Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-01256/USCOURTS-casd-3_09-cv-01256-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1132 E.R.I.S.A.

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JULIET BENNETT,

Plaintiff,

CASE NO. 09cv1256-WQH-JMA

ORDER

vs.

GREAT-WEST LIFE & ANNUITY

INSURANCE COMPANY, a business

entity form unknown; CIGNA

HEALTHCARE, a business entity form

unknown, and DOES 1 through 100,

inclusive,

Defendants.

HAYES, Judge:

The matters before the Court are the Motion to Dismiss (Doc. # 2) and the Motion to

Strike Plaintiff’s Demand for Jury Trial (“Motion to Strike”) (Doc. # 8), both filed by

Defendants, Great-West Life & Annuity Insurance Company and Cigna Healthcare.

I. Background

On May 8, 2009, Plaintiff filed a “Complaint for ... Breach of Insurance Contract; ...

Breach of the Covenant of Good Faith and Fair Dealing; ... [and] Declaratory Relief”

(“Complaint”) in San Diego Superior Court. (Doc. # 1, Ex. A). The Complaint alleges that

Defendants issued a medical benefits insurance policy “as part of a group insurance plan ...

sold by Defendants ... to Clark Security Products, Inc.” (Doc. # 1, Ex. A ¶ 7). Plaintiff alleges

that this plan provided coverage to Clark Security Products’ employees and their dependents,

and that Plaintiff was entitled to benefits under that plan. (Doc. # 1, Ex. A ¶¶ 7-8). Plaintiff

alleges that on July 18, 2008, Plaintiff “requested that Defendants ... pre-authorize payment

for bariatric surgery under the terms of the Policy. Despite the fact that [Plaintiff] repeatedly

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demonstrated to Defendants ... that she qualifies for bariatric surgery under the policy,

Defendants ... have repeatedly refused and continue to refuse to pre-authorize payment for

bariatric surgery under the terms of the Policy.” (Doc. # 1, Ex. A ¶ 12). Plaintiff also alleges

that Defendants failed to do the following: “[c]onduct a prompt, full and complete

investigation of the Plaintiff’s request to pre-authorize payment for bariatric surgery”;

“[a]dvise Plaintiff in a timely manner regarding the status of the claim”; and “[p]romptly

respond to communications with respect to the claim.” (Doc. # 1, Ex. A ¶ 13). Plaintiff

alleges that these actions by Defendants constitute a breach of contract and a breach of the

covenant of good faith and fair dealing. (Doc. # 1, Ex. A ¶¶ 16-24). The Complaint requests

compensatory damages, punitive damages, attorneys fees, and “a judicial declaration that

Plaintiff qualifies for bariatric surgery under the terms of the Policy.” (Doc. # 1, Ex. A at 8).

On June 9, 2009, Defendants removed the action to this Court, on the grounds that

federal question jurisdiction exists pursuant to the Employee Retirement Income Security Act

of 1974, 29 U.S.C. §§ 1001, et seq. (“ERISA”). (Doc. # 1). On June 11, 2009, Defendants

filed the Motion to Dismiss. (Doc. # 2). Defendants contend that the insurance plan at issue

is governed by ERISA, which completely preempts Plaintiff’s state law claims. (Doc. # 2-2

at 1). Defendants contend that Plaintiff’s state law claims should be dismissed with prejudice.

(Doc. # 2-2 at 10).

On June 19, 2009, Plaintiff filed a notice stating: “Plaintiff Juliet Bennett hereby

demands trial by jury in this action.” (Doc. # 6 at 1). On June 30, 2009, Defendants filed the

Motion to Strike, contending that “there is no right to a jury trial in ERISA matters, and

Defendants do not consent to a jury trial.” (Doc. # 8 at 1).

On July 6, 2009, Plaintiff filed a brief in opposition to the Motion to Dismiss, stating:

Plaintiff does not contest the point that the claims for relief stated in the

complaint are governed by ERISA. However, the complaint requests remedies

that are available under ERISA (at 29 U.S.C. §1132) and therefore states a claim

under ERISA. Namely, the complaint seeks ‘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 ....’ 29 U.S.C.

§ 1132 (1)(B). Accordingly, Defendants[’] Motion to Dismiss must be denied

in its entirety.

(Doc. # 9 at 2). Plaintiff also requests leave of Court to amend the Complaint, “should this

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1

 Defendants attach a copy of the plan at issue to the Motion to Dismiss. (McClure

Decl., Ex. A, Doc. # 2-3). Plaintiff does not challenge the authenticity of that document as the

plan referenced in the Complaint. (Doc. # 9). The Court takes judicial notice of the plan. See

No. 84 Employer-Teamster Joint Council Pension Trust Fund v. Am. W. Holding Corp., 320

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court find that amendments to Plaintiff’s complaint are warranted.” (Doc. # 9 at 6).

On July 13, 2009, Defendants filed a reply brief in support of the Motion to Dismiss,

contending that Plaintiff’s state law claims should be dismissed because “the causes of action

in the complaint–for breach of contract, for ‘bad faith’ seeking general and punitive damages,

and for declaratory relief–are not the same as the claims that are established by ERISA.” (Doc.

# 10 at 2).

On July 27, 2009, Plaintiff filed a brief in opposition to the Motion to Strike, contending

that the Motion to Strike is premature because the Court has not ruled on the pending Motion

to Dismiss, and “the issue [of whether Plaintiff is entitled to a jury trial] should remain open

for the court to decide at the time the matter is scheduled for trial.” (Doc. # 11 at 2).

