George Mark Gowen v. Assurity Life Insurance Company et al
Filing
31
ORDER DENYING Defendant Aycock's 3 Motion to Dismiss, or in the Alternatively Transfer for Improper Venue; DENYING Plaintiff's 10 Motion to Remand. Signed by Chief Judge Lisa G. Wood on 3/22/2013. (ca)
3n the Enfttb Atattg Jitrttt Court
for the boutbern flitrttt of atoratia
Wayrr000 Mbfffion
GEORGE MARK GOWEN,
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Plaintiff,
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VS.
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CV 5 12-034
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ASSURITY LIFE INSURANCE CO. and
RALPH V. AYCOCK,
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Defendants.
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ORDER
Presently before the Court are Plaintiff's Motion to Remand
this case to the State Court of Chariton County (Dkt. No. 10)
and Defendant Aycock's Motion to Dismiss or Transfer Venue (Dkt.
No. 3). Upon due consideration, both motions are DENIED.
I. INTRODUCTION
This action is predicated on the denial of disability
income resulting from Defendants' alleged tortious actions.
Specifically, Plaintiff alleges that Defendants misled him into
procuring a five (5) year disability income policy when he
bargained for a ten (10) year policy. Dkt. No. 1-2. Plaintiff
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asserts the following claims and remedies against Defendants:
Declaratory Relief, Misrepresentation, Negligence, and
Attorney's Fees. Id. The causes of action allegedly originated
in Chariton County, Georgia. Id.
Plaintiff filed this action in the State Court of Chariton
County, Georgia. Id. Pursuant to Georgia law, Defendant Aycock
filed a Motion to Dismiss or Transfer Venue. Dkt. No. 3.
Pursuant to 28 U.S.C. § 1446, Defendants removed the case to
this Court. Dkt. No. 1. Defendants assert that the Court has
subject matter jurisdiction because the Employee Retirement
Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et
seq., completely preempts Plaintiff's state law claims. Id.
Plaintiff filed a motion to remand the case to State Court.
Dkt. No. 10. The Court heard oral argument regarding the
parties' motions on January 15, 2013.
II. CLAIMS AGAINST DEFENDANT ASSURITY
"[Amy civil action brought in a State court of which the
district courts of the United States have original jurisdiction,
may be removed by the defendant" to federal court. 28 U.S.C.
§ 1441(a). Original jurisdiction exists for, inter alia, cases
"arising under the Constitution, laws, or treaties of the United
2
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States." 28 U.S.C. § 1331. Ordinarily, the "well-pleaded
complaint" rule determines whether a particular case arises
under federal law. Aetna Health Inc. v. Davila, 542 U.S. 200,
207 (2004) . Specifically, the court has federal question
jurisdiction if a federal question is presented on the face of
the plaintiff's complaint. See Kemp v. Int'l Bus. Machines
Corp., 109 F.3d 708, 712 (11th Cir. 1997) (citing Franchise Tax
Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 11 (1983)).
The well-pleaded complaint rule directs the Court's "focus to
the terms of the complaint as the plaintiff cho[se] to frame
it." Id. If the plaintiff elects to bring only state law
causes of action in state court, the complaint contains no
federal question. In such case, the case may not be removed to
federal court. Id.
"Because a federal question must appear on the face of the
plaintiff's complaint to satisfy the well-pleaded complaint
rule, a defense which presents a federal question cannot create
removal jurisdiction." Id. "Thus, a case may not be removed to
federal court on the ground of a federal question defense alone,
even if that defense is valid." Id. (citation omitted); see,
e.g., Franchise Tax Bd., 463 U.S. at 25-28 (holding that ERISA
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preemption defense, without more, does not create removal
jurisdiction).
