United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER
J. BOYLE, UNITED STATES DISTRICT JUDGE
the Court are: (1) Defendant Bank of America
Corporation's (BoA) Motion to Dismiss (Doc. 32); and (2)
Defendant Prudential Insurance Company of America's
(Prudential) Motion to Dismiss (Doc. 36). Both Motions were
filed under Federal Rule of Civil Procedure 12(b)(6) and seek
dismissal of the respective claims brought against BoA and
Prudential in Plaintiff's Fourth Amended Complaint (Doc.
26). For the reasons stated below, the Court GRANTS
in part and DENIES in part
BoA's Motion to Dismiss (Doc. 32) and
DISMISSES Plaintiff's state-law
negligent-misrepresentation claim as preempted by ERISA.
However, the Court GRANTS Plaintiff leave to
amend his Complaint against BoA and to assert the dismissed
state-law claim under ERISA. Furthermore, the Court
GRANTS Prudential's Motion to Dismiss
(Doc. 36) and DISMISSES with prejudice
Plaintiff's ERISA claim against Prudential.
case involves a dispute over Prudential's payment of the
life-insurance benefits of David Freemen (hereinafter the
“Decedent”) to Defendant Otis Norman
Freemen. Plaintiff alleges that he was the
common-law spouse of the Decedent until the Decedent
unfortunately passed away on October 23, 2016. Doc. 26,
Pl.'s Fourth Am. Compl. (FAC), ¶ 11. The
life-insurance policy (the “Policy”) at issue was
obtained in 1996 by the Decedent from his employer at the
time, MBNA. Id. ¶ 12. On December 30,
1996, Plaintiff alleges that the Decedent executed a
beneficiary form designating the Plaintiff as the 100%
beneficiary on the Policy. Id. ¶ 12. The
Decedent worked for MBNA until 2005, when he left active
employment and was placed on long-term disability.
Id. ¶ 13.
2005 to 2016, Plaintiff alleges that MBNA, BoA, and/or
Prudential periodically sent the Decedent information
confirming his status, the existence and amount of the
Policy, and that Plaintiff was the sole beneficiary.
Id. ¶ 15. However, Plaintiff does not currently
have access to these documents because prior to the
Decedent's death, Decedent “cleaned out”
these documents, and thus, Plaintiff does not specifically
allege which entity purportedly sent these documents. See
Id. After the Decedent's death, Plaintiff contacted
Prudential and BoA to make claims for various survivor
benefits, including a claim as the beneficiary under the
Policy. Id. ¶ 16. Prudential told Plaintiff
that there was no beneficiary designation on the Policy and
advised Plaintiff to contact BoA to obtain the original
records of the Policy since BoA had succeeded to MBNA's
records. Id. ¶ 17.
then called BoA and spoke to a BoA employee, Kecia Atkins,
requesting that she check the records to see if she could
locate the form naming Plaintiff as the beneficiary on the
Policy. Id. In response, Atkins allegedly confirmed
that she “found [Plaintiff's] name, but could not
(and would not) certify that the beneficiary designation
applied to the Policy.” Id. Atkins also
allegedly “stated unequivocally that there was no
beneficiary form showing [Plaintiff] as beneficiary of the
Policy.” Id. However, in October of 2018, in
response to a subpoena Plaintiff served on BoA, BoA turned
over records it had regarding the Policy, which allegedly
showed Plaintiff as the sole 100% beneficiary of the Policy
based on the 1996 designation. Id. ¶¶
on the representations BoA made in 2016, Plaintiff proceeded
to discuss with Prudential how the Policy proceeds would be
paid without a beneficiary designee. Id.
¶¶ 17-18. Prudential allegedly stated that the
proceeds would go to the Decedent's spouse, and if none
existed, to his “heirs.” Id. ¶ 18.
Although Plaintiff alleges that he and the Decedent were
common-law married, they never registered their marriage or
applied for a marriage certificate after the Supreme
Court's decision in Obergefell v. Hodges, 135
S.Ct. 2584 (2015). Id. Thus, Prudential allegedly
advised Plaintiff that he would have to make a claim for
benefits and prove the elements of common-law marriage in
court to obtain the Policy proceeds. Id.
then called Freemen expressing his concern that BoA and
Prudential did not have record of his beneficiary designation
and with having to go through the process of proving his
marital status with the Decedent. Id. ¶ 19.
