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Streit v. Matrix Absence Management, Inc.

United States District Court, D. Oregon, Portland Division

February 18, 2014

ROGER STREIT, Plaintiff,


MICHAEL W. MOSMAN, District Judge.

Plaintiff Roger Streit ("Mr. Streit") brings this suit for damages under the Employee Retirement Income Security Act ("ERISA"). In his First Amended Complaint ("FAC"), he seeks damages arising from the denial of benefits under a life insurance policy provided to his late wife by her employer. Judge Acosta issued his Findings and Recommendation ("F&R") [42], recommending that the FAC be dismissed. I ADOPT the F&R in part.


It is uncontested that Mr. Streit's late wife, Sandra Streit, was at one time a participant in an ERISA benefits plan providing short-term disability coverage, long-term disability coverage, and a life insurance policy. It is the life insurance policy that is at issue in this suit. For purposes of this motion, it is conceded that Defendant Viasystems is the ERISA plan administrator. (Br. [26] at 2 n.1.)

Sandra Streit received a terminal cancer diagnosis while covered by the Plan, whereupon she applied for short-term disability benefits, long-term disability benefits, and for a Waiver of Premium on the life insurance policy. (FAC [20] ¶¶ 21-23.) Both long- and short-term disability benefits were granted and paid to her until her death in 2010. Id. ¶ 24. Mr. Streit alleges that the Plan never informed her that the Waiver of Premium application had been denied. Id. ¶ 24. If she had been so informed, he argues, the Streits could have paid the premiums themselves after Sandra Streit left employment, and thereby maintained the policy until her death. (Pl.'s Resp. [32] at 4.) As it happened, the policy was terminated when she left employment, and thus Mr. Streit's application for life insurance benefits upon her death was denied. (FAC [20] ¶¶ 27-30.)

Mr. Streit alleges three violations of ERISA. First, the Defendants failed to provide him a copy of the Summary Plan Document when requested to do so, as required by 29 U.S.C. § 1024(b)(4). Second, the Defendants failed to provide notice that the life insurance Waiver of Premium application had been denied. Third, the Defendants are equitably estopped from denying the life insurance claim due to the failure to timely deny the Waiver of Premium application, because this failure prejudiced the Streits.

Judge Acosta recommends that all claims be dismissed with prejudice as to Defendants Matrix Absence Management, Inc. and Reliance Life Insurance Co. (F&R [42] 7-9.) I agree with Judge Acosta and adopt his opinion regarding these two Defendants as my own. Neither is the plan administrator and thus neither can be held liable for statutory damages under 29 U.S.C. § 1132 (hereafter "Section 1132(c)"). Consequently, Mr. Streit's first and second claims must be dismissed as against Defendants Matrix and Reliance. Judge Acosta recommends that Mr. Streit's third claim, which is brought under a theory of equitable estoppel, be dismissed with prejudice as to all Defendants. Id. at 9, 14. In the context of ERISA, equitable estoppel requires a Plaintiff to "establish[ ] a material misrepresentation, reasonable and detrimental reliance upon the representation and extraordinary circumstances." Pisciotta v. Teledyne Indus., Inc., 91 F.3d 1326, 1331 (9th Cir. 1996). For the reasons set out by Judge Acosta, I DISMISS Mr. Streit's third claim with prejudice as to all Defendants. ( See F&R [42] at 8-9, 14.)

I write to explain my holding as to Mr. Streit's second claim for relief, which I DISMISS with prejudice as to all Defendants.


The magistrate judge makes only recommendations to the court, to which any party may file written objections. The court is not bound by the recommendations of the magistrate judge, but retains responsibility for making the final determination. The court is generally required to make a de novo determination regarding those portions of the report or specified findings or recommendation as to which an objection is made. 28 U.S.C. § 636(b)(1)(C). However, the court is not required to review, de novo or under any other standard, the factual or legal conclusions of the magistrate judge as to those portions of the F&R to which no objections are addressed. See Thomas v. Arn, 474 U.S. 140, 149 (1985); United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003). While the level of scrutiny under which I am required to review the F&R depends on whether or not objections have been filed, in either case, I am free to accept, reject, or modify any part of the F&R. 28 U.S.C. § 636(b)(1)(C).

To survive a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A pleading that offers only "labels and conclusions" or "naked assertion[s]' devoid of further factual enhancement'" will not suffice. Id. (quoting Twombly, 550 U.S. at 555, 557) (alteration in original). While the plaintiff does not need to make detailed factual allegations at the pleading stage, the allegations must be sufficiently specific to give the defendant "fair notice" of the claim and the grounds on which it rests. See Erickson v. Pardus, 551 U.S. 89, 93-94 (2007) (per curiam) (citing Twombly, 550 U.S. at 555). When reviewing a motion to dismiss, the court must "accept all factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). A court need not accept legal conclusions as true because "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678. These standards apply to suits removed from state court under 28 U.S.C. § 1441 just as they do to complaints originally filed in federal court. Fed.R.Civ.P. 81(c).

Leave to amend a complaint should be freely granted. Fed.R.Civ.P. 15(a); Gordon v. City of Oakland, 627 F.3d 1092, 1094 (9th Cir. 2010). In determining whether to allow amendment, I consider the presence or absence of "(1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether the plaintiff has previously amended" the complaint. Sisseton-Wahpeton Sioux Tribe of Lake Traverse Indian Res., North Dakota and South Dakota v. United States, 90 F.3d 351, 355-56 (9th Cir. 1996). Amendment is futile where "the complaint could not be saved by any amendment." United States v. Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011) (quoting Krainski v. Nevada ex rel. Bd. of Regents of Nev. Sys. of Higher Educ., 616 F.3d 963, 972 (9th Cir. 2010)).


I agree with Judge Acosta's conclusion that Mr. Streit has not adequately pled his standing as a beneficiary of an ERISA plan, and thus his second claim for relief must be dismissed. (F&R [42] at 10-11, 14.) The conclusory allegation that Sandra Streit was "a participant" and that he is "a beneficiary" is insufficient. See Iqbal, ...

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