United States District Court, N.D. New York
DESPINA JEVELEKIDES and JAMES N. GRAY, III, Plaintiffs,
LINCOLN NATIONAL CORPORATION, et al., Defendants.
MEMORANDUM-DECISION and ORDER
LAWRENCE E. KAHN, District Judge.
Plaintiffs Despina Jevelekides ("Jevelekides") and James N. Gray III ("Gray") (collectively, "Plaintiffs") commenced the instant action on October 7, 2014, in New York Supreme Court, County of Broome, asserting various causes of action regarding the payment of benefits on a longterm disability insurance policy. Dkt. No. 1-1 ("Complaint"). Defendants Lincoln National Life Insurance Company ("Lincoln Life"), Lincoln National Corporation ("Lincoln National"), and Lincoln Financial (collectively, "Defendants") removed the action pursuant to 28 U.S.C. § 1441 on December 16, 2014, on the ground that Plaintiffs' claims arise, in whole or in part, under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. Dkt. No. 1. Presently before the Court is Defendants' Motion to dismiss Plaintiffs' Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Dkt. Nos. 9 ("Motion"); 9-9 ("Memorandum"). For the following reasons, Defendants' Motion is granted.
The present action concerns a group long-term disability insurance policy (the "Policy") issued to Jevelekides' former employer, Boscov's, Inc. ("Boscov's"), effective January 1, 2002. Compl. ¶ 4; Dkt. No. 9-2 ("Policy"). The Policy provides long-term disability benefits to eligible Boscov's employees. Compl. ¶ 4; Policy.
Jevelekides was diagnosed with Stage IV cervical cancer in February 2007. Compl. ¶ 5. She was eligible for long-term disability benefits under the Policy and properly submitted a claim to Jefferson Pilot. Id . ¶ 6. Her claimed disability began on February 8, 2007. Dkt. No. 9-3. The Policy requires a 180-day "Elimination Period, " from the first date of disability, before benefit payments can begin. Policy at Schedule of Benefits, 4. The employee must submit written proof of claim within ninety days of the end of the Elimination Period. Id. at 21. Because Jevelekides' claimed disability began February 8, 2007, her written proof of claim was therefore due by November 5, 2007.
On July 11, 2007, Lincoln Life approved Jevelekides' claim, and on August 6, 2007, Lincoln Life began sending Jevelekides monthly benefit payments of $1, 113.00. Compl. ¶ 8; Dkt. No. 9-4 ("July 11, 2007 Letter"). Lincoln Life also notified Jevelekides that she had an obligation to apply for Social Security Disability Income ("SSDI"), and that her benefit payments would be reduced by the amount of SSDI she received. See Compl. ¶ 9. While Jevelekides' application for SSDI was pending, Lincoln Life offered Jevelekides two options to avoid overpayment: (1) Lincoln Life could estimate the amount of SSDI she would receive and reduce her monthly payments accordingly; or (2) she could continue receiving full payments and repay any overpayment upon being awarded SSDI. Id .; July 11, 2007 Letter. Jevelekides elected to continue receiving full monthly benefits subject to a repayment obligation. See July 11, 2007 Letter.
Jevelekides did not believe she was entitled to SSDI for her cancer because she was already receiving SSDI for another condition. See Compl. ¶ 10. On or about December 27, 2001, Jevelekides had applied for SSDI due to osteoarthritis in both her hips. Id . ¶ 3. Her application was approved on September 12, 2003, and she began receiving benefits retroactively from October 1, 2001. See id. Jevelekides informed Lincoln Life that she already was receiving SSDI for her osteoarthritis, but was advised that she could also receive benefits for her cancer. Id . ¶ 10. The Social Security Administration had previously advised Jevelekides to the contrary. Id.
In a letter dated October 1, 2008, Lincoln Life informed Jevelekides that she had been overpaid $12, 637.81 because she and her dependent, Gray, had been awarded $1, 386 in SSDI benefits monthly, beginning on March 1, 2008. Id . ¶ 11; Dkt. No. 9-5 ("October 1, 2008 Letter"). The letter also notified Jevelekides that her benefits would be reduced to $111.30 per month. Compl. ¶ 12; October 1, 2008 Letter.
Plaintiffs' Complaint contains four causes of action related to the reduction in benefits: (1) breach of contract; (2) unjust enrichment; (3) misrepresentation; and (4) breach of duty of good faith and fair dealing. Compl. ¶¶ 14, 18, 20, 22. Plaintiffs seek to recover the difference between the monthly benefits originally awarded under the Policy and the benefits as reduced by the SSDI Jevelekides allegedly was receiving. See id. ¶¶ 15, 18.
III. LEGAL STANDARD
To survive a motion to dismiss pursuant to Rule 12(b)(6), a "complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also FED. R. CIV. P. 12(b)(6). A court must accept as true the factual allegations contained in a complaint and draw all inferences in a plaintiff's favor. See Allaire Corp. v. Okumus, 433 F.3d 248, 249-50 (2d Cir. 2006). A complaint may be dismissed pursuant to Rule 12(b)(6) only where it appears that there are not "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. Plausibility requires "enough fact [s] to raise a reasonable expectation that discovery will reveal evidence of [the alleged misconduct]." Id. at 556. The plausibility standard "asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). "[T]he pleading standard Rule 8 announces does not require detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id . (citing Twombly, 550 U.S. at 555). Where a court is unable to infer more than the mere possibility of the alleged misconduct based on the pleaded facts, the pleader has not demonstrated that she is entitled to relief and the action is subject to dismissal. See id. at 678-79.
Defendants argue that the Complaint should be dismissed because all of Plaintiffs' causes of action are preempted by ERISA. Mem. at 5-9. Defendants further argue that allowing Plaintiffs to amend the Complaint to assert an ERISA cause of action would be futile because any claim Plaintiffs could assert pursuant to ERISA would be barred by the Policy's limitations period. Id. at 9-11. Defendants additionally argue that Gray has no standing under ...