Metropolitan Life Insurance Company

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United States District Court, E.D. LouisianaApr 22, 2005
Civil Action No. 04-2956, Section: "J" (4). (E.D. La. Apr. 22, 2005)

Civil Action No. 04-2956, Section: "J" (4).

April 22, 2005


Before the Court is plaintiff's Motion to Dismiss Defendant's Counterclaim. Rec. Doc. 10. Defendant/plaintiff in counterclaim opposes the motion. The motion, set for hearing on April 13, 2005, is before the Court on briefs without oral argument. For the reasons which follow, the Court finds that plaintiff's motion should be granted.

Factual Background

This matter involves a suit for declaratory judgment and rescission brought by plaintiff ("Met Life") against Lawrence Randle. Randle was a federal employee who applied for and was approved for federal long-term care ("LTC") insurance. After he made a claim, Met Life determined that his policy was subject to rescission because he was untruthful on his application regarding the fact that he had ALS.

The relevant timeline is as follows. The date of Randle's application was September 29, 2002, and the effective date of coverage was November 1, 2002. According to Met Life, Randle received his ALS diagnosis on October 16, 2002, prior to the effective date; according to Randle, he was not diagnosed until sometime in November 2002, after the effective date. Randle first made a claim on his LTC policy in June of 2004. Under the terms of the policy, if Randle had, had been diagnosed, or had been treated for ALS prior to the effective date of coverage, he was ineligible for the LTC insurance.

Based on its contention that the ALS diagnosis predated the effective date of the policy and thus made the policy subject to rescission, Met Life filed the instant suit for a declaratory judgment on whether it properly rescinded the policy and whether it was obligated to pay under the policy. Randle filed a counterclaim for breach of contract.

Met Life now moves to dismiss the counterclaim, arguing that the Court lacks jurisdiction over the claim because the only relief Randle could potentially be entitled to is benefits under the policy, and to the extent Randle seeks benefits under the Act, he has not exhausted required administrative remedies, since Met Life rescinded Randle's policy rather than denying his claim on the merits. Thus, according to Met Life, this Court cannot reach the question posed by the counterclaim until it has resolved the question whether Met Life improperly rescinded coverage.


Randle's claims under the policy are governed by the Long Term Care Security Act ("the Act"), 5 U.S.C. § 9001 et seq., which preempts any state laws otherwise applicable to interpreting a federal LTC insurance contract. 5 U.S.C. § 9005. Congress has also enacted an administrative enforcement scheme for resolving disputes over claims for benefits under the Act, which requires exhaustion of administrative remedies as a prerequisite to federal jurisdiction. 5 U.S.C. § 9007; 5 C.F.R. § 875.104. Accordingly, notwithstanding the fact that Randle has styled his claim as one for breach of contract, his sole remedy is a suit for benefits under the applicable federal laws, and any such claim is subject to the administrative exhaustion requirement.

It is undisputed that Randle's claim has not been administratively exhausted, because Met Life rescinded Randle's LTC policy rather than addressing the merits of his claim. Moreover, Met Life cannot address the merits of Randle's claim unless and until this Court rules that the rescission of the policy was improper. Accordingly, Randle's counterclaim must be dismissed without prejudice as premature for failure to exhaust administrative remedies. Therefore,

IT IS ORDERED that plaintiff's Motion to Dismiss Defendant's Counterclaim, Rec. Doc. 10, should be and is hereby GRANTED, and Lawrence Randle's counterclaim is dismissed without prejudice as premature.

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