Based on this concern, Freemen and Plaintiff allegedly agreed
that Plaintiff was entitled to the Policy's proceeds and
that instead of going through the “time
consuming” process of proving up Plaintiff's
marriage, Freemen would accept the proceeds as the
Decedent's father and then send the money to Plaintiff.
Id. Based on this alleged agreement, Plaintiff
stopped pursuing his own claim for the funds with Prudential
and allowed Freemen to complete the necessary paperwork to
pay out the Policy's proceeds. Id.¶ 20.
Prudential paid Freemen the Policy proceeds, which at the
time totaled $726, 299.18. Id. ¶ 21. Despite
their agreement, Freemen did not pay the Policy proceeds to
Plaintiff, but instead allegedly used the money to pay off
the title to his house and other third parties. Id.
February 22, 2017, Plaintiff filed his Original Petition in
state court bringing only state-law claims against Freemen
based on his breach of the agreement. See generally
Doc. 1-2, Ex. A-2, Original Pet. After almost two years of
litigation in state court, Plaintiff filed a Third Amended
Petition, adding state-law claims against Defendants BoA and
Prudential. See generally Doc. 1-4, Ex. A-49, Third
Am. Pet. On November 20, 2018, Defendants removed the
state-court action to this Court invoking federal-question
jurisdiction. See Doc. 1, Notice of Removal.
Defendants argued that the Policy at issue was provided under
an employee welfare benefit plan controlled by the Employee
Retirement Income Security Act (ERISA), and thus,
Plaintiff's state-law claims were preempted. Id.
¶ 4. Plaintiff did not dispute Defendants' removal
on any grounds.
on January 2, 2019, Plaintiff filed his now-operative Fourth
Amended Complaint. Doc. 26, FAC. In this Complaint, Plaintiff
brings a state-law claim against BoA for negligent
misrepresentation based on its allegedly negligent handling
of and communications regarding the Policy documents.
Id. ¶¶ 43-46. Against Prudential,
Plaintiff brings a federal claim under ERISA alleging that he
was entitled to the Policy's proceeds, but was denied the
proceeds in violation of ERISA § 502(a)(1)(B), codified
at 29 U.S.C. § 1132(a)(1)(B). Id. ¶¶
January 16, 2019, BoA filed its Motion to Dismiss arguing
inter alia that Plaintiff's state law
negligent-misrepresentation claim is preempted by ERISA and
that Plaintiff's claim for benefits should otherwise be
dismissed with prejudice for failure to exhaust
administrative remedies. Doc. 33, BoA Mot. to Dismiss, 4-5,
10-11. Shortly thereafter, on January 22, 2019, Prudential
filed its Motion to Dismiss making the same exhaustion
argument and arguing that in any case, Prudential
appropriately paid Freemen according to the Policy's
terms, and thus, cannot be liable under ERISA. Doc. 36,
Prudential's Mot. to Dismiss, 5-8. Having been fully
briefed on both Motions, the Court now addresses the
sufficiency of Plaintiff's claims as to both Defendants.
Rule 8(a)(2) of the Federal Rules of Civil Procedure, a
complaint must contain “a short and plain statement of
the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). Rule 12(b)(6) authorizes
a court to dismiss a plaintiff's complaint for
“failure to state a claim upon which relief can be
granted.” Id. 12(b)(6). In considering a Rule
12(b)(6) motion to dismiss, “[t]he court accepts all
well-pleaded facts as true, viewing them in the light most
favorable to the plaintiff.” In re Katrina Canal
Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007).
