Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-3_10-cv-00572/USCOURTS-almd-3_10-cv-00572-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

EASTERN DIVISION

ALLEN BALL, )

 )

Plaintiff, )

 ) CIVIL ACTION NO. 03:10cv572-WHA

 )

UNUM GROUP CORPORATION, et al., ) (wo)

 )

Defendants. )

MEMORANDUM OPINION AND ORDER

I. Facts and Procedural History

This cause is before the court on a Motion for Leave to Amend Answer (Doc. #20) and

Defendants’ Supplemental Motion for Leave to Amend (Doc. #22), filed by the Defendants, and

a Plaintiff’s Motion to Strike (Doc. #24).

The Plaintiff, Allen Ball, originally filed a Complaint in the Circuit Court of Macon

County, Alabama on June 4, 2010. The Complaint alleges claims for denial of benefits under a

disability insurance policy, and for fraud and bad faith. 

On July 6, 2010, the case was removed by the Defendants to federal court on the basis of

diversity subject matter jurisdiction, pursuant to 28 U.S.C. § 1332, 1441, 1446. No Motion to

Remand was filed, and it appears that the court has diversity subject matter jurisdiction in this

case.

The Defendants filed an Answer to the Complaint on July 7, 2010, admitting that the

Plaintiff purchased a disability policy, identifying the policy by number, and admitting the dates

during which premiums were paid. See Doc. #1, p.2. The Answer also included various

affirmative defenses. There is no mention of the Employee Retirement Income Security Act of

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1974 (“ERISA”) in the Notice of Removal or in the Answer.

The parties filed a Report of Parties’ Planning Meeting in which they requested that

certain deadlines be set by the court, including a November 15, 2010 deadline for the Defendants

to amend the pleadings. See Doc. #14. On August 17, 2010, the court entered a Uniform

Scheduling Order, setting November 15, 2010 as the deadline for the Defendants to amend the

pleadings. See Doc. #15, § 4.

The Defendants’ Motion for Leave to Amend Answer, filed on March 14, 2011, seeks to

add three paragraphs, including an invocation of complete preemption under ERISA, a request

for dismissal for failure to exhaust administrative remedies, and a request to strike the right to a

jury trial because the claims are ERISA claims. The Defendants state that the insurance policy

identified in the Complaint appears on its face to be an individual disability insurance policy, and

that it was not until the Plaintiff’s January 19, 2011 deposition that the Defendants became aware

that the policy was part of a package of insurance benefits made available to employees, thereby

potentially raising ERISA issues.

II. DISCUSSION

Nearly four months after the deadline for amendment of the pleadings, the Defendants

seek to transform this case from one bringing claims for damages, subject to state law defenses,

to a case subject to ERISA defenses and standards. The Defendants do not contend that their

request is jurisdictional. Instead, they concede that they seek to add affirmative defenses. 

The Circuits which have addressed the issue have concluded that, in a case bringing a

claim for benefits, ERISA affirmative defenses may be waived if not timely raised. See Saks v.

Franklin Covey Co., 316 F.3d 337, 349-50 (2d Cir. 2003); Wolf v. Reliance Standard Life Ins.

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Co., 71 F.3d 444, 448-49 (1st Cir. 1995); Dueringer v. Gen. Am. Life Ins. Co., 842 F.2d 127,

129-30 (5th Cir. 1988); Gilchrist v. Jim Slemons Imports, Inc., 803 F.2d 1488, 1497 (9th Cir.

1986); see also Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1212 (11th Cir. 1999)

(characterizing defensive preemption as an affirmative defense). In Wolf, the plaintiff filed a

claim for disability benefits in state court, and the case was removed to federal court on the basis

of diversity jurisdiction. 71 F.3d at 446. The district court denied out-of-time requests to

dismiss and to strike the jury demand based on ERISA. The First Circuit affirmed, concluding

that ERISA affirmative defenses are waivable in a benefits-due action, and that it is within a

district court’s discretion to find prejudice to the plaintiff in an amendment which changes the

theory of the case and requires additional discovery, research, and preparation. Id. at 450. 

In this case, because the affirmative defenses they seek to add are waivable if not timely

pled, the Defendants must meet the standard for amendment of the pleadings. The Defendants

have argued that this court should allow their untimely amendment because “[t]o the extent the

Defendants could have raised these affirmative defenses prior to the Court’s deadline for

amending the pleadings, counsel for Defendants asserts that the failure to do so was caused by

excusable neglect.” See Doc. #22, p. 2. 

A district court is required to issue a scheduling order to “limit the time to join other

parties, amend the pleadings . . . . ” Fed. R. Civ. P. 16(b)(3)(A). A scheduling order “may be

modified only for good cause and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4). The good

cause standard precludes modification unless the schedule cannot “‘be met despite the diligence

of the party seeking the extension.’” Sosa v. Airprint Systems, Inc., 133 F.3d 1417 (11th Cir.

1998) (quoting Fed. R. Civ. P. 16 advisory committee's note). These rules are important to

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protect the integrity of scheduling orders, and enforcement is necessary if the orders are not to be

rendered meaningless. 

 In this case, based on the parties’ request, the court set a deadline for the Defendants’

amendment of the pleadings of November 15, 2010. That scheduling order was entered on

August 17, 2010, and the Defendants were, therefore, free to take the Plaintiff’s deposition for

nearly three months before the amendment deadline. The Defendants seek to add affirmative

defenses nearly four months after that deadline passed. The insurance policy at issue, and the

premium payments, were specifically referenced in the Answer, indicating that the information

needed to discern that this case potentially implicated ERISA issues was available to the

Defendants through the exercise of diligence. The Defendants do not purport to have acted

diligently, but instead merely state that their conduct in failing to timely-amend was excusable

neglect. Accordingly, the Defendants in this case have not met their burden to show good cause,

and their motions are due to be DENIED on that basis. 

The Defendants state that the Plaintiff will suffer no prejudice by allowing the

amendment because the Plaintiff has conducted no discovery, there have been no legal rulings,

and the Motion for Leave to Amend was filed before the end of discovery. Although lack of

prejudice is not a reason which would authorize modification of a scheduling order, allowing the

Defendants to interject an entirely new basis for defending the claims against them, including

exhaustion of remedies, would prejudice the Plaintiff by requiring additional research and

preparation.

III. CONCLUSION

 For the reasons discussed, it is hereby ORDERED as follows:

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1. The Motion for Leave to Amend Answer (Doc. #20) and Defendants’ Supplemental

Motion for Leave to Amend (Doc. #22) are DENIED.

2. The Plaintiff’s Motion to Strike (Doc. #24) is DENIED as moot.

 Done this 8th day of June, 2011.

 /s/ W. Harold Albritton 

W. HAROLD ALBRITTON

SENIOR UNITED STATES DISTRICT JUDGE

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