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Gardner v. Verizon Communications Inc.

United States District Court, E.D. New York

March 17, 2017

HELEN T. GARDNER, Plaintiff,
v.
VERIZON COMMUNICATIONS INC., Defendant.

          MEMORANDUM AND ORDER

          ROSLYNN R. MAUSKOPF, UNITED STATES DISTRICT JUDGE.

         Plaintiff pro se Helen T. Gardner seeks life insurance benefits for her daughter's death, pursuant to a policy issued by Gardner's former employer, defendant Verizon Communications Inc. ("Verizon").[1] Before the Court is Verizon's motion to dismiss Gardner's first amended complaint pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6) for failure to state a claim upon which relief can be granted. (See Mot. Dismiss (Doc. No. 19-2).) Specifically, Verizon seeks to dismiss (1) Gardner's stale law claims because they are preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), and (2) Gardner's claims for compensatory and punitive damages because ERISA limits her legal relief to the $5, 000 life insurance benefits due under her life insurance plan, which have already been paid to Gardner. (See id)

         For the reasons that follow, Verizon's motion to dismiss is granted. However, Gardner is granted thirty (30) days from the date of this Memorandum and Order to seek leave to amend her complaint to include a claim for contractual damages for interest accrued on the delayed disbursement of benefits.

         BACKGROUND

         The following facts, liberally construed, are taken from Gardner's first amended complaint and considered to be true for purposes of this motion to dismiss. Gardner worked for "New York Telephone/ Atlantic/ NYNEX/ Verizon" from 1971 until 2006. (First Am. Compl. (Doc. No. 11) at 1 .)[2] After retiring in 2006, Gardner made monthly payments to her former employer, Verizon, "for a $5, 000 supplemental insurance policy for [her] daughter" under the Verizon Dependent Group Life Insurance Plan for New York and New England Associates (the "Plan"). (See id.) When Gardner's daughter passed away on November 15, 2016, Gardner "called the Verizon Benefit Center to advise them of [her] daughter's passing in order to collect the supplemental policy." (Id. at 1-2.) Gardner was advised that her daughter "had 'no policy.'" (Id. at 2.) Gardner alleges that Verizon deliberately falsified online records to state that the supplemental policy had been terminated on January 1, 2015, before her daughter's death. (See id at 2-4.)

         Gardner alleges that Verizon refused to pay life insurance benefits under the Plan. (See Id. at 3-4; Mot. Dismiss at 5.) Gardner concedes in her first amended complaint that the Plan is an employee benefit plan under ERISA, [3] and asserts causes of action under ERISA and related state law claims of deceptive acts and practices, breach of contract, and "intentional misrepresentation/fraud." (See Id. at 3-4.) Gardner's first amended complaint seeks compensatory damages in the amount of the life insurance policy of $5, 000 and punitive damages in the amount of $1, 000, 000. (See id.)

         It is undisputed that on or about May 31, 2016, following the filing of the instant action, Gardner received the $5, 000 in life insurance benefits due under the Plan. (See Mot. Dismiss at 12-13; Pl's Mem. in Supp. (Doc. No. 19-6) at 9.) Verizon subsequently moved to dismiss Gardner's first amended complaint, on the grounds that she received her benefits due under the Plan and was not entitled to further relief. (See Mot. Dismiss.)

         On July 5, 2016, Gardner opposed Verizon's motion and subsequently filed a motion to amend her complaint for a second time. (See Notice of Mot. to Amend (Doc. No. 19-5); Pl's Mem. in Supp, )[4] In her proposed second amended complaint, Gardner asserts claims for damages under ERISA for (1) "improperly denying benefits to current or former employees"; (2) "breach of fiduciary duty toward employees covered by plans"; and (3) "interference with the right of employees covered by plans." (See Pl's Mem. in Supp. at 5.) Gardner also seeks additional civil and criminal penalties pursuant to the following federal statutes: (1)18 U.S.C. § 1027, entitled False Statements and Concealment of Facts in Relation to Documents Required by ERISA; (2) 29 U.S.C. § 1140, entitled Interference with Protected Rights; (3) 29 U.S.C. § 1149, entitled Prohibition on False Statements and Representations; (4) the Computer Fraud and Abuse Act, 18 U.S.C. § 1030; (5) Section 802 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. §§ 1501, 1519, 1520; and (6) Section 904 of the Sarbanes-Oxley Act of 2002, 29 U.S.C. § 1131. (See Pl's Mem. in Supp. at 5-10.)[5]

         STANDARD OF REVIEW

         Pursuant to Rule 12(b)(6), a party may move to dismiss a cause of action that "fail[s] to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). In order to withstand a motion to dismiss, 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, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)); Hoyden v. Paterson, 594 F.3d 150, 161 (2d Cir. 2010). A claim is plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Matson v. Bd. of Educ, 631 F.3d 57, 63 (2d Cir. 2011) (quoting Iqbal, 556 U.S. at 678). The Court assumes the truth of the facts alleged, and draws all reasonable inferences in the nonmovant's favor. See Harris v. Mills, 572 F.3d 66, 71 (2d Cir. 2009). Although all factual allegations contained in the complaint are assumed to be true, this tenet is "inapplicable to legal conclusions." Iqbal 556 U.S. at 678.

         When a plaintiff proceeds pro se, the plaintiffs pleadings should be held "to less stringent standards than formal pleadings drafted by lawyers." Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam) (quoting Estelle v. Gamble, 429 U.S. 97, 104-05 (1976)); see Harris v. Mills. 572 F.3d 66, 72 (2d Cir. 2009) (noting that even after Twombly, the court "remain[s] obligated to construe a pro se complaint liberally"). Notwithstanding the liberal pleading standards granted to a pro se plaintiff, if "the allegations in a complaint, however true, could not raise a claim of entitlement to relief, " dismissal is warranted. Twombly, 550 U.S. at 558.

         DISCUSSION

         I. Express Preemption Under ERISA

         In 1974, Congress enacted ERISA to provide comprehensive and uniform regulation of employee benefit plans - including employee welfare benefit plans - in order to protect "participants in employee benefit plans and their beneficiaries." See 29 U.S.C. ยงยง 1001(b), 1002(1), 1003(1). ERISA defines an employee welfare benefit plan, in pertinent part, as "any plan, fund or program .. . established or maintained by an employer or by an employee organization ... for the purpose of providing its participants or their beneficiaries, through the purchase of insurance or ...


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