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Court Holds Plaintiff’s State Claims Preempted by ERISA and Dismissed Complaint

In Lowe v. Lincoln Nat’l Life Ins. Co., Plaintiff suffered a stroke in May 2016 while working for Diversicare Healthcare Services, Inc. Diversicare provided its employees with long-term disability (LTD) benefits under a policy issued by The Lincoln National Life Insurance Company (Lincoln).

The stroke rendered Plaintiff unable to work. She was initially awarded benefits under the plan from November 6, 2016 to June 6, 2017. Lincoln then notified her that her benefits were terminated. Benefits were reinstated following Plaintiff’s submission of additional records pursuant to her administrative appeal. She then received benefits from June 6, 2017 to December 31, 2017. It appears benefits were again terminated and she again appealed.

While an additional appeal was pending, Plaintiff filed a lawsuit initially alleging five causes of action, but later amended her complaint to add two additional causes of action. The Amended Complaint against Lincoln alleged:

  1. Negligence.
  2. Negligent infliction of emotional distress.
  3. Outrage.
  4. Fraudulent misrepresentation.
  5. Violations of Kentucky’s Consumer Protection Act.
  6. Bad faith.
  7. Violations of Kentucky’s Unfair Claims Settlement Practices Act.

Meanwhile, Lincoln issued a favorable decision for Plaintiff whose benefits were reinstated. She was still receiving monthly benefits from Lincoln as of October 3, 2019, when the United States District Court for the Eastern District of Kentucky, Northern Division, Ashland, issued its decision dismissing Plaintiff’s complaint.

Lincoln’s Motion to Dismiss Under Federal Rule of Civil Procedure Rule 12(b)(6)

Lincoln filed a Motion to Dismiss Plaintiff’s civil lawsuit under Federal Rule of Civil Procedure Rule 12(b)(6) on the grounds that all of Plaintiff’s claims were preempted by the Employment Retirement Income Security Act (ERISA).

The Court first analyzed the standard it was required to apply in order to dismiss a case under Rule 12(b)(6). It concluded that “The Court must determine not whether plaintiff will ultimately prevail but whether the plaintiff is entitled to offer evidence to support his claims.” In doing this, the facts in the complaint must be construed in the light most favorable to the plaintiff. Since the Court concluded the claims were preempted by ERISA, Plaintiff was not entitled to present evidence to support her claims, so the case was dismissed.

ERISA Preemption

The parties agreed that the case was governed by ERISA. The policy referenced in Plaintiff’s Amended Complaint was the group LTD insurance policy issued by Lincoln to Diversicare, Plaintiff’s employer. 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.”

The Court noted that under the provision of 29 U.S.C. section 1132(a)(1)(B), ERISA preemption provides that ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.’ A key inquiry that must be made is “whether the cause of action is based on the terms of the ‘ERISA-regulated employee benefit plan’ itself as opposed to an independent legal duty.”

The Plaintiff argued that her claims “are beyond ERISA’s purview because she asserts violations of duties that are not related to ERISA or the Plan under which she receives benefits.” She relied on one case to support her claim, but that case was not a claim for disability, and did not involve a wrongful denial of disability benefits. The Court found the Plaintiff’s reliance on that case misplaced.

The Court noted that in this case “Plaintiff alleges a panoply of state law claims…” and determined that each of Plaintiff’s claims were based upon “Lincoln’s allegedly wrongful denial of benefits.”

Plaintiff’s own pleadings support this conclusion. She described her claims as arising from Lincoln’s rejection of her claim. She also alleged that Lincoln used unfair and false practices “to deny her long-term disability claim.” The Court then analyzed carefully each cause of action and explained which Sixth Circuit or Supreme Court case it was relying on to determine the specific claim was preempted.

The Court concluded that “As Plaintiff’s own allegations make clear, none of Plaintiff’s claims allege wrongdoing independent of Lincoln’s handling of her claim. Further, Plaintiff does not allege any relationship between Defendants and Plaintiff other than through the policy. This is an ERISA case. Plaintiff’s claims fall squarely within the scope of section 1132(a)(1)(B) and are preempted by ERISA.” The Court then granted Lincoln’s Motion to Dismiss.

If you have a disability claim or are thinking about filing such a claim for either STD or LTD benefits with your disability insurance company, contact one of our attorneys at Dell & Schaefer for a free consultation.

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Questions About Hiring Us

Do you help Lincoln Financial claimants nationwide?

We represent Lincoln Financial clients nationwide and we encourage you to contact us for a FREE immediate phone consultation with one of our experienced disability insurance attorneys.

Can you help with a Lincoln Financial disability insurance policy?

Our disability insurance lawyers help policy holders seeking short or long term disability insurance benefits from Lincoln Financial. We have helped thousands of disability insurance claimants nationwide with monthly disability benefits. With more than 40 years of disability insurance experience we have helped individuals in almost every occupation and we are familiar with the disability income policies offered by Lincoln Financial.

How do you help Lincoln Financial claimants?

Our lawyers help individuals that have either purchased a Lincoln Financial long term disability insurance policy from an insurance company or obtained short or long term disability insurance coverage as a benefit from their employer.

Our experienced lawyers can assist with Lincoln Financial:

  • ERISA and Non-ERISA Appeals of Disability Benefit Denials
  • ERISA and Non-ERISA Disability Benefit Lawsuits
  • Applying For Short or Long Term Disability Benefits
  • Daily Handling & Management of Your Disability Claim
  • Disability Insurance Lump-Sum Buyout or Settlement Negotiations

Do you work in my state?

Yes. We are a national disability insurance law firm that is available to represent you regardless of where you live in the United States. We have partner lawyers in every state and we have filed lawsuits in most federal courts nationwide. Our disability lawyers represent disability claimants at all stages of a claim for disability insurance benefits. There is nothing that our lawyers have not seen in the disability insurance world.

What are your fees?

Since we represent disability insurance claimants at different stages of a disability insurance claim we offer a variety of different fee options. We understand that claimants living on disability insurance benefits have a limited source of income; therefore we always try to work with the claimant to make our attorney fees as affordable as possible.

The three available fee options are a contingency fee agreement (no attorney fee or cost unless we make a recovery), hourly fee or fixed flat rate.

In every case we provide each client with a written fee agreement detailing the terms and conditions. We always offer a free initial phone consultation and we appreciate the opportunity to work with you in obtaining payment of your disability insurance benefits.

Do I have to come to your office to work with your law firm?

No. For purposes of efficiency and to reduce expenses for our clients we have found that 99% of our clients prefer to communicate via telephone, e-mail, fax, GoToMeeting.com sessions, or Skype. If you prefer an initial in-person meeting please let us know. A disability company will never require you to come to their office and similarly we are set up so that we handle your entire claim without the need for you to come to our office.

How can I contact you?

When you call us during normal business hours you will immediately speak with a disability attorney. We can be reached at 800-682-8331 or by email. Lawyer and staff must return all client calls same day. Client emails are usually replied to within the same business day and seem to be the preferred and most efficient method of communication for most clients.

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Anthony M.

My experience with Mr. Dell and all of the staff working at the practice has been an excellent experience. Planning to make a claim for disability with a private insurance company can be very intimidating for the average person. Mr. Dell is professional and sharp, just what I was looking for in an attorney to represent my case. He walked me through every step and helped me make the best application for benefits. There were absolutely no surprises while applying for my benefits as we were both well prepared for any questions that could arise during the process. Mr. Dell was able to work with me and my physicians to make sure the application was thorough and complete. No mistakes were made along the way and my benefits were approved without any problems whatsoever. I will truly be grateful for Mr. Dell for the rest of my life.

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