Opinion
CASE NO. 1:19-CV-01621-DAP
11-27-2019
PRUDENTIAL INSURANCE COMPANY OF AMERICA, Plaintiff, v. MICHAEL J. LUCAK-BREWER, et al., Defendants.
JUDGE DAN AARON POLSTER
REPORT & RECOMMENDATION
This case is before the Court upon referral for pre-trial supervision, entered July 23, 2019. Currently pending is Defendant Michael J. Lucak-Brewer's ("Brewer") motion to dismiss for improper venue (Doc. No. 12). For the following reasons, the Court recommends Brewer's motion to dismiss for improper venue be DENIED.
In the same motion, Brewer also moved to dismiss the case for failure to state a claim upon which relief may be granted because he claims he was named improperly. (Doc. No. 12.) Also pending is Plaintiff Prudential Insurance Company of America's ("Prudential") motion for leave to amend the Complaint to correct Brewer's name. (Doc. No. 11.) The Court addresses Brewer's claim that venue is improper first. Reilly v. Meffe, 6 F. Supp. 3d 760, 764 (S.D. Ohio 2014) (citing Arrowsmith v. United Press Int'l, 320 F.2d 219, 221 (2nd Cir. 1963) (en banc)). Once the Court issues an order on the venue question, if necessary, the undersigned will address the motion to dismiss for failure to state a claim and the motion to amend the complaint.
I. Background
On July 16, 2019, Prudential filed a Complaint in Interpleader against defendants Sara Lucak ("Lucak") and Brewer. (Doc. No. 1.) On July 25, 2019, Brewer waived his right to personal service of the summons and Complaint. (Doc. No. 4.) On September 19, 2019, Lucak waived her right to personal service of the summons and Complaint. (Doc. No. 5.) On October 23, 2019, Prudential filed its Motion for Leave to Amend Complaint, stating it had received letter correspondence from Brewer on September 23, 2019 titled "Defendant's Rule 12b Motion" and, "to the extent [Brewer] has identified a pleading error," sought to amend the Complaint to correct the spelling of the name "Michael J. Lucak-Brewer" to "Michael J. Brewer a/k/a Michael Lucak." (Doc. No 11.) On October 28, 2019, Brewer filed his motion to dismiss, claiming the action failed to state a claim against "Michael J. Brewer" upon which relief may be granted as there "is no person by the legal name Michael J. Lucak-Brewer in the United States of America" and that venue was improper. (Doc. No. 12.) On November 5, 2019, Brewer filed his answer to the Complaint, a crossclaim against Lucak, and a counterclaim against Prudential. (Doc. No. 13.)
Also on November 5, 2019, the Court received letter correspondence from Brewer asking that his former last name of Lucak not be used as it is "irrelevant," "not needed," and implicates privacy and safety concerns for him because he was a confidential informant about ten years ago and going by Brewer gives him an additional layer of security. (Doc. No. 14.) Given the sensitive nature of the facts set forth in that correspondence, the Court restricted the letter to case participants only.
The Court also restricts this Report and Recommendation to case participants only given Brewer's assertions that he was a confidential information and the safety concerns raised in his correspondence. (Doc. No. 14.)
On November 18, 2019, Prudential filed its opposition to Brewer's motion to dismiss. (Doc. No. 16.)
On November 26, 2019, Brewer filed "Defendants [sic] Verified Statement in Regards [sic] to Public Records Search Being False." (Doc. No. 18). In it, he asserts he is a "dual resident" of Arizona and Ohio and presents evidence in support of his residency in those two states. (Id.) The Court construes this document as his reply in support of his motion to dismiss (Doc. No. 12).
The Court notes that in this document, Brewer repeatedly uses the name "Michael Lucak," despite security concerns raised in his earlier filing (Doc. No. 14). (Doc. No. 18.) The Court restricts this document (Doc. No. 18) to case participants as well.
II. Factual Allegations
The Complaint alleges the following facts. Prudential issued group life insurance and accidental death and dismemberment policies to the National Education Association ("NEA") Members Insurance Trust, which constitutes an employee welfare benefit plan under ERISA. (Doc. No. 1.) Helen Lucak was an eligible employee of the NEA who received optional life insurance benefits under the policies. (Id.) Helen and her husband, Dennis Lucak, were killed in the same homicide event on November 10, 2018. (Id.) Dennis was the only beneficiary of record at the time of Helen's death. (Id.)
