Jacob Wieselman, Wieselman Law Group, Portland, OR. Attorney for Plaintiff
Rick S. Pope, Kristen A. Chambers, Kirklin Thompson & Pope LLP, Portland, OR. Attorneys for Defendant.
OPINION AND ORDER
DENNIS J. HUBEL, Magistrate Judge.
Before the Court is Defendant Standard Insurance Company's ("Defendant") motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure ("Rule") 12(c). Defendant's principal contentions are that: (1) Plaintiff Lisa Ephrem's ("Plaintiff") exclusively state common law claims are preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461; (2) Plaintiff does not qualify as a beneficiary on certain claims and thus lacks statutory standing; and (3) Plaintiff has failed to join necessary parties. For the reasons that follow, Defendant's motion (Docket No. 24) for judgment on the pleadings is granted in part and denied in part.
I. FACTS AND PROCEDURAL HISTORY
These are the facts as presented by Plaintiff in her complaint. Plaintiff is an Oregon resident licensed as an automobile dealer by the Oregon Department of Motor Vehicles. (Compl. ¶ 1.) She is authorized to conduct business under the name "Carr City" by the Oregon Secretary of State, Corporation Division. (Compl. ¶ 1.) At the beginning of August 2011, Plaintiff met with one of Defendant's insurance "producers, " Donovan Rayfield ("Rayfield"), at his office in Battle Ground, Washington. (Compl. ¶¶ 3-4.) Plaintiff asked Rayfield to recommend an appropriate life, accidental death and dismemberment insurance for the employees of Carr City. (Compl. ¶ 4.)
After obtaining all of the necessary information about Carr City from Plaintiff, Rayfield determined that Defendant's group life insurance policy would be the best fit for Carr City's needs, business and employees. (Compl. ¶ 8.) On August 3, 2011, with the assistance of Rayfield, Plaintiff completed and a signed an application for a group life insurance policy for her employees. (Compl. ¶ 9.) The application includes a provision entitled "Active Work Requirement, " which states: "A person must meet an Active Work requirement to become insured. Members who have not met an Active Requirement are not insured until returning to work for one full day and meeting all other contractual requirements." (Compl. ¶ 10, Ex. 1.) Plaintiff initialed her acknowledgment of the active work requirement. (Compl. ¶ 10, Ex. 1.)
On October 11, 2011, Defendant issued a group life insurance policy ("the policy") with an effective date of September 1, 2011. (Compl. ¶ 17, Ex. 3.) On December 16, 2011, one of the policy members, Ruby Marks, passed away and Defendant paid the death benefits due under the policy. (Compl. ¶ 21.) Almost three months later, on March 10, 2012, policy member Sophie Marks passed away, but Defendant refused to pay the death benefits due under the policy. (Compl. ¶ 22.) On April 25, 2012, policy member James Zeko passed away and Defendant refused to pay death benefits due under the policy. (Compl. ¶ 23.) The same thing occurred again on August 23, 2012, after policy member John Ellis passed away. (Compl. ¶ 26.)
In letters dated September 14, 2012, Defendant informed Plaintiff that Sophie Marks and James Zeko did not qualify as members under the policy due to the fact that: (1) they did not work forty hours per week; (2) they may have been independent contractors; (3) Plaintiff did not control, supervise or direct individuals performing services for Carr City; and (4) Carr City employees were not covered by a contract negotiated between Defendant and Plaintiff. (Compl. ¶¶ 27-30.)
On October 5, 2012, an eligible employee, David Eli, passed away and Defendant once again refused to pay death benefits due under the policy. (Compl. ¶ 31.) Roughly thee months later, on January 3, 2013, Defendant rescinded the policy based on purported material misrepresentations in the application. (Compl. ¶ 32.) Defendant explained that, at the time Plaintiff submitted her application, "Carr City likely ha[d] no eligible Member employees and had [Defendant] known that, it would not have issued the policy." (Compl. ¶ 33.) Twelve days later, by letter dated January 15, 2013, Defendant denied the claim for benefits for David Eli on the ground that it had rescinded the policy. (Compl. ¶ 36.) Defendant also demanded that Plaintiff pay back the $100, 000 in death benefits that were paid out following the death of Ruby Marks on December 16, 2011. (Compl. ¶ 37.)
On the basis of the foregoing events, Plaintiff filed a complaint against Defendant in Multnomah County Circuit Court on April 24, 2013, alleging claims for breach of contract (Claim One), breach of the implied covenant of good faith and fair dealing (Claim Two), tortious breach of the implied covenant of good faith and fair dealing (Claim Three), negligence (Claim Four), estoppel (Claim Five), and reformation of the policy (Claim Six).
On May 22, 2013, Defendant removed the action to federal court on the basis of federal question jurisdiction. Defendant responded with an answer, affirmative defenses and counterclaims on May 29, 2013. A little over two months later, on July 30, 2013, the case was reassigned to the undersigned after the parties consented to proceed before a magistrate judge. See 28 U.S.C. § 636(c); FED. R. CIV. P. 73(a)-(b). Defendant's Rule 12(c) motion for judgment on the pleadings followed on October 4, 2013. Defendant filed an amended motion for judgment on the pleadings four days later.
II. LEGAL STANDARD
A. Rule 12(c) ...