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Stover v. Delta Air Lines, Inc.

United States District Court, D. Minnesota

September 25, 2017

Lori Ann Stover, Plaintiff,
Delta Air Lines, Inc. Optional Insurances Plan, Administrative Committee of Delta Air Lines, Inc., and rudential Insurance Co. of America, Defendants.


          Paul A. Magnuson, United States District Court Judge.

         This matter is before the Court on Defendants' Motion to Dismiss. (Docket No. 17.) For the following reasons, the Motion is granted in part and denied in part.


         Plaintiff Lori Ann Stover previously worked for Delta Air Lines, Inc. (“Delta”) as a flight attendant, and participated in the Delta Air Lines Inc. Optional Insurances Plan (the “Plan”), a Delta-sponsored employee-benefit plan governed by ERISA. She participated in two Plan programs in particular: Group Accident Insurance and Private Pilots Accident Insurance. The parties have not defined these programs, but it appears they provided Stover with up to $350, 000 and $165, 000, respectively, in benefits for job-related injuries. Defendant Prudential Insurance Co. of America (“Prudential”) insured the Plan, while Defendant Administrative Committee of Delta Air Lines, Inc. was the fiduciary for, and administered, the Plan.

         The Plan included several provisions regarding claim processing. First, it required that “proof of the loss for which [a] claim is made” must be submitted within “90 days after the date of the loss.” (Kamps Aff. (Docket No. 20) Ex. C at 39.) Second, a Plan participant could appeal the denial of a claim within 180 days from receipt of the denial. Determination of the appeal must then occur within 45 days, but this 45-day period could be extended by an additional 45 days under special circumstances, which would require prior notice. (Id. at 45-46.) Finally, no legal action under the Plan may “be brought more than three years after the end of the time within which proof of loss is required.” (Kamps Aff. Ex. D. at 30.)

         On August 24, 2012, Stover was injured when a flight on which she was working suddenly encountered turbulence. She was thrown to the floor and landed on her right side, injuring her right arm, her shoulder, and her hand. Subsequently, she was diagnosed with Reflex Sympathetic Dystrophy, causing her “severe, intractable pain.” She underwent several surgeries in an attempt to remedy the problems, but she continues to suffer from extreme pain, difficulty turning her head, and limited motility and function in her right arm and hand. She alleges she has been unable to work in any capacity since the date of the incident. Following her injury, Stover contacted Prudential to submit claims under the Plan. She alleges Defendants gave her the runaround despite repeated telephone calls, emails, and letters. Eventually, however, Prudential gave Stover a claim-submittal form, and she promptly submitted her claim, asserting permanent disability.

         On or about September 3, 2013, Prudential denied Stover's claim by letter, concluding that she was not permanently disabled. The letter stated that she could appeal this determination, that a determination on the appeal would be made within 45 days, and that the 45-day period could be extended only if Prudential provided prior notification. Lastly, the letter advised that once the appeal was decided, Stover could elect either to seek a further appeal or to commence an action under ERISA. The letter made no mention of the Plan's three-year time limit for commencing a lawsuit.

         On September 10, 2013, Stover informed Prudential that she received the letter denying her claim and that she was “attempt[ing to] appeal, ” and she inquired what further steps she needed to take. She heard nothing further from Prudential. Prudential contends it did not receive her appeal.

         No further action occurred until Stover commenced this lawsuit on December 9, 2016, more than three years later. Her two-Count Amended Complaint alleges (1) that Defendants violated ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), by failing to process her claims properly and (2) in the alternative, that Defendants breached fiduciary duties owed to her under ERISA by not properly processing the claims. Notably, she seeks an order from this Court remanding the matter to Defendants with instructions to permit her to resubmit her claims; she does not seek an award of benefits. Defendants now move to dismiss.


         A. Count I

         Defendants argue that Count I of Stover's Amended Complaint, which alleges that Defendants violated ERISA by failing to properly process her claims for benefits, is untimely. The Court disagrees.

         ERISA contains no statute of limitations for claims under § 502(a)(1)(B). Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S.Ct. 604, 610 (2013). As a result, ERISA-governed plans may impose their own limitation periods for commencing lawsuits, as long as those periods are reasonable. Id. at 612. Here, Stover does not contend that the Plan's three-year limitation period for commencing a lawsuit is unreasonable. This period runs from the “end of the time within which proof of loss is required.” Proof of loss, in turn, “must be furnished within 90 days after the date of the loss.” Defendants assert that Stover's loss occurred on August 24, 2012, the date of her injury, because she marked this date as the date of loss on the claim form. (Stover Decl. (Docket No. 27) Ex. 5 at 1.) Thus, they argue that proof of loss was due 90 days later, November 22, 2012, and Count I had to be filed no later than three years after that date, or November 22, 2015. Because Stover did not sue until nearly the end of 2016, Defendants argue that Count I is time-barred and must be dismissed.

         But to determine Stover's date of loss, the Court must look to the Plan's terms and construe them according to their “literal and natural meaning.” Admin. Comm. of Wal-Mart Stores, Inc. Assocs.' Health & Welfare Plan v. Shank, 500 F.3d 834, 838 (8th Cir. 2007) (citation omitted). Defendants make no effort to undertake such an analysis here or identify the Plan's definition of the term “loss, ” which is not synonymous with injury or accident. Indeed, the Plan defines an “injury” as “injury to the body of a Covered” employee and “loss” as any of a prescribed set of 14 different types of injuries, including death or loss of sight. (Kamps Aff. Ex. D at 16, 29.) In ...

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