THE ESTATE OF MARK JENNINGS et al v. DELTA AIR LINES, INC. et al

Filing 26

OPINION. Signed by Chief Judge Jerome B. Simandle on 8/27/2015. (tf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

THE ESTATE OF MARK JENNINGS,
et al.,
Plaintiffs,

HONORABLE JEROME B. SIMANDLE

Civil Action
No. 15-962 (JBS/AMD)

v.
DELTA AIR LINES, INC., et al.,

OPINION

Defendants.

APPEARANCES:
Robert Aaron Greenberg, Esq.
ARONBERG, KOUSER & PAUL
430 Route 70 West
Cherry Hill, NJ 08002
Attorney for Plaintiffs
John Timothy McDonald, Esq.
THOMPSON HINE LLP
Two Alliance Center
3560 Lenox Road, Suite 1600
Atlanta, GA 30326
Attorney for Defendant Delta Air Lines, Inc.
Darth M. Newman, Esq.
Howard A. Rosenthal, Esq.
ARCHER & GREINER, P.C.
One Centennial Square
Haddonfield, NJ 08033
-andJonathan P. Rardin, Esq.
ARCHER & GREINER, P.C.
One Liberty Place, 32nd Floor
1650 Market Street
Philadelphia, PA 19103
Attorneys for Defendant Xerox Business Services, LLC

SIMANDLE, Chief Judge:
I. INTRODUCTION
In this action, Emily Jennings, individually and as
administratrix of the Estate of Mark Jennings, asserts claims
for breach of contract and negligence against Delta Air Lines,
Inc. (“Delta”) and Xerox Business Services, LLC (“Xerox”), as
successor of Affiliated Computer Services, Inc. (“ACS”), for
their roles in the allegedly wrongful denial of the Estate’s
life insurance claim. Following her husband’s unexpected death,
Ms. Jennings filed a claim under his life insurance policy
provided by his employer, Delta, as part of a group employee
benefits plan. Xerox was the records custodian for the plan, and
in this capacity, interacted with Mr. Jennings and made
eligibility decisions regarding his life insurance benefits.
This matter comes before the Court on motions to dismiss by
Defendants Xerox [Docket Item 17] and Delta [Docket Item 18]
under Rule 12(b)(6), Fed. R. Civ. P., for failure to state a
claim. Defendants principally argue that the Employment
Retirement Income Security Act of 1974 (“ERISA”) preempts
Plaintiffs’ claims for breach of contract and negligence because
they “relate to” a benefits plan covered by ERISA. The Court
finds that Plaintiffs’ claims essentially challenge the
propriety of Defendants’ conduct under the terms of an ERISA

2

plan, require interpretation of the plan, and are thus preempted
by ERISA.
For the reasons discussed below, the Court will grant
Defendants’ motions and dismiss Plaintiffs’ complaint in its
entirety against Delta and Xerox without prejudice to refiling
an amended complaint curing these deficiencies within 21 days.
II. BACKGROUND
A.

Facts

The Court accepts as true for the purposes of the instant
motions to dismiss the following facts as alleged in the
Complaint. [Docket Item 1.]
Mark Jennings died on or about December 14, 2009 after
being struck by a motorist while doing yard work on his
property. (Compl. ¶ 9.) Prior to his death, Mr. Jennings was
employed at all relevant times as a pilot by Delta, which
offered its employees a Welfare Benefit Plan entitled “Delta
Pilot’s Disability and Survivor Trust” (“the Plan”). (Id. ¶ 10.)
Metropolitan Life Insurance Company (“Metlife”) was the claims
administrator responsible for paying benefits under the Plan
while Xerox was the records custodian responsible for
maintaining records and corresponding with participants
regarding eligibility. (Id. ¶¶ 11-13.) Mr. Jennings was insured
under a group life insurance policy as part of the Plan with
death benefits totaling $501,725.00. (Id. ¶ 16.)

3

Plaintiffs allege that Mr. Jennings, a Lieutenant Colonel
with the New Jersey Air National Guard, was on active duty at
the time of his death, during which he was on Special Conflict
Military Leave of Absence from Delta from December 1, 2008 until
his death on December 14, 2009. (Id. ¶¶ 14-15.) According to
Plaintiffs, due to his Special Conflict Military Leave of
Absence status, Delta was responsible for paying premiums for
Mr. Jennings’ coverage, despite the fact that he was notified in
March, 2009 that he would be responsible for paying the premiums
for his medical, dental, vision and life insurance coverages
beginning in May, 2009. (Id. ¶¶ 17-18.) After receiving this
notification, Mr. Jennings called the Delta Employee Service
Center (“ESC”) on April 17, 2009 and indicated that he wished to
“cancel his medical, dental and vision insurance and to
temporarily suspend his medical, dental and vision insurance
benefits ONLY, as he would be receiving such benefits through
his active military service . . . .” (Id. ¶ 28.) Mr. Jennings
then sent a letter to Xerox dated April 20, 2009, which stated
the following:
I am requesting that my health care benefits be retroactively
rescinded beginning 1 December 2008. Since that time, I have
been on extended military leave of absence. The USAF has been
providing full medical and dental coverage through the TriCare program . . . . I plan to continue utilizing this
coverage until the time I am able to return to Delta Air
Lines. Thank you for your assistance to this matter.

4

(Id. ¶ 29.) Based on this letter, Xerox cancelled all of Mr.
Jennings’ coverages, including his life insurance, and did not
send any further billing invoices. (Id. ¶ 30.) Delta did not
submit any premiums for any of Mr. Jennings’ coverages. (Id. ¶
31.) On June 9, 2009, Mr. Jennings called the ESC and was
informed that his letter had been received. (Id. ¶ 32.) However,
he was not advised that all coverages, including his life
insurance, had been cancelled. (Id.)
In October, 2011, Mr. Jennings’ wife, Emily Jennings, filed
a claim with Metlife as beneficiary for the basic life insurance
benefits under the Plan. (Id. ¶ 19.) After consulting Xerox,
Metlife denied Ms. Jennings’ claim and explained that Mr.
Jennings’ life insurance was cancelled effective May 31, 2009
and therefore not in effect at the time of his death. (Id. ¶
20.) Metlife also stated that Mr. Jennings