United States District Court, D. Delaware
John S. Spadaro, Esquire of John Sheehan Spadaro, LLC, Hockessin, Delaware, Counsel for Plaintiff.
John D. Demmy, Esquire of Stevens & Lee, P.C., Wilmington, Delaware and E. Thomas Henefer of Stevens & Lee, P.C., Reading, Pennsylvania, Counsel for Defendants.
Sue L. Robinson, District Judge.
On August 14, 2013, plaintiff Karen Friedland (" plaintiff" ) filed a complaint against Unum Group (" Unum" ) and its wholly owned subsidiary, Unum Life Insurance Company of America (" Unum Life" ) (collectively " defendants" ), to challenge Unum Life's denial of her claim for ongoing disability benefits under a long-term disability plan tat is regulated by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § § 1001-1461 (" ERISA" ). (D.I. 1) Plaintiff asserts three causes of action: (1) claim for benefits under ERISA § 502(a)(1)(B); (2) common law fraud; and (3) violation of the Federal Racketeer Influenced and Corrupt Organizations Act (" RICO" ), 18 U.S.C. § 1961 et. seq., particularly § § 1962(c) and (d). (D.I. 1 at ¶ ¶ 42-43, 45-47, 48-51) Plaintiff seeks payment of benefits past due and of future benefits to age 65 discounted to present value, economic losses caused by her loss of her position at Gettysburg College, treble damages under RICO, and attorney fees and costs. ( Id. at 28, ¶ ¶ a--h)
Currently before the court is defendants' motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) alleging that: (1) plaintiff's ERISA claim is time barred by the Delaware statute of limitations or, in the alternative, plaintiff cannot recover future benefits under § 1132(a)(1)(B); (2) plaintiff's common law fraud claim is preempted by ERISA; and (3) plaintiff's RICO claim fails to state a claim for relief. (D.I. 7) This court has jurisdiction pursuant to 28 U.S.C. § § 1331, 1332, and 1367(a).
Plaintiff is a Pennsylvania resident and former employee of The Johns Hopkins University, where she was insured against disability pursuant to an employee benefit plan issued by defendants and governed by ERISA. (D.I. 1 at ¶ ¶ 1-3) In 1994, plaintiff left her job at Johns Hopkins after she was hospitalized as a result of falling down a flight of steps. ( Id. at ¶ 10) Defendants agreed that plaintiff was totally disabled, and paid her full disability benefits for about two years until 1996, when plaintiff notified defendants that she would attempt to work part-time as an instructor in the theater department at Carroll Community College. ( Id. ) Early into her part-time work, defendants examined and tested plaintiff's capacity to work. ( Id. at ¶ 12) On May 18, 1999, defendants concluded that plaintiff's restrictions and limitations were permanent, as confirmed by an independent medical examination and functional capacity evaluation. ( Id. ) Defendants concluded that plaintiff suffered from permanent partial disability. ( Id. )
In the spring of 2007, plaintiff notified defendants of her employment contract with Gettysburg College for the 2007-2008 school year, whereby she would receive 7.5 hours per week of class time and $50,000 in salary for the school year. ( Id. at ¶ 13) After acknowledging receipt of plaintiff's employment contract, defendants determined that plaintiff was still eligible for benefits under her disability plan. ( Id. at ¶ 14) On January 15, 2010, defendants notified plaintiff that her condition had
improved to the point that she was able to work full time, and subsequently discontinued her benefits. ( Id. )
Plaintiff claims that the discontinuance of her benefits did not result from new medical evidence, but instead from an illegal policy and scheme to reduce expensive payouts, whereby defendants conducted their evaluation of plaintiff's entitlement to benefits through unethical and fraudulent insurance claim-processing standards. ( Id. at ¶ 19) In exchange for substantial insurance premiums, plaintiff claims that she and others similarly situated relied to their detriment upon the promises ...