Opinion
Civil Action No.: 4:18-cv-842-RBH-TER
09-19-2018
XAVIER HEWITT, Plaintiff, v. LIBERTY LIFE ASSURANCE COMPANY OF BOSTON, Defendants.
REPORT AND RECOMMENDATION
I. INTRODUCTION
Plaintiff originally filed this action in state court, alleging various causes of action arising out of Defendant's denial of Plaintiff's claim for life insurance benefits. Defendant removed the case to this court based on federal question jurisdiction pursuant to 28 U.S.C. § 1331 and the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (ERISA). Plaintiff's counsel is not admitted to practice in this court, and no other counsel has made an appearance on behalf of Plaintiff. Therefore, Plaintiff is proceeding pro se. Presently before the court is Defendant's Motion for Judgment on the Pleadings (ECF No. 24). Because Plaintiff is proceeding pro se, he was advised pursuant to Roseboro v. Garrison, 528 F.3d 309 (4th Cir. 1975), that a failure to respond to Defendants' motion could result in dismissal of his Complaint. Plaintiff has not filed a response. This report and recommendation is entered for review by the district judge.
On March 29, 2018, the Court issued the following Text Order:
This case was removed to this Court on March 27, 2018. Plaintiff's counsel is not admitted to practice law in federal court. Local Civil Rule 83.I.04 provides that "[l]itigants in civil and criminal actions, except for parties appearing pro se, must be represented by at least one member of the bar of this court who shall sign each pleading, motion, discovery procedure or other document served or filed in this court." Accordingly, Plaintiff's counsel shall gain admission to practice law in federal court or associate a member of the bar of this court no later than April 30, 2018. If Plaintiff's counsel does not become admitted or no member of the bar of this court is associated or files a notice of appearance on behalf of Plaintiff by April 30, 2018, the court will consider Plaintiff to be proceeding pro se and will refer the case to a Magistrate Judge for pretrial handling pursuant to Local Rule 73.02(B)(2)(e).Order (ECF No. 6).
II. RULE 41(b) DISMISSAL
"The Federal Rules of Civil Procedure recognize that courts must have the authority to control litigation before them, and this authority includes the power to order dismissal of an action for failure to comply with court orders. Fed.R.Civ.P. 41(b)." Ballard v. Carlson, 882 F.2d 93, 95 (4th Cir.1989). "Federal courts possess an inherent authority to dismiss cases with prejudice sua sponte." Gantt v. Maryland Division of Correction, 894 F.Supp. 226, 229 (D.Md. 1995) (citing Link v. Wabash R. Co., 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962); White v. Raymark Industs., Inc., 783 F.2d 1175 (4th Cir.1986); Zaczek v. Fauquier County, Va., 764 F.Supp. 1071, 1074 (E.D.Va.1991)).
The Fourth Circuit, in Davis v. Williams, 588 F.2d 69, 70 (4th Cir. 1978), recognizing that dismissal with prejudice is a harsh sanction which should not be invoked lightly, set forth four considerations in determining whether Rule 41(b) dismissal is appropriate: (1) the degree of personal responsibility on the part of the plaintiff; (2) the amount of prejudice to the defendant caused by the delay; (3) the presence or absence of a drawn out history of deliberately proceeding in a dilatory fashion; and (4) the effectiveness of sanctions less drastic than dismissal. Id. at 70.
Subsequently, however, the Fourth Circuit noted that "the four factors ... are not a rigid four-pronged test." Ballard, 882 F.2d at 95. "Here, we think the Magistrate's explicit warning that a recommendation of dismissal would result from failure to obey his order is a critical fact that distinguishes this case from those cited by appellant. . . . In view of the warning, the district court had little alternative to dismissal. Any other course would have placed the credibility of the court in doubt and invited abuse." Id. at 95-96.
In the present case, Plaintiff is proceeding pro se and, thus, is entirely responsible for his actions. Because Plaintiff has failed to participate in the litigation of his case, the undersigned concludes that he has abandoned this action. No other conclusion is reasonable.
III. MOTION FOR JUDGMENT ON THE PLEADINGS
A. Factual Allegations
In the alternative, dismissal of this action is also appropriate for the reasons raised in Defendant's motion. Plaintiff was the beneficiary of Damien Hewitt (Decedent) under Group Life Insurance Policy Number SA3-850-291263-01 (the Policy), which Defendant issued to Decedent's employer, Nash Johnson & Sons Farms, Inc. (Nash Johnson). Compl. at ¶ 3; Determination Letter dated August 10, 2017 (Determination Letter) (Ex. B to Def. Motion); Policy (Ex. C to Def. Motion). In the Determination Letter, Liberty Life denied Plaintiff's claim for Accidental Death and Dismemberment (AD&D) benefits on the ground that Plaintiff had failed to provide documentation necessary to evaluate the AD&D Claim. The Determination Letter expressly advised Plaintiff of his right to request a review of the denial of his claim within sixty days of Plaintiff's receipt of the Determination Letter. Along with the Determination Letter, Defendant enclosed a copy of the Policy, which also sets forth the right to request a review within sixty days of the denial. Plaintiff, however, did not seek administrative review of the denial of his claim. Instead, he filed this lawsuit on March 2, 2018.
