Efimenko v. The Catalina Marketing Corporation Group Life Plan

Background

Anna Efimenko sued under the Employee Retirement Income Security Act of 1974 (ERISA) after her husband, Nikita Toulinov, died of a sudden heart attack in Moscow, Russia, on February 25, 2020. The complaint alleged that Toulinov was a Catalina employee, regularly paid premiums for life-insurance benefits, and was designated as a California employee even though he was working remotely from Russia. Catalina allegedly did not send the insurer an administrative letter documenting that Toulinov was temporarily working abroad.

After Toulinov’s death, Efimenko made a claim as his designated beneficiary. Lincoln denied the claim on the ground that the plan did not cover employees working outside the United States without the administrative expatriate letter. Efimenko’s amended complaint asserted five causes of action against Lincoln and Catalina, including an ERISA claim to recover benefits, an ERISA claim for equitable relief based on an alleged breach of fiduciary duty, and state-law claims for negligence, breach of contract, and equitable estoppel.

Catalina moved under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not adequately state a legally recognized claim. Catalina sought dismissal of the ERISA equitable-relief claim and the state-law claims. Catalina argued that the equitable-relief claim duplicated the claim for benefits and that ERISA preempted the state-law claims, meaning that federal law displaced those state-law causes of action.

ERISA Equitable-Relief Claim

The court granted the motion as to Efimenko’s claim under ERISA § 502(a)(3). That provision allows a claimant to seek appropriate equitable relief, including certain remedies beyond the recovery of withheld benefits. The complaint, however, requested an injunction enforcing the ERISA plan and other equitable relief, without specifically alleging a claim for equitable surcharge or another remedy for losses beyond the benefits themselves.

The court concluded that the requested injunction duplicated Efimenko’s separate claim under ERISA § 502(a)(1)(B) to recover the full amount of benefits owed under the plan. The court therefore granted the motion to dismiss the § 502(a)(3) claim. Because it was not clear that amendment would be futile, the court granted Efimenko leave to amend that claim only and allowed 21 days to file an amended complaint.

State-Law Claims and Preemption

The court denied the motion to dismiss the negligence, breach-of-contract, and equitable-estoppel claims. Efimenko pleaded those claims in the alternative: if Toulinov was not a participant in the ERISA plan because Catalina failed to send the administrative letter, she argued that Catalina’s conduct could support state-law claims instead.

The court explained that ERISA generally preempts state-law claims that duplicate, supplement, or replace ERISA’s enforcement remedies. But the court also noted that ERISA does not preempt claims by people who have no right to sue under ERISA because they are neither plan participants nor beneficiaries. Whether Toulinov was a plan participant was therefore central to deciding whether the state-law claims were preempted.

The court held that Federal Rule of Civil Procedure 8 permits parties to plead alternative or even inconsistent theories. Because discovery was needed to determine whether Toulinov was a participant and whether ERISA preempted the state-law claims, the court found dismissal premature. It denied the motion to dismiss those claims without prejudice to Catalina raising the preemption issue again after discovery. The court also noted that Catalina allegedly collected Toulinov’s premiums and had not reimbursed them, and that ERISA preemption should not create a windfall by allowing an employer or plan administrator to retain premiums while withholding benefits.

Disposition

The court granted in part and denied in part Catalina’s motion to dismiss. It granted the motion as to Efimenko’s ERISA § 502(a)(3) equitable-relief claim, granted leave to amend that claim only, and otherwise denied the motion. The court also set a case-management conference.