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McNAMARA GOLDSMITH 

A Professional Corporation

1670 E. River Road, Suite 200

Tucson, Arizona 85718

(520) 624-0126

(520) 624-9238 - FAX

Michael F. McNamara, SBN 011277

E-mail: mfm@mgm-legal.com

María del Pilar Mendoza, SBN 024740

E-mail: pm@mgm-legal.com

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

IN AND FOR THE DISTRICT OF ARIZONA

KATHLEEN MOORE, a single woman, 

individually, and as Personal Representative of the 

Estate of James Michael Moore, Deceased;

 Plaintiff,

v.

LIFE INSURANCE COMPANY OF NORTH 

AMERICA, a foreign corporation; CIGNA 

INSURANCE AGENCY, LLC, a foreign 

corporation; AmWINS GROUP BENEFITS, 

INC., f/k/a NATIONAL EMPLOYEE BENEFITS 

COMPANIES, INC., a foreign corporation; 

BORDER STATES INDUSTRIES, INC., d/b/a

BORDER STATES ELECTRIC, a foreign 

corporation; BORDER STATES ELECTRIC 

PLAN; XYZ CORPORATIONS I-III; ABC 

PARTNERSHIPS I-III; JOHN and JANE DOES 

I-III,

 Defendants.

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NO.

COMPLAINT FOR ERISA VIOLATIONS;

ERISA BENEFITS DENIED; BREACH OF 

FIDUCIARY DUTY, BREACH OF A.R.S. 

§ 20-1269, CONSUMER FRAUD

(Tort-Non-Motor-Vehicle)

Assigned to: 

 

Plaintiff, Kathleen Moore, individually, and as Personal Representative of the Estate of 

James Michael Moore, Deceased (“Kathleen”), as and for her Complaint against Life Insurance 

Company of North America (“LICNA”) , CIGNA Insurance Agency LLC (“CIGNA”), AmWINS 

Group Benefits, Inc., formerly known as National Employee Benefits Companies Inc, a foreign 

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corporation (“NEBCO”), Border States Industries, Inc., dba Border States Electric. (“BSE”), Border

States Electric’s Life Insurance Benefits Plan (“the Plan”), XYZ Corporations I-III; ABC Partnerships IIII; and John and Jane Does I-III, collectively (“Defendants”), and allege as follows:

1. The United States District Court has jurisdiction over this action pursuant to 

ERISA § 502 (e)(1), 29 U.S.C. § 1132(e)(1); and 28 U.S.C. § 1331.

2. Venue is proper as the Plan was administered in this District, the breach took 

place in this District, the Plaintiff is an Arizona resident, and James Moore worked for BSE in Arizona. 

3. With regard to the Plaintiff’s state law claims pursuant to A.R.S. § 20-1251 et 

seq., the Court has supplemental jurisdiction pursuant to 28 U.S.C. § 1367.

4. BSE is a foreign corporation based in Fargo, North Dakota, but doing business in 

Arizona. BSE employs Arizona residents, conducts ongoing business within Arizona, and therefore, 

may be found within Arizona

5. BSE was James Moore’s (“James”) employer. 

6. LICNA is a wholly owned and subsidiary of CIGNA. LICNA was the insurance 

company that provided the Group Life Insurance Plan to BSE of which James Moore was a beneficiary. 

Since, April 1, 1957, LICNA has been registered as a foreign corporation with the State of Arizona, has 

extensive contacts with the State of Arizona, conducts ongoing business within the State of Arizona, and 

therefore, may be found within the State. 

7. CIGNA is a foreign L.L.C. with a domicile in Connecticut and doing business in 

Arizona. 

8. NEBCO is a foreign corporation with a domicile in Rhode Island and doing 

business in Arizona. 

9. NEBCO administered for CIGNA and LICNA BSE’s life insurance benefits plan. 

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10. Kathleen is James’ widow and an Arizona resident. Kathleen is also the Personal 

Representative of her husband’s Estate. 

11. Upon information and belief, at all times, the Plan was an employee welfare 

benefit plan within the meaning of ERISA § 3(1), 29 U.S.C. § 1002(1), sponsored by James’ employer,

BSE, administered and funded, in part or in whole, by LICNA, CIGNA, NEBCO, and BSE.