"[T]he removing party bears the burden of showing the
existence of federal subject matter jurisdiction." Conn. State
Dental Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1343
(11th Cir. 2009) (citing Pacheco de Perez v. AT&T Co., 139 F.3d
1368, 1373 (11th Cit. 1998)). "To determine whether the case
should be remanded, the district court must evaluate the factual
allegations in the light most favorable to the plaintiff and
must resolve any uncertainties about state substantive law in
favor of the plaintiff." Stillwell v. Allstate Ins. Co., 663
F.3d 1329, 1333 (11th Cir. 2011) (citing Crowe v. Coleman, 113
F.3d 1536, 1538 (11th Cir. 1997)). The court may consider the
plaintiff's pleadings as well as affidavits and deposition
transcripts submitted by the parties. Id. at 1333 n.1; Crowe,
113 F.3d at 1538.Plaintiff is a Georgia resident. Dkt. No. 1-2
¶ 1. Defendant Assurity Life ("Assurity") is a foreign
corporation.' Id. ¶ 2. Defendant Aycock is a Georgia resident. 2
Id. ¶ 3.
Defendant Assurity is a Nebraska corporation with its principal place of
business in Nebraska. Dkt. No. 1-2 ¶ 2.
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Because Plaintiff and Defendant Aycock are both Georgia
residents, this Court lacks diversity jurisdiction over the
case. See 28 U.S.C. § 1332. Thus, the Court lacks subject
matter jurisdiction unless Plaintiff's case arises under federal
law. See id. § 1331. For the reasons stated below, this Court
finds that Plaintiff's claims against Defendant Assurity are
completely preempted by ERISA. Consequently, the Court has
federal question jurisdiction over those claims. 3
Plaintiff brought only state law claims. See Dkt. No. 1-2.
Therefore, the Court lacks federal question jurisdiction under
the well-pleaded complaint rule. See Conn. State Dental Ass'n,
591 F.3d at 1343. However, there is a narrow exception to the
well-pleaded complaint rule. That exception "exists where the
preemptive force of a federal statute is so extraordinary that
it converts an ordinary state law claim into a statutory federal
claim." Id. (citing Caterpillar, Inc. v. Williams, 482 U.S.
386, 393 (1987) and Butero v. Royal Maccabees Life Ins. Co., 174
F.3d 1207, 1212 (11th Cir. 1999) (quotation omitted))
2
Defendant Aycock's residence is in Appling County, Georgia. Dkt. No. 3.
See 29 U.S.C. § 1132 (e) (1) ("Except for actions under subsection (a) (1) (B)
of this section, the district courts of the United States shall have
exclusive jurisdiction of civil actions under this subchapter brought by the
Secretary or by a participant, beneficiary, [or] fiduciary,....
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There are two types of ERISA preemption: complete (or
super) preemption and defensive (or conflict) preemption. See
Id. at 1343-44. Complete preemption provides a basis for
removal. Id. at 1344. Defensive preemption does not. Id.
Consequently, the Court has subject matter jurisdiction only if
ERISA completely preempts Plaintiff's state law claims.
"Congress may preempt an area of law so completely that
any complaint raising claims in that area is necessarily federal
in character and[,] therefore[,] necessarily presents a basis
for federal court jurisdiction." Kemp, 109 F.3d at 712 (citing
Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987)
Complete preemption "convert[s] state law claims into federal
claims." Id. Consequently, complete preemption "allow[s] a
defendant to remove the case to federal court."
Id.
"Complete preemption under ERISA derives from ERISA's civil
enforcement provision, § 502(a)." Conn. State Dental Ass'n, 591
F.3d at 1344. Section 502(a) is codified at 29 U.S.C.
§ 1132 (a) . Section 1132(a) "has such 'extraordinary' preemptive
power that it 'converts an ordinary state common law complaint
into one stating a federal claim for purposes of the wellpleaded complaint rule.'" Id. (citing Taylor, 481 U.S. at 6566) . Thus, state law claims seeking relief available under
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§ 1132(a) are recharacterized as ERISA claims. Kemp, 109 F.3d
at 712 (citing Taylor, 481 U.S. at 67) . Consequently, any
"cause[] of action within the scope of the civil enforcement
provisions of § 1132(a)] [is] removable to federal court."