The Court may consider the Policy and the Determination Letter without conversion of this motion to a motion for summary judgment because the Policy and Defendant's denial of Plaintiff's claim are expressly referenced in the Complaint and they are central to Plaintiff's claims. Clark v. BASF Corp., 142 Fed. App'x 659, 661 (4th Cir. 2005); Philips v. Pitt County Memorial Hosp., 572 F.3d 176, 180 (4th Cir. 2009).
Plaintiff's Complaint asserts four causes of action. The first cause of action is a claim for wrongful and unreasonable refusal to pay benefits pursuant to S.C. Code Ann. § 38-63-90. The second cause of action is for breach of contract accompanied by a fraudulent act. Plaintiff's third cause of action is for violation of the South Carolina Unfair Trade Practices Act. The fourth cause of action is a bad faith failure-to-pay insurance benefits claim.
B. Standard of Review
Rule 12(c) of the Federal Rules of Civil Procedure allows a party to move for judgment on the pleadings after the pleadings are closed. Such a motion should be granted when, accepting the facts set forth in the pleadings, the case can be decided as a matter of law. Tollison v. B & J Machinery Co., Inc., 812 F.Supp. 618, 619 (D.S.C.1993); see also S & S Const., Inc. of Anderson v. Reliance Ins. Co., 42 F.Supp.2d 622, 623 (D.S.C.1998). The standard is almost identical to the standard employed in considering a Rule 12(b)(6) motion "with the key difference being that on a 12(c) motion, the court is to consider the answer as well as the complaint." Cont'l Cleaning Serv. v. United Parcel Serv., Inc., 1999 WL 1939249, * 1 (M.D.N.C.1999) (internal quotations omitted); see also Burbach Broad. Co. v. Elkins Radio Corp., 278 F.3d 401, 405-06 (4th Cir.2002). In addition to the complaint, the factual allegations of the answer are taken as true, to the extent "they have not been denied or do not conflict with the complaint." Pledger v. North Carolina Dep't of Health & Human Servs., 7 F.Supp.2d 705, 707 (E.D.N.C.1998); Jadoff v. Gleason, 140 F.R.D. 330, 331 (M.D.N.C.1991) (citing 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1368 (3d ed.2004)). In determining a motion for judgment on the pleadings, the court "may consider documents incorporated by reference in the pleadings." Parks v. Alteon, Inc., 161 F.Supp.2d 645, 649 n. 1 (M.D.N.C.2001); see note 2, supra.
C. Discussion
Defendant first argues that each of Plaintiff's four causes of action should be dismissed because they are state law claims preempted by ERISA. ERISA applies to any "employee benefit plan "if the plan is established or maintained by an employer or employee organization engaged in commerce or in any industry or activity affecting commerce." 29 U.S.C. § 1003. ERISA categorizes "employee benefit plans "as either an employee welfare benefit plan or an employee pension benefit plan." 29 U.S.C. § 1002(3). A plan is an ERISA welfare benefit plan if it "was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, [...] benefits in the event of sickness, accident, disability, death or unemployment." 29 U.S.C. § 1002(1).
Whenever a state law claim effectively "duplicates, supplements, or supplants the ERISA civil enforcement remedy," Aetna Health Inc. v. Davila, 542 U.S. 200, 209 (2004), any such claim is completely preempted by ERISA, converting the claim "into one stating a federal claim." Prince v. Sears Holdings Corp., 848 F.3d 173, 177 (4th Cir. 2017). A defendant "may remove preempted state law claims to federal court, regardless of the 'label' that the plaintiff has used" for his claims, even if there is no mention of ERISA in the complaint at all. Id. As such, the doctrine of complete preemption is an exception to the well-pleaded complaint rule. Id. ("An exception to the well-pleaded complaint rule occurs when a federal statute completely preempts state law causes of action").
