Waggeh v. Guardian Highlights Importance of Governing Documents in ERISA Disputes

At a Glance

• In Waggeh v. Guardian Life Ins. Co. of Am., the court rejected the plaintiff’s contention that her state law claims “fell outside the provisions of ERISA,” and dismissed the complaint on the grounds that they were preempted by ERISA.
• In support of its motion to dismiss, Guardian offered an affidavit disputing the assertions in the complaint, but did not include a copy of the policy or the plan with the affidavit.
• While the court could have considered the policy and plan when ruling on the motion to dismiss, the affidavit was outside of the pleadings and was not considered without governing documents.

In Waggeh v. Guardian Life Ins. Co. of Am., 2023 WL 4373897 (D. Mass. July 6, 2023), Chief Judge Saylor of the District of Massachusetts rejected the plaintiff’s contention that her state law claims “fell outside the provisions of ERISA,” and dismissed the complaint on the grounds that they were preempted by ERISA. The Plaintiff alleged that Guardian approved her husband’s application for group life insurance and issued coverage despite his failure to complete required medical testing. After his death, Guardian denied the claim for benefits on the grounds that the insured misrepresented his medical condition, and offered to return the premiums paid. The plaintiff brought state law claims for breach of contract, fraud, specific performance and declaratory relief, and Guardian removed and moved to dismiss on the grounds that the state law claims were preempted by ERISA.

The court found that the complaint sought to recover benefits under an employer sponsored plan, and that the state law claims “appear to be preempted by ERISA.” The plaintiff, however, asserted that the life insurance policy was excluded from ERISA’s definition of an employer welfare benefit plan, and so not covered by ERISA, because (i) it was a “payroll practice” under 29 C.F.R. § 2510.3-1(b); and (ii) under 29 C.F.R. § 2510.3-1(j), the policy was offered in pursuant to a program in connection with which (1) the employer makes no contributions; (2) participation is completely voluntary; (3) the employer does not endorse the program, and only collects premiums through payroll deductions to remit to the insurer; and (4) the employer receives no consideration in connection with the program.

In support of its motion to dismiss, Guardian offered an affidavit disputing the assertions in the complaint, but did not include a copy of the policy or the plan with the affidavit. The court determined that while it could have considered the policy and plan when ruling on the motion to dismiss, the affidavit was outside of the pleadings, and declined to consider it when ruling on the motion to dismiss. Notwithstanding that, the court held that the plaintiff offered only conclusory allegations with no supporting factual assertions, and dismissed the complaint for failure to state a plausible claim.

Faegre Drinker Takeaway: Nothing substitutes for the governing documents — and if possible, they should be offered in connection with a motion to dismiss.