Conn. State Dental Ass'n, 591 F.3d at 1344 (alterations in
original; citation omitted)
Determining whether § 1132(a) completely preempts a
plaintiff's claims requires two inquiries: "(1) whether the
plaintiff could have brought its claim under § [1132(a)]; and
(2) whether no other legal duty supports the plaintiff's claim."
Id. at 1345 (citing Davila, 542 U.S. at 210) .'
Defensive preemption "is a substantive defense to preempted
state law claims." Id. at 1344 (citing Jones v. LMR Int'l
Inc., 457 F.3d 1174, 1179 (11th Cir. 2006)). It "arises from
ERISA's express preemption provision, § 514(a), which preempts
In Connecticut State Dental Association, the Eleventh Circuit recognized
that the test articulated by the Supreme Court in Davila augmented the test
previously utilized by the Eleventh Circuit to determine whether ERISA
preempted a plaintiff's state law claims. See 591 F.3d 1337, 1345 (11th Cir.
2009) (noting that the Eleventh Circuit previously used the test articulated
in Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207 (11th Cir. 1999)).
The Eleventh Circuit also recognized that it used the Butero test after the
Supreme Court's decision in Davila. Id. at 1345 n.5 (citing use of the
Butero test by the court in Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267
(11th Cir. 2005)) .
However, the court clarified that the use of the Butero
test in Cotton was dicta and, therefore, not controlling. Id. Consequently,
this Court applies the test articulated by the Eleventh Circuit in
Connecticut State Dental Association.
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any state law claim that 'relates to' an ERISA plan." Id.
(citing 29 U.S.C. § 1144(a)) (footnote omitted). Because
defensive preemption is a defense, it is not a basis for
removal. Id. (citing Gully v. First Nat'l Bank, 299 U.S. 109,
115-16 (1936)); see also Ervast v. Flexible Prods. Co., 346 F.3d
1007, 1012 n.6 (11th Cir. 2003) (Defensive preemption "provides
only an affirmative defense to state law claims and is not a
basis for removal.")
A. Claims Aaainst Defendant Assurit
To establish complete preemption, Defendant Assurity must
show that Plaintiff could have brought his claim under 29 U.S.C.
§ 1132(a). Borrero v. United Healthcare of N.Y., Inc., 610 F.3d
1296, 1301 (11th Cir. 2010) (quoting Davila, 542 U.S. at 210)
Plaintiff could have brought his claim under § 1132(a) if four
(4) requirements are met: (1) there is a relevant ERISA plan,
(2) Plaintiff has standing to sue under ERISA, (3) Defendant
Assurity is an ERISA entity, and (4) Plaintiff seeks
compensatory relief akin to that available under § 1132 (a) . See
Butero, 174 F.3d at 1212 (citations omitted); Conn. State Dental
Ass'n, 591 F.3d at 1350 (citing Davila, 542 U.S. at 211-12 and
X.
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Mann Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941,
947-49 (9th Cm. 2009)).
In addition to showing that Plaintiff could have brought
his claim under § 1132, Defendant Assurity must show that "no
legal duty (state or federal) independent of ERISA or the plan
terms is violated." Davila, 542 U.S. at 210; see also Conn.
State Dental Ass'n, 591 F.3d at 1353.
1.
ERISA Plan
The disability policy at issue is a relevant ERISA plan.
An ERISA plan "does not have to be in writing." Suggs v. Pan
Am. Life Ins. Co., 847 F. Supp. 1324, 1330 (S.D. Miss. 1994).
Moreover, a formal document designated as "the Plan" is not
required to establish that an ERISA plan exists. Id. (citing
Mem'l Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d 236, 241
(5th Cir. 1990)). "[T]he purchase of an insurance policy does
not, in and of itself, establish the existence of an ERISA
plan." Id. However, such a "purchase is evidence of the
establishment of a plan . . . [and] the purchase of a policy or
multiple policies covering a class of employees offers
substantial evidence that a plan . . . has been established."
Id. (quoting Mem'l Hosp. Sys., 904 F.2d at 242 and Donovan v.
