Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_16-cv-01197/USCOURTS-caed-1_16-cv-01197-0/pdf.json

Parties Involved:
Fresno Pacific University
Defendant
April Powell
Plaintiff
UNUM Life Insurance Company of America
Defendant
Unum Group
Defendant

Document Text:

1

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

I. Introduction

Plaintiff April Powell (“Plaintiff”) is a now-disabled, former employee of Fresno Pacific 

University (“FPU”). Plaintiff sought long term disability (“LTD”) insurance benefits and waiver 

of life insurance premium (“LWOP”) benefits from Unum Group and Unum Life Insurance 

Company of America (“Unum”). Unum approved Plaintiff’s LTD benefits claim but 

characterized her disabling medical condition in a manner that limits LTD benefits to twenty four 

months. That twenty four month period has run and Unum has terminated benefits. Plaintiff 

remains disabled and claims continuing entitlement LTD benefits. She has alleged claims for 

APRIL POWELL,

Plaintiff

v.

UNUM LIFE INSURANCE COMPANY 

OF AMERICA, a Delaware Corporation, 

UNUM GROUP, a Delaware Corporation, 

FRESNO PACIFIC UNIVERSITY, a 

California Corporation, and DOES 1-20, 

inclusive,

Defendants

CASE NO. 1:16-cv-01197-AWI-SKO 

ORDER GRANTING DEFENDANT 

UNUM’S MOTION TO DISMISS

ORDER GRANTING IN PART AND 

DENYING IN PART PLAINTIFF’S 

REQUEST FOR LEAVE TO AMEND

Case 1:16-cv-01197-AWI-SKO Document 15 Filed 09/30/16 Page 1 of 6
2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

breach of contract against Unum, breach of the covenant of good faith and fair dealing against 

Unum, and breach of fiduciary duty against FPU. 

Unum has filed a motion to dismiss contending that the Employee Retirement Income 

Security Act of 1974, 29 U.S.C. §§ 1001 et seq. (“ERISA”), governs this action and provides the 

exclusive remedy for Plaintiff to recover any benefits due under the terms of her plan. As a 

result, Unum contends, Plaintiff’s state law causes of action are preempted. Plaintiff has filed an 

opposition, agreeing that her state law causes of action are preempted by ERISA. However, 

Plaintiff suggests that her state law claims are only preempted insofar as Rollins v. Dignity 

Health, --- F.3d ----, 2016 WL 3997259 (9th Cir. July 26, 2016), is good law. Plaintiff further 

suggests that the Court should permit her to amend her claim in anticipation of Ninth Circuit en 

banc review and reversal of Rollins or Supreme Court review and reversal of Rollins. Unum 

opposes Plaintiff’s suggested outcome.

For the following reasons, Unum’s motion to dismiss Plaintiff’s state law claims will be 

granted. Plaintiff will be granted leave to amend only as to the ERISA causes of action set forth 

in her proposed First Amended Complaint (“FAC”).

II. Background1

Plaintiff was enrolled in a LTD policy and a Life policy with Unum as a benefit of her 

employment with FPU. Complaint, Doc. 1-1 (“Compl.”) at ¶ 10. FPU is a “University ... 

established by a church group.” Compl. at ¶ 15. In 2013, FPU elected for ERISA to govern its 

employee health and welfare benefit plan. RJN, Exh. A, Doc. 10-1 at 2-3.2

In April of 2012 Plaintiff became disabled due to symptoms including “headaches, 

vertigo, fatigue, cognitive impairment, and anxiety[,] arising from a stroke ... suffered on 

October 6, 2010. Compl. at ¶ 12. On December 13, 2013, Unum approved Plaintiff’s claim for 

 

1 The background portion of this order relies upon the allegations set forth in Plaintiff’s complaint, the documents 

incorporated therein, and the documents subject to judicial notice.

2 The Court “may judicially notice a fact that is not subject to reasonable dispute because it ... can be accurately and 

readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b)(2). 

“Records of state [and federal] agencies and other undisputed matters of public record” are the appropriate subject of 

judicial notice. Disabled Rights Action Committee v. Las Vegas Events, Inc., 375 F.3d 861, 866 n.1 (9th Cir. 2004) 

(citing, inter alia, Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001)). The “Annual Return/Report of 

Employee Benefit Plan (Form 5500)” filed with the Internal Revenue Service by Fresno Pacific University is the 

appropriate subject of judicial notice. Unum’s request for judicial notice is granted.

