United States District Court, N.D. Iowa, Cedar Rapids Division
WILLIAMS, UNITED STATES MAGISTRATE JUDGE
matter is before the Court pursuant to defendant Prudential
Insurance Company of America's Motion for Leave to Amend
Scheduling Order and For Leave to File Amended Answer and
Counterclaim. Doc. 75. Plaintiff, Amy Stanczyk, originally
sued defendant in state court alleging defendant refused in
bad faith to pay her insurance benefits pursuant to a Group
Long-Term Disability Plan. Doc. 3. Defendant filed an answer
to the complaint, denying liability. Doc. 9. Defendant now
seeks to amend its answer and assert a counterclaim alleging
plaintiff was ineligible for coverage because she did not
work full time. Defendant's counterclaim seeks return of
benefits paid by defendant to plaintiff under an unjust
enrichment theory. Plaintiff resists defendant's motion.
Doc. 80. Plaintiff argues defendant has not shown good cause
to modify the Court's scheduling order. Plaintiff also
argues the Court should deny defendant's motion to amend
on the ground defendant's counterclaim is futile because
it is defective for a number of reasons.
December 5, 2016, the Court heard argument on defendant's
motion. For the reasons that follow, the Court grants
defendant's motion to amend its answer and bring a
was a certified public accountant who worked as a part-time
independent contractor. On July 7, 2004, plaintiff applied
for insurance coverage. Doc. 75-5 (Exhibit A). Pursuant to
the terms of the policy, for plaintiff to be eligible for
coverage, she was required to be "actively at work on
full time." Doc. 75-6, at 9 (Exhibit B). The policy
defines "full time" as "regularly working
17½ or more hours per week." Id. The
policy further provides:
Your Participant Insurance under a Coverage will be delayed
if you do not meet the Active Work Requirement on the day
your insurance would otherwise begin. Instead, it will begin
on the first day you meet the Active Work Requirement and the
other requirements for the insurance. The same delay rule
will apply to any change in your insurance that is subject to
this section. If you do not meet the Active Work Requirement
on the day that change would take effect, it will take effect
on the first day you meet that requirement.
Doc. 75-6, at 10. The policy again defines "Active Work
Requirement" as working full time, meaning 17½ or
more hours per week." Id., at 18.
October 13-14, 2016, defendant deposed plaintiff. During her
deposition, plaintiff testified that she charged at least
$100 per hour (and up to $150 per hour) for work she
performed from the mid-1990s until she stopped working in
2006. Doc. 75-7 (Exhibit C, at 31, 116-17). Plaintiff also
testified that she would trust her husband's recollection
better than her own regarding the most she made in a year
because he completed the taxes; plaintiff's husband
testified that the "largest revenue year for
[plaintiff's] consulting practice was about $60,
000." Id., at 117.
on this testimony about plaintiff's hourly rate and
maximum revenue, defendant calculated that she worked less
than the required 17½ hours per week. Doc. 75-4, at 4.
Through further discovery requests, defendant obtained
plaintiff's Social Security records. Defendant asserts
these records show that plaintiff's actual work hours
were even fewer than previously calculated based on
plaintiff's husband's recollection of plaintiff's
now seeks to amend its answer and assert an unjust enrichment
counterclaim against plaintiff, seeking restitution in excess
of a quarter of a million dollars. Specifically,
defendant's proposed counterclaim asserts, in pertinent
10. On July 7, 2004, Stanczyk applied for LTD coverage under
the Policy by submitting an application for coverage
electronically to Aon Corporation ("Aon"). At that
time, Aon received and processed applications for the
coverage under the Policy.
11. At the time Stanczyk applied for coverage[, ] she was not
regularly working 17½ or more hours per week and had
not done so for several years.
12. At no time since Stanczyk applied for coverage under the
Policy has she regularly worked 17½ hours per week.
13. Stanczyk applied for and ultimately received LTD benefits
under the Policy beginning on or about January 18, 2007, less
a six month elimination period specified in the Policy.
14. Stanczyk received LTD benefits under the Policy through
July 31, 2013[, ] in the amount of $3, 000 per month.
15. Because Stanczyk has never been eligible for LTD
insurance coverage under the Policy, she was paid LTD
benefits in the amount of $238, 900 to which she was not
entitled. By paying LTD benefits to Stanczyk, Prudential
conferred a benefit upon Stanczyk.
16. Stanczyk voluntarily accepted and retained the payments,
and took affirmative actions, and made affirmative
representations, in order to procure the payment of the LTD
17. The entire amount of the payment, less the premiums
Stanczyk paid for coverage, is money belonging in good