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Dillingham, 688 F.2d 1367, 1373 (11th Cir. 1982) (en banc)).
Ultimately, the existence of an ERISA plan is a question of
fact, to be answered in light of all the surrounding
circumstances and facts from the point of view of a reasonable
person. Langley v. DaimlerChrysler Corp., 502 F.3d 475, 479
(6th Cir. 2007); see also Slamen v. Paul Revere Life Ins. Co.,
166 F.3d 1102, 1104 (11th Cir. 1999)
The term "plan" as used in ERISA means an "employee welfare
benefit plan. ,5 See 29 U.S.C. § 1002(3). For present purposes,
an "employee welfare benefit plan" governed by ERISA has five
(5) elements. It is (1) a "plan" (2) established or maintained
(3) by an employer (4) to provide its participants or their
beneficiaries (5) disability benefits. Id. § 1002(1); see also
Donovan, 688 F.2d at 1371 (dividing the statutory definition
into elements)
There is a "plan." "An ERISA plan exists whenever there
are intended benefits, intended beneficiaries, a source of
financing, and a procedure to apply for and collect benefits.'"
In the alternative, "plan" means an "employee pension benefit plan or a plan
which is both an employee welfare benefit plan and an employee pension
benefit plan." 29 U.S.C. § 1002(3). However, employee pension benefit plans
are not at issue in this case.
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Butero, 174 F.3d at 1214 (citing Donovan, 688 F.2d at 1372); see
also Pegram v. Herdrich, 530 U.S. 211, 223 (2000) ("Rules
governing collection of premiums, definition of benefits,
submission of claims, and resolution of disagreements over
entitlement to services are the sorts of provisions that
constitute a plan. . . . Thus, when employers contract with an
HMO to provide benefits to employees subject to ERISA, the
provisions of documents that set up the HMO are not, as such, an
ERISA plan; but the agreement between an HMO and an employer who
pays the premiums may . .
provide elements of a plan by
setting out rules under which beneficiaries will be entitled to
[benefits] .") . Here, the intended benefit was disability
income. Plaintiff was the intended beneficiary. See Dkt. No.
14, at 6.6 Plaintiff's employer provided financing by paying the
6
See, e.g., Williams v. Wright, 927 F.2d 1540, 1545 (11th Cir. 1991) ("[A]
plan covering only a single employee, where all other requirements are met,
is covered by ERISA."); Cowart v. Metro. Life Ins. Co., 444 F. Supp. 2d 1282,
1292 (M.D. Ga. 2006) ("Though the plan was offered to only three employees
the requirement that there exist an identifiable class of beneficiaries
is satisfied even if the benefit in question is conferred on only a single
person." (citing Randol v. Mid-West Nat'l Life Ins. Co., 987 F.2d 1547, 1550
n.4 (11th Cir. 1993))).
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premiums. See id. at 77 The disability policy provided the
procedure to apply for and collect benefits. 8 See id.
The plan was "established or maintained." "A plan is
'established' when there has been some degree of implementation
by the employer going beyond a mere intent to confer a benefit."
Butero, 174 F.3d at 1214 (citing Whitt v. Sherman Int'l C
•,
147 F.3d 1325, 1331 (11th Cir. 1998)); see also Donovan, 688
F.2d at 1373 ("Acts or events that record, exemplify or
implement the decision [are] direct or circumstantial evidence
that the decision has become reality—e.g., financing or
arranging to finance or fund the intended benefits, establishing
a procedure for disbursing benefits, assuring employees that the
plan or program exists—but it is the reality of a plan, fund or
program[,] and not the decision to extend certain benefits[,]
that is determinative.") . Such implementation happened here.
Plaintiff consulted an insurance agent, selected the terms of
See, e.g., Cowart, 444 F. Supp. 2d at 1286-87 (noting that "premiums were to
be paid with the employer's funds" (internal quotation marks omitted)); Suggs
v. Pan Am. Life Ins. Co., 847 F. Supp. 1324, 1331 (S.D. Miss. 1994) ("[T]he
source of financing was by premiums paid by the employer and/or the employees
and submitted by the employer to the insurer.")
