United States District Court, W.D. Kentucky, Bowling Green Division
MEMORANDUM OPINION AND ORDER
N. Stivers, Judge.
matter comes before the Court on Defendant Hartford Financial
Group, Inc.'s Motion to Dismiss (DN 7). For the following
reasons, the Court will hold Defendant's Motion to
Dismiss (DN 7) in abeyance and Plaintiff will be granted
thirty days to amend her Complaint.
Velma England (“England”) alleges that she
applied for disability benefits under a disability insurance
policy and that Defendant Hartford Life and Accident
terminated said benefits. (Notice Removal Ex. A, ¶¶
1-7, DN 1-2 [hereinafter Compl.]). Policy No. GLT-206375
(“the Policy”) was issued by Hartford to
England's employer, Johnson Controls, Inc.
(“Johnson Controls”), as part of employee welfare
benefit plan (“the Plan”). (Compl. ¶ 3).
England began receiving LTD benefits on September 17, 2002.
(Compl. ¶ 4).
September 2, 2015, Hartford terminated England's LTD
benefits. (Compl. ¶ 5). England filed this action in the
Metcalfe Circuit Court on or about August 5, 2016, claiming
that the failure to pay benefits is actionable under the
Kentucky Unfair Claims Settlement Practices Act
(“KUCSPA”), KRS 304.12-230. (Compl. ¶ 7).
England sought past and future benefits, interest, punitive
damages, and attorneys' fees. (Compl. ¶ 8). Hartford
subsequently removed the case to this Court on the basis of
preemption by the Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. §§ 1001-1461.
(Notice Removal, DN 1).
Court has “original jurisdiction of all civil actions
arising under the Constitution, laws, or treaties of the
United States.” 28 U.S.C. § 1331.
STANDARD OF REVIEW
complaint must include a “short and plain statement of
the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). It must also 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) (quoting Twombly v. Bell Atl. Corp., 550
U.S. 544, 570 (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.” Id.
“[A] formulaic recitation of the elements of a cause of
action will not do.” Twombly, 550 U.S. at 555.
Moreover, the Court “is not bound to accept as true
unwarranted factual inferences, or legal conclusions
unsupported by well-pleaded facts.” Terry v. Tyson
Farms, Inc., 604 F.3d 272, 276 (6th Cir. 2010).
contends that England's state law claims are preempted by
ERISA, and therefore, moves to dismiss the Complaint.
(Def.'s Mem. Supp. Mot. Dismiss 4-8, DN 7-1). England
argues that a ruling on Hartford's Motion to Dismiss
would be premature. (Pl.'s Resp. Def.'s Mot. Dismiss
3-4, DN 8). Although England “expects that it will
probably be so” she asserts that there is no evidence
in the record to determine if the Policy is regulated under
ERISA. (Pl.'s Resp. Def.'s Mot. Dismiss 3-4).
Existence of ERISA Plan
regulates employee benefit plans established by employers or
organizations that represent employees, known as
“employee welfare benefit plans.” 29 U.S.C. §
1003(a). Hartford attached the Policy as an exhibit to its
Notice of Removal. (Notice Removal Ex. B, at 22, DN 1-3
[hereinafter Policy]). In determining whether a plan is an
employee welfare benefit plan, a court must undertake a
three-step factual inquiry. Thompson v. Am. Home Assur.
Co., 95 F.3d 429, 434 (6th Cir. 1996). First, the court
applies “the so-called ‘safe harbor'
regulations established by the Department of Labor to
determine whether the program was exempt from ERISA.”
Id. (citing Fugarino v. Hartford Life &
Accident Ins. Co., 969 F.2d 178, 183 (6th Cir. 1992)).
The “safe harbor” regulations exclude a plan from
ERISA coverage if: (1) the employer does not make any
contribution to the policy; (2) employee participation in the
policy is voluntary; (3) “the employer's sole
functions are, without endorsing the policy, to permit the
insurer to publicize the policy to employees, collect
premiums through payroll deductions and remit them to the
insurer;” and (4) no consideration is received by the
employer “in connection with the policy other than
reasonable compensation for administrative services.”
Id. at 435 (citing 29 C.F.R. § 2510.3-1(j)).
a plan meets all four criteria is it excluded from ERISA
coverage. Id. (citing Fugarino, 969 F.2d at
183). An examination of the Policy reveals that the
“safe harbor” regulations do not exclude the Plan
from ERISA coverage because, at a minimum, it is clear from
the Policy that Johnson Controls contributes to the policy.
(Policy 22 (“Sources of Contribution -- The Employer
pays the premium for the insurance, but may allocate part of
the cost ...