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Malbrough v. Kanawha Insurance Co.

United States District Court, W.D. Louisiana, Lake Charles Division

November 17, 2014

CARMEN MALBROUGH & LIONEL SIMON, Plaintiffs,
v.
KANAWHA INSURANCE COMPANY & GILCHRIST CONSTRUCTION COMPANY, L.L.C., Defendants.

MEMORANDUM RULING

PATRICIA MINALDI, District Judge.

Before the court is a Motion to Dismiss [Doc. 85] pursuant to Federal Rule of Civil Procedure 12(b)(6), filed by the defendant, Willis of Louisiana, Inc. ("Willis"), to which the plaintiffs have filed an Opposition [Doc. 91], and the defendants have filed a Reply [Doc. 97], to which the plaintiffs have filed a Supplemental Memorandum [Doc. 106]. For the following reasons, the Motion [Doc. 85] be and hereby is GRANTED.

FACTS & PROCEDURAL HISTORY

In December of 2009, Ronald Simon ("the decedent") selected Life Insurance and Accidental Death Dismemberment Insurance through a website set up by one of the defendants, Gilchrist Construction Company, LLC ("Gilchrist").[1] Gilchrist had previously hired defendant, Willis of Louisiana, Inc. ("Willis"), to act as a broker and gather information about available group insurance policies for Gilchrist.[2] Using quotes received from various insurers, Willis prepared a proposal summary chart, and a quote from defendant Kanawha Insurance Company ("Kanawha") was included in the Willis proposal summary chart.[3]

The written quote that Kanawha gave to Willis contained a five (5) times salary limitation on Life and Accidental Death and Dismemberment insurance.[4] However, Willis failed to include this limitation in the proposal summary that Willis prepared for Gilchrist.[5] Using the Willis proposal summary, Gilchrist set up a website for selecting coverage through Kanawha that did not include the five times salary limitation.[6] It was this website that the decedent used to select his insurance coverage.[7]

Willis took no action, either in writing or verbally, to correct the mistake contained in the proposal summary chart provided to Gilchrist.[8] Neither Gilchrist nor Kanawha ensured that the salary limitation was imposed on the computer program used by Gilchrist employees, including the decedent, to select coverage.[9] The decedent made approximately $30, 000 per year but was ultimately able to purchase $350, 000 in total Life Insurance and $350, 000 total in Accidental Death Insurance through Gilchrist's website.[10]

On December 21, 2010, the decedent died after being backed over by a bulldozer.[11] After the decedent's death, the plaintiffs filed their claims as beneficiaries under both the Life and Accidental Death and Dismemberment policies.[12] Kanawha paid $300, 000 to the beneficiaries but then refused to make any other payments; a denial of benefits was issued on May 27, 2011.[13]

On September 15, 2011, the plaintiffs filed suit against Gilchrist and Kanawha in the Thirty-First District Court for the Parish of Jefferson Davis.[14] The case was thereafter removed to this court under 28 U.S.C. ยง 1331, federal question jurisdiction.[15] Willis was added as a defendant in this matter in the plaintiffs' Third Supplemental and Amending Petition for Damages [Doc. 73] on March 26, 2014. Willis then filed the instant Motion to Dismiss [Doc. 85] on May 22, 2014. In the Motion, Willis argues that the plaintiffs' suit is untimely.[16]

LAW & ANALYSIS

Motions to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure seek the dismissal of an action for failure to state a claim and challenge the sufficiency of a plaintiff's allegations. See Fed. R. Civ. Pro. 12(b)(6). The Fifth Circuit has stated that motions to dismiss are generally viewed with disfavor and should rarely be granted. Harrington v. State Farm Fire & Cas. Co., 563 F.3d 141, 147 (5th Cir. 2009) (citing Gregson v. Zurich Am. Ins. Co., 322 F.3d 883, 885 (5th Cir. 2003) (additional citations omitted)).

In ruling on motions to dismiss under Rule 12(b)(6), courts "must consider the complaint in its entirety, as well as other sources courts ordinarily examine... in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice." Jackson v. NAACP, No. 12-20399, 2013 U.S.App. LEXIS 20493, at *9 (5th Cir. Oct. 8, 2013) (citing Funk v. Stryker Corp., 631 F.3d 777, 783 (5th Cir. 2011) (additional citation omitted)). "The court must accept all well-pleaded facts as true, and it must view them in the light most favorable to the plaintiff." Herbert v. Delta Airlines, Inc., No. 11-cv-1574, 2012 U.S. Dist. LEXIS 93848, at *6 (W.D. La. Jun. 5, 2012) (citing In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007) (citations omitted)). However, conclusory allegations are not to be accepted as true, and courts "are not bound to accept as true a legal conclusion couched as a factual conclusion." Id. (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted)).

A plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. The allegations must "raise the right to relief above the speculative level." Id. at 555. "Determining whether a complaint states a plausible claim for relief... [is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009).

I. Whether the Plaintiffs' Claim Against Willis Is Preempted by ERISA

Willis asserts that the plaintiff's claim is not preempted by ERISA and therefore subject to Louisiana's three-year peremptive period for such claims.[17] The plaintiffs argue that the claim against Willis is preempted by ERISA, and as such, ...


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