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Motion to Dismiss: D. Conn.

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  • Motion to Dismiss: D. Conn.

    In a recent case from Connecticut, the court rules on a Motion to Dismiss Plaintiff's amended complaint. The Defendant in this cases raises three main arguments: "First, although the Amended Complaint does not explicitly cite the statute, the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001, et seq., governs the policy. Second, because ERISA only provides a cause of action to the beneficiary of the policy, Joker’s Wild is not a proper plaintiff in this case. Finally, Mr. Acquarulo failed to exhaust his claim and it is too late to do so now."

    With relation to the issue of exhaustion, the court reasoned as follows:

    Under ERISA’s “deemed exhaustion” provision, this certificate cannot establish an appeals process for Mr. Acquarulo’s claim. Indeed, “[u]nder the Department of Labor’s claims-procedure regulation, . . . a claimant ‘shall be deemed to have exhausted’ her administrative remedies if a plan fails to establish or follow claims procedures in compliance with ERISA.” McFarlane v. First Unum Life Ins. Co., 274 F. Supp. 3d 150, 155 (S.D.N.Y. 2017) (citing 29 C.F.R. § 2560.503–1(l)(1)). “In Eastman Kodak Co. v. STWB, Inc., for example, the Second Circuit addressed “[w]hether a benefits claimant may be required to exhaust administrative remedies that were adopted only after the claimant has brought an action to recover benefits.” 452 F.3d 215, 220 (2d Cir. 2006). The defendant, Bayer, “admittedly had no ERISA-compliant claims procedure in place when Coyne first sought benefits. Still, Bayer notes, an ERISA-compliant claims procedure was adopted later, and it was given retroactive effect to before the time when Coyne filed his suit.” Id. at 221. According to the Eastman Kodak court, the “‘deemed exhausted’ provision was plainly designed to give claimants faced with inadequate claims procedures a fast track into court—an end not compatible with allowing a ‘do-over’ to plans that failed to get it right the first time.” Id. at 222.
    Ultimately, however, Defendant’s supplemental filing makes it clear that the resolution of this issue should await the summary judgment stage of this litigation. Cf. Spector v. Bd. of Trustees of Cmty.-Tech. Colleges, 463 F. Supp. 2d 234, 246 (D. Conn. 2006) (deferring judgment of exhaustion until summary judgment in Title VII case because “prudence would seem to counsel against deciding the matter before the parties have developed a more complete evidentiary record.”). Indeed, all the cases cited by Reliance in its supplemental filing are cases decided at the summary judgment stage, rather than at the motion to dismiss stage. See Def. Suppl. Br. at 4 (citing Perrino v. S. Bell Tel. & Tel. Co., 209 F.3d 1309 (11th Cir. 2000); Heller v. Fortis Benefits Ins. Co., 142 F.3d 487 (D.C. Cir. 1998); and Holmes v. Colorado Coal. For the Homeless Long Term Disability Plan, 762 F.3d 1195, 1214 (10th Cir. 2014)). Because the Court would benefit from a fuller factual record to determine what notice Plaintiffs were given of an appeals provision, if any, and if they could have “reasonably interpret[ed] the plan terms not to require exhaustion,” the Court will deny the motion to dismiss as to exhaustion. See Kirkendall, 707 F.3d at 181.
    Ultimately, the court removed the employer as a party to the case, and allowed the other claims to proceed. The full opinion is attached below.

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