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Menotti v. Metropolitan Life Insurance Co.

April 20, 2009


The opinion of the court was delivered by: Judge Nan R. Nolan


Plaintiff Ralph Menotti has filed a three-count complaint against Metropolitan Life Insurance Company ("MetLife") seeking to recover benefits allegedly owed to him under a disability insurance policy. The parties have consented to the jurisdiction of the United States Magistrate Judge pursuant to 28 U.S.C. § 636(c), and MetLife now moves to dismiss Count II of the complaint for failure to state a claim. FED. R. CIV. P. 12(b)(6). For the reasons set forth below, the motion is granted.


MetLife, a New York corporation with its principal place of business in New York, New York, is an insurance company providing disability insurance. Menotti is a resident of Vernon Hills, Illinois who worked as a commodities broker, performing open outcry trading with the Chicago Mercantile Exchange ("CME"). (SAC ¶¶ 2, 3, 7.)*fn2 On January 15, 1992, Menotti procured a disability insurance policy (the "Policy") through New England Mutual Life Insurance Company, which is now part of MetLife. The Policy defines "Total Disability" to mean: (1) "You are unable to perform the important duties of Your Occupation; and (2) You are not engaged in any other gainful occupation; and (3) You are receiving Physician's Care." (Policy, Ex. A to SAC, at 6.) Years later, on November 23, 2005, Menotti sustained personal injuries in a motor vehicle accident. (SAC ¶¶ 4, 6.)

A. Menotti's Disability Claim

On May 1, 2006, Menotti submitted an Income Protection Claim to MetLife, asserting that he was disabled and had been unable to perform the functions of his job as a commodities broker with the CME since March 20, 2006. When Menotti formally left his position on July 30, 2006, MetLife started paying him a monthly disability benefit of $5,550, dating back to June 2006. (Id. ¶¶ 7-9.) On December 18, 2007, however, MetLife sent Menotti a letter stating that it was ceasing his disability benefits because he was no longer disabled within the meaning of the Policy. Menotti appealed this determination on March 3, 2008, but MetLife denied the appeal on March 8, 2008. (Id. ¶¶ 10, 13, 14.) Menotti insists that he remains disabled within the terms of the Policy and is entitled to his full benefits. (Id. ¶¶ 11, 12, 16, 17.)

B. Menotti's Lawsuit

Menotti filed this lawsuit on May 13, 2008, asserting claims under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. Upon discovering that the Policy is not an ERISA plan, Menotti amended his suit to allege breach of contract (Count I), anticipatory breach of contract (Count II), and breach of the Illinois Insurance Code (Count III). This court has diversity jurisdiction over these claims under 28 U.S.C. § 1332(a). MetLife answered Counts I and III on March 3, 2009, but simultaneously moved to dismiss Count II for failure to state a claim.


The purpose of a motion to dismiss is to test the sufficiency of the plaintiff's complaint, not to decide its merits. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). A motion to dismiss will be granted only "if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which entitles him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

In reviewing a motion to dismiss for failure to state a claim, the court accepts as true all factual allegations in the plaintiff's complaint and draws all reasonable inferences in his favor. Franzoni v. Hartmarx Corp., 300 F.3d 767, 770 (7th Cir. 2002).

In Count II of the complaint, Menotti seeks to recover a lump sum award of future disability benefits through age 65, on a theory of anticipatory repudiation. Specifically, Menotti alleges that MetLife has "unequivocally manifested its intention not to render performance under the [Policy]," and that he "is thus entitled to treat Defendant's repudiation of the [Policy] as a breach." (SAC ¶¶ 27, 28.) MetLife argues that Count II must be dismissed because (1) Menotti has not alleged facts demonstrating a clear repudiation of the Policy as required to state a claim for anticipatory breach of contract; and (2) it is preempted by § 155 of the Illinois Insurance Code, 215 ILCS 5/155. The court considers each argument in turn.

A. Anticipatory Repudiation

The Illinois Supreme Court has held that "[t]he doctrine of anticipatory repudiation requires a clear manifestation of an intent not to perform the contract." In re Marriage of Olsen, 124 Ill. 2d 19, 24, 528 N.E.2d 684, 686 ...

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