In Jobe v. The Prudential Insurance Company of America, the insured was diagnosed in October, 2007 with long-standing relapsing multiple sclerosis causing fatigue and lack of endurance that interfered with her cognition and ability to work. She filed a disability claim with the insurer about three weeks later. Almost four months later, the insurer sent the insured a letter initiating a review of the insured’s claim. In May, 2008, the insurer denied the insured’s claim for disability, as it had determined that she was not disabled after reviewing her medical records. The insured promptly appealed the denial, and in November, 2008, the insurer finally approved the her claim.
The insured filed a Complaint with four claims: breach of contract, breach of the duty of good faith and fair dealing, violations of Pennsylvania’s insurance bad faith statute, and violations of Pennsylvania’s Unfair Trade Practices in Consumer Protection Law.
The court first dismissed the counts for breach of contract and breach of the duty of good faith and fair dealing. The insured had filed for disability relating to an employee benefit plan, and the plan was governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). ERISA expressly preempts breach of contract claims (and claims for the breach of the duty of good faith and fair dealing, because they are subsumed with breach of contract claims) based upon claims related to benefits arising out of an employee benefit plan.
Concerning the bad faith claim, the insured alleged that the insurer violated legal duties that arose independently of ERISA and the terms of the employee benefit plan. However, after an analysis of prior case law that said that the Pennsylvania Bad Faith Statute was preempted by ERISA, the court held that the insured could not proceed with a bad faith claim. It therefore granted the insurer’s Motion to Dismiss the Complaint on all counts.
Date of Decision: September 23, 2010
Jobe v. Prudential Ins. Co. of Am., Civil Action No. 10-684, United States District Court for the Western District of Pennsylvania, 2010 U.S. Dist. LEXIS 100429, (Sept. 23, 2010) (Conti, J.)