The Complaint alleges Dennis was treated as having predeceased Helen because they died during the same event in accordance with Ohio Rev. Code ("O.R.C.") § 2015.33. (Id.) Plaintiff asserts, under the policy terms, the benefits would be payable to Helen's two children, Lucak and Brewer. (Id.)
On January 10, 2019, Lucak asserted a claim for death benefits and identified Brewer as a claimant to the death benefits. (Id.) On May 14, 2019, Prudential distributed 50% of the benefits to Lucak. (Id.) Prudential represents $16,100 remains in death benefits under the policies. (Id.)
The Complaint alleges Brewer has been criminally charged in the murders of Helen and Dennis. (Id.) Prudential asserts, under Ohio's Slayer Statute (O.R.C. § 2105.19), if Brewer is convicted of, pleads guilty to, or is found not guilty by reason of insanity of the murders of Helen and Dennis, it would be as if Brewer predeceased Helen. (Id.) All remaining benefits would then go to Lucak. (Id.)
Prudential alleges that by reason of the actual or potential claims of the Defendants, it is or may be exposed to multiple liability. (Id.) Prudential asserts it is ready and willing to pay the remaining death benefits, plus any applicable interest, in accordance with the terms of the plans, to whomever the Court designates. (Id.) Prudential asks the Court to determine to whom the remaining death benefits should be paid. (Id.) Prudential will deposit into the Court the remaining death benefits, plus any applicable interest, for disbursement in accordance with the judgment of the Court. (Id.)
III. Analysis
When a party challenges venue as improper, the following considerations and standards apply:
There is a split of authority among district courts in the Sixth Circuit regarding who bears the burden of proof when venue is challenged as improper. See Vizachero v. McAlees, No. 12-13985, 2013 WL 3270948, at *6 (E.D. Mich. June 27, 2013) (collecting cases); cf. 14D Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure § 3826 (3d ed. 2013) ("There are many cases ... holding that the burden is on the objecting defendant to establish that venue is improper, because venue rules are for the convenience and benefit of the defendant. But the weight of judicial authority appears to be that when the defendant has made a proper objection, the burden is on the plaintiff to establish that the chosen district is a proper venue. This may be considered the better view because it is consistent with the plaintiff's threshold obligation to show that the case belongs in the particular district court in which suit has been instituted." (footnotes omitted)). Regardless of who bears the burden of proof, under Rule 12(b)(3), a plaintiff's well-pled allegations pertaining to the venue issue are taken as true, unless contradicted by a defendant's affidavits. 5B Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure § 1352 (3d ed. 2013). In resolving venue questions, courts "may examine facts outside the complaint but must draw all reasonable inferences and resolve factual conflicts in favor of the plaintiff." Audi AG & Volkswagen of Am. v. Izumi, 204 F. Supp. 2d 1014, 1017 (E.D. Mich.2002) (citing Moore v. AT & T Latin Am. Corp., 177 F. Supp. 2d 785, 788 (N.D. Ill. 2001); Solow Bldg. Co., LLC v. ATC Assocs., Inc., 175 F. Supp. 2d 465, 469 (E.D.N.Y. 2001)). See also 5B Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure § 1352 (3d ed. 2013) ("A district court may examine facts outside the complaint to determine whether its venue is proper. And ... the court must draw all reasonable inferences and resolve all factual conflicts in favor of the plaintiff.").Reilly v. Meffe, 6 F. Supp. 3d 760, 765 (S.D. Ohio 2014).
Where jurisdiction is not founded solely on diversity of citizenship, 28 U.S.C. § 1391(b) controls for purposes of determining venue unless a special venue statute exists that is applicable to the federal claim(s) at issue. Helder v. Hitachi Power Tools, 764 F. Supp. 93, 94 (E.D. Mich. 1991). For claims brought pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(e)(2) "provides the relevant criteria for determining venue." Id. Section 1132(e)(2) states: "Where an action under this subchapter is brought in a district court of the United States, it may be brought in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found, and process may be served in any other district where a defendant resides or may be found." 29 U.S.C. § 1132(e)(2) (emphasis added). "A defendant 'resides or may be found,' for ERISA venue purposes, in any district in which its 'minimum contacts' would support the exercise of personal jurisdiction.'" Moore v. Rohm & Haas Co., 446 F.3d 643, 646 (6th Cir. 2006) (citations omitted). To satisfy the "minimum contacts" standard, "the defendant's contacts with the forum state" must be "substantial and continuous and systematic, so that the state may exercise personal jurisdiction over the defendant even if the action does not relate to the defendant's contacts with the state." Id. (internal quotation marks and citation omitted).