Case 1:16-cv-01197-AWI-SKO Document 15 Filed 09/30/16 Page 2 of 6
3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

LTD benefits. Compl. at ¶ 13. Unum characterized Plaintiff’s disability as a medical condition of 

major depressive disorder and anxiety disorder. Compl. at ¶ 13. The impact of that 

characterization was that Plaintiff was limited to twenty four months of LTD benefits. Compl. at 

¶ 13. Unum paid LTD benefits for twenty four months and have now ceased paying LTD 

benefits despite Plaintiff’s ongoing disability.

III. Discussion

1) Does FPU provide an employee welfare benefit plan governed by ERISA?

As the Rollins court recited, “Congress enacted ERISA to protect ‘the interests of 

participants in employee benefit plans and their beneficiaries by setting out substantive 

regulatory requirements for employee benefit plans....’” Rollins, 2016 WL 3997250 at *2 

(quoting Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004)). If an employer establishes or 

maintains an employee welfare benefit plan,

3

that employer is required do so in compliance with 

ERISA requirements unless the employer is exempt. See 29 U.S.C. § 1003(a). An exemption 

exists for “church plans”—plans “established and maintained by a church ... which is exempt 

from tax under section 501 of Title 26,” 29 U.S.C. §§ 1102(33), 1103(b)(2), unless the church 

elects to have its plan governed by ERISA, 29 U.S.C. § 1103(b)(2), 26 U.S.C. § 410(d)(1).

It is undisputed in this action that FPU, through the Unum policies, provided its 

employees with long-term disability insurance and life insurance benefits. Those policies make 

up FPU’s employee welfare benefit plan within the meaning of section 1102(1) of Title 29. 

Assuming, without deciding, that FPU would be eligible for the “church plan” exemption of 

section 1103(b)(2), FPU’s voluntary election to be governed by ERISA is controlling. FPU’s 

employee welfare benefit plan is governed by ERISA requirements. 

///

///

 

3 An “employee welfare benefit plan” comprises “any plan, fund, or program ... established or maintained by an 

employer or by an employee organization, or by both, ... for the purpose of providing for its participants or their 

beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or 

benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or 

other training programs, or day care centers, scholarship funds, or prepaid legal services, or (B) any benefit 

described in section 186(c) of this title (other than pensions on retirement or death, and insurance to provide such 

pensions).” 29 U.S.C. § 1002(1).

Case 1:16-cv-01197-AWI-SKO Document 15 Filed 09/30/16 Page 3 of 6
4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2) Are Plaintiff’s common law claims preempted by ERISA?

“ERISA contains one of the broadest preemption clauses ever enacted by Congress.” 

Joanou v. Coca-Cola Co., 26 F.3d 96, 99 (9th Cir. 1994) (internal quotation marks omitted). 

“Under § 514(a), ERISA broadly ‘preempts any and all State laws insofar as they may now or 

hereafter relate to any [covered] employee benefit plan ....’ ” Fossen v. Blue Cross & Blue Shield 

of Mont., Inc., 660 F.3d 1102, 1108 (9th Cir. 2011) (alterations in original) (quoting 29 U.S.C. § 

1144(a)). “In analyzing a state law cause of action..., ‘the focus is whether the claim is premised 

on the existence of an ERISA plan, and whether the existence of the plan is essential to the 

claim's survival.’” Johnson v. Lucent Technologies Inc., --- F.Appx. ----, 2016 WL 5390352, *2 

(9th. Cir. Sept. 27, 2016) (quoting Providence Health Plan v. McDowell, 385 F.3d 1168, 1172 

(9th Cir. 2004)). In short, if the state law claim is premised on a plan governed by ERISA, it is 

preempted. E.g., Bui v. American Telephone & Telegraph Co., Inc., 310 F.3d 1143, 1152 (9th 

Cir. 2002) (“ERISA preempts [an insured’s] contract claims. These claims do not merely 

reference the ERISA plan, they require its construction because the contract allegedly breached 

is the ERISA plan itself. Accordingly, ERISA preempts the contract claims.”) (internal citation 

omitted).

Plaintiff’s causes of action for breach of contract, breach of the covenant of good faith 

and fair dealing, and breach of fiduciary duty, all arise out of the alleged breach of the ERISA 

plan obligations themselves. Plaintiff recognizes as much. See Doc. 11 at 2. Plaintiff’s common 

law claims are preempted by ERISA. Those claims will be dismissed.

C. Should the Court grant leave to amend?

Plaintiff makes to requests for leave to amend. First, she seeks to allege new causes of 

action under ERISA. Second, she seeks to reallege two of her three common law claims “in the 

alternative ... in the event that Rollins is overturned.”

