Stalp et al v. Excellus Health Plan, Inc.
ORDER- The defendants motion for partial summary judgment (Filing No. 16 ) is granted. The plaintiffs objection thereto (Filing No. 24 ) is denied. The plaintiffs shall file an amended complaint within 14 days of the date of this order. Ordered by Judge Joseph F. Bataillon. (MKR)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
CHRISTOPHER STALP, JOYCE STALP,
MEMORANDUM AND ORDER
EXCELLUS HEALTH PLAN, INC., A
This matter is before the court on the defendant’s motion for partial summary
judgment, Filing No. 16, and on the plaintiffs’ objection thereto, Filing No. 24.1 This is
an action seeking damages for breach of contract, bad faith, and unfair claims
settlement practices in connection with denials of claims for health insurance benefits.
Filing No. 3, Amended Complaint. In their Amended Complaint, plaintiffs Christopher
Stalp, Joyce Stalp, and Timothy Stalp (“the Stalps”) allege they are insured under a
health insurance policy provided by Excellus Health Plan, Inc. (“Excellus”) and that
Excellus wrongfully refused to pay claims for mental health treatment benefits. Id. at 23. The plaintiffs premise jurisdiction on diversity of citizenship under 28 U.S.C. § 1332.
Excellus asserts that the plaintiffs’ claims are preempted by ERISA, 29 U.S.C.
§ 1001 et seq.
However, it has no objection to the plaintiffs filing of an amended
complaint asserting claims under ERISA. The Stalps oppose the motion, contending
the insurance policy at issue is not an employee welfare benefit plan as defined by the
The objection is properly viewed as a response to the motion and will be treated as such.
statute. Alternatively, the Stalps seek leave to file an amended complaint alleging a
claim under ERISA.
The following facts are gleaned from the parties’ statements of undisputed facts.
See Filing No. 17, Defendant’s brief at 1-3; Filing No. 24, Plaintiffs’ Brief at 1 (admitting
undisputed facts 1-4 and 6-7). The undisputed evidence shows that the Timothy Stalp
obtained the health insurance at issue as a benefit of his employment by Stalp Ready
Mix. Stalp Ready Mix is a sand and gravel business that primarily sells products and
provides services to agricultural customers.
Stalp Ready Mix provided health
insurance, through the Excellus policy, to employees other than Timothy Stalp. At all
relevant times, plaintiffs Timothy and Joyce Stalp and their dependent son, Christopher,
were covered under a health insurance policy provided by Stalp Ready Mix and issued
by the defendant, Excellus. Stalp Ready Mix paid the health insurance premiums for
Timothy Stalp and for other employees as a benefit of their respective employments.
The group benefit plan offered through Agri-Services Agency, LLC (“ASA”), including
the Excellus health insurance policy at issue here, is sponsored by Dairylea Group, a
marketing cooperative that includes farm producers, other cooperatives and their
members, and employers who directly support agriculture, and provides benefits to the
employees of the employer-members.
The benefit plan is not part of a collective
bargaining agreement, nor is it established by a rural electric cooperative or a rural
telephone cooperative association.
Documents submitted in connection with the motion show that a booklet and
summary describing coverage under the Excellus Blue Cross Blue Shield Health
Benefits Plan is included in the “Summary Plan Description Information (The Employee
Retirement Income Security Act of 1974)” (“SPD”). Filing No. 19, Ex. A, Affidavit of Erin
E. Busch (“Busch Aff.”), Ex. 4, Summary Plan Document (“SPD”) at 1. It describes the
type of plan as a “Welfare benefit plan providing Health, Dental, Life Insurance, Long
Term Disability and Employee Assistance Plan Benefits” to “Dairylea Cooperative Inc.
and its wholly owned subsidiary Agri-Services Agency, L.L.C.” as employer/plan
sponsor. Id. Under “contributions to the plan,” the SPD states the plan is funded by a
combination of employer and employee contributions. Id. at 2. The plan administrator
is Agri-Services agency, L.L.C. Id. Excellus Blue Cross BlueShield is responsible for
plan administrative duties and processing of claims.