12. Defendants, and each of them, caused events to occur in Pima County, Arizona,

out of which this Complaint arises.

13. Upon information and belief, Defendants ABC Partnerships I-III, are Arizona or 

foreign general or limited partnerships whose identities are presently unknown to Plaintiff, and who 

committed some or all of the acts complained of herein.

14. Upon information and belief, Defendants John Does III-VI and Jane Does I-III,

are individuals or married couples whose identities are presently unknown and not reasonably 

ascertainable to Plaintiff, and who committed some or all of the acts complained of herein.

15. All acts complained of herein were done by Defendants or by their authorized 

agents in the course and scope of their employment or agency, and as to married individuals, were done 

in furtherance of their respective marital communities.

General Allegations 

16. James participated in BSE’s life employee benefits plans, including the life 

insurance plan insured by LICNA and CIGNA under policy number FLX 962801.

17. Upon information and belief, BSE self-administered the Plan. 

18. Kathleen is the beneficiary of James’ life insurance policy. 

19. BSE provided James with a basic group life insurance policy benefit. The basic 

benefit was 1.5 times James’ annual compensation rounded to the next higher $1,000, if not already a 

multiple thereof. 

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20. James added voluntary benefit coverage of $100,000 for him and $25,000 for his 

wife Kathleen.

21. In August, 2013, James was diagnosed with liver cancer. James used his shortterm and long-term disability benefits he had under BSE’s Plan.

22. James applied and paid all premiums to continue his short-term and long-term 

Disability Coverage with LICNA and CIGNA.

23. The Life Insurance policy had an “Accelerated Benefits” provision. The Accelerated 

benefits provision reduces the death benefit payable for life insurance. 

24. Under the policy, “Any benefits payable under this Accelerated Benefits provision 

will reduce the Death Benefit payable for life Insurance. Any automatic increases in Life Insurance 

benefits will end when benefits are payable under this provision.”

25. Under the policy, a Terminal Illness Benefit is an Accelerated Benefit. The policy 

provides:

We will pay a Terminal Illness Benefit if we determine you or your Spouse are Terminally 

Ill. The amount of this benefit is 75% of the Life Insurance in effect for you or your 

Spouse on the date we determine you are Terminally Ill up to the Maximum Benefit 

Amount shown in your Schedule of Benefits for this option. The Terminal Illness Benefit 

is payable only once in an Insured’s lifetime. 

26. On March 27, 2014, James applied for the accelerated benefit under basic Life 

Insurance. 

27. James was a valued employee; he worked for BSE for over 20 years. 

James and his work at BSE

28. BSE provided James with a flexible schedule after his diagnosis in 2013. James 

worked as much as he was able given his terminal illness. 

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29. James continued to work until April 1, 2014, when he officially retired from his job. 

At that time, BSE hired a replacement for James’ position.

30. James had a hard time accepting his terminal illness diagnosis and asked BSE if he 

could continue working part-time. James had long-time friends at work and felt useful trying to work

and spending his time with his colleagues.

31. Despite James’ hopes to continue to work, he could never even work a complete day 

after April 1, 2014. James was struggling with difficulties concentrating, dealing with the pain and 

going to medical appointments and necessary treatments. Going to work was a needed emotional tool

for James and his hopes of beating his cancer. 

32. In March 2014, James’ doctors informed Kathleen and James that the 

chemotherapy cancer treatment was not working and the cancer had spread. 

The Progression of James’ Cancer 

33. James and Kathleen knew James was terminally ill in March 2014, and the 

chances of survival were very slim.

34. In April 2014, James underwent a second round of liver directed therapy in an 

effort to halt the cancer’s growth. These treatments began in April, 2014. 

35. James never recovered from the second round of liver directed therapy. From 

that moment on, James suffered from several complications that required medical procedures. 

36. During April and May 2014, James was rapidly deteriorating and required many 

medical procedures, including endoscopies and biopsies. 

37. Beginning in May 2014, James had a gradual decline in his performance 

secondary to the malignancy of the cancer. James also experienced a decline in his mental functions

with episodes of poor alertness.

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38. In June 2014, James began a new round of chemotherapy.

