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Bufkin v. The Prudential Insurance Company of America

United States District Court, S.D. Mississippi, Northern Division

September 8, 2019

JOANNA M. BUFKIN and MICHAEL S. MCDOWELL PLAINTIFFS
v.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA and JOHN DOES 1-10 DEFENDANTS

          ORDER

          HENRY T. WINGATE UNITED STATES DISTRICT JUDGE

         BEFORE THIS COURT is a Motion to Dismiss [Docket no. 7] filed by Defendant The Prudential Insurance Company of America (hereinafter referred to as “Prudential”). Prudential filed its Motion to Dismiss under Rule 12(b)(6)[1] of the Federal Rules of Civil Procedure, requesting that this Court dismiss Plaintiffs' Complaint [Complaint, Docket no. 2, pp. 4-8] with prejudice. In support of its Motion to Dismiss, Prudential alleges that Plaintiffs' Complaint asserts only state law claims, which are preempted here because, says Prudential, this action must be constructed under the Employee Retirement Income Security Act of 1974[2] (“ERISA”), an enactment authorized by the United States Congress. Accordingly, continues Prudential, the Complaint, sub judice, fails to state any state law claims against Prudential upon which relief can be granted.

         Plaintiffs, Joanna M. Bufkin (“Bufkin”) and Michael S. McDowell (“McDowell”) (hereinafter collectively referred to as “Plaintiffs”), in their Response to Prudential's Motion to Dismiss [Docket no. 9], contend otherwise and deny that their pleading triggers ERISA jurisprudence. Plaintiffs further contend, as a precaution, that if this Court finds their Complaint to be insufficient to survive a Rule 12(b)(6) analysis, this Court should grant Plaintiffs leave to amend their assertions and causes of action.

         For the reasons set forth below, this Court DENIES IN PART and GRANTS IN PART Prudential's Motion to Dismiss [Docket no. 7].

         I. PREAMBLE

         The question presented herein is whether Plaintiffs' state law claims for death benefits under a life-insurance policy issued by Prudential are preempted by ERISA. Plaintiffs allege that their claims are not preempted by ERISA because: (1) the policy of insurance at issue here is not an “employee benefit plan” under ERISA; and (2) Plaintiffs' have alleged state law claims against Prudential based upon state laws which are “saved” from federal preemption.

         II. THE PARTIES

         Bufkin is an adult resident citizen of Hinds County, Mississippi [Compl. ¶1]. Bufkin is a named beneficiary under the life-insurance policy issued by Prudential, which is the subject of this dispute.

         McDowell is an adult resident citizen of Los Angeles County, California [Compl. ¶2]. McDowell, too, is also a named beneficiary under the life insurance policy at issue in this matter.

         Prudential is a foreign corporation doing business in the State of Mississippi and organized under the laws of the State of New Jersey with its principal address in Newark, New Jersey [Compl. ¶3].

         Plaintiffs also name as Defendants, John Does 1-10 (“ John Doe Defendants”) as “persons or entities affiliated with Defendant Prudential and/or have acted in concert with Prudential, whose identities are currently unknown.” [Compl. ¶4]. This Court ignores the “presence” of the John Doe Defendants on any jurisdictional question in this matter. Title 28 U.S.C. § 1441(b)(1)[3] explains: “[i]n determining whether a civil action is removable on the basis of the jurisdiction under section 1332(a) ... the citizenship of defendants sued under fictitious names shall be disregarded.” Chapman v. Kroger Ltd. Partn., 3:11-CV-688 HTW-LRA, 2012 WL 775812, at *2 (S.D.Miss. Mar. 7, 2012).

         III. PROCEDURAL BACKGROUND

         On April 17, 2018, Plaintiffs filed their Complaint against Prudential in the Circuit Court for the First Judicial District of Hinds County, Mississippi, Cause No. 25CI1:18-cv-00218-JAW. Plaintiffs' State Complaint asserted claims against Prudential for: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) negligence; (4) gross negligence; (5) bad faith and tortuous breach of contract; (6) misrepresentation; (7) promissory estoppel; (8) equitable estoppel; and (9) vicarious liability [See generally Compl.].

