United States District Court, M.D. North Carolina
MEMORANDUM OPINION AND ORDER
WILLIAM L. OSTEEN, Jr., District Judge.
Plaintiff Phonephet Nguyen ("Plaintiff") filed the present action in the General Court of Justice, Superior Court Division, Guilford County, North Carolina, against Defendant American United Life Insurance Company ("Defendant"). Defendant removed the action to this court on August 14, 2014, based on both federal question and diversity jurisdiction. (Pet. for Removal (Doc. 1).) Presently before this court is Defendant's Motion to Dismiss (Doc. 8). This court has carefully considered Defendant's Motion, Defendant's Supporting Brief (Def.'s Br. (Doc. 9)), Plaintiff's Response (Pl.'s Resp. (Doc. 10)), and Defendant's Reply (Def.'s Reply (Doc. 11)), and concludes that Plaintiff's Complaint asserts only state law claims which are preempted by the Employee Retirement Security Act of 1974 ("ERISA"). Defendant's motion is now ripe for adjudication, and for the reasons stated fully below, this court will grant Defendant's motion in part and grant Plaintiff's request for leave to amend her complaint.
Plaintiff's mother was employed by Medi Manufacturing, Inc. ("Medi") in Whitsett, North Carolina. (Complaint ("Compl.") (Doc. 5) ¶ 6.) Medi offered life insurance to its employees through Defendant as an employee benefit. (Id. ¶ 7.) Plaintiff's mother purchased this life insurance and premiums were deducted from Plaintiff's mother's paycheck. (Id. ¶ 8.) Plaintiff is beneficiary of this policy. (Id. ¶ 9.) Plaintiff's mother, as the insured party, was able to apply for a conversion from the group policy to an individual life insurance plan within thirty-one days of termination of employment. (Id.)
Plaintiff's mother's last day of work (her termination of employment) for Employer was October 31, 2013. (Id. ¶ 12.) Defendant received Plaintiff's mother's conversion application on November 27, 2013, within the thirty-one days allowed to apply for conversion. (Id. ¶ 13.) Defendant denied the application based on timeliness stemming from Medi reporting to Defendant a termination date of October 7, 2013. (Id. ¶ 14.) Medi mailed a letter to Defendant on January 14, 2014, in an attempt to correct the error in date of termination. (Id. ¶ 15.) Plaintiff's mother passed away on January 24, 2014. (Id. ¶ 17.) To date, Defendant has not corrected the termination date. Plaintiff filed this action in an effort to force Defendant to correct the application error, effectuate the life insurance policy, and pay the death benefit. (Id. at 3.) Plaintiff alleges Defendant's actions in failing to correct the date on the life insurance application constitute breach of contract and unfair and deceptive trade practices. (Id. ¶ 29.)
II. LEGAL STANDARD
"To survive a motion to dismiss, a complaint must 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 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible provided the plaintiff provides enough factual content to enable the court to reasonably infer that the defendant is liable for the misconduct alleged. Id. The pleading setting forth the claim must be "liberally construed" in the light most favorable to the non-moving party, and allegations made therein are taken as true. Jenkins v. McKeithen, 395 U.S. 411, 421 (1969). However, the "requirement of liberal construction does not mean that the court can ignore a clear failure in the pleadings to allege any facts [that] set forth a claim." Estate of Williams-Moore v. Alliance One Receivables Mgmt., Inc., 335 F.Supp.2d 636, 646 (M.D. N.C. 2004).
In ERISA litigation, the law is clear that a state law claim that is completely preempted by ERISA does state a claim upon which relief can be granted.
[T]he doctrine of complete preemption serves as a corollary to the well-pleaded complaint rule: because the state claims in the complaint are converted into federal claims, the federal claims appear on the face of the complaint. The Supreme Court has determined that ERISA's civil enforcement provision, § 502(a), completely preempts state law claims that come within its scope and converts these state claims into federal claims under § 502. Thus, when a complaint contains state law claims that fit within the scope of ERISA's § 502 civil enforcement provision, those claims are converted into federal claims, and the action can be removed to federal court.
Darcangelo v. Verizon Commc'ns, Inc., 292 F.3d 181, 187 (4th Cir. 2002)(internal citations omitted).
Congress enacted ERISA to provide a uniform federal regulatory regime over employee benefit plans. Aetna Health Inc. v. Davila 542 U.S. 200, 208 (2004). To ensure such uniformity, Congress included an expansive preemption provision within ERISA. Id. Specifically, Congress enacted that ERISA "shall supercede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan...." 29 U.S.C. ¶ 1144(a). In addition, the United States Supreme Court and the Fourth Circuit have consistently held that common law claims stemming from employee benefit claims are preempted by ERISA.
Under ERISA, a civil action may ...