United States District Court, D. Maryland
DOUGLAS SLOAN, Individually, and as Personal Representative of the Estate of Susan Sloan Plaintiff,
LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant/Cross-Claim Defendant and PRA HEALTH SCIENCES, INC., Defendant/Cross-Claim Plaintiff
P. Gesner Chief United States Magistrate Judge.
pending before the court are defendant/cross-claim defendant
Life Insurance Company of North America’s
(“LINA”) Motion to Dismiss Cross-Claim
(“Motion to Dismiss”) (ECF No. 27),
defendant/cross-claim plaintiff PRA Health Sciences,
Inc.’s (“PRA”) Opposition to Motion to
Dismiss (ECF No. 28), and LINA’s Response to
PRA’s Opposition to Motion to Dismiss (ECF No. 30). The
issues are fully briefed, and no hearing is necessary. Loc.
R. 105.6. For the reasons stated below, LINA’s Motion
to Dismiss (ECF No. 27) is denied.
Employee Retirement Income Security Act of 1974
(“ERISA”) case, plaintiff asserts a claim against
PRA and LINA for benefits from a life insurance policy (LINA
and PRA hereinafter referred to collectively as
“defendants”). (ECF No. 19 at ¶¶
36–39). Plaintiff filed this lawsuit individually and
as personal representative of the estate of his deceased
wife, Susan Sloan. According to the Amended Complaint, Ms.
Sloan was employed by PRA and participated in Group Life
Insurance Policy No. FLX 963879 (the “Policy”)
which provided life insurance benefits under an employee
benefit plan (the “Plan”) established by PRA for
its employees. (Id. at ¶ 14). LINA issued the
Policy and PRA served as the Plan administrator.
(Id. at ¶¶ 14, 20).
the Policy, Ms. Sloan elected life insurance coverage in the
amount of $360, 000 and named Plaintiff as the beneficiary.
(Id. at ¶ 14). The Policy provided a conversion
privilege wherein Ms. Sloan had the right to convert coverage
under the Policy into an individual life insurance policy if
coverage under the Policy was terminated. (Id. at
¶ 24). To obtain conversion insurance, the Policy
required Ms. Sloan to submit an application within 31 days of
termination of coverage under the Policy, which would be
extended by 15 days, up to a maximum of 90 days, if Ms. Sloan
was not notified of this right at least 15 days prior to the
end of the conversion period. (Id.)
Sloan’s life insurance coverage under the Policy
continued through September 30, 2016. (Id. at ¶
20). After this date, however, PRA stopped its payment of
Policy premiums and coverage terminated on October 1, 2016.
(Id.) Ms. Sloan died on December 1, 2016.
(Id. at ¶ 16). In January 2017, Plaintiff
submitted a claim for life insurance benefits under the
Policy. (Id. at ¶ 17). LINA denied
plaintiff’s claim and plaintiff’s subsequent
appeal on the grounds that PRA had stopped payment of
premiums, and because Ms. Sloan had not converted coverage
into an individual policy, her participation in the Policy
terminated prior to her death. (Id. at ¶¶
5, 17). Plaintiff alleges that either or both defendants were
required to provide Ms. Sloan with written notice of
PRA’s intention to stop payment of premiums and of Ms.
Sloan’s right to convert the Policy into an individual
life insurance policy with LINA. (Id. at ¶ 4).
Plaintiff further alleges that neither of these notices were
provided by defendants, which resulted in Plaintiff’s
loss of $360, 000 in life insurance benefits. (Id.
at ¶¶ 25, 31, 40).
filed a cross-claim against LINA seeking indemnification and
contribution from LINA under ERISA federal common law. (ECF
No. 22). PRA asserts that it was the Plan Sponsor and Plan
Administrator of the Plan in which Ms. Sloan participated.
(Id. at ¶¶ 5, 9). PRA contends that in
this role, it appointed LINA as the named fiduciary for
adjudicating claims for benefits under the Plan and for
deciding any appeals of denied claims. (Id. at
¶ 7). As such, should PRA be found liable for any of the
remedies requested by plaintiff, PRA seeks indemnification
from LINA, alleging that the acts of LINA resulted in the
alleged damages to plaintiff. (Id. at ¶ 22).