39. In June 2014, James’ treating physicians informed James and Kathleen that 

James’ survival was measured in weeks.

40. James began hospice care at home in July 2014, and died on September 11, 2014. 

41. On April 14, 2015, James completed the paperwork to port his life insurance, 

given he was now a retired employee and he knew he was terminally ill. 

CIGNA and LICNA’s Insurance Correspondence

42. The portability form James completed had a section to be completed by BSE. 

BSE completed that portion of the form and wrote that James’ last day of work as an employee was 

March 31, 2014. (See attached Exhibit 1, Bate Stamp Nos. MOORE00001-00002.)

43. The portability form shows that James had a $93,000 basic life insurance and a 

$100,000 voluntary coverage for him and $25,000 voluntary coverage for his spouse.

44. On the portability form, James named Kathleen as a 100% beneficiary of his life 

insurance policy. 

45. On the portability form, James checked the section where it showed that he had 

applied for Accelerated benefits under the insurance on March 27, 2014.

46. James wanted to continue his life insurance and timely submitted the portability 

form to CIGNA. 

47. Under the policy, that application for accelerated benefits reduced the amount of 

basic life insurance provided by BSE.

48. On the portability form, James checked that he wanted to continue his wife’s Life 

Insurance coverage.

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49. On correspondence dated May 29, 2014, CIGNA through NEBCO informed 

James they had received the completed form but that he failed to check a box where he showed what

amount of coverage he would continue. (See Exhibit 1, Bate Stamp No. MOOR00003.)

50. The May 29, 2014, correspondence failed to acknowledge that James had applied 

for the terminal illness accelerated benefit and how that affected his life insurance benefits.

51. The letter created an additional deadline. The letter reads:

“Should you wish to continue coverage on yourself and your spouse please initial 

and date any changes made to your application and resubmit to our office no later 

than June 29, 2014.”

Exhibit 1.

52. Upon information and belief, in April 2014, CIGNA paid James his terminal 

illness benefit. 

53. The May 29, 2014 letter arrived at James and Kathleen’s home when James was 

not doing well and his survival was counted in weeks.

54. The May 29, 2014 letter gave James less than 30 days after receipt of the letter to 

resubmit the application. 

55. Kathleen saw the letter from CIGNA in June, 2014. James Moore signed the 

form in Tucson, Arizona, on June 29, 2014. This signature occurred within the unilaterally 

manufactured deadline in the May 29, 2014 letter. 

56. BSE’s representative, Mary Anne VonBank, signed the letter in Fargo, North 

Dakota, on July 2, 2015. 

57. Upon information and belief, NEBCO received that form in early July 2015. 

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58. After mailing the letter to NEBCO, Kathleen contacted NEBCO on more than one 

occasion to inquire whether they had received the amended form they had requested and to inquire about 

the insurance premiums. 

59. NEBCO employees informed Kathleen all paperwork had been received. 

60. Kathleen presented a claim for life insurance benefits to the Plan and CIGNA in a 

timely manner.

61. On September 22, 2014, CIGNA requested additional forms from Kathleen to 

process the life insurance claim. 

62. On October 27, 2014, CIGNA denied Kathleen’s life insurance claim because 

they received the amended form on July 9, 2015, and not before June 29, 2014. 

63. On December 19, 2014, Kathleen appealed CIGNA’s decision. Kathleen

informed CIGNA that James was not doing well in June, 2014. Kathleen included a letter from James’ 

treating physician.

64. On April 2, 2015, CIGNA sent correspondence denying Kathleen’s appeal and 

stating that they had received the letter on July 9, 2014.

65. The appeal decision stated that the May 29, 2014 correspondence had a deadline 

to resubmit the application to CIGNA by June 29, 2014. 

66. The Defendants were required to provide James with an adequate notice of his 

right to exercise his option to convert.

67. The Defendants had obligations to act in good faith, but instead, they created 

additional deadlines, not included in the policy, for James to port his life Insurance. 

