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Hogan v. Jacobson

United States District Court, W.D. Kentucky, Louisville Division

April 28, 2015

IOLET M. HOGAN, Plaintiff,


DAVID J. HALE, District Judge.

Plaintiff Violet M. Hogan alleges that Defendants Jo Ellen Jacobson and Kem Alan Lockhart prevented her from receiving benefits under a long-term disability insurance policy. Jacobson and Lockhart have moved to dismiss Hogan's amended complaint, arguing that her state-law claim of negligence per se must be dismissed on preemption grounds and that she has failed to allege any actionable interference under the Employee Retirement Income Security Act (ERISA). (Docket No. 46) Because the Court agrees that the amended complaint fails to state a plausible claim for relief, the motion to dismiss will be granted.


Before the Court examines the amended complaint, a brief procedural history is in order. This is Hogan's second lawsuit related to disability insurance policies provided by Life Insurance Company of North America (LINA). Hogan alleges that she became disabled while covered under the policies. (D.N. 43 at 3 ¶¶ 12-13) She sought disability benefits, and her claim was denied. Hogan first sued LINA in federal court, alleging that she had been wrongly denied short-term disability (STD) and long-term disability (LTD) benefits. This Court concluded, and the Sixth Circuit Court of Appeals agreed, that LINA's denial of Hogan's claim was reasonable in light of the minimal evidence Hogan provided in support of the claim. See Hogan v. Life Ins. Co. of N. Am., 521 F.Appx. 410 (6th Cir. 2013) ( Hogan I ).

The present case was originally filed in Jefferson Circuit Court. In her initial complaint, Hogan alleged that Jacobson and Lockhart-LINA employees who reviewed Hogan's medical records-had engaged in the practice of medicine and psychology without a license in violation of KRS §§ 311.560 and 319.005. (D.N. 1-3 at 4 ¶¶ 16-20) Jacobson and Lockhart removed the case to this Court on the ground that it arises under ERISA. (D.N. 1 at 2) The Court agreed and denied Hogan's request for remand, finding that her state-law claim was actually a claim for benefits and therefore completely preempted by ERISA, providing removal jurisdiction. ( See D.N. 23) Following an unsuccessful attempt to have the remand issue reconsidered ( see D.N. 39), Hogan filed an amended complaint (D.N. 43). Notwithstanding the Court's previous decision that the claim is preempted, Hogan again alleges negligence per se under KRS §§ 311.560 and 319.005.[1] (D.N. 43 at 4-5) She also asserts a claim of interference with protected rights under ERISA, 29 U.S.C. § 1140, alleging that Jacobson and Lockhart interfered with her "right to receive long term disability benefits." (Id. at 5 ¶ 30) The defendants seek dismissal of both claims. (D.N. 46)


In evaluating a motion to dismiss under Rule 12(b)(6), the Court must ask whether the complaint "contain[s] 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) (alteration in original) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint that merely offers "naked assertions' devoid of further factual enhancement'" does not satisfy the Federal Rules of Civil Procedure. Id. (quoting Twombly, 550 U.S. at 557). With this standard in mind, the Court turns to Hogan's amended complaint.

A. Negligence Per Se

As in her initial complaint, Hogan contends that Jacobson and Lockhart violated Kentucky statutes prohibiting the practice of medicine and psychology without a license.[2] (D.N. 43 at 4-5) The Court previously determined that this claim was completely preempted by ERISA because Jacobson and Lockhart had no duty to Hogan outside the administrative review process. (D.N. 23 at 7) According to the defendants, the Court's earlier ruling is dispositive here; they maintain that Hogan's state-law claim should be dismissed as preempted. The answer is not that simple, however.

The basis for removal in this case was complete preemption-that is, the Court found that Hogan's negligence claim was in essence a claim for benefits under ERISA. ( See generally D.N. 23) Complete preemption is different from express preemption. Whereas the latter generally results in dismissal, complete preemption "converts a state-law claim that could have been brought under § 1132 into a federal claim and makes the recharacterized claims removable to federal court." Loffredo v. Daimler AG, 500 F.Appx. 491, 495 (6th Cir. 2012); see 29 U.S.C. § 1144 (ERISA express-preemption provision). The two doctrines "are unique, distinct, and mutually exclusive; as to a single claim, they are incompatible and cannot exist." Ackerman v. Fortis Benefits Ins. Co., 254 F.Supp.2d 792, 818 (S.D. Ohio 2003). Thus, the Court's previous decision that Hogan's claim was completely preempted does not amount to a finding that the claim cannot survive in federal court. To the contrary, complete preemption means that the claim is innately federal. Id. at 817; see also Loffredo, 500 F.Appx. at 495 ("Complete preemption applies when a plaintiff dresses up a claim for benefits under a pension plan in statelaw clothing....").

A court presented with a claim that is completely preempted by ERISA has two options: allow the plaintiff to amend the complaint to expressly assert an ERISA claim or simply treat the state-law claim as a claim under ERISA. Ackerman, 254 F.Supp.2d at 818. Here, Hogan has already had an opportunity to amend. Therefore, the Court will construe the state-law claim as an ERISA claim and analyze it accordingly. Cf. Mazur v. Unum Ins. Co., 590 F.Appx. 518, 521 (6th Cir. 2014) (approving district court's use of this approach).

The Court previously found Hogan's state-law claim to be "subsumed within the claim for wrongful denial of benefits under the ERISA plan." (D.N. 23 at 7) In Hogan's prior lawsuit, she alleged improper denial of both STD and LTD benefits. See id. at 411. Her present complaint asserts only that she was wrongly denied LTD benefits. ( See D.N. 43 at 4 ¶ 22 ("Defendants' illegal opinions were provided with the express purpose of denying Mrs. Hogan her long term disability benefits, and in fact resulted in Mrs. Hogan's loss of the right to attain these protected benefits.")) According to Hogan, "no court has ever addressed or ruled upon [her] LTD benefits." (D.N. 51 at 3) She proceeds to quote the following portion of the Sixth Circuit's decision:

While Hogan also seeks LTD benefits, she did not first seek these benefits from LINA and therefore she failed to exhaust administrative remedies with respect to this claim. She advances a theory that LTD benefits should be awarded automatically if STD benefits are granted, because LINA's policy includes a provision that automatically transitions STD into LTD after the expiration of the STD period. However, because we uphold LINA's denial of STD benefits we have no reason to reach Hogan's LTD claims on this theory.

Hogan I, 521 F.Appx. at 417. ( See D.N. 51 at 4) Thus, the Sixth Circuit did address Hogan's entitlement to LTD benefits-it found that the issue was not properly before the court because ...

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