,336.72 per month, id. at 11:20-27, for approximately two years. In March 

of 2012, plaintiff attempted to enroll in the Plan’s “Return to Work” program, and was told that 

he was being terminated because benefits related to mental illness were limited to a two-year 

period. ECF No. 1-2 at 10-12. 

 Plaintiff’s complaint was filed in Nevada County Superior Court on March 7, 2016. ECF 

1-1 at 3. Defendants removed the action to federal court on April 15, 2016. ECF No. 1. Insofar 

as the court has concluded for the reasons which follow that the Disability Plan at issue is indeed 

governed by ERISA, jurisdiction is established under 28 U.S.C. § 1331. 

II. ERISA PRINCIPLES AND REMOVAL JURISDICTION 

 The Employee Retirement Income Security Act (ERISA) was enacted to provide a 

uniform regulatory regime over employee benefit plans and, in order to assure success in that 

effort, it includes “expansive preemption provisions ... which are intended to ensure that 

employee benefit plan regulation would be ‘exclusively a federal concern.’” Aetna Health. Inc. v. 

Davila, 542 U.S. 200, 208 (2004) (quoting Pilot Life Ins. Co. v. Deadeaux, 482 U.S 41 (1987)). 

“Therefore, any state law cause of action that duplicates, supplements, or supplants the ERISA 

civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy 

exclusive and is therefore preempted.” Aetna, 542 U.S. at 209. 

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 The criteria for establishing that a disability plan is ERISA regulated are: (1) a plan, fund 

or program; (2) established or maintained; (3) by an employer; (4) for the purpose of providing 

benefits; (5) to its employees. 29 U.S.C. § 1002(2)(A); Kanne v. Connecticut General Life Ins. 

Co., 867 F.2d 489, 492 (9th Cir. 1988). Criterion (1) “implies the existence of intended benefits, 

intended beneficiaries, a source of funding, and a procedure to apply for and collect benefits.” 

Donovan v. Dillingham, 688 F.2d 1367, 1371 (11th Cir. 1982). The Plan at issue here meets all 

these criteria. The Plan was instituted by Thompson Inc. for the benefit of its employees and was 

designed to provide them with benefits when they suffered a disability that precluded them from 

working. Plaintiff argues that this is not an ERISA controlled plan since it is funded solely by 

insurance. But, as the Ninth Circuit has determined, “[a]n employer . . . can establish an ERISA 

plan rather easily. Even if an employer does no more than arrange for a ‘group-type insurance 

program,’ it can establish an ERISA plan, unless it is a mere advisor who makes no contributions 

on behalf of its employees.” Credit Managers Ass’n of So. Cal. v. Kennesaw Life and Accident 

Ins. Co., 809 F.2d 617, 625 (9th Cir. 1986). 

 The Plan here meets all of the ERISA criteria. Because plaintiff’s complaint seeks relief 

from an ERISA regulated Plan, the federal courts have exclusive jurisdiction over this dispute and 

removal was proper. See Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (1987); Marin 

General Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 945 (9th Cir. 2009). Plaintiff’s 

framing of his claims in state law terms (breach of contract and breach of fiduciary duty) does not 

defeat removal, because those claims are preempted by ERISA. Id. Accordingly, plaintiff’s 

Motion to Remand will be denied. 

III. THE MOTION TO DISMISS 

A. Standards Under Rule 12(b)(6) 

 A motion to dismiss under Fed. R. Civ. P. 12(b)(6) tests the sufficiency of a complaint. 

Ileto v. Glock, Inc., 349 F.3d 1191, 1199-1200 (9th Cir. 2003). A complaint may be dismissed as 

a matter of law for two reasons: (1) lack of a cognizable legal theory, or (2) insufficient facts 

under a cognizable theory. See Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). 

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 In reviewing a Rule 12(b)(6) motion, the Court will only ascertain whether the nonmoving 

party has sufficiently alleged claims that would entitle him or her to relief. Jackson v. Carey, 353 

F.3d 750, 756 (9th Cir. 2003). In doing so, the Court assumes the truth of all factual allegations 

and construes factual allegations in the light most favorable to the nonmoving party. See 

Gompper v. VISX. Inc., 298 F.3d 893, 895 (9th Cir. 2002). However, the court is not bound to 

accept as true a legal conclusion couched as a factual allegation. “When there are well-pleaded 

factual allegations, a court should assume their veracity and then determine whether they 

plausibly give rise to an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009). 

However, the conclusions contained in the pleading “are not entitled to the assumption of truth.” 

Id. 