         On May 17, 2018, Prudential removed this lawsuit from the Circuit Court of Hinds County, Mississippi, to this Court. This Court, said Prudential in its Notice of Removal [Docket no. 1], has jurisdiction over this matter until Title 28 U.S.C. §§ 1332[4], 1441, and 1446[5]

         IV. FACTS

         As alleged beneficiaries of a life-insurance policy issued by Prudential, Plaintiffs brought forth this action to recover death benefits, which Plaintiffs allege were wrongfully denied to them by Prudential. Below is a summary of the pertinent events which led to this lawsuit.

         Mrs. Joanne C. Mohrman (hereinafter referred to as “Mrs. Mohrman” was an employee of Prudential until late 2001 and a participant in Prudential's Employee Benefit Group Plan (hereinafter referred to as “the Group Plan”), which provided Mrs. Mohrman life-insurance coverage with a death benefit amount of $288, 000 [Compl. ¶ 7; See generally Exhibits A-C]. The Group Plan was maintained and administered by Prudential to provide its employees with inter alia, life insurance [See generally Ex. A and Ex. B]. As the “Plan Sponsor” and “Plan Administrator”, Prudential issued the group- insurance coverage, administered the Group Plan, and among other things, supplied claim forms to employees, maintained claims records, processed claims, and determined benefits [Compl. ¶ 7; Exhibit A at pp. 29-30; Exhibit B at p. 36].

         At the end of Mrs. Mohrman's employment with Prudential, Prudential offered Mrs. Mohrman the option to either continue coverage under the Group Plan as a “portable participant” or to covert that coverage into an individual-life policy [Compl. ¶ 7; Exhibit D]. Prudential's Group Universal Life Insurance Option Election Form (“Option Form”) explained to Mrs. Mohrman that “[she] may continue the same amount of coverage that was in force on the last day of [her] active service.” [Compl. ¶ 7; Exhibit D]. at p. 2 ¶ 1]. The Option Form clarifies that “[p]ortable participants are billed quarterly, and are subject to all rate changes that apply to the active participants.” Id.

         Mrs Mohrman elected to continue her insurance coverage under the Group Plan after her employment with Prudential had ended in 2001 [Compl. ¶ 7; Exhibit D][6].

         Plaintiffs' Complaint alleges:

Joanne C. Morhman (Mrs. Mohrman) was the named insured of a universal life insurance policy issued by Prudential [Compl. ¶7].
Mrs. Mohrman…applied for Prudential's Electronic Funds Transfer (“EFT”) payment method to ensure the payment of her insurance premiums [Compl. ¶8].
…Mrs. Mohrman received a notice from Prudential that her EFT application had been processed and would be used to initiate an EFT deduction on her “next payment” [Compl. ¶10].
Mrs. Mohrman reasonably relied on the notice and reasonably believed that the premiums due under her policy would be paid by an EFT reduction [Compl. ¶10].
…Prudential…canceled her insurance policy for failure to pay the premium. Prudential claimed premiums owed had not been paid by EFT deduction [Compl. ¶12].
At all times prior to her death, Mrs. Mohrman was willing and able to pay the policy premiums and believed, in fact, that she had [Compl. ¶13].
Mrs. Mohrman died on April 18, 2015 [Compl. ¶14].
Plaintiffs Joanna M. Bufkin and Michael S. McDowell are the named beneficiaries under the policy and are entitled to the policy's death benefits [Compl. ¶17][7].
On April 30, 2015, the Administrator of Mrs. Mohrman's estate sent a copy of the Death Certificate for Mrs. Mohrman to Prudential requesting that the policy be paid to the beneficiaries [Compl. ¶15].
Prudential denied payment of death benefits under the policy. The stated reason was for nonpayment of premium [Compl. ¶16].
Prudential breached the universal life insurance contract by failing to pay death benefits upon the death of Mrs. Mohrman and the presentment of the beneficiaries' claim [Compl. ¶19].

         Plaintiffs' Complaint does not identify the exact amount of damages sought; rather, Plaintiffs' ...


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