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Baker v. Colonial Life & Accident Insurance Co.

United States District Court, W.D. Washington, Seattle

April 30, 2014

LINDA K. BAKER, Plaintiff,


JAMES L. ROBART, District Judge.


Before the court is Defendant Colonial Life & Accident Insurance Co.'s ("Colonial Life") motion to dismiss Plaintiff Linda K. Baker's state law claims pursuant to Federal Rule of Civil Procedure 12(c). ( See generally Mot. (Dkt. # 9).) The court converts Colonial Life's motion to dismiss into a motion for summary judgment pursuant to Rule 12(d) because both parties present to the court matters outside the pleadings. See Fed.R.Civ.P. 12(d); ( see generally Mot.; Resp. (Dkt. # 13); Reply (Dkt. # 19)). Having considered the submissions of the parties, the balance of the record, and the relevant law, and considering itself fully advised, the court DENIES Colonial Life's motion without prejudice to raising the arguments made therein in a later motion.


This is a case about insurance benefits. Ms. Baker is insured by Colonial Life under Colonial Life & Accident Insurance Company, Policy No. "4 3766-569 80 Linda." (Compl. (Dkt. # 1-2) ¶¶ 35, 36.) Ms. Baker was diagnosed with cancer in November 2012, which triggered her benefits under the policy. ( Id. ¶ 38.) Ms. Baker submitted a claim for her loss ( id. ¶ 39), but she alleges that Colonial Life has unreasonably failed to pay her the benefits owed under the policy. ( Id. ¶ 45.) While Colonial Life has paid some benefits, Ms. Baker alleges that not all claims have been paid. ( Id. ¶ 41.) Ms. Baker claims that she has invested a significant amount of time on this insurance claim because of Colonial Life's failure to investigate and failure to pay, and that the process has taken an emotional and financial toll on her. ( Id. ¶ 48.) Ms. Baker filed this complaint in King County Superior Court, alleging claims for breach of contract, bad faith, negligent claims handling, constructive fraud, violations of unfair claim handling regulations, and claims under Washington's Insurance Fair Conduct Act and the Consumer Protection Act. ( See generally Compl.)

Colonial Life removed the case to federal court. ( See Not. of Removal (Dkt. # 1) at 1.) Colonial Life asserts that the court has federal question jurisdiction under 28 U.S.C. § 1331 because Ms. Baker's complaint seeks benefits under an insurance policy that is part of an "employee welfare benefit plan" governed by the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. ("ERISA"). ( Id. at 2.) Colonial Life also asserts that diversity of citizenship under 28 U.S.C. § 1332 exists because Ms. Baker is a Washington citizen, Colonial Life is a citizen of the State of South Carolina, and the amount in controversy exceeds $75, 000.00. ( Id. at 9-10.)

In its motion, Colonial Life argues that Ms. Baker's state law claims are preempted because her claims all "relate to" a policy regulated by ERISA. (Mot. at 1.) Colonial Life contends that Ms. Baker's policy does not satisfy the four requirements of the Department of Labor's "safe harbor" regulation that excludes certain group insurance plans from ERISA's definition of an "employee welfare benefit plan." ( Id. at 6.) Colonial Life asserts that, therefore, Ms. Baker's policy is an ERISA plan, and her state law claims should be dismissed because ERISA provides the exclusive remedy for such claims. ( Id. at 1.) In making its arguments, Colonial Life relies on exhibits and declarations submitted with its notice of removal and with Ms. Baker's response to Colonial Life's motion to dismiss. ( See generally Mot.; Reply.)

Ms. Baker responds that her Colonial Life policy meets the requirements of the safe harbor. (Resp. at 10.) She states that her employer, Keller Rohrback, makes no contributions to the Colonial Life insurance premiums; that employee participation in the Colonial Life plan is completely voluntary; that Keller Rohrback does not endorse the Colonial Life program; and that Keller Rohrback does not receive consideration in connection with the program. ( Id. at 1-2.) Ms. Baker submits two declarations and multiple exhibits to support these assertions. ( See generally Resp.; Peaquin Decl. (Dkt # 14); Baker Decl. (Dkt # 15).) Ms. Baker contends that because the Colonial Life policy falls under the safe harbor, the policy is not an employee benefit plan under ERISA and therefore ERISA does not preempt her state law claims. (Resp. at 10.)


A. Judgment on the Pleadings Standard

Colonial Life moves to dismiss Ms. Baker's claims pursuant to Rule 12(c). ( See generally Mot.) Under Rule 12(c), "[a]fter the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings." Fed.R.Civ.P. 12(c). Judgment on the pleadings "is properly granted when, taking all the allegations in the pleadings as true, a party is entitled to judgment as a matter of law." Lyon v. Chase Bank USA, N.A., 656 F.3d 877, 883 (9th Cir. 2011). The court evaluates a Rule 12(c) motion for judgment on the pleadings under the same standard as a Rule 12(b)(6) motion to dismiss. Dworkin v. Hustler Magazine Inc., 867 F.2d 1188, 1192 (9th Cir. 1989). When ruling on a motion to dismiss, a court may consider the pleadings, documents attached to the pleadings, documents incorporated by reference in the pleadings, and matters of judicial notice. United States v. Ritchie, 342 F.3d 903, 907-08 (9th Cir. 2003). However, "[i]f, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56." Fed.R.Civ.P. 12(d). "All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion." Id.

B. Colonial Life's Motion to Dismiss and Ms. Baker's Response

Here, it is appropriate to convert Colonial Life's motion into a motion for summary judgment. Both parties rely extensively on declarations and exhibits outside of the pleadings to supply facts supporting their positions. ( See generally Mot.; Resp.; Reply.) In its motion to dismiss, Colonial Life cites a Form 5500, a Plan Administrator Membership Form, selected billing statements, and an email. (Mot. at 4-6.) These documents are contained in exhibits attached to the declaration of Joel Newman, which Colonial Life submitted in support of its notice of removal. ( See Newman Decl. (Dkt. # 3).) Ms. Baker submits two declarations with attached exhibits with her response ( see Peaquin Decl.; Baker Decl.) and cites to these declarations, invoices, and an email throughout the response. ( See generally Resp.) Colonial Life's reply further cites declarations, forms, invoices, and an email-all presented outside the pleadings. ( See generally Reply.) Rule 12(d) requires the court to convert Colonial Life's Rule 12(c) motion to dismiss into a motion for summary judgment in order to consider these extraneous materials. Fed.R.Civ.P. 12(d).

Rule 12(d) also demands that the parties be given a reasonable opportunity to present all material pertinent to the motion. Id. Satisfying this "reasonable opportunity" requirement does not mandate formal notice, but instead requires that the parties be "fairly apprised that the court [will] look beyond the pleadings" and transform the motion to dismiss into a motion for summary judgment. Olsen v. Idaho State Bd. of Medicine, 363 F.3d 916, 922 (9th Cir. 2004) (quoting Garaux v. Pulley, 793 F.2d 437, 439 (9th Cir. 1984)). "[A] represented party who submits matters outside the pleadings to the judge and invites consideration of them has notice that the judge may use them to decide a motion originally noted as a motion to dismiss, requiring its transformation to a motion for summary judgment.'" Olsen, 363 F.3d at 922 (quoting San Pedro Hotel Co. v. City of L.A., 159 F.3d 470, 477 (9th Cir. 1998)). Here, the parties have sufficient notice that the court will convert Colonial Life's motion to dismiss into a motion for summary judgment because both parties present and rely on extraneous material. See id. at 922 (finding a party had sufficient notice of the district ...

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