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Halley v. Aetna Life Insurance Co.

United States District Court, N.D. Illinois, Eastern Division

September 10, 2014

RONALD HALLEY, Plaintiff,
v.
AETNA LIFE INSURANCE COMPANY, Defendant.

OPINION AND ORDER

SARA L. ELLIS, District Judge.

Plaintiff Ronald Halley seeks the restoration of his long-term disability benefits under a policy underwritten and administered by Aetna Life Insurance Company ("Aetna"). Halley initially brought a single count complaint for denial of benefits under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. § 1132(a)(1)(B) ("§ 502(a)(1)(B)"). Halley then amended his complaint to include a claim for breach of fiduciary duty and disgorgement pursuant to 29 U.S.C. § 1132(a)(3) ("§ 502(a)(3)") based on the denial of his benefits. Aetna now moves to dismiss Halley's breach of fiduciary duty claim. Because Halley cannot maintain a § 502(a)(3) claim for an injury for which remedies exist under § 502(a)(1)(B), Aetna's motion [62] is granted and Claim II of the First Amended Complaint ("Complaint") [31] is dismissed.

BACKGROUND[1]

Halley worked full-time as Vice President of Sales at The Duchossois Group Inc. until June 1, 2009. At that point, Halley stopped working for several months "due to the worsening of a combination of severe impairments including, but not limited to stenosis and spondylosis of both the cervical and lumbar spine, polyneuropathy with tremor, a labral tear in his left shoulder, deep vein thrombosis, left elbow epicondylitis, peripheral artery disease, spurs in the left and right shoulders, and other non-specific orthopedic and medical conditions which caused shortness of breath, fatigue, chronic pain, and limited mobility." Compl. (Doc. 31) ¶ 6. Halley tried to return to work in October 2009 on a part-time basis; however, his impairments forced him to stop working altogether on October 30, 2009. Halley has not worked in any capacity whatsoever since October 30, 2009.

Halley received coverage as a participant under a group long-term disability benefits plan underwritten and administered by Aetna for employees of The Duchossois Group, Inc. under the plan name "Long Term Disability Policy" (the "Plan"). The relevant policy number is GP-657484 (the "Policy"). At all relevant times this Plan constituted an "employee welfare benefit plan" as defined by 29 U.S.C. § 1002(1).

Halley applied for, received, and exhausted his short-term disability benefits. On December 30, 2009, Halley applied for long-term disability benefits through Aetna. Aetna denied Halley's application on February 10, 2010. Halley successfully appealed that decision and Aetna reversed its denial and awarded Halley long-term disability benefits. Aetna paid Halley long-term disability benefits until November 9, 2010, when Aetna terminated the benefits. Halley appealed again and Aetna resumed payment of the benefits.

Halley received benefits from Aetna until January 23, 2013, when Aetna informed Halley it would terminate his benefits at the end of January 2013. Despite a lack of improvement in Halley's condition, Aetna stated Halley no longer met the Plan definition of disabled.[2] In terminating Halley's benefits, Aetna asserted Halley was capable of working at a reasonable occupation other than his own, which disqualified Halley from continued benefits under the Plan.[3] At that time, Aetna had medical evidence in its possession that "established [Halley] could not meet the exertional demands of any identified occupation." Compl. ¶ 10.

On June 24, 2013, Halley appealed the January 2013 denial of benefits. Halley's formal appeal included the submission of additional medical records and medical opinions, and a favorable disability decision from the Social Security Administration ("SSA") with the supporting administrative record. These documents established that Halley is "unable to engage in any substantially gainful activity." Compl. ¶ 11. Halley's "appeal further established that Aetna's termination of benefits was based on a defective vocational evaluation." Id.

Aetna affirmed the denial of benefits on August 22, 2013, stating the medical evidence was insufficient to support a finding of continued disability. Aetna also stated Halley had the functional capacity to engage in a reasonable occupation other than his own, even though Halley submitted opinions from his physicians and the SSA decision finding he was totally disabled from all work. Aetna did not explain why it reached a conclusion different from that of the SSA.

LEGAL STANDARD

A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not its merits. Fed.R.Civ.P. 12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion to dismiss, the Court accepts as true all well-pleaded facts in the plaintiff's complaint and draws all reasonable inferences from those facts in the plaintiff's favor. AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of a claim's basis but must also be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "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." Iqbal, 556 U.S. at 678.

ANALYSIS

In Count I of the Complaint, Halley brings a claim under ERISA Section 502(a)(1)(B) for payment of his long-term disability benefits, retroactive to February 1, 2013. Count II of the Complaint reasserts and incorporates the facts of the denial of benefits claim, then pleads that "the foregoing course of conduct continues a breach of fiduciary duty" on the part of Aetna and requests "disgorgement" under Section 502(a)(3). Compl. ¶ 18. Because Halley's fiduciary duty claim seeks the same relief as the denial of benefits claim and Section 502(a)(1)(B) provides the possibility of adequate relief, Count II is dismissed.

Section 502(a)(1)(B) allows an ERISA participant or beneficiary to bring an action "to recover benefits due him [or her] under the terms of his [or her] plan[.]" 29 U.S.C. § 1132 (a)(1)(B). In other words, § 502(a)(1)(B) permits suits for the recovery of unpaid benefits. A breach of fiduciary duty claim based on the "interpretation of plan documents and the payment of claims, " running directly to the injured beneficiary, may be ...


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