Under Rule 15 of the Federal Rules of Civil Procedure, a party may amend her pleading 

once as a matter of course within twenty-one days after a responsive pleading or Rule 12(b) 

motion has been filed, whichever is earlier. Fed. R. Civ. P. 15(a)(1). In all other cases, a party 

may amend his or her pleading only with the opposing party's written consent or with the court's 

Case 1:16-cv-01197-AWI-SKO Document 15 Filed 09/30/16 Page 4 of 6
5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

leave. Fed. R. Civ. P. 15(a)(2). “The court should freely give leave when justice so requires.” 

Fed. R. Civ. P. 15(a)(2). Leave to amend existing claims should be granted unless amendment 

would be futile—i.e., unless the claim would be subject to immediate dismissal. Foman v. Davis, 

371 U.S. 178 (1967); Garmon v. County of Los Angeles, 828 F.3d 837, 842 (9th Cir. 2016). New

claims are generally permitted so long as the new claims are not proposed after undue delay and

would not substantially alter the nature of the litigation or require the opposing party to prepare 

an entirely new course of defense. See Morongo Band of Mission Indians v. Rose, 893 F.2d 

1074, 1079 (9th Cir. 1990). If a new claim relies upon the existing facts and merely incorporates 

alternative theories of liability, it falls within Rule 15(a)’s policy of promoting litigation on the 

merits and leave to allege the new claims should be granted. Morongo, 893 F.2d at 1079.

Unum’s motion to dismiss, filed on August 17, 2016, is a Rule 12(b) motion. Twenty-one 

days after filing of that motion was September 7, 2016. Plaintiff did not file her opposition and 

proposed amended complaint until September 12, 2016. Plaintiff may only amend her complaint 

with Unum’s consent or with leave of the Court.

Unum has voiced no objection to Plaintiff’s request for leave to allege new causes of 

action pursuant to ERISA. In fact, Unum specifically suggests that Plaintiff’s common law

claims fail precisely because ERISA governs. Allowing Plaintiff to allege new ERISA claims 

does not appear to be futile. See, e.g., FAC, Doc. 11-1 at ¶ 18 (citing 29 U.S.C. § 1132(a)(1)(B) 

(An ERISA plan beneficiary may bring suit “to recover benefits due to [her] under the terms of 

his plan, to enforce [her] rights under the terms of the plan, or to clarify [her] rights to future 

benefits under the terms of the plan.”)) Plaintiff will be granted leave to amend her complaint to 

allege the ERISA claims set out in the first and second causes of action of the proposed FAC. 

Plaintiff suggests that she should be permitted to maintain her preempted common law

claims because Rollins, 2016 WL 3997259, may be overturned. The Court rejects Plaintiff’s 

request for multiple reasons. However the Court need look no further than Rollins itself. Even if 

Rollins is overturned the FPU employee welfare benefit plan will continue to be an ERISA 

plan. Rollins restricts the types of employer entities that qualify for the “church plan” exemption 

from ERISA. The parties agree that, under Rollins, FPU is ineligible for the “church plan” 

Case 1:16-cv-01197-AWI-SKO Document 15 Filed 09/30/16 Page 5 of 6
6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

exemption from ERISA. Doc. 11 at 2; Doc. 12 at 4. However, even assuming that Rollins was 

reversed on that issue, FPU affirmatively elected to have ERISA requirements govern its 

employee welfare benefit plan. RJN, Exh. A, Doc. 10-1 at 2-3; see 29 U.S.C. § 1003(b)(2); 26 

U.S.C. § 410(d)(1). FPU’s election for ERISA requirements to govern is irrevocable. 26 U.S.C. §

410(d)(2). Whether Rollins remains the law has no impact on whether ERISA will continue to 

govern to the FPU employee welfare benefit plan; in any case, Plaintiff’s common law claims 

will remain preempted.

As to Plaintiff’s preempted common law claims, amendment would be futile. Plaintiff’s 

request for to leave to reallege her common law claims will be denied.

IV. Order

Based on the foregoing, IT IS HEREBY ORDERED that:

1. Plaintiff’s common law claims for breach of contract, breach of the covenant of good 

faith and fair dealing, and breach of fiduciary duty are DISMISSED with prejudice;

2. Plaintiff is GRANTED leave to amend to allege the two ERISA causes of action set forth 

in her proposed FAC;

3. As no claims remain against Defendant Fresno Pacific University, it is DISMISSED from 

this action.

IT IS SO ORDERED.

Dated: September 30, 2016 

 SENIOR DISTRICT JUDGE

Case 1:16-cv-01197-AWI-SKO Document 15 Filed 09/30/16 Page 6 of 6