United States District Court, W.D. North Carolina, Statesville Division
ORDER AND MEMORANDUM
RICHARD L. VOORHEES, District Judge.
THIS MATTER comes before the Court on Defendant's Motion to Dismiss for Failure to State a Claim pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. 5).
I. PROCEDURAL AND BACKGROUND FACTS
Defendant Hartford Life and Accident Insurance Company ("Hartford") is in the business of administering long-term disability ("LTD") insurance programs as "employee welfare benefit plans" within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"). (Compl., ¶3). ProBuild Holding, Inc. ("ProBuild") contracted with Hartford to provide disability insurance to ProBuild's employees. (Compl., ¶2). Pursuant to the contract, Hartford offered ProBuild employees a standard benefit plan which paid disability benefits for a limited period of time. (Compl., ¶9). Under this standard plan, the employer paid the premiums for disability insurance coverage. Id . Hartford also offered an extended LTD benefit plan in which ProBuild employees could participate at their own individual expense. (Compl., ¶10). The extended LTD benefit plan paid a monthly benefit that was equal to the difference between the disabled employee's monthly salary and the monthly amount of any "Other Income" including Social Security Disability ("SSD") insurance benefits. Id . The extended LTD benefit plan paid the employee through her Social Security retirement age. Id . Plaintiff Tina Wright, a North Carolina resident, was employed by ProBuild as a truss designer. (Compl., ¶7). Plaintiff enrolled in, and paid for, the extended LTD coverage. (Compl., ¶11).
In 2008 Plaintiff developed a MRSA infection that spread to other parts of her body. (Compl., ¶12). Plaintiff was treated with antibiotics but suffered severe side effects from the treatment, including sepsis, osteomyelitis, gastrointestinal symptoms, a mitral valve disorder, bone marrow suppression, migraine headaches, anemia, and degenerative disc disease. Id . Plaintiff has been hospitalized several times with these conditions but her complications have never been fully resolved. Id . In April of 2009, Plaintiff's primary care physician determined that Plaintiff was not strong enough for ordinary activity. (Compl., ¶13).
Hartford began paying Plaintiff long-term disability benefits starting on December 17, 2008. (Compl., ¶15). On July 4, 2010, Hartford notified Plaintiff that it was investigating if she would qualify for benefits after December 17, 2010. (Compl., ¶16). On May 2, 2011, the Social Security Administration, through an Administrative Law Judge, found that Plaintiff had been disabled since June 20, 2008. (Compl., ¶17). Plaintiff alleges that Hartford made payments during the months of March, April, May, June, and July of 2011 in an amount scheduled under the standard disability insurance plan, but made a payment to Plaintiff on July 21, 2011 in an amount scheduled under the extended LTD disability insurance plan. (Compl., ¶¶18, 19) (emphasis added). Plaintiff has not received any payments from Hartford since July 21, 2011. (Compl., ¶20).
On July 27, 2011, Hartford sent Plaintiff a letter notifying her of Hartford's belief that it had overpaid on the policy. (Doc. 5-3 at 2). Hartford demanded for reimbursement from the Plaintiff. Id . Hartford also requested from Plaintiff her Social Security Disability Notice of Award. Id . Hartford sent three similar letters to Plaintiff on March 9, 2012; April 5, 2012; and December 2, 2013. Id . After Plaintiff provided Hartford with her SSD Notice of Award, Hartford recalculated the balance and determined that the overpayment from Plaintiff's disability coverage was $39, 022.34. Id . at 9. Hartford's letter states that "further LTD benefit payments will not be issued until we receive [Plaintiff's] full repayment of the overpayment." Id . Plaintiff does not allege that she has reimbursed Hartford. Hartford contends that it is permitted to withhold LTD benefits under the disability policy until the overpayment is reimbursed. (Doc. 5 at 2).
Hartford's long-term disability policy contains the following language:
We have the right to recover from You any amount that we determine to be an overpayment. You have the obligation to refund to us any such amount... If reimbursement is not made in a timely manner, Hartford Life has the right to:... (2) reduce or offset against any future benefits payable to You or Your survivors.
Doc. 5-2 at 32.
The policy also contains the following language regarding appeals:
On any wholly or partially denied claim, you or your representative must appeal once to the Insurance Company for a full and fair review. You must complete this claim appeal process before you file an action in court. Your appeal request must be in writing and be received by the Insurance Company no later than the expiration of 60 days from the date you received your claim denial.
Doc. 5-2 at 77.
Plaintiff has filed suit against Hartford claiming that Defendant is liable to pay past and future benefits to Plaintiff under 29 U.S.C. § 1132(a)(1)(B). (Compl., ¶3 at 4). Plaintiff further alleges that "Defendant's failure to explain its decision regarding Plaintiff's benefits and Defendant's failure to give ...