United States District Court, W.D. Kentucky, Bowling Green Division
JEFFREY B. TRAUGHBER as the Administrator of the Estate of Erin Schutt PLAINTIFF
SUN LIFE FINANCIAL U.S. SERVICES COMPANY, INC. DEFENDANT
MEMORANDUM OPINION AND ORDER
N. STIVERS, CHIEF JUDGE UNITED STATES DISTRICT COURT
matter is before the Court on Plaintiff's Motion for
Leave to File an Amended Complaint (DN 13) and
Defendant's Motion to Dismiss for Failure to State a
Claim, or in the alternative, for Partial Summary Judgment
(DN 8). For the reasons provided below, Plaintiff's
motion is DENIED, and Defendant's motion
action arises from a denial of accidental death benefits
under a life insurance plan governed by the Employment
Retirement Income Security Act of 1974 (“ERISA”),
29 U.S.C. §§ 1001-1461. On December 26, 2015, Erin
M. Nynas-Schutt (“Decedent”) was involved in a
fatal motor vehicle accident. (Notice Removal Ex. B, ¶
4, DN 1-2 [hereinafter Compl.]). Plaintiff Jeffrey B.
Traughber (“Plaintiff”) is the administrator of
Decedent's estate. (Compl. ¶ 1). Decedent's
employer, Metalsa Structural Products, Inc., established and
maintained an employee welfare benefit plan (“the
Plan”) funded by group policies issued by Defendant Sun
Life Assurance Company of Canada (“Sun Life”).
(Haarstick Decl. ¶ 5, DN 8-2). Decedent was a
participant in the Plan and, shortly following her death, her
estate filed a claim for life insurance and accidental death
benefits with Sun Life. (Haarstick Decl. ¶ 8).
Haarstick (“Haarstick”) is the Life Claims
Analyst for Sun Life who dealt with Plaintiff during the
claim process. (Haarstick Decl. ¶¶ 3-4). Sun Life
reviewed Plaintiff's claims and paid life insurance
benefits, but after receiving the toxicology report from the
coroner indicating Decedent tested positive for nonprescribed
drugs, Sun Life determined that accidental death benefits
were not payable under several provisions of Decedent's
policy. (Haarstick Decl. ¶¶ 7-8).
communicated Sun Life's denial of accidental death
benefits to Decedent's estate by letter dated March 16,
2017 (“Denial Letter”). (Haarstick Decl. ¶
9). The Denial Letter also contained instructions for
appealing Sun Life's determination, including the
statement that “[i]f you disagree with our decision,
you may request in writing a review of the denial within 180
days after receiving this notice of denial.” (Haarstick
Decl. ¶ 10).
Life received a letter dated April 25, 2017, from Plaintiff
on behalf of Decedent's estate. (Haarstick Decl. ¶
11). The letter indicated Plaintiff had received the Denial
Letter and referred to an unanswered email requesting a copy
of the toxicology report and the information on which Sun
Life based its decision to deny accidental death benefits.
(Haarstick Decl. ¶ 11). Haarstick replied by letter
dated May 9, 2017, stating that Sun Life had no record of
Plaintiff's earlier email, and including a copy of the
requested toxicology and prescription reports. (Haarstick
Decl. ¶ 11). Haarstick also provided two phone No. for
Plaintiff to use for other inquiries to Sun Life or to
request a complete copy of the claim file. (Def.'s Mot.
Dismiss Ex. F, at 4, DN 8-8).
Life received no further communication from Plaintiff until
January 2018, several months after the 180-day deadline for
seeking review of Sun Life's Denial Letter. (Haarstick
Decl. ¶ 12). On January 22, 2018, Sun Life received a
demand letter from Plaintiff's counsel with a draft of
the Complaint alleging violations of multiple Kentucky laws.
(Haarstick Decl. ¶ 12).
suit was initially filed in state court in Todd County,
Kentucky, asserting claims under the Kentucky Unfair Claims
Settlement Practices Act (“KUCSPA”) and the
Kentucky Consumer Protection Act (“KCPA”).
(Compl. ¶¶ 5-9, DN 1-2). Plaintiff asserts that
Defendant violated its duties set forth in the KUCSPA when it
denied the claim because, “[p]ursuant to the terms of
the policy, Defendant was obligated to pay the Plaintiff . .
. .” (Compl. ¶ 5). Plaintiff contends that
“[d]efendant either knew there was no reasonable basis
for denying Plaintiff's claim or acted with reckless
disregard for whether such a basis existed.” (Compl.
¶ 6). Plaintiff alleges Defendant's failure to abide
by the KUCSPA constituted “oppression, fraud, malice,
and bad faith” in violation of the KCPA to the point
the Plaintiff is entitled to punitive damages. (Compl.
¶¶ 8-9). Sun Life removed the action to this Court
under 28 U.S.C. § 1441. (Notice Removal, DN 1).
Complaint, Plaintiff misidentified Sun Life Financial (U.S.)
Services Company, Inc. as the defendant. (Compl. ¶ 2).
That company is not an insurance company, did not issue the
policies in this case, and has no responsibility for paying
benefits under Decedent's policies. Instead, as discussed
above, the policies involved here were issued and
underwritten by Sun Life Assurance Company of Canada.
(Haarstick Decl. ¶ 13; Def.'s Mot. Dismiss, DN 8).
Plaintiff's proposed First Amended Complaint names the
correct defendant, but otherwise restates the state law
claims originally filed in Kentucky state court. (First Am.
Compl., DN 13-1).
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
15(a)(2) of the Federal Rules of Civil Procedure instructs
that leave to amend a pleading should be freely given
“when justice so requires.” Fed.R.Civ.P.
15(a)(2). A motion to amend a pleading should be denied,
however, “if the amendment is brought in bad faith, for
dilatory purposes, results in undue delay or prejudice to the
opposing party, or would be futile.” Colvin v.
Caruso, 605 F.3d 282, 294 (6th Cir. 2010) (internal
quotation marks omitted) (quoting Crawford v. Roane,
53 F.3d 750, 753 (6th Cir. 1995)). A proposed amendment to a
pleading is deemed futile if the amendment ...