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Black v. Lincoln National Life Insurance

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

June 21, 2017

Joseph Black, Plaintiff,
v.
Lincoln National Life Insurance, Defendant.

          MEMORANDUM OPINION AND ORDER

          Honorable Thomas M. Durkin United States District Judge.

         Joseph Black alleges that Lincoln National Life Insurance violated the Employment Retirement Income Security Act (“ERISA”) when it failed to pay him the proceeds of his late father's life insurance policy. R. 30. Lincoln National has moved to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). R. 39. For the following reasons, the motion is granted.

         Legal Standard

         A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See, e.g., Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). A complaint must provide “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), sufficient to provide defendant with “fair notice” of the claim and the basis for it. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). This standard “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While “detailed factual allegations” are not required, “labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. The complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). “‘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.'” Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013) (quoting Iqbal, 556 U.S. at 678). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Mann, 707 F.3d at 877.

         Background

         Black's father died on August 10, 2011. R. 30 ¶ 2. At the time of his death, Black's father was employed by Superior Air Ground Ambulance Service, and was insured under Superior Air's Lincoln Financial Group Insurance Policy, which provided $125, 000 to the policy's beneficiaries. Id. ¶¶ 2-3. The policy included both $15, 000 in Basic Life coverage and $110, 000 in voluntary life coverage. R. 40-1; R. 40-2; R. 40-3; R. 40-4; R. 40-5; R. 40-6. The Basic Life policy included a three-year contractual limitations period for bringing civil suits. R. 40-1 at 25.

         Black alleges that his stepmother fraudulently obtained the proceeds of his father's life insurance policy and deposited them into an MB Financial bank account. See R. 30. In September 2013, Black sued Lincoln National, MB Financial Bank, and his stepmother in the Circuit Court of Cook County, Illinois to recover the proceeds. See R. 11-1. Lincoln National moved to dismiss, arguing that Black's claims were preempted by ERISA. See R. 15-1 at 4-14. Black did not file a response, and the state court granted the motion. See R. 11-2 at 2. The state court eventually resolved Black's claims against his stepmother and MB Financial, by ordering MB Financial to turn over the remaining $37, 700.54 balance in the bank account to Black, and by entering a $100, 000 judgment against his stepmother for “conversion and fraud.” See R. 11-3; 11-4.

         Black then filed another complaint in Illinois state court on January 12, 2016, seeking to recover the full $125, 000 amount of the policy benefits from Lincoln National. R. 1. Black alleged that Lincoln National violated ERISA and breached the terms of the policy when it paid the proceeds to his stepmother. Id. Lincoln National removed that complaint to this Court in May 2016, and filed a motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). R. 10. The Court granted the motion as to the breach of contract claim, but denied it with respect to the ERISA claim. R. 18 (Black v. Lincoln Nat. Life Ins., 2016 WL 6582582 (N.D. Ill. Nov. 7, 2016)).

         Black then filed an amended complaint on March 15, 2017. R. 30. Black alleges in his amended complaint that Lincoln National violated ERISA by paying the proceeds of the life insurance policy to his stepmother, who allegedly obtained them by forging both his signature and his father's signature on various policy documents. R. 30 ¶¶ 5-7. Specifically, Black alleges that his stepmother forged his father's signature on the enrollment form naming the minor daughter of Black's stepmother and father, as a 50% co-beneficiary on the $110, 000 Voluntary Life policy. R. 30 ¶ 6. Additionally, Black alleges that his stepmother forged Black's signature on a claim form in order to have Lincoln National deposit the proceeds of the Voluntary Life policy into the MB Financial joint bank account. R. 30 ¶ 5.

         Analysis

         Lincoln National argues that Black's claims should be dismissed for the following reasons: (1) Black fails to allege a viable legal theory to support his claim for benefits under the Basic Life policy; (2) the Basic Life policy's three-year contractual limitation provision makes Black's claim untimely; (3) Black's forged Enrollment Form theory rests on the false premise that ERISA imposes strict liability on administrators for losses due to forged signatures; and (4) Black's claim against Lincoln National for payment of the $55, 000 Voluntary Life Benefit also depends on that same incorrect premise.

         I. Basic Life Policy

         Lincoln National argues that Black fails to allege a right to the Basic Life policy's proceeds. Because the Basic Life policy and the voluntary life policy documents, enrollment forms, and claim forms are central to and form the basis of Black's claim, the Court may take judicial notice of these documents. See Citadel Grp. Ltd. v. Wash. Reg'l Med. Ctr., 692 F.3d 580, 591 (7th Cir. 2012).

         Black alleges that he is the “sole beneficiary” of his late father's entire $125, 000 life insurance coverage, including both the $15, 000 Basic Life coverage and the $110, 000 voluntary life coverage. However, although Black claims a right to the entire $125, 000, he makes no allegations with regard to the Basic Life Policy in particular. Rather, all of his allegations focus on allegedly fraudulent signatures relevant to distribution of the $110, 000 Voluntary Life proceeds. Moreover, Black does not address Lincoln National's argument that he is not entitled to the Basic Life proceeds. This is likely because the express terms of the Basic Life policy enrollment form name his stepmother, Miavria Black, as the “100%” beneficiary. R. 40-5. Additionally, Black admitted that “Ms. Black was the intended beneficiary of $15, 000 in ...


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