II. Discussion

A. Motion to Dismiss

Federal Rule of Civil Procedure 12(b)(6) permits dismissal for “failure to state a claim

upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). In ruling on a Rule 12(b)(6)

motion to dismiss, the court reads the complaint in the light most favorable to the non-moving

party. See Odom v. Microsoft Corp., 486 F.3d 541, 547 (9th Cir. 2007). “Allegations in the

complaint, together with reasonable inferences therefrom, are assumed to be true for purposes

of the motion.” Id. “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does

not need detailed factual allegations, a plaintiff’s obligation to provide the grounds of his

entitlement to relief requires more than labels and conclusions, and a formulaic recitation of

the elements of a cause of action will not do.” Bell Atlantic v. Twombly, 550 U.S. 544, 555

(2007). Dismissal without leave to amend is appropriate only when the Court is satisfied that

the deficiencies of the complaint could not possibly be cured by amendment. See Chang v.

Chen, 80 F.3d 1293, 1296 (9th Cir. 1996).

As Plaintiff concedes, the plan at issue is governed by ERISA.1

 Compare 29 U.S.C. §

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28 F.3d 920, 925 n.2 (9th Cir. 2003) (when deciding a motion to dismiss, a district court may

“consider documents submitted by Defendants that were referenced in the complaint and

whose authenticity has not been questioned”).

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1002(3) (defining an “employee welfare benefit plan”), and Winterrowd v. Am. Gen. Annuity

Ins. Co., 321 F.3d 933, 939-40 (9th Cir. 2003) (“[A]n ERISA plan must invoke an ongoing

administrative program, and must enable reasonable persons to ascertain the intended benefits,

beneficiaries, source of financing, and procedures for receiving benefits.”), with McClure

Decl., Ex. A, Doc. # 2-3, at 2-19 (stating that the plan is self-funded by the employer and

setting forth the benefits, beneficiaries, and procedures for receiving benefits), and id. at 2

(“Clark Security Products, Inc. ... has established an Employee Welfare Benefit Plan within

the meaning of the Employee Retirement Income Security Act of 1974.”)).

“[A] state law cause of action is preempted by ERISA if it ‘relates to’ an employee

benefit plan.” Bast v. Prudential Ins. Co. of Am. 150 F.3d 1003, 1007 (9th Cir. 1998) (citing

29 U.S.C. § 1144(a); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987)). “The Supreme Court

has held that ERISA preempts state common law tort and contract causes of action asserting

improper processing of a claim for benefits under an insured employee benefit plan. ...

Similarly, we have held that state law tort and contract claims as well as violations of a state

insurance statute are preempted by ERISA.” Bast, 150 F.3d at 1007 (citing Pilot Life, 481 U.S.

at 57; Tingey v. Pixley-Richards West, Inc., 953 F.2d 1124, 1131 (9th Cir. 1992) (holding

plaintiffs’ causes of action for breach of contract, breach of the duty of good faith and fair

dealing, intentional infliction of emotional distress, and violations of the Arizona Insurance

Code were preempted by ERISA)).

The Court concludes that the state law causes of action for breach of contract and

breach of the covenant of good faith and fair dealing are preempted by ERISA. See Tingey,

953 F.2d at 1131. Similarly, Plaintiff’s claims for punitive damages are preempted by ERISA.

See Bast, 150 F.3d at 1009 (“Extracontractual, compensatory and punitive damages are not

available under ERISA.”) (citing Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134,

148 (1985)).

The Court will dismiss the Complaint without prejudice and allow Plaintiff to replead

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her claims under ERISA. See Scott v. Gulf Oil Corp., 754 F.2d 1499, 1506 (9th Cir. 1985)

(“Our affirmance of the district court’s dismissal without prejudice of the state-law claims that

we have found to be preempted by ERISA leaves the plaintiffs free to assert those claims under

ERISA.”); Rozman v. Prudential Ins. Co. of Am., 1994 WL 514030, at *2 (N.D. Cal., Sept. 7,

1994) (“Because Rozman has standing as either an employee or a beneficiary to bring claims

under ERISA, his state law claims are preempted. Rozman’s claims are dismissed without

prejudice to whatever remedies he may have under ERISA.”).

B. Motion to Strike

Federal Rule of Civil Procedure 39 provides: “When a jury trial has been demanded...,

the action must be designated on the docket as a jury action. The trial on all issues so

demanded must be by jury unless ... the court, on motion or on its own, finds that on some or

all of those issues there is no federal right to a jury trial.” Fed. R. Civ. P. 39(a)(2). The Ninth

Circuit has held that there is no right to a jury trial in ERISA cases. See Thomas v. Oregon

Fruit Prods. Co., 228 F.3d 991, 996-97 (9th Cir. 2000) (“[T]he remedies available to a

participant or beneficiary under ERISA are equitable in nature and the Seventh Amendment

does not require that a jury trial be afforded for claims made by participants or beneficiaries.

The district court properly rejected Thomas’ demand for a jury trial.”). The Motion to Strike

is granted.

III. Conclusion

IT IS HEREBY ORDERED that the Motion to Dismiss (Doc. # 2) is GRANTED. The

Complaint is DISMISSED without prejudice. No later than THIRTY (30) DAYS from the

date of this Order, Plaintiff may file a first amended complaint. The Motion to Strike

Plaintiff’s Demand for Jury Trial (Doc. # 8) is GRANTED.

DATED: August 18, 2009

WILLIAM Q. HAYES

United States District Judge

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