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Thompson v. Continental Casualty Co.

March 16, 2009


The opinion of the court was delivered by: Elaine E. Bucklo United States District Judge


Plaintiff Joyce Thompson filed a three count complaint on July 14, 2008, against defendant Continental Casualty Company ("Continental") alleging, inter alia, violations of the Employee Retirement Security Act of 1974, 29 U.S.C. §§ 1001 et seq. ("ERISA") for failure to notify plaintiff of her continuing coverage rights (Count I), failure to provide requested plan information (Count II), and for breach of fiduciary duty (Count III). Defendant filed a motion to dismiss all counts pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure ("FRCP"). For the following reasons, the motion is granted.*fn1


Plaintiff's spouse, William Thompson, worked for Continental from 1981 through 1996, during which time he received benefits under the Continental group health plan ("the Plan"). Mr. Thompson became ill and took short term disability benefits in 1995. Upon the expiration of his short term disability benefits in 1996, Mr. Thompson stopped working*fn2 at Continental and elected to receive long term disability benefits ("LTD"). Those benefits included medical coverage for Mr. Thompson, for which the Thompsons paid premiums. Mr. Thompson's medical coverage extended until his death in 1999, although according to the complaint his coverage should have ended six months earlier.

Although Mr. Thompson died in 1999, plaintiff did not request medical coverage under the Plan until October 2007, about eight years after her husband's death. Her 2007 claim was denied, as were subsequent appeals of that denial. On January 15, 2008, plaintiff requested several documents, namely, a copy of "the applicable document from the Human Resources Manual that would have been in effect" in 1996, "copies of any documentation from CNA that would have been sent to us in 1996" that explained the Thompsons' benefits, and documentation from Continental advising of a "substantial change in benefits depicted in the document effective September 1, 1998." Plaintiff alleges that Continental did not provide these documents. She filed the present three-count complaint on July 14, 2008.


In assessing defendants' motions to dismiss under FED.R.CIV.P. 12(b)(6), I must accept all well-pleaded facts in the complaint as true and view all allegations in the light most favorable to plaintiff. McMillan v. Collection Prof'ls, 455 F.3d 754, 758 (7th Cir.2006). Under Rule 12(b)(6), "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007). When the plaintiff effectively pleads herself out of court by alleging facts sufficient to establish a statute of limitations defense, dismissal is appropriate. Zitzka v. Village of Westmont, No. 07 C 0949, 2007 WL 3334336, at *2 (N.D.Ill. Nov. 6, 2007) (citing Hollander v. Brown, 457 F.3d 688, 691 n. 1 (7th Cir.2006)).


Count I of the complaint alleges that defendant violated ERISA § 1166 by failing to notify plaintiff of her rights to continuing medical coverage after her husband's LTD election in 1996 and again after his death in 1999.*fn3 Defendant argues that count I must be dismissed because it was filed outside the statute of limitations. Because ERISA § 1166 does not have an express statute of limitations, I look to the most analogous cause of action under state law and apply its limitations period. See Teumer v. General Motors Corp., 34 F.3d 542, 546 (7th Cir. 1994). Defendant contends the most analogous cause of action is 735 ILCS 5/13-214.4, which provides a two year statute of limitations for actions against insurance producers.*fn4 Because defendant's argument is persuasive and plaintiff suggests no alternative, I find a two year statute of limitations applicable here.

Plaintiff argues that regardless of the statute of limitations, her 2008 complaint was timely filed because she did not "discover" the notice failure until 2007 when her request for medical coverage as the widow of a retired/terminated employee was denied.*fn5 Under the discovery rule, the limitations period does not begin until the plaintiff "learns or should learn that he has been injured." Wolin v. Smith Barney Inc., 83 F.3d 847, 852 (7th Cir. 1996).

Plaintiff contends that her discovery of the material facts relating to count I was impeded for two reasons. First, she argues that the lack of notice itself was misleading and impeded discovery of her claim. But defendant's failure to notify is the cause of action, not an impediment to the discovery of that cause of action. See e.g., Jones v. Citibank, 844 F.Supp. 437, 443 (N.D.Ill. 1994)(noting bank's failure to notify of loan application denial within 30 days was the violation and limitations period began when the omission occurred).

Second, plaintiff contends that because her husband received six months more coverage than he should have from Continental, in error, she believed he would have continued to receive coverage indefinitely, but for his death. Even assuming plaintiff's belief was reasonable, it does not support her contention that she believed her own rights to medical benefits would extend indefinitely (or at least for eight years) after her husband's death. Plaintiff's husband elected medical coverage, paid (allegedly excessively) for that coverage, and received that coverage until he died, while plaintiff is not alleged to have ever elected, received, or paid for coverage.

A reasonable widow in plaintiff's shoes would have inquired into the extent of all available benefits*fn6 at the time of her husband's death in 1999 or at least within the statute of limitations period. Nothing in the complaint indicates that application of the discovery rule is appropriate in this ...

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