8
Presumably Plaintiff followed this procedure, as he filed his claim and was
denied coverage. See Dkt. No. 1-2; see, e.g., Suggs, 847 F. Supp. at 1331
("[TI he procedure for receiving benefits was to make claim with the insurer
through forms provided to the employer by the insurer and completed by the
insured").
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the disability income policy, and contracted for the policy.
See Dkt. No. 1-2 ¶[ 9-15; Dkt. No. 14, at 4-7. Plaintiff's
employer then remitted premium checks to Defendant Assurity.
See id. Thus, Plaintiff's employer went beyond the intent to
confer a benefit. It implemented its desire to provide a
disability income policy. Consequently, the plan was
established. Compare Whitt, 147 F.3d at 1331 (finding no plan
established where asserted "plan" was no more than several draft
plans), with Butero, 174 F.3d at 1214 (finding established plan
where plaintiff "consulted an insurance agent, selected the
terms of the group policy it wished to purchase for its
employees, completed an application form for the policy,
solicited enrollments from its employees, collected money
through payroll deductions, and remitted premium checks").
Moreover, even if Plaintiff's employer did not establish the
plan, it took actions to maintain the plan. See Crooms v.
Provident Life & Acc. Ins. Co., 484 F. Supp. 2d 1286, 1297-99
(N.D. Ga. 2007) (The "requirement, that the plan be 'established
or maintained' by the employer is a disjunctive one. 'A showing
of either one is sufficient to give rise to ERISA's
application.'" (citing Cowart v. Metro. Life. Ins. Co., 444 F.
Supp. 2d 1282, 1293 (M.D. Ga. 2006))). Here, Plaintiff's
13
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employer paid all of the applicable insurance premiums. See
Dkt. No. 14, at 7.
These payments maintained the plan. See,
e.g., Randol v. Mid-West Nat'l Life. Ins. Co. of Tenn., 987 F.2d
1547, 1551 (11th Cir. 1993) (finding that an employer
"maintained" a plan when, "to facilitate the employees'
obtaining health coverage," it "wrote the first check purchasing
the policies, established a system whereby the premiums would be
paid monthly by means of a bank draft on the corporate account,
contributed $75 per employee per month toward the premiums, and
collected from the employees the balance of the premiums through
a withholding system").
Plaintiff's employer maintained the plan. An "employer" is
"any person acting directly as an employer, or indirectly in the
interest of an employer, in relation to an employee benefit
plan." 29 U.S.C. § 1002(5). Here, Plaintiff's employer
maintained the plan by remitting premium checks to Defendant
Assurity. Dkt. No. 14, at 7.
It is undisputed that the plan was established to provide
its participant disability income benefits. See Dkt. No. 1-2
191 9-15. Therefore, Plaintiff's claim involves a
plan established by an employer to provide its participant
disability benefits. Consequently, the disability policy at
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issue is a relevant ERISA plan. Compare Randol, 987 F.2d at
1551 (finding ERISA plan where employer purchased health
insurance policies and remitted monthly premium checks to
insurer, where such checks were funded partially by employer and
partially by employees); Mem'l Hosp. Sys., 904 F.2d at 241-43
(finding ERISA plan existed where employer purchased group
health insurance policy even though employer's "administrative
function" in administering the plan was minimal and appeared to
only involve remitting monthly premium payments); Suggs, 847 F.
Supp. at 1331 (recognizing that ERISA plan existed because "it
would have been obvious to a reasonable person that the intended
benefits of the policy at issue . . •, purchased by [the]
Plaintiff's employer, were medical coverages; that the
beneficiaries were the employees .
. enrolled in the program;
that the source of financing was by premiums paid by the
employer and/or the employees and submitted by the employer to
the insurer; and that the procedure for receiving benefits was
to make claim with the insurer through forms provided to the
employer by the insurer and completed by the insured"), with
Letner v. UNUN Life Ins. Co. of Am., 203 F. Supp. 2d 1291 (N.D.
