Reaper v. ACE American Insurance Company

Background

Red Reaper voluntarily donated bone marrow to the National Marrow Donor Program in March 2012. ACE had issued the program an insurance policy providing temporary and permanent disability benefits to eligible donors. Red Reaper alleged that the program told him he was not covered and discouraged him from submitting a claim. More than eight years later, his counsel submitted a claim for his continued disability, and ACE denied it.

The court had already granted ACE’s first motion to dismiss and had found that Red Reaper’s claims appeared untimely. The court had rejected his argument that the program’s conduct should prevent ACE from relying on the policy’s time limit because he had not alleged facts showing that the program was acting as ACE’s agent. After two amended complaints, the court considered ACE’s third motion to dismiss.

Legal Standard

ACE moved under Rule 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. At this stage, the court generally accepts well-supported factual allegations as true and asks whether they plausibly show an entitlement to relief. Conclusory allegations and unsupported assumptions are not enough.

Court’s Analysis

The court focused on whether Red Reaper had plausibly alleged that the National Marrow Donor Program acted as ACE’s agent when it discouraged him from filing a claim. The latest complaint added allegations, stated on information and belief, that ACE provided claim forms to the program, authorized the program to use and review them, knew about certain communications, and authorized one communication from a program employee.

The court found that Red Reaper identified no factual foundation supporting those allegations. The emails in the complaint did not allege that ACE was involved in or aware of the relevant communications. The emails instead indicated that ACE—not the program—ultimately decided whether claims were covered. ACE’s later communications also showed that it was waiting to receive claim materials for its own review, rather than showing that the program was ACE’s agent.

The court also considered two declarations from program employees that Red Reaper submitted after briefing had ended without court approval. The court said the filing was improper, but considered the declarations anyway. The declarations showed that the program gave donors claim forms, answered questions about the policy, verified donor information, and sent completed forms to ACE. They also stated that ACE knew about and authorized that process. The court concluded, however, that these facts did not show that the program was ACE’s agent when it discouraged Red Reaper from filing a claim. The court further stated that adding the declaration information to the complaint would still not be enough.

Disposition

Judge Haywood S. Gilliam, Jr. granted ACE’s motion to dismiss. The court found that Red Reaper had been given opportunities to allege sufficient facts but had not done so, and it concluded that allowing another amendment would be futile. The court therefore dismissed the case without leave to amend, directed the clerk to enter judgment for ACE, and closed the case.