Id. The SPD also includes a
“statement of ERISA rights.” Id. at 6.
ERISA fully preempts any state law that “relate[s] to” any employee benefit plan.
29 U.S.C. § 1144(b). As a preliminary matter, a court must determine if the policy at
issue is a “plan” within the meaning of ERISA because the existence of a “plan” is a
prerequisite to the jurisdiction of ERISA. Johnston v. Paul Revere Life Ins. Co., 241
F.3d 623, 629 (8th Cir. 2001). ERISA defines a “plan” as “an employee welfare benefit
plan.” 29 U.S.C. § 1002(3). ERISA further defines an “employee welfare benefit plan,”
in pertinent part, as “any plan, fund, or program . . . established or maintained by an
employer . . . for the purpose of providing . . . benefits in the event of sickness, accident,
disability, death or unemployment.” 29 U.S.C. § 1002(1). This preemption language is
“conspicuous for its breadth.” FMC Corp. v. Holliday, 498 U.S. 52, 58 (1990).
In determining whether a plan is “a reality,” a court must look at the surrounding
circumstances to determine whether “a reasonable person could ascertain the intended
benefits, beneficiaries, source of financing, and procedures for receiving benefits.”
Johnston, 241 F.3d at 629 (quoting Harris v. Arkansas Book Co., 794 F.2d 358, 360
(8th Cir. 1986)). “[A]n employer's payment of insurance premiums, standing alone, is
substantial evidence of the existence of an ERISA plan.” Robinson v. Linomaz, 58 F.3d
365, 368 (8th Cir.1995) (collecting cases); see also Credit Managers Ass'n of S. Cal. v.
Kennesaw Life & Accident Ins. Co., 809 F.2d 617, 625 (9th Cir. 1987) (noting that “[a]n
employer . . . can establish an ERISA plan rather easily . . . unless it is a mere
advertiser who makes no contributions on behalf of its employees”). Although “[p]lans
that cover only sole owners or partners and their spouses . . . fall outside [ERISA’s]
domain,” plans that cover a working owner or partner and at least one non-owner
employee are considered employee benefit plans and thus “fall entirely within ERISA’s
compass.” See Raymond B. Yates, M.D., P.C. Profit Sharing Plan v. Hendon, 541 U.S.
1, 21 (2004).
ERISA preempts “‘state common law tort and contract actions asserting improper
processing of a claim for benefits' under an ERISA plan.” Thompson v. Gencare Health
Sys., Inc., 202 F.3d 1072, 1073 (8th Cir. 2000) (quoting Pilot Life Ins. Co. v. Dedeaux,
481 U.S. 41, 43 (1987)); see Aetna Health Inc. v. Davila, 542 U.S. 200, 207-08 (2004)
(“any state-law cause of action that duplicates, supplements, or supplants the ERISA
civil enforcement remedy conflicts with the clear congressional intent to make the
ERISA remedy exclusive and is therefore pre-empted”).
Because the essence of the plaintiffs’ claims relates to the administration of plan
benefits, it falls within the scope of ERISA. It is evident that a reasonable person could
conclude that Stalp Ready Mix maintained a plan, within the meaning of ERISA, that
offered health insurance benefits to its employees.
Ready Mix paid part of the premiums.
There is no dispute that Stalp
Further, plaintiffs acknowledge that other
employees are covered under the policy. Accordingly, the court finds the policy at issue
is an employee welfare benefit plan and plaintiffs’ state law claims are preempted by
ERISA. Both parties urge the court to grant the plaintiffs leave to file an amended
IT IS ORERED:
The defendant’s motion for partial summary judgment (Filing No. 16) is
The plaintiffs’ objection thereto (Filing No. 24) is denied.
The plaintiffs shall file an amended complaint within 14 days of the date of
DATED this 22nd day of August, 2012.
BY THE COURT:
s/ Joseph F. Bataillon
United States District Judge
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