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Estate of Coggins v. Wapato Point Management Co. Health and Welfare Plan

United States District Court, E.D. Washington

April 30, 2014

THE ESTATE OF ORBIE COGGINS, deceased, by and through GAIL COGGINS BROOKS and DUANE COGGINS, as Personal Representatives, Plaintiffs,
v.
WAPATO POINT MANAGEMENT COMPANY HEALTH AND WELFARE PLAN; WAPATO POINT MANAGEMENT COMPANY, INC., as Plan Administrator, Defendants/Third Party Plaintiffs,
v.
LABORERS INTERNATIONAL UNION OF NORTH AMERICA LOCAL 292, a labor organization, Third Party Defendant.

ORDER GRANTING THIRD-PARTY DEFENDANT LIUNA'S MOTION TO DISMISS

ROSANNA MALOUF PETERSON, Chief District Judge.

Before the Court is Third-Party Defendant Laborer's International Union of North America, Local 292 ("LIUNA")'s motion to dismiss for failure to state a claim. ECF No. 8. The underlying cause of action is an alleged breach of fiduciary duties pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et. seq. ECF No. 2-1 at 12. The Court has considered the motion and related documents.

BACKGROUND

The Estate of Orbie Coggins ("Plaintiff") alleges that Defendants Wapato Point Management Health and Welfare Plan and Wapato Point Management Company, Inc. (collectively, "Defendants") breached their fiduciary duties by failing to notify decedent Coggins of the termination of his death benefits coverage. ECF No. 2-1 at 11.

Mr. Coggins participated in a Company Health and Welfare Plan ("Company Plan") that included life insurance coverage of two times an employee's annual salary. ECF Nos. 2-1 at 9-10, 3 at 3. On or about May 1, 2009, LIUNA and Defendant Wapato Point Company reached a Collective Bargaining Agreement ("CBA") that required employees to participate in the Northwest Laborers-Employees Health and Security Trust Fund ("Union Plan"). ECF No. 2-1 at 10. Defendants state that life insurance benefits under the Union Plan were limited to $5, 000. ECF No. 3 at 6. Plaintiff claims, however, that on or about January 21, 2011, Mr. Coggins received a 2010 benefits statement from Defendant Wapato Point Company indicating that he was still paying into the Company Plan for life insurance. ECF No. 2-1 at 10.

Mr. Coggins died on December 16, 2011, and the beneficiaries of his estate sought his life insurance benefits under the Company Plan. ECF No. 2-1 at 10. The life insurance provider indicated that Defendant Wapato Point Company had terminated coverage on May 31, 2009. ECF No. 2-1 at 10. LIUNA filed a grievance that was subject to mediation, which resulted in a settlement check for Plaintiff in the amount of $10, 000. ECF No. 2-1 at 10-11.

Plaintiff claims that Defendants breached their fiduciary duties by failing to provide complete and accurate information regarding the status and termination of Mr. Coggins's insurance coverage. ECF No. 2-1 at 11. This action was removed to this Court from Chelan County Superior Court based on federal question jurisdiction, 28 U.S.C. § 1331. ECF No. 1 at 2.

After removal of the case, Defendants filed a third-party complaint against LIUNA. ECF No. 3. LIUNA is a labor organization as defined by ERISA and was Mr. Coggins's bargaining representative. ECF No. 3 at 8. Defendants claim that LIUNA is liable "[f]or and to the extent defendants/third-party plaintiffs are found liable for a violation of ERISA and/or Section 301." ECF No. 3 at 10.

LIUNA moves for dismissal of the Third-Party Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), contending that Defendants failed to assert any legal basis under federal or state law pursuant to which relief could be granted. ECF No. 8 at 5.

Defendants respond that LIUNA could be liable for breach of an ERISA fiduciary duty and breach of the duty of fair representation under § 301 of the Labor Management Relations Act. ECF No. 15 at 8-12. Defendants further argue that they satisfied any fiduciary duty that they may have owed to union employees and that they were in fact statutorily prohibited from providing additional information about changes to the employees' benefit plan. ECF No. 15 at 12-14.

DISCUSSION

The Federal Rules of Civil Procedure allow for the dismissal of a complaint where the plaintiff fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A motion to dismiss brought pursuant to this Rule "tests the legal sufficiency of a [plaintiff's] claim." Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In reviewing the sufficiency of a complaint, a court accepts all well-pleaded allegations as true and construes those allegations in the light most favorable to the non-moving party. Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010) (citing Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031-32 (9th Cir. 2008)).

To withstand dismissal, a complaint must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To determine plausibility, a court should (1) take note of the elements that a plaintiff must plead to state a claim; and (2) determine whether the factual allegations as asserted in the complaint support that claim. Id. at 679.

While specific legal theories need not be pleaded, the pleadings must put the opposing party on notice of the claim. Fontana v. Haskin, 262 F.3d 871, 877 (9th Cir. 2001) (citing Conley v. Gibson, 355 U.S. 41, 47 (1957)). A plaintiff is not required to establish a probability of success on the merits; however, he or she must demonstrate "more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678. "Naked assertion[s], " "labels and conclusions, " ...


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