United States District Court, W.D. Washington, Seattle
LINCOLN NATIONAL LIFE INSURANCE COMPANY, Interpleader-Plaintiff,
CLAUDIA RIDGWAY, et al., Defendants.
ORDER DENYING MOTION FOR RECONSIDERATION
RICARDO S. MARTINEZ, CHIEF UNITED STATES DISTRICT JUDGE
MATTER comes before the Court on Interpleader-Plaintiff's
Motion for Partial Reconsideration of this Court's prior
Order allowing Plaintiff to interplead funds in this Court,
but declining to dismiss it from this action. Dkts. #40 and
#41. Plaintiff asserts that this Court “misapprehended
Ridgway's counterclaim and the remedies available under
ERISA. Lincoln National, therefore, respectfully moves the
Court to reconsider its decision, in part, and dismiss
Ridgway's counterclaim.” Dkt. #41 at 2. The Court
directed Defendant Ridgway to file a response to this motion.
Ms. Ridgway filed her opposition on March 17, 2018. Dkt. #46.
This motion is now ripe for review.
for reconsideration are disfavored.” LCR 7(h).
“The court will ordinarily deny such motions in the
absence of a showing of manifest error in the prior ruling or
a showing of new facts or legal authority which could not
have been brought to its attention earlier with reasonable
diligence.” LCR 7(h)(1). In this case, the Court is not
persuaded that it should reconsider its prior Order.
first argues that this Court has misconstrued Ms.
Ridgway's counterclaim against it. Specifically,
Plaintiff asserts that this Court cannot find both that
Plaintiff had a good faith basis to interplead the disputed
funds, but that it acted in bad faith by choosing not to pay
one of the claimants. Dkt. #41 at 3-4. Plaintiff has
misinterpreted the Court's Order. Indeed, this Court
determined that Ms. Ridgway's counterclaim is based
primarily on Plaintiff's handling of her claim, and its
alleged failure to comply with the governing claims handling
statutes and regulations. Dkt. #40 at 12-13. That claim is
distinguishable from a claim simply for a failure to pay
next argues that Ms. Ridgway cannot maintain her Counterclaim
as alleged under 29 U.S.C. § 1132, because there is no
right under ERISA to recover punitive, consequential, or
extra-contractual damages, including damages for alleged
bad-faith claim handling. Dkt. #41 at 4-6. However, Ms.
Ridgway seeks relief under ERISA's
“catch-all” provision, 29 U.S.C. §
1132(a)(3). Dkt. #46 at 6-8. In Varity v. Howe, 516
U.S. 489, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996), the United
States Supreme Court explained that this provision acts
“as a safety net, offering appropriate equitable relief
for injuries caused by violations that § 502 does not
elsewhere adequately remedy.” Varity, 516 U.S.
at 512. Ms. Ridgway asserts that a “surcharge”
remedy is one type of equitable remedy allowed under 29
U.S.C. § 1132(a)(3). Dkt. #46 at 6 (citing CIGNA v.
Amara, 563 U.S. 421, 422-23, 131 S.Ct. 1866, 179 L.Ed.2d
843 (2011)). The authority presented by Plaintiff does not
contradict Ms. Ridgway's assertion.
the Court is not persuaded that Ms. Ridgway cannot
characterize her claim as one for breach of fiduciary duty.
See Dkt. #41 at 6. Contrary to Plaintiff's
Supreme Court and Ninth Circuit authorities have both
authorized a claim under section 1132(a)(3) for a
fiduciary's improper handling of an individual benefit
claim in violation of its fiduciary duties. See Varity
Corp. v Howe, 516 U.S. 489, 510-11, 116 S.Ct. 1065, 134
L.Ed.2d 130 (1996) (“subsection (3)...[is] broad enough
to cover individual relief for breach of a fiduciary
obligation” including determination of entitlement to
benefits); Paulsen v. CNF Inc., 559 F.3d 1061, 1075
(9th Cir. 2009) (“[u]nlike 29 U.S.C. § 1132(a)(2),
which requires that relief sought must be on behalf of the
entire plan, the Supreme Court has held that a participant or
beneficiary has standing pursuant to section 1132(a)(3) to
seek individual recovery in the form of ‘appropriate
equitable relief, '” citing Varity);
Peralta v. Hispanic Bus., Inc., 419 F.3d 1064, 1075
(9th Cir. 2005) (“[i]ndividual substantive relief under
ERISA is available where an employer actively and
deliberately misleads its employees to their
detriment”); see also CIGNA Corp. v. Amara,
563 U.S. 421, 131 S.Ct. 1866, 1881-82, 179 L.Ed.2d 843
(2011), (“[t]o obtain relief by surcharge for
violations of §§ 102(a) and 104(b) [under section
1132(a)(3)], a plan participant or beneficiary must show that
the violation injured him or her”) (emphasis
supplied). In Varity, the Supreme Court held the
individual claimants, though foreclosed from seeking
individual remedies under section 1132(a)(2), and unable to
show they had benefits due them under section
nevertheless proceed under 1132(a)(3) for other appropriate,
individual equitable relief. Id. at 515. In so
holding, Varity rejected the idea that section
1132(a)(3) remedies were only to benefit the plan, not
Zisk v. Gannett Co. Income Prot. Plan, 73 F.Supp.3d
1115, 1118 (N.D. Cal. Nov. 6, 2014).
of these reasons, the Court is not persuaded that it
“misapprehended Ridgway's counterclaim and the
remedies available under ERISA.” See Dkt. #41.
Likewise, the Court is not persuaded that it committed
manifest error in its prior ruling, or that Plaintiff has
presented legal authority which could not have been brought
to the Court's attention earlier with reasonable
diligence. Accordingly, Plaintiff's Motion for
Reconsideration (Dkt. #41) is DENIED.
has also filed a motion to stay all discovery deadlines in
this matter until the Court resolves the instant motion. Dkt.