 “Dismissal can be based on the lack of a cognizable legal theory or the absence of 

sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 

F.2d 696, 699 (9th Cir. 1990). In order to survive dismissal for failure to state a claim, a 

complaint must contain more than a “formulaic recitation of the elements of a cause of action;” it 

must contain factual allegations sufficient to “raise a right to relief above the speculative level.” 

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). It is insufficient for the pleading to 

contain a statement of facts that “merely creates a suspicion” that the pleader might have a legally 

cognizable right of action. 5 C. Wright & A. Miller, Federal Practice and Procedure§ 1216, pp. 

235-36 (3d ed. 2004) (citing Twombly, 550 U.S. at 570). “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.” Iqbal ̧ 556 U.S. at 678. 

 In reviewing a complaint under this standard, the court “must accept as true all of the 

factual allegations contained in the complaint,” Erickson v. Pardus, 551 U.S. 89, 94 (2007), 

construe those allegations in the light most favorable to the plaintiff, Von Saher v. Norton Simon 

Museum of Art at Pasadena, 592 F.3d 954, 960 (9th Cir. 2010), and resolve all doubts in the 

plaintiffs’ favor. Hebbe v. Pliler, 627 F.3d 338, 340 (9th Cir. 2010). The court need not accept as 

true, legal conclusions “cast in the form of factual allegations.” Western Mining Council v. Watt, 

643 F.2d 618, 624 (9th Cir. 1981). 

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 Moreover, pro se pleadings are held to a less stringent standard than those drafted by 

lawyers. Haines v. Kerner, 404 U.S. 519, 520 (1972). “Pro se complaints are construed 

‘liberally’ and may only be dismissed ‘if it appears beyond doubt that the plaintiff can prove no 

set of facts in support of his claim which would entitle him to relief.’” Nordstrom v. Ryan, 762 

F.3d 903, 908 (9th Cir. 2014) (quoting Wilhelm v. Rotman, 680 F.3d 1113, 1121 (9th Cir. 2012)). 

However, the conclusions contained in the pleading “are not entitled to the assumption of truth.” 

Id. 

B. The Statute of Limitations 

The dispositive issue presented by defendants’ Motion to Dismiss is whether plaintiff’s 

ERISA claims were filed too late and are therefore barred by the statute of limitations. As a 

general principal, a “claim accrues – and the statute of limitations clock starts running – ‘when 

the plaintiff knows or has reason to know of the injury which is the basis of the action.’” 

TwoRivers v. Lewis, 174 F.3d 987, 991 (9th Cir. 1999); see also Lukovsky v. City & County of 

San Francisco, 535 F.3d 1044, 1048 (9th Cir. 2008), cert. denied, 556 U.S. 1183 (2009). 

 ERISA specifies that: 

No action may be commenced under this subchapter with respect to 

a fiduciary’s breach of any responsibility, duty or obligation under 

this part, or with respect to a violation of this part, after the earlier 

of – 

(1) six years after (A) the date of the last action which 

constituted a part of the breach or violation, or (B) in the 

case of an omission the latest date on which the fiduciary 

could have cured the breach or violation, or (2) three years 

after the earliest date on which the plaintiff had actual 

knowledge of the breach or violation; 

except that in the case of fraud or concealment, such action may be 

commenced not later than six years after the date of discovery of 

such breach or violation. 

29 U.S.C. § 1113(a).1 

 

1

 The Plan itself states a similar limitation: “Time Limit on Legal Actions. A legal action on a 

claim may only be brought against US during a certain period. This period begins 60 days after 

the date Proof is filed and ends 3 years after the date such Proof is required.” ECF 10-3 at 45. 

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 The Ninth Circuit has held in the ERISA context that the statute of limitations is triggered 

by a claimant’s knowledge of the transaction that constituted the alleged violation, not by his 

knowledge of ERISA. Meagher v. International Assoc. of Machinists & Aerospace Workers, 856 

F.2d 1418, 1423 (9th Cir. 1988) (quoting Blanton v. Anzalone, 760 F.2d 989, 992 (9th Cir. 

1985)). 

C. Discussion 

 Here the alleged breach occurred when plaintiff’s benefits – and his employment – were 

terminated on March 22, 2012. ECF No. 1-2 at 9. Because plaintiff was contemporaneously 

notified of the termination, the three year limitations period prescribed in § 1113(a)(2) applies. 

Because plaintiff appealed the termination of his benefits, his cause of action did not accrue until 

the appeal was denied on October 11, 2012. See Heimeshoff v. Hartford Life & Accident Ins. 