68. The Defendants are precluded from denying benefits to Kathleen, because the 

conversion period and/or the termination of benefits that allegedly occurred on June 29, 2014, was 

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stayed and/or equitable tolled given James condition as a terminally ill cancer patient. Between April 1, 

2014, and September 11, 2014, James was terminally ill and suffering from cancer and its treatments. It 

is alleged, upon information and belief, that the Plan continues coverage during such terms of terminal 

disability. The Plan’s conversion period of termination date is stayed and/or equitably tolled as a matter 

of law in cases where a terminally ill patient, who may be in a state of incapacitation, is unable to elect 

continued Life Insurance Coverage. The option of continuing coverage on any of these bases, or any 

other, was never extended to the Plaintiff by Defendants. 

COUNT I

[FOR ERISA BENEFITS]

69. Kathleen realleges each and every allegation previously stated as though fully set 

forth herein. 

70. ERISA 502 § (a)(1)(b), 29 U.S.C. 1132 (a)(1)(B) permits a plan participant or 

beneficiary to bring a civil action to recover benefits due under the plan, to enforce rights under the plan, 

and/or to clarify his rights to future benefits under the plan.

71. Kathleen is entitled to death benefits arising from James’ life insurance policy.

72. At all relevant times, Kathleen has been entitled to Life Insurance Benefits. By 

denying Kathleen’s benefits under the Plan, and by related acts and omissions, Defendants and the Plan 

have violated and continue to violate the terms of the Plan and Kathleen’s rights thereunder. 

COUNT II.

[BREACH OF FIDUCIARY DUTY AND REQUEST FOR EQUITABLE RELIEF 

UNDER ERISA § 502(a)(3)]

73. Kathleen realleges each and every allegation previously stated as though fully set 

forth herein. 

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74. ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), authorizes a plan participant to bring 

a civil action to enjoin any act or practice which violates any provision of ERISA Title I or the terms of 

the plan, or to obtain any other appropriate equitable relief to redress such violations or to enforce any 

provisions of the title or the terms of the plan.

75. ERISA § 404(a)(1)(D), 29 U.S.C. § 1104 (a)(1)(D), requires that a fiduciary of an 

employee benefit plan administer the plan under the documents and instruments governing the plan 

where such documents and instruments follow ERISA.

76. ERISA § 3 (21)(A), 29 U.S.C. § 1002 (21)(A), provides that a person is a 

fiduciary regarding a plan to the extent:

a. He exercises any discretionary authority or discretionary control respecting 

management of such plan or exercise any authority or control respecting 

management or disposition of its assets;

b. He renders investment advice for a fee or other compensation, direct or 

indirect, regarding any moneys or other property of such plan, or has any 

authority or responsibility to do so; or

c. He has any discretionary authority or discretionary responsibility in the 

administration of such plan.

77. At all relevant times herein, the Defendants served as the Plan’s fiduciaries.

78. On or about March 27, 2014, Defendants knew or should have known of James’

terminal condition.

79. On or about March 27, 2014, Defendants should have, but failed to take certain 

practical, common sense and prudent actions to inform and notify James = and/or his wife Kathleen, 

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regarding their life insurance benefits. Specifically, they should have informed them how James’ 

application for accelerated benefits affected what amount of life insurance James could port. 

80. Defendants had a fiduciary duty to appropriately inform of what was necessary to 

port the life insurance, including premiums James needed to pay to port the insurance. 

81. Defendants had a fiduciary duty to appropriately inform James and Kathleen 

regarding the contents of the portability form and how it should have been completed.

82. Defendants had a fiduciary to cooperate with James and Kathleen in porting their 

life insurance instead of providing additional steps to prevent them from porting the life insurance. 

83. Defendants breached their fiduciary duties to Kathleen, and she was harmed

thereby. 

COUNT III.

[CLAIMS OF INTEREST, ATTORNEY’S FEES PURSUANT TO §§ 1132(a)(3), 

1132(g)(1)]

84. Kathleen realleges each and every allegation previously stated as though fully set 

forth herein. 

85. Defendants are responsible to pay Kathleen interest from James’ date of death or 

September 11, 2014, pursuant to 29 U.S.C. § 1132(a)(3).

86. Defendants are responsible to provide Kathleen her reasonable attorney’s

fees/costs of litigation pursuant to 29 U.S.C. § 1132(g)(1). 

COUNT IV.

[CLAIM OF LACK OF ADEQUATE CONVERSION NOTICE PURSUANT TO A.R.S. § 

20-1269]

87. Kathleen realleges each and every allegation previously stated as though fully set 

forth herein. 