Further, PRA seeks contribution from LINA to the extent LINA
is found liable to plaintiff. (Id. at ¶ 27).
LINA has filed the instant Motion to Dismiss PRA’s
cross-claim. (ECF No. 27).
STANDARD OF REVIEW
purpose of a motion to dismiss for failure to state a claim
under Federal Rule of Civil Procedure 12(b)(6) is to test the
legal sufficiency of a complaint. Edwards v. City of
Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). When
ruling on such a motion, the court must “accept all
well-pleaded allegations in the plaintiff’s complaint
as true” and “draw all reasonable factual
inferences from those facts in the plaintiff’s
favor.” Id. at 244. Nonetheless, “[t]he
mere recital of elements of a cause of action, supported only
by conclusory statements, is not sufficient to survive a
motion made pursuant to Rule 12(b)(6).” Walters v.
McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citing
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
Rather, “a complaint must contain sufficient factual
matter . . . to state a claim to relief that is plausible on
its face.” Ashcroft, 556 U.S. at 678 (internal
citation and quotation marks omitted). A plaintiff satisfies
this standard not by forecasting evidence sufficient to prove
the elements of the claim, but by alleging sufficient facts
to establish those elements. Walters, 684 F.3d at
439. Accordingly, “while a plaintiff does not need to
demonstrate in a complaint that the right to relief is
‘probable, ’ the complaint must advance the
plaintiff’s claim ‘across the line from
conceivable to plausible.’” Id. (citing
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
asserts two grounds for dismissal of PRA’s cross-claim
for indemnification and contribution under ERISA federal
common law. (ECF No. 27 at 1). First, LINA argues there is no
right of indemnification or contribution among ERISA
fiduciaries. (Id.) Second, LINA argues that, even if
there is a right to indemnification or contribution, LINA is
not a co-fiduciary with respect to the notification duties at
issue in the Amended Complaint or proposed Second Amended
Right of Indemnification or Contribution Under
cross-claim asserts claims for indemnification and
contribution against LINA under federal common law. (ECF No.
22 at 10–11). LINA urges the Court to dismiss this
claim, arguing that the “Fourth Circuit . . . has never
recognized a federal common law right of indemnification or
contribution among ERISA fiduciaries.” (ECF No. 27-1 at
5). Although the Fourth Circuit has not yet decided this
issue, there is a split among the Circuit Courts on this
issue. The Second and Seventh Circuits have found a right of
indemnification or contribution exists under federal common
law, while the Eighth and Ninth Circuits have not.
Compare Chemung Canal Tr. Co. v. Sovran
Bank/Maryland, 939 F.2d 12, 18 (2d Cir. 1991) (holding
that it is “appropriate” to “incorporat[e]
traditional trust law’s doctrine of contribution and
indemnity into the law of ERISA”), and Chesemore v.
Fenkell, 829 F.3d 803, 813 (7th Cir. 2016) (finding that
“indemnification and contribution are available
equitable remedies under [ERISA]”), with
Travelers Cas. & Sur. Co. of Am. v. IADA Servs.,
Inc., 497 F.3d 862, 867 (8th Cir. 2007) (concluding that
“ERISA does not create a right of contribution for
[ERISA fiduciary] against . . . another fiduciary”),
and Kim v. Fujikawa, 871 F.2d 1427, 1432 (9th Cir.
1989) (rejecting the “contention that Congress
implicitly intended to allow a cause of action for
contribution under ERISA”).
recently, Chief Judge Bredar of this Court has recognized a
right of contribution and indemnification among ERISA
fiduciaries, noting that the Court found “more
persuasive the rationale of courts that allow a claim for
contribution.” Perez v. Silva, No.
15-CV-3484-JKB, 2017 WL 713759, at *3 (D. Md. Feb. 23, 2017).
I am persuaded by the reasoning of the Perez court,
as well as the analysis of the other courts which have
recognized a federal common law right of indemnification or
contribution among ERISA fiduciaries. ...