Co., 134 S.Ct. 604, 610 (2013) (because ERISA requires an administrative appeals process, a 

participant’s cause of action does not accrue until the plan issues a final denial). Plaintiff did not 

file suit within three years of that date, however, but continued to communicate with the Claims 

Specialist until the “middle of 2014.” ECF No. 1-1 at 21, ¶ 30. He waited approximately two 

years thereafter, well past expiration of the limitations period, before filing his complaint on 

March 7, 2016. 

 These facts strongly suggest that the complaint is untimely. Indeed, in the absence of 

facts which would support a longer limitations period or an exception to the statute of limitations, 

plaintiff’s claims are time-barred. Accordingly, defendant’s motion to dismiss the complaint as 

untimely must be granted. However, there are circumstances which in rare cases can extend the 

filing period, such as “fraud or concealment” as provided in 29 U.S.C. § 1113. The present 

complaint does not include allegations which would support such an exception, but plaintiff has 

implied that such facts may exist. Accordingly, plaintiff will be afforded an opportunity to amend 

his complaint. See Ramirez v. Galaza, 334 F.3d 850, 861 (9th Cir. 2003) (“Leave to amend 

should be granted unless the pleading ‘could not possibly be cured by the allegation of other 

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facts,’ and should be granted more liberally to pro se plaintiffs.”).2 The court therefore proceeds 

to inform plaintiff of the pleading requirements and legal principles applicable to an amended 

complaint in this case. 

IV. PRINCIPLES RELEVANT TO AMENDMENT 

A. ERISA Preemption 

ERISA provides that a plan participant or beneficiary may sue to recover wrongfully 

denied benefits. 29 U.S.C. § 1132(a)(1)(B). A claim brought under this provision is akin to a 

breach of contact claim, in the specific context of insurance benefits. Equitable relief is also 

available to redress violations of ERISA or to enforce its provisions. § 1132(a)(3). 

Plaintiff is advised that state law claims of general application, such as breach of contract, 

breach of fiduciary duty, and breach of the covenant of good faith and fair dealing, are all 

preempted by ERISA when asserted in the benefits context. See Bui v. AT&T, 310 F.3d 1143, 

1147-48 (9th Cir. 2002) (ERISA preempts lawsuits challenging administrative decisions, 

including the denial of benefits). That means such claims cannot be separately maintained against 

a Plan or its Claims Administrator, because ERISA provides the exclusive avenue for relief. Id. 

at 1148 (“ERSIA precludes state law claims predicated on the denial of benefits.”).3 Plaintiff 

would therefore be well advised to frame any claims in an amended complaint as ERISA claims. 

If an amended complaint contains putative state law claims predicated on the denial of benefits, 

those claims will be subject to dismissal with prejudice. 

B. Statute of Limitations Issues 

As currently pled, for the reasons previously explained, plaintiff’s claims appear to be 

time-barred. Leave to amend has been granted to permit plaintiff to allege facts, if he can 

truthfully do so, which would support a theory of timeliness. 

 

2

 Leave to amend is granted pursuant to these general principles and not pursuant to plaintiff’s 

motion to amend. Plaintiff is cautioned that some of the amendments he proposes in his motion, 

ECF No. 15, are inconsistent with the guidance provided above. By granting leave to amend, the 

court is not endorsing any particular amendments. Any amended complaint will be subject to 

challenge by a motion to dismiss. 

3

 Only state laws that specifically regulate insurance or benefits plans, and do not apply more 

broadly to other kinds of businesses, escape preemption. 

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1. Fraud or Concealment 

 ERISA provides an extended six-year limitations period in cases of “fraud or 

concealment.” 29 U.S.C. § 1113. For this provision to apply, there must be evidence that the 

Plan and/or Claims Administrator either attempted to defraud the plaintiff or concealed its 

fiduciary breach. See Barker v. American Mobil Power Corp., 64 F.3d 1397, 1401 (9th Cir. 

1995); see also Kurz v. Philadelphia Elec. Co., 96 F.3d 1544, 1552 (3d Cir. 1996) (“The relevant 

question is . . . not whether the complaint ‘sounds in concealment,’ but rather whether there is 

evidence that the defendant took affirmative steps to hide its breach of fiduciary duty.”). “Fraud” 

involves false statements or misrepresentations, made with knowledge of their falsity and with the 

intent to wrongfully deprive the plaintiff. See Barker, 64 F.3d at 1401. “Concealment” requires 

active steps to prevent plaintiff from discovering the violation. Id. 