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88. BSE’s Plan under which James was insured is a plan regulated by A.R.S. § 20-

1251 et. seq.

89. James had a right to convert his Group Life Insurance Policy into an individual 

Life Insurance Policy pursuant to the terms of the Plan and A.R.S. § 20-1266.

90. James had a right to written notice from Defendants regarding his right to convert 

his Group Life Insurance Policy into an individual Life Insurance Policy pursuant to the terms of the 

Plan and A.R.S. § 20-1269. That notice needed to explain how the accelerated benefits application 

affected what portion of the Life Insurance Coverage would be portable. 

91. Defendants did not provide James with written notice explaining how the 

portability form needed to be completed when he also had applied for accelerated benefits, and Kathleen

was damaged thereby. 

COUNT V.

[PLAINTIFF’S REASONABLE EXPECTATIONS]

92. Kathleen realleges each and every allegation previously stated as though fully set 

forth herein. 

93. James knew he was terminally ill and applied for the accelerated benefits option 

under the policy. James further completed the portability form within 15 days after retiring. 

94. James knew he was terminally ill and made all preparations for this event, he 

knew he had life insurance with his employer, and had a reasonable expectation that his wife would 

receive this benefit. 

95. Defendants breached their duty to James by failing to provide sufficient 

information for him to complete the portability form to the Defendants’ satisfaction.

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96. Defendants failed to provide guidance and appropriate information to Kathleen 

and James regarding what needed to be completed on the portability form. 

97. Defendants knew James wanted to continue his life insurance and that he was 

terminally ill, but created additional steps to port his life insurance in an effort to later deny his Life 

insurance benefit. 

98. Defendants’ breach harmed Kathleen 

COUNT VI.

[CONSUMER FRAUD]

99. Kathleen realleges each and every allegation previously stated as though fully set 

forth herein.

100. The Plan and the Policy establish that James needed to complete the portability 

form and to pay the premium in order to port his life insurance.

101. James completed the portability form within the time limitation and submitted it 

to CIGNA on April 15, 2014.

102. The Defendants were aware James was terminally ill. He had applied for the 

accelerated benefits under the policy in March, 2014.

103. The Defendants knew that Kathleen, as James’ beneficiary, would make a life 

insurance claim after her husband’s death. 

104. The Defendants knew that a portion of the life Insurance was reduced due to the 

accelerated benefits application, but failed to explain how that affected what portion of the life insurance 

was portable and how the form needed to be completed.

105. Knowing of James’ frail condition, they sent a letter to James dated May 29, 

2014, and created an additional deadline for him to provide additional information on the form and 

denied the claim when he was unable to comply.

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106. The Defendants failed to provide James and Kathleen with adequate notice of 

what they needed to do to continue the life insurance coverage. 

107. The Defendants’ creation of a new deadline in order to limit or eliminate James’

life insurance coverage was unfair and in violation of A.R.S. 44-1521, et. seq. 

WHEREFORE, Plaintiff is entitled to judgment in her favor and against the Defendants, and 

each of them, for the following relief:

1. Declare that the Defendants violated the terms of the Plan by denying the Plaintiff’s

claims for Life Insurance Benefits;

2. Declare that the Defendants violated Arizona law when they failed to provide adequate 

notice of conversion to James;

3. Order BSE to pay compensatory damages to Plaintiff;

4. Order CIGNA, LICNA and the Plan to pay the Plaintiff’s Life Insurance Benefits 

pursuant to the terms of the Plan;

5. Order the Defendants to pay interest on Plaintiff’s past benefits due from the date of 

death to the date of judgment herein;

6. Award Plaintiff’s reasonable attorney’s fees and costs pursuant to 29 U.S.C. § 1132(g); 

and

7. For other and further relief as the Court determines to be appropriate under the 

circumstances.

DATED this 11th day of September, 2015.

McNAMARA GOLDSMITH, P.C.

By: /s/ Michael F. McNamara

 Michael F. McNamara

___________________

 Maria del Pilar Mendoza

 Attorneys for Plaintiffs

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The foregoing document electronically

filed with the U.S. District Court, District

of Arizona, this 11th day of September, 2015.

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