“The court's review [under 12(b)(6)] is limited to
the complaint, any documents attached to the complaint, and
any documents attached to the motion to dismiss that are
central to the claim and referenced by the
complaint.” Ironshore Europe DAC v. Schiff Hardin,
L.L.P., 912 F.3d 759, 763 (5th Cir. 2019)
(emphasis added) (quoting Lone Star Fund V (U.S.), L.P.
v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010)
survive a motion to dismiss, a plaintiff must plead
“enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). “Threadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
“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.” Id. “The
plausibility standard is not akin to a ‘probability
requirement,' but it asks for more than a sheer
possibility that a defendant has acted unlawfully.”
Id. When well-pleaded facts fail to achieve this
plausibility standard, “the complaint has alleged-but
it has not shown-that the pleader is entitled to
relief.” Id. at 679 (cleaned up).
analyzing these Motions to Dismiss, the Court will first
address BoA's argument that Plaintiff's state-law
negligent-misrepresentation claim is preempted by ERISA; then
second address the sufficiency of Plaintiff's ERISA
§ 502(a)(1)(B) claim against Prudential; and then
finally address the
failure-to-exhaust-administrative-remedies argument raised by
BoA and Prudential.
the Court addresses BoA's argument that ERISA preempts
Plaintiff's state-law claim for negligent
misrepresentation. Doc. 33, BoA's Mot. to Dismiss, 4-10.
are two types of preemption under ERISA”: complete and
conflict. Giles v. NYLCare Health Plans, Inc., 172
F.3d 332, 336 (5th Cir. 1999). Here, it appears to the Court
that parts of BoA's Motion conflates the two types of
preemption-i.e., in parts of its Motion to Dismiss
it argues that ERISA completely preempts Plaintiff's
state-law claim, but simultaneously argues for conflict
preemption by citing to ERISA cases dealing with conflict
preemption of state-law claims. The scope of complete and
conflict preemption under ERISA are very similar but not
exactly the same. See Woods v. Tex. Aggregates,
L.L.C., 459 F.3d 600, 603 (5th Cir. 2006). Because of
their differences, and as each appears applicable to this
case, the Court considers both preemption types. However,
because the parties agree that the Policy is an employee
welfare benefit plan governed by ERISA, the Court goes
directly into determining whether either type of preemption
applies. Then the Court concludes this section with
discussing the effect of ERISA preemption on Plaintiff's
state-law negligent-misrepresentation claim.
preemption is an exception to the well-pleaded complaint
rule. Aetna Health Inc. v. Davila, 542 U.S. 200,
207-08 (2004). It provides grounds to remove a case from
state court-despite the fact that the complaint does not
affirmatively allege a federal claim-because Congress may so
completely preempt a particular area such that “any
civil complaint raising this select group of claims is
necessarily federal in character.” See Arana v.
Ochsner Health Plan, 338 F.3d 433, 437 (5th Cir. 2003)
(quoting Metro. Life Ins. Co. v. Taylor, 481 U.S.
58, 63-64 (1987)). In other words, complete preemption is not
grounds for dismissal, but instead a mechanism to confer
federal jurisdiction on a state-law claim that is in fact an
ERISA claim. See Mid-Town Surgical Ctr., L.L.P. v. Humana
Health Plan of Tex., Inc., 16 F.Supp.3d 767, 779 (S.D.
Tex. 2014) (citing Loffredo v. Daimler AG, 500
Fed.Appx. 491, 501 (6th Cir. 2012) (Moore, J., concurring in
the judgment) (“Complete preemption under §
1132(a) is not grounds for dismissal. . . . If an ostensible
state-law claim is in fact an ERISA claim, it cannot be
dismissed as preempted by ERISA; that is, ERISA cannot
preempt an ERISA claim.”)). Because Plaintiff
originally brought his state-law claim against BoA in state
court, complete preemption is applicable to this case.
Cf. Id. (finding that because the plaintiff's
state-law claims were originally filed in federal court,
complete preemption was inapplicable, and instead applying
ERISA's conflict-preemption framework).
preemption under ERISA stems from § 502(a), codified at
29 U.S.C. 1132(a), which sets forth a comprehensive civil
enforcement scheme. Davilla, 542 U.S. at 208. The
effect of complete preemption is that “any state-law
cause of action that duplicates, supplements, or
supplants” this scheme conflicts with the congressional