The ERISA statutes provide the exclusive regulation of employee benefit plans. Aetna Health Inc., 542 U.S. at 208 ("ERISA includes expansive pre-emption provisions ... which are intended to ensure that employee benefit plan regulation would be exclusively a federal concern.") (citations omitted). ERISA's broad preemption provision is recognized as "the most sweeping federal preemption statute ever enacted by Congress." Sejman v. Warner-Lambert Co., 845 F.2d 66, 68 (4th Cir. 1988). This provision declares that ERISA shall "supersede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan." 29 U.S.C. § 1144(a). State laws preempted by the statute include "all laws, decisions, rules, regulations, or other State action having the effect of law, of any State." 29 U.S.C. § 1144(c)(1). Thus, if any of Plaintiff's state law claims "relates to" an employee benefit plan, it is preempted by ERISA.
The Supreme Court has interpreted the phrase "relate to" in this provision, giving it "its broadest common-sense meaning such that a state law 'relates to' a benefit plan . . . 'if it has a connection with or reference to such a plan.'" Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 739 (1985) (quoting Shaw v. Delta Airlines, 463 U.S. 85, 97 (1983)). The Supreme Court further emphasized that the preemption clause was not limited to "state laws specifically designed to affect employee benefit plans." Id. 463 U.S. at 97. Whether the "connection with" or "reference to" is direct or indirect, the state law will be preempted. Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 525 (1981); Davila, 542 U.S. at 208 (ERISA's "expansive pre-emption provisions ... are intended to ensure that employee benefit plan regulation would be exclusively a federal concern").
In the present case, all four causes of action arise from Defendant's alleged wrongful denial of insurance benefits under the terms of the Policy, which is part of an employee welfare benefit plan. The United States Supreme Court and the Fourth Circuit Court of Appeals have repeatedly held that ERISA preempts state law causes of action such as Plaintiff's four state law claims. See e.g., Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (1987) (common law breach of contract and tort claims for mental anguish preempted by ERISA); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987) (state common law causes of action for breach of contract relate to an employee benefit plan and therefore fall under ERISA's preemption provision), overruled on other grounds by Kentucky Ass'n of Health Plans v. Miller, 538 U.S. 329, 341 (2003); Tri-State Machine, Inc. v. Nationwide Life Ins. Co., 33 F.3d 309, 314-315 (4th Cir. 1994), cert. denied, 513 U.S. 1183 (1995) (state law claims of breach of contract, breach of implied covenants of good faith and fair dealing, and bad faith preempted by ERISA). Accordingly, because ERISA's civil remedies provision expressly provides a remedy for wrongful denials of benefits, 29 U.S.C. § 1132(a)(1)(B), each of Plaintiff's state law claims is completely preempted by ERISA. 29 U.S.C. § 1144(a). Thus, Plaintiff's sole potential remedy, if any, is pursuant to a civil action for benefits due under 29 U.S.C. § 1132(a)(1)(B) of ERISA.
In certain circumstances, otherwise preempted state law claims will be "re-characterized" by the court as an ERISA claim for benefits due pursuant to 29 U.S.C. § 1132(a)(1)(B). Purvis v. Lutheran Homes of S.C., 2018 U.S. Dist. Lexis 35042 (D.S.C. Mar. 5, 2018) (citing Darcangelo v. Verizon Communications, Inc., 292 F.3d 181, 195 (4th Cir. 2002)). However, "[a]n ERISA welfare benefit plan participant must both pursue and exhaust plan remedies before gaining access to the federal courts." Gayle v. United Parcel Serv., Inc., 401 F.3d 222, 226 (4th Cir. 2005) (emphasis added); Makar v. Health Care Corp., 872 F.2d 80, 82 (4th Cir. 1989) (exhaustion of plan remedies is "a prerequisite to an ERISA action for denial of benefits"). In the instant matter, the Complaint makes no mention of exhaustion of Plaintiff's administrative remedies at all. As set forth above, Plaintiff's claim was denied on August 10, 2017. See Determination Letter. The Policy expressly requires that a claimant submit a request for review of an adverse claim determination within sixty days of receipt of the decision. See Policy. Considering the time allowed for mailing days, the deadline for Plaintiff to seek review of the denial of his claim was October 13, 2017. Plaintiff did not file this action until March 2, 2018. Thus, under the law of this Circuit, recharacterizing the preempted state law claims as a claim for benefits due pursuant to 29 U.S.C. § 1132(a)(1)(B) of ERISA would be futile. As such, dismissal of Plaintiff's claims is appropriate.
IV. CONCLUSION
For the reasons discussed above, it is recommended that this case be dismissed pursuant to Fed.R.Civ.P. 41(b) for failure to prosecute. In the alternative, it is recommended that Defendant's Motion for Judgment on the Pleadings (ECF No. 24) be granted and this case be dismissed with prejudice.
If the District Judge accepts this recommendation, all other pending motions will be moot. --------
s/Thomas E. Rogers, III
Thomas E. Rogers, III
United States Magistrate Judge September 19, 2018
Florence, South Carolina