United States District Court, M.D. Alabama, Northern Division
CHARLES M. DAVIS, Plaintiff,
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant.
OPINION AND ORDER
H. THOMPSON UNITED STATES DISTRICT JUDGE.
Charles M. Davis filed suit in state court against defendant
Prudential Insurance Company of America, claiming breach of
contract and unjust enrichment based on Prudential's
refusal to pay his insurance claim for disability benefits.
Prudential removed the case to this federal court pursuant to
28 U.S.C. § 1441, and thereafter brought a motion to
dismiss the case for failure to state a claim. The court
granted the dismissal motion because Davis's state claims
were preempted by the Employee Retirement Income Security Act
of 1974 (“ERISA”), 29 U.S.C. §§ 1001
et seq. See Davis v. The Prudential Ins. Co. of
Am., 2015 WL 5719628 (M.D. Ala. 2015) (Thompson, J.).
However, the court gave Davis leave to file a motion to
vacate the judgment and amend his complaint if a viable ERISA
case is now before the court on two motions Davis has timely
filed: a motion to vacate the judgment granting
Prudential's motion to dismiss and a motion to amend his
complaint. This court has federal-question jurisdiction
pursuant to 28 U.S.C. § 1331. For the reasons stated
below, the motions will be granted with leave for Davis to
file a further amended complaint.
case arises out of Prudential's denial of Davis's
workplace disability claim. Davis worked as a customer
service representative at a bottling plant in southeast
Alabama for some time before stopping due to severe headaches
and visual dysfunction in mid-2012. Based on these
conditions, he filed a disability claim with the insurance
company under a benefits plan provided by his employer. After
considering the medical records in Davis's file, the
company denied his claim. Counsel for Davis wrote a letter to
the company in response to the decision. Davis later filed
suit against the company.
argues that Davis's motion to amend his complaint should
be denied because he did not exhaust his administrative
remedies prior to filing suit and that his motion to vacate
the judgment should be denied because no manifest injustice
would result from its denial. Davis contends that the letter
from his counsel qualified as an appeal sufficient to satisfy
ERISA's exhaustion requirement and that denial of the
motion to vacate would result in a manifest injustice.
Rule of Civil Procedure 59(e) authorizes a motion to alter or
amend a judgment after its entry. “[T]he decision to
alter or amend the judgment is committed to the sound
discretion of the district judge.” American Home
Assur. Co. v. Glenn Estess & Assocs., Inc., 763 F.2d
1237, 1238, 1238-1239 (11th Cir. 1985). There are four basic
grounds for granting a Rule 59(e) motion: “(1) manifest
errors of law or fact upon which the judgment was based; (2)
newly discovered or previously unavailable evidence; (3)
manifest injustice in the judgment; and (4) an intervening
change in the controlling law.” Jacobs v. Elec.
Data. Sys. Corp., 240 F.R.D. 595, 599 (M.D. Ala. 2007)
(Thompson, J.) (citing 11 Charles Alan Wright, Arthur R.
Miller & Mary Kay Kane, Federal Practice &
Procedure § 2810.1 (3d ed. 2012)). Further, a
judgment will not be amended or altered if to do so would
serve no useful purpose. See 11 Charles Alan Wright,
Arthur R. Miller & Mary Kay Kane, supra, §
2810.1, at 128.
Rule of Civil Procedure 15(a) states that the court
“should freely give leave [to amend a pleading] when
justice so requires.” “Generally, ‘[w]here
a more carefully drafted complaint might state a claim, a
plaintiff must be given at least one chance to amend the
complaint before the district court dismisses the action with
prejudice.'” Bryant v. Dupree, 252 F.3d
1161, 1163 (11th Cir. 2001) (quoting Bank v. Pitt,
928 F.2d 1108, 1112 (11th Cir. 1991)). A “substantial
ground” is required to deny leave, such as “undue
delay, bad faith or dilatory motive on the part of the
movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, [or] futility of
amendment.” Reese v. Herbert, 527 F.3d 1253,
1263 (11th Cir. 2008) (quoting Burger King Corp. v.
Weaver, 169 F.3d 1310, 1319 (11th Cir. 1999)).
‘same standards [for granting a motion to amend] apply
when a plaintiff seeks to amend after a judgment of dismissal
has been entered by asking the district court to vacate its
order of dismissal pursuant to Fed.R.Civ.P. 59(e).”
Spanish Broad. Sys. Of Fla., Inc. v. Clear Channel
Commc'ns, Inc., 376 F.3d 1065, 1077 (11th Cir. 2004)
(quoting Thomas v. Town of Davie, 847 F.2d 771, 773
(11th Cir. 1988)).
resolution of Davis's motions to vacate the judgment and
for leave to amend the complaint are obviously interrelated.
Unless the proposed amended complaint states a viable claim,
vacating the judgment would serve no purpose and cause no
manifest injustice. Thus, the court will first determine
whether the motion to amend should be granted, then will turn
to the motion to vacate.
Motion to Amend
argues that the proposed amendment of Davis's complaint
is futile because Davis never exhausted his administrative
remedies by appealing the adverse determination, and because
he cannot exhaust his administrative remedies since the time
for doing so has passed. Davis responds that he did exhaust
his administrative remedies because the letter sent by his
counsel qualified as an appeal sufficient to exhaust, or at
minimum there is a disputed issue of fact as to whether he
exhausted that should be resolved at a later stage of
litigation, after discovery.
standard for denying a motion to amend on the basis of
futility is akin to that of granting a motion to dismiss.
“A proposed amendment may be denied for futility when
the complaint as amended would still be properly
dismissed.” Coventry First, LLC v. McCarty,
605 F.3d 865, 870 (11th Cir. 2010)) (internal quotation marks
omitted); see also Burger King Corp v. Weaver, 169
F.3d 1310, 1320 (11th Cir. 1999) (“This court has found
that denial of leave to amend is justified by futility when
the complaint as amended is still subject to
dismissal.”) (internal quotation marks omitted). Thus,
the court must assess whether the proposed amended complaint
would survive dismissal.
law is clear in this circuit that plaintiffs in ERISA actions
must exhaust available administrative remedies before suing
in federal court.” Counts v. Am. Gen. Life &
Acc. Ins. Co., 111 F.3d 105, 108 (11th Cir.
1997). However, the law is less clear as to what
requirement governs when considering dismissal for failure to
exhaust administrative remedies in an ERISA case. Federal
Rule of Civil Procedure 12(b) does not enumerate exhaustion
as a basis for dismissal. Which part of Rule 12(b) applies
can have serious implications: the district court is
empowered to act as the factfinder and determine disputed
facts on certain types of dismissals, such as ...