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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
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District Court Allows Breach of Fiduciary Duty Claim Under ERISA, Dismisses State Contract Claim
In this action alleging violations of ERISA and state contract law, Defendants moved to dismiss two of the claims under F.R.C.P. Rule 12(b)(6). Plaintiff’s husband was employed by one of the defendants. Plaintiff brought the action against the employer and its insurance company, alleging that Defendants wrongfully denied her claim under an employee welfare benefit plan after her husband was killed while on a business trip. She alleged that defendants wrongfully denied benefits under ERISA, breached fiduciary duties owed under ERISA, and violated state contract law. Defendants moved to dismiss the fiduciary breach and state contract claims. The Court allowed the breach of fiduciary duties claim, but dismissed the state contract claim.
Defendants argued that Plaintiff could not seek equitable relief under 29 U.S.C. § 1132(a)(3) when she also sought legal relief under 29 U.S.C. § 1132(a)(1)(B). The Court, however, concluded that there was no authority for the position that a claim for legal relief under the statute precluded a claim for equitable relief under it, finding that the claim for equitable relief could support independent or additional remedies to what was received under the legal claim. The Court therefore denied the motion to dismiss the breach of fiduciary duty claim. Defendants also asserted that the state contract law claim was preempted by ERISA. The Court agreed, concluding that the employee benefit plan at issue was governed by ERISA, which expressly preempts state law. The Court therefore granted Defendants’ motion to dismiss the state contract law claim.