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Lowe v. Lincoln National Life Insurance Co.

United States District Court, E.D. Kentucky, Northern Division, Ashland

October 3, 2019

LOREY LOWE, PLAINTIFF,
v.
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY, and LINCOLN NATIONAL CORPORTION, DEFENDANTS.

          MEMORANDUM OPINION AND ORDER

          Henry R. Wilhoit, Jr. United States District Judge

         This matter is before the Court upon Defendants The Lincoln Life Insurace Company ad Lincoln National Corporation's Motion to Dismiss, or in the Alternative, Motion fr Summary Judgment [Docket No. 8]. The matter has been fully briefed by the parties [Docket Nos. 10 and 13]. The for the reasons stated herein, the Court fends that the Complaint fails to state a claim upon which relief can be granted.

         I.

         This case arises for a dispute regarding benefts under a group long term disability policy issued by Defendant The Lincoln National Life Insurance Company ("Lincoln") to Plaintiffs employer, Diversicare Healthcare Services, Inc. Lincoln issued the policy to Diversicare to fund benefits under its employee welfare benefit plan. [Docket No. 1-1, Declaration of Thomas J. Vargo].

         In May 2016, while employed by Diversicare, Plaintiff suffered a stroke and was unable to work. [Amended Complaint, Docket No. 7, ¶¶ 7-8]. Lincoln first awarded benefits under the subject plan from November 6, 2016 to June 6, 2017. [Docket No. 8-1, ¶ 6]. Lincoln originally denied Plaintiffs requests for benefits beyond June of 2017. [Amended Complaint, Docket No. 7, ¶ 12]. Plaintiff appealed. Id. at ¶ 13. Following the appeal and submission of additional records, Lincoln paid benefits to Plaintiff for the period June 6, 2017 to December 31, 2017. [Docket No. 8-1, ¶ 7].

         While an additional appeal was pending, Plaintiff filed this lawsuit against Lincoln, alleging negligence (Count I), negligent infliction of emotional distress (Count II), outrage (Count III), fraudulent misrepresentation (Count IV), violations of Kentucky's Consumer Protection Act, KRS §367.170 (Count V).

         Following the aforementioned appeal and review, Lincoln issued a favorable determination on April 22, 2019. Id. at, ¶ 8. It appears from the record that Plaintiff continues to receive monthly disability benefits from Lincoln.

         About two weeks later, Plaintiff Amended her Complaint to include allegations of bad faith (Count VI) and violations of Kentucky's Unfair Claims Settlement Practices Act, KRS §304.12-230. [Docket No. 7].

         Defendants seeks dismissal of all claims alleged herein, arguing that they are preempted by the Employee Retirement Income Security Act, 26 U.S.C. § 219, et seq.

         II.

         Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint that fails to state a claim upon which relief can be granted. The purpose of Rule 12(b)(6) is to permit a defendant to test whether, as a matter of law, the plaintiff is entitled to relief even if everything alleged in the complaint is true. Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993). To survive a motion to dismiss under 12(b)(6), plaintiffs "factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true." Assoc. of Cleveland Fire Fighters v. City of Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir. 2007) (citing Bell Atlantic v. Twombly, 127 S.Ct. 1955, 1974 (2007)). "[A] plaintiffs obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. The Court must determine not whether the plaintiff will ultimately prevail but whether the plaintiff is entitled to offer evidence to support his claims. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). In making this determination, the Court must construe the complaint in the light most favorable to plaintiff and accept as true all well-pleaded factual allegations. Mixon v. Ohio, 193 F.3d 389, 400 (6th Cir. 1999).

         III.

         The parties do not dispute that this case is governed by the Employee Retirement Income Security Act ("ERISA"). The Policy referenced in Plaintiffs Amended Complaint is a group long term disability insurance policy issued by Lincoln to Diversicare, Plaintiffs employer. Lincoln issued the Policy to Plaintiffs employer to fund benefits under Diversicare's employee welfare benefit plan. The Plan is an "employee welfare benefit plan" governed by ERISA because it is funded by Diversicare and was for the purpose of providing benefits to its employees. 29 U.S.C. § 1002(1).

         Defendant argues that because the Plan is governed by ERISA, Plaintiffs claims ...


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