In its Complaint, Prudential alleged, "upon information and belief," that Brewer is an adult citizen of Ohio and domiciled in Cuyahoga County, Ohio, and he "has been criminally charged with Aggravated Murder under Ohio Stat. § 2903.01 in connection with the Insured's death." (Doc. No. 1 at ¶¶2, 21.) The death certificates for Helen and Dennis attached to the Complaint show the place of death as their residence at 11856 Harbour Light Drive, North Royalton, Ohio. (Doc No. 1-3.) Prudential alleged that venue is proper in the Northern District of Ohio "pursuant to 28 U.S.C. § 1391(b)(2) because a substantial part of the events or omissions giving rise to the claim occurred in this district" and "pursuant to 28 U.S.C. § 1397 because one or more of the defendants resides in this judicial district." (Doc. No. 1 at ¶5.) There is no dispute that Brewer currently is incarcerated in the Cuyahoga County jail. (Doc. Nos. 2, 4, 7.)
The Court notes the Complaint failed to specify that because this matter was it was filed as an ERISA case, it should invoke the venue provision of 29 U.S.C. § 1132(e)(2).
In his motion to dismiss, Brewer states he moves the Court:
To dismiss the action because the complaint is filed in the wrong venue, as the North Royalton Police, by police or court order, I have not seen, evicted me, sometime after Nov. 14, 2018 from my Ohio residance [sic] by multiple liscense [sic] at 11856 Harbour Light Dr., North Royalton, Ohio.(Doc. No. 12 at 2-3.)
This makes me, for diversity of citizen purposes, a citizen solely of the State of Arizona, my primary maintained residence and state of interstate drivers liscense [sic]. (28 U.S.C. 1332).
This is the entirety of Brewer's venue argument. He does not make any challenge on personal jurisdiction grounds. (See Doc. No. 12.)
Prudential opposes Brewer's motion to dismiss on venue grounds, stating "Although [Brewer] asserts his residency as Arizona without providing any supporting facts, the basis for diversity citizenship is not defeated." (Doc. No. 16 at 5.) Prudential asserts venue is proper under 28 U.S.C. § 1391 because the "life insurance policy at issue was issued in Ohio," Helen and Dennis, "during all relevant time periods, resided within the Court's judicial district in Ohio," and Helen's death, "which gave rise to the competing claims to the Remaining Death Benefits," also occurred in this Court's judicial district." (Id. at 4-5.) Prudential also maintains, "upon information and belief," that at the time the Complaint was filed, it "identified [Brewer's] domicile in Ohio even prior to his incarceration in Cuyahoga County jail." (Id. at 5.)
In his November 26, 2019 filing, Brewer identifies himself as an "Arizona Resident (Dual Ohio Residnt [sic] 2). (Doc. No. 18 at 1) (emphasis added). He asserts he has been an Ohio resident from 2016 to present ("Dual Arizona Resident 1)," although he maintains Arizona was "declared [his] primary residence in 2017 to present." (Id. at 2.) He represents that 11856 Harbour Light Drive, North Royalton, Ohio, is the address for his registered boat and former fishing license. (Id. at 3.) He states he spent two and a half months in Ohio in 2018 "while traveling for advanced health care for chronic follicular lymphoma non-hodking [sic] grade II and for pleasure." (Id. at 3-4.) In October 2018, he purchased "Ohio State Farm Auto Insurance." (Id. at 4.) He also claims statements made by a witness to the North Royalton Police Department that he "had moved out, was in a drug rehab in AZ and drove around the country in a homeless manner" were "false." (Id. at 3.)
The Court notes this contradicts his statement in his motion to dismiss that his "eviction" from his home in North Royalton made him "for diversity of citizen purposes, a citizen solely of the State of Arizona, my primary maintained residence and state of interstate drivers liscense [sic]." (Doc. No. 12 at 2-3) (citation omitted).