If plaintiff chooses to amend and seeks application of the extended limitations period 

applicable to fraud and concealment, he must clearly and concisely specify the facts that he 

believes demonstrate fraud, including knowledge of falsity and intent to defraud, or concealment, 

including specific and/or affirmative steps taken to hide the alleged breach. 

2. Estoppel 

An ERISA defendant may be “estopped” (barred for equitable reasons) from relying on 

the statute of limitations when its own conduct caused the late filing. See Heimeshoff, 134 S.Ct. 

at 615 (recognizing applicability of equitable estoppel to ERISA cases); Lamantia v. Voluntary 

Plan Administrators, 401 F.3d 1114, 1119 (9th Cir. 2005). Estoppel applies, for example, where 

the defendant’s conduct lulls plaintiff into reasonably believing, during the pendency of a lengthy 

administrative appeal, that the defendant does not intend to rely on a contractual limitations 

period which expires due to plaintiff’s reliance on defendant’s representations. Lamantia, 401 

F.3d at 1120-21 (affirming application of estoppel). 

3. Equitable Tolling 

Equitable tolling may extend the limitations period in an ERISA case, where the 

participant has diligently pursued both internal review and judicial review but was prevented from 

filing suit within the presumptive limitations period by extraordinary circumstances. Heimeshoff, 

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134 S.Ct. at 615. Equitable tolling is different from equitable estoppel in that it need not turn on 

conduct of the defendant(s). Tolling does, however, require both (1) “extraordinary 

circumstances” which prevented timely filing, and (2) diligence on plaintiff’s part. Id. 

The equitable tolling inquiry focuses on whether plaintiff’s delay in filing is excusable. 

Johnson v. Henderson, 314 F.3d 409, 414 (9th Cir. 2002). “‘If a reasonable plaintiff would not 

have known of the existence of a possible claim within the limitations period [due to 

extraordinary circumstances], then equitable tolling will serve to extend the statute of limitations 

for filing suit until the plaintiff can gather what information he needs.’” Id. (quoting Santa Maria 

v. Pac. Bell, 202 F.3d 1170, 1178 (9th Cir. 2000)). 

If applied, equitable tolling stops the running of the limitations period for the time that the 

extraordinary circumstances existed. It does not render the statute of limitations inapplicable or 

guarantee timeliness. 

C. Pleading Requirements 

Rule 8 of the Federal Rules of Civil Procedure requires “a short and plain statement of the 

claim showing that [plaintiff] is entitled to relief.” Accordingly, an amended complaint should 

plainly state who harmed the plaintiff, and in what way. Plaintiff should identify the facts 

underlying his claims, not just assert legal conclusions. Facts alleged in an amended complaint 

“must not be inconsistent with those already alleged.” Lacey v. Maricopa County, 693 F.3d 896, 

939 (9th Cir. 2012) (en banc). 

An amended complaint must not refer to a prior pleading in order to make the amended 

complaint complete. An amended complaint must be complete in itself without reference to any 

prior pleading. Local Rule 220. This is because, as a general rule, an amended complaint 

supersedes the original complaint. See Pacific Bell Telephone Co. v. Linkline Communications, 

Inc., 555 U.S. 438, 456 n.4 (2009) (“[n]ormally, an amended complaint supersedes the original 

complaint”) (citing 6 C. Wright & A. Miller, Federal Practice & Procedure § 1476, pp. 556-57 

(2d ed. 1990)). 

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V. PLAINTIFF’S MOTION FOR SUMMARY ADJUDICATION 

Because the complaint will be dismissed with leave to amend, plaintiff’s motion for 

summary adjudication (ECF No. 30) is moot and will be denied. Plaintiff is informed that 

motions for summary judgment or summary adjudication are ordinarily premature until the point 

in litigation at which the defendants have answered the complaint and the parties have conducted 

any necessary discovery. 

CONCLUSION 

For the reasons explained above, it is hereby ordered as follows: 

1. Plaintiff’s Motion to Remand, ECF No. 12, is DENIED; 

2. Defendants’ Motion to Dismiss, ECF No. 10, is GRANTED on statute of limitations 

grounds. Dismissal is without prejudice and plaintiff is granted LEAVE TO AMEND; 

3. Plaintiff’s Motion to Amend, ECF No. 15, is DENIED as moot; 

4. Plaintiff’s Motion for Summary Adjudication, ECF No. 30, is DENIED as moot; 

5. Plaintiff shall have 60 days from the date of this Order to file a First Amended 

Complaint. 

 IT IS SO ORDERED

DATED: August 2, 2016 

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