MITCHELL S. GOLDBERG, District Judge.
Plaintiff William Hansel brings claims under the civil enforcement provision of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B), against Defendants Aetna Life Insurance Company ("Aetna") and Lincoln National Life Insurance Company ("Lincoln"), seeking disability benefits under an employee benefits plan. Aetna has moved to dismiss Plaintiff's Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.
The Amended Complaint sets forth the following facts:
From December 1, 2015 until mid-2016, Plaintiff was an employee of Anexinet Corporation ("Anexinet"), who provided Plaintiff with a disability insurance plan governed by ERISA and sponsored by third-party insurers. Lincoln was the plan's sponsor prior to March 1, 2016, and Aetna sponsored it from March 1 onward. The terms of the Aetna policy are described in a "Booklet-Certificate" that Plaintiff attached to his Amended Complaint.
On February 26, 2016, Plaintiff alleges that he "went out of work with severe anxiety and depression, and exacerbation of his bi-polar disorder." He "was non-functional to the point of not being able to leave his home." On March 4, 2016, Plaintiff was admitted to a treatment center. Since then, Plaintiff has been under the ongoing supervision of a physician. At the time Plaintiff filed his Complaint, he was still unable to work. (
On March 4, 2016, Plaintiff applied to Aetna for short-term disability benefits. Aetna denied coverage because it concluded that Plaintiff's disability started on February 26, 2016— the day of his first absence from work—four days before the Aetna coverage period began on March 1, 2016. Plaintiff then applied to Lincoln, which also denied coverage, based on, among other reasons, its conclusion that Plaintiff's disability did not begin until March 4, 2016, the date Plaintiff first sought treatment. This date was four days after the Lincoln coverage period ended on February 29, 2016. (
Plaintiff did not apply to either Lincoln or Aetna for long-term disability benefits. Under both insurer's policies, a participant is not eligible for long-term disability before exhausting short-term disability. Plaintiff alleges that, given both insurers' positions that he was not eligible for short-term disability, applying for long-term disability would have been futile. (
Plaintiff filed suit in this Court on August 31, 2017, seeking an award of short-term and long-term disability benefits from both insurers, a declaration of his future right to receive long-term disability benefits, and attorney's fees and costs. (
To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint must "contain sufficient factual matter, accepted as true, to `state a claim for relief that is plausible on its face.'"
ERISA permits a plan beneficiary to bring an action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). To succeed in such an action, a plaintiff must show that he was owed benefits under the plan and that benefits were wrongly denied.
Aetna argues that Plaintiff has not plausibly alleged an entitlement to relief because the undisputed facts show that: (a) Plaintiff's disability began before the start of the Aetna policy, putting it outside the policy's coverage; (b) even if Plaintiff was not disabled before the start of the policy, his absence from work delayed coverage until after he became disabled; and (c) Plaintiff has not plausibly alleged that exhaustion of administrative remedies for long-term disability benefits would be futile.
Aetna first argues that it is undisputed that Plaintiff's disability began on February 26, 2016, putting the disability outside of Aetna's coverage period, which did not start until March 1, 2016. Plaintiff counters that the first date on which his condition met the definition of a "disability" under the policy is a factual issue that cannot be resolved on a motion to dismiss.
Plaintiff and Aetna both rely on the Booklet-Certificate for the definition of a covered "disability." (Am. Compl., Ex. D.) The Booklet-Certificate defines a disability as being "not able [to] perform the material duties of your own occupation because of an illness or injury." (
Although the Amended Complaint raises a possible inference that Plaintiff became disabled on February 26, 2016, that is not the only inference that can be drawn from these facts. Plaintiff was not treated until March 4, 2016, and Lincoln determined that his disability did not begin until that date. (Am. Compl. ¶¶ 19, 29, 32.) Additionally, Plaintiff's Social Security disability began on March 4, 2016. (
When more than one inference can be drawn from a pleading, it is premature to resolve the conflict on a motion to dismiss.
Next, Aetna argues that even if Plaintiff was not disabled on February 26, 2016, it is at least undisputed that he was not at work from that date forward. This fact, according to Aetna, delayed the effective start date of coverage as specified in the Booklet-Certificate's "Active Work Rule," so that Plaintiff would not have been covered on the date he became disabled. The "Active Work Rule" operates to delay coverage if an employee is "ill or injured and away from work on the date [the employee's] coverage would take effect." (Am. Compl., Ex. D at AETNA 00235.)
Plaintiff, both in his Amended Complaint and in his Response to Aetna's Motion, counters that because the Aetna policy replaced prior coverage under which Plaintiff was already "actively at work," he was automatically "actively at work" under the Aetna policy despite not being physically present in the office. Plaintiff points to language in the Booklet-Certificate stating that Aetna's coverage "replaces and supersedes" any prior coverage and that it is "in exchange for everything under such prior coverage." (
Even if it were possible to resolve the meaning of the active-work requirement and the effect of Plaintiff's prior coverage solely from the Amended Complaint and its attachments, the question of whether Plaintiff was, within the meaning of the policy, "ill . . . and away from work" as of March 1, 2016 is a factual dispute that cannot be resolved on a motion to dismiss. The same facts that give rise to an inference that Plaintiff was not disabled on February 26, 2016 also give rise to an inference that he was not "ill" on that date as defined by the policy. In fact, Plaintiff alleges that he was a full-time employee eligible for coverage under the Aetna policy at the time he became disabled. (Am. Compl. ¶¶ 50, 55.) Although this allegation may potentially conflict with his contention that he left work because of disability on February 26, 2016, a motion to dismiss is "not a proper procedural vehicle to resolve conflicting inferences of fact."
Finally, Aetna contends that Plaintiff's claim for long-term disability benefits should be dismissed because Plaintiff did not exhaust administrative remedies by first seeking these benefits from Aetna. Plaintiff concedes that he did not exhaust administrative remedies for long-term disability benefits, but argues that exhaustion is excused because it would be futile. Since Aetna has already decided that Plaintiff's disability is not covered by the policy, Plaintiff argues that it would be unproductive to ask Aetna for yet another uncovered benefit.
"Except in limited circumstances, . . . a federal court will not entertain an ERISA claim unless the plaintiff has exhausted the remedies available under the plan."
Here, Plaintiff applied for short-term disability benefits and was denied. (Am. Compl. ¶¶ 25-26, 43, 56.) According to Plaintiff's allegations, long-term disability benefits are unavailable until he has first completed short-term disability benefits. (
Plaintiff has adequately alleged, for purposes of Rule 12(b)(6) review, that exhaustion would be futile. Whether exhaustion would in fact be futile remains a disputed issue that cannot be decided at this time.
For the foregoing reasons, I find that Plaintiff has pleaded a plausible claim for relief sufficient to withstand a motion to dismiss. Accordingly, Aetna's Motion will be denied.
An appropriate Order follows.