Prudential filed this case as an ERISA cause of action. See docket ("Cause: 28:1132 E.R.I.S.A."). In its Complaint, Prudential alleged:
This Court has jurisdiction under 29 U.S.C. §§ 1132(e) and (f) which gives the District Court jurisdiction to hear civil actions relating to benefits due under the terms of an employee welfare benefit plan brought by, among other parties, a fiduciary. The group life insurance policy at issue in this action is an employee welfare benefit plan governed by ERISA. The basis for jurisdiction is consistent with general federal question jurisdiction under 28 U.S.C. § 1331 which gives the District Court jurisdiction over actions that arise under the laws of the United States.(Doc. No. 1 at ¶4.) Because Prudential brought this action pursuant to ERISA, the venue provision of 29 U.S.C. § 1132(e)(2) controls. Helder, 764 F. Supp. at 94.
While Prudential failed to cite § 1132(e)(2) in the portion of its Complaint entitled "Venue," other facts Prudential pled elsewhere in the Complaint, as well as set forth in the exhibits to the Complaint, support venue. See Reilly v. Meffe, 6 F. Supp. 3d at 765 ("A plaintiff's well-pled allegations pertaining to the venue issue are taken as true, unless contradicted by a defendant's affidavits" and "courts 'may examine facts outside the complaint but must draw all reasonable inferences and resolve factual conflicts in favor of the plaintiff.'") (emphasis added). It is undisputed that Brewer "may be found" in this district: he is incarcerated in the Cuyahoga County jail. (Doc. Nos. 1, 2, 4, 7.) In addition, Helen and Dennis died in the same homicide event in North Royalton, Ohio, and Brewer has been charged with aggravated murder in connection with their deaths. Prudential maintains, upon information and belief, that Brewer's domicile was Ohio even before he was incarcerated in Cuyahoga County jail. (Doc. No. 16 at 5). Brewer admits he resided in the same home as Helen and Dennis until he was "evicted" by the North Royalton Police Department three days after Helen and Dennis were pronounced dead. (Doc. No. 12; Doc. No. 1-3.) Furthermore, the fact that Brewer was "evicted" from his home does not, without more, establish that he no longer resided in Ohio.
In addition, in Brewer's November 26, 2019 filing, he admits to: (1) being an Ohio resident from 2016 to present, although he says he currently is a dual resident of Arizona and Ohio; (2) using 11856 Harbour Light Drive, North Royalton, Ohio, as the address for his registered boat and former fishing license; (3) spending two and a half months in Ohio in 2018 "while traveling for advanced health care for chronic follicular lymphoma non-hodking [sic] grade II and for pleasure"; and (4) buying "Ohio State Farm Auto Insurance" in October 2018. (Doc. No. 18 at 2-4.)
These facts, with all reasonable inferences drawn and all factual inconsistencies resolved in Prudential's favor, Reilly, 6 F. Supp. 3d at 765, establish that Brewer "resides or may be found" in the Northern District of Ohio. See Moore, 446 F.3d at 646 ("A defendant 'resides or may be found,' for ERISA venue purposes, in any district in which its 'minimum contacts' would support the exercise of personal jurisdiction.'") (citations omitted).
See n.5, supra. --------
As a result, regardless of whether Brewer is a citizen of Arizona or that venue may also be possible elsewhere, venue is proper in this district under 29 U.S.C. § 1132(e)(2). Iron Workers Dist. Council of Southern Ohio & Vicinity Annuity Trust v. Carlin, Inc., No. 3:17-cv-00165, 2017 WL 5054740, at *5 (S.D. Ohio Oct. 17, 2017) ("Section 1132(e)(2) is written in disjunctive language. It thus gave Plaintiffs a choice between three proper venues, one of which it turns out is this District.") (citations omitted), report and recommendation adopted by 2017 WL 5005728 (S.D. Ohio Nov. 1, 2017). Therefore, the Magistrate Judge recommends Brewer's motion to dismiss on venue grounds be DENIED. Date: November 27, 2019
s/ Jonathan Greenberg
Jonathan D. Greenberg
United States Magistrate Judge
OBJECTIONS
Any objections to this Report and Recommendation must be filed with the Clerk of Court within fourteen (14) days after the party objecting has been served with a copy of this Report and Recommendation. 28 U.S.C. § 636(b)(1). Failure to file objections within the specified time may waive the right to appeal the District Court's order. See United States v. Walters , 638 F.2d 947 (6th Cir. 1981); Thomas v. Arn , 474 U.S. 140 (1985), reh'g denied , 474 U.S. 1111 (1986).