Fla. 2001) (finding no ERISA plan where employee applied for and
purchased policy that was not sponsored by her employer, where
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employee was policy owner and named insured, and where employer
simply withheld employee's premiums through payroll deductions
but made no financial contribution towards those insurance
premiums)
2. Standing Under ERISA
Plaintiff has standing to sue. Specifically, as an
employee eligible to receive benefits under the ERISA plan,
Plaintiff is a participant. See 29 U.S.C. § 1002(7) (defining
participant as "any employee or former employee of an employer
who is or may become eligible to receive a benefit of any
type from an employee benefit plan which covers employees of
such employer . . . or whose beneficiaries may be eligible to
receive any such benefit"). As a participant, Plaintiff has
standing to assert a variety of claims under § 1132 (a) . See,
e.g., 29 U.S.C. § 1132 (a) (1) (B) ("A civil action may be brought
by a participant . . . to recover benefits due to him
under the terms of his plan, to enforce his rights under the
terms of the plan, or to clarify his rights to future benefits
under the terms of the plan."). Consequently, Plaintiff has
standing to sue under ERISA.
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3.
ERISA Entity
Defendant Assurity is an ERISA entity. "ERISA entities are
the employer, the plan, the plan fiduciaries, and the
beneficiaries under the plan." Morstein v. Nat'l Ins. Servs.
Inc., 93 F.3d 715, 722 (11th Cir. 1996) (en banc) (citations
omitted). "A fiduciary within the meaning of ERISA must be
someone acting in the capacity of manager, administrator, or
financial adviser to a 'plan.'" Pegram, 530 U.S. at 222 (citing
29 U.S.C. §§ 1002(21)(A)(i)-(±ii)). Specifically, the fiduciary
function applicable here is Defendant Assurity's exercise of
"discretionary authority or discretionary responsibility in the
administration of [the ERISA] plan." 29 U.S.C. §
1002 (21) (A) (iii). Defendant Assurity is not an ERISA fiduciary
merely because it administers or exercises discretionary
authority over its own business. See Pegram, 530 U.S. at 223.
However, "it [is] a fiduciary if it administers the plan." Id.
Defendant Assurity administers the plan by "control[ling]
the payment of benefits" and determining Plaintiff's rights.
Morstein, 93 F.3d at 723; see also Davila, 542 U.S. at 218
(2004) ("A benefit determination under ERISA, though, is
generally a fiduciary act." (citation omitted)); Butero, 174
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F.3d at 1213. As such, it is the plan fiduciary. 9 Consequently,
Defendant Assurity is an ERISA entity.
4. Relief Sought
The relief sought is available under § 1132. Specifically,
Plaintiff claims that Defendant Assurity misled him into
procuring a five (5) year disability income policy when he
bargained for a ten (10) year policy. Dkt. No. 1-2 191 24-27.
Plaintiff's claim of misrepresentation is "in essence [a]
claim[] 'to recover benefits due to [Plaintiff] under the terms
of the plan.'" Butero, 174 F.3d at 1213 (citing 29 U.S.C.
§ 1132 (a) (1) (B)); see Engelhardt v. Paul Revere Life Ins. Co.,
139 F.3d 1346, 1353 (11th Cir. 1998) (fraud in the inducement is
claim for benefits under § 1132 (a) (1)); Franklin v. QHG of
The absence of a trust fund from which benefits would be paid does not
preclude the application of ERISA. See Mem'l Hosp. Sys. v. Northbrook Life
Ins. Co., 904 F.2d 236, 243 n.9 (5th Cir. 1990). One of ERISA's principal
goals is to protect plan assets held in trust for the benefit of plan
participants and beneficiaries. Id. (citing 29 U.S.C. § 1001). "However,
ERISA specifically envisions that an employer may establish an employee
welfare benefit plan 'through the purchase of insurance or otherwise.'" Id.
(citing 29 U.S.C. § 1002(1)); see also Metro. Life Ins. Co. v. Mass., 471
U.S. 724, 732, (1985) ("[ERISA] [p]lans may self-insure or they may purchase
insurance for their participants.") . Although ERISA "imposes a fiduciary
requirement that 'all assets of an employee benefit plan shall be held in
trust by one or more trustees,' . . . this provision does not apply to any
assets of a plan which consist of insurance contracts or policies issued by
an insurance company qualified to do business in a State.'" Mem'l Hosp.
Sys., 904 F.2d at 243 n.9 (citing 29 U.S.C. §§ 1103(a), (b)(1)).
18
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Gadsden, Inc., 127 F.3d 1024, 1029 (11th Cir. 1997) (claim based
on alleged misrepresentation by ERISA entity that certain
coverage would exist is claim for benefits) . As such, the
relief sought is available under § 1132(a).
5. No Independent Legal Duty
Plaintiff's cause of action is dependent on the plan's
terms. Plaintiff claims that he procured a ten (10) year
disability income policy. Dkt. No. 1-2 ¶91 24-26. He further
contends that Defendant Assurity denied him coverage beyond five
(5) years. Id. ¶ 27. Based on Plaintiff's assertions,
"interpretation of the terms of [Plaintiff's ERISA-regulated]
benefit plan[] forms an essential part of [his] [state law]
claim." Davila, 542 U.S. at 213. Therefore, state law
"liability would exist . . . only because of [Defendant
Assurity's] administration of [the] ERISA-regulated benefit
plan[]." Id. Defendant Assurity's potential state law
liability "derives entirely from the particular rights and
obligations established by [his ERISA-regulated] benefit
plan[]." Id. Consequently, Plaintiff's cause of action is
dependent on the plan's terms. Compare id. at 212-13 (finding
that, although state law imposed a duty on defendants to use
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"ordinary care" in making health care decisions, that legal duty
did not arise independently of the plan because "the failure of
the plan itself to cover the requested treatment [was] the
proximate cause" of injuries arising from the denial), with
Pascack Valley Hosp. v. Local 464A UFCW Welfare Reimbursement
Plan, 388 F.3d 393 (3d Cir. 2004) (observing that claims would
be independent of ERISA plan where claim required interpretation
of third-party Subscriber Agreements and the ERISA Plan's
coverage and eligibility were not disputed)
6. Conclusion
In summary, there is a relevant ERISA plan, Plaintiff has
standing to sue, Defendant Assurity is an ERISA entity, and
Plaintiff seeks compensatory relief that is available under
§ 1132(a). Consequently, Plaintiff could have brought suit
under § 1132. See Butero, 174 F.3d at 1212 (citations omitted).
Moreover, Plaintiff's claims against Defendant Assurity depend
on the plan's terms. Therefore, Plaintiff's claims against
Defendant Assurity are completely preempted by ERISA. Conn.
State Dental Ass'n, 591 F.3d at 1345. Consequently, the Court
has federal question jurisdiction over Plaintiff's claims
against Defendant Assurity.
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III. CLAIMS AGAINST DEFENDANT AYCOCK
Defendant Aycock asserts that ERISA preempts Plaintiff's
claims against him. However, complete preemption under ERISA
does not extend to state law tort claims brought against nonERISA entities. See Morstein v. Nat'l Ins. Servs., Inc., 93
F.3d 715, 722 (11th Cir. 1996) (en banc) (holding "when a state
law claim brought against a non-ERISA entity does not affect
relations among principal ERISA entities as such, then it is not
preempted by ERISA"). As an insurance agent, Defendant Aycock
is not an ERISA entity. See id. (adopting rule from Perkins v.
Time Ins. Co., 898 F.2d 470, 473 (5th Cir. 1990)). He does not
manage, administer, or provide financial advice to the plan.
See 29 U.S.C. §§ 1002 (21) (A) (i)-(iii) . Consequently,
Plaintiff's claims against Defendant Aycock are not completely
preempted by ERISA.
Defendant Aycock argues that Plaintiff's claims must be
preempted because those claims "relate to" an ERISA plan. See
Dkt. No. 13, at 7-10. ERISA supersedes "any and all State laws"
that "relate to any employee benefit plan." 29 U.S.C.
§ 1144(a). Therefore, if Plaintiff's "claims sufficiently
relate to an ERISA plan, ordinary preemption principles would
bar [Plaintiff's] state law action." See Kemp v. Int'l Bus.
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Machines Corp., 109 F.3d 708, 714 (11th Cir. 1997). However,
§ 1144(a) is an affirmative defense. "The defense of
[defensive] preemption, by itself, does not create federal
question jurisdiction." Id. (citing Franchise Tax Bd., 463 U.S.
at 7, 27-28).
Nevertheless, removal jurisdiction exists over the action
by virtue of ERISA's complete preemption of the claims against
Defendant Assurity. See, supra, Part II; Butero v. Royal
Maccabees Life Ins. Co., 174 F.3d 1207, 1215 (11th Cir. 1999).
Therefore, Plaintiff's claims against Defendant Assurity were
removable. Because Plaintiff's claims against Defendant Aycock
were joined with these removable claims, the Court can retain
jurisdiction over all of Plaintiff's claims. See 28 U.S.C.
§§ 1367, 1441(c); Conn. State Dental Ass'n v. Anthem Health
Plans, Inc., 591 F.3d 1337, 1353 (11th Cir. 2009) (citing
Butero, 174 F.3d at 1215); In re City of Mobile, 75 F.3d 605,
608 (11th Cir. 1996) . Specifically, this Court can exercise its
supplemental jurisdiction over Plaintiff's remaining state law
claims if they "form part of the same case or controversy" as
the claims for which the Court has original jurisdiction. 28
U.S.C. § 1367. "Considerations of judicial economy, convenience
and fairness to litigants" determine whether it is reasonable
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and proper for a federal court to proceed to final judgment.
Osborn v. Haley, 549 U.S. 225, 245 (2007) (citation omitted).
Plaintiff's claims relate to a single disability insurance
policy. Moreover, Defendants' actions and understanding of the
policies are related. Defendant Aycock's affidavit suggests
that he was a conduit of information between Defendant Assurity
and Plaintiff. See Dkt. No. 13-1. Similar evidence and
witnesses are likely required to prove the separate claims.
Given the relatedness of the claims and facts, the Court
finds that the claims against Defendant Aycock "form part of the
same case or controversy" as the claims against Defendant
Assurity. Consequently, the Court chooses to exercise its power
to retain jurisdiction over Plaintiff's claims against Defendant
Aycock.
IV. VENUE
The Court has subject matter jurisdiction over Plaintiff's
claims. See supra Parts 11-111. Therefore, the Federal Rules
of Civil Procedure determine the appropriate venue. "A civil
action may be brought in . . . a judicial district in which a
substantial part of the events or omissions giving rise to the
claim occurred . . . ." 28 U.S.C. § 1391(b) (2).
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Plaintiff asserts that the actions forming the basis of his
Complaint originated in Charlton County, Georgia. See Dkt. No.
1-2 ¶ 5. Chariton County is in the Waycross division. 28
U.S.C. § 90(c) (4). Consequently, the Waycross division is an
appropriate venue. 28 U.S.C. § 1391(b) (2) . Defendant Aycock
agrees. See Dkt. No. 3.
V. CONCLUSION
Because Plaintiff's state law claims against Defendant
Assurity must be "recharacterized" as federal claims for ERISA
benefits, Plaintiff's Complaint includes a sufficient federal
question to support removal jurisdiction. The Court exercises
its power of supplemental jurisdiction and retains jurisdiction
over all of Plaintiff's claims. Accordingly, Plaintiff's Motion
to Remand is DENIED.
Dkt. No. 10.
Given that the Waycross division is an appropriate venue,
Defendant Aycock's Motion to Dismiss or Transfer Venue is
DENIED.
Dkt. No. 3.
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SO ORDERED, this 22nd day of March, 2013.
L SA GODBEY OD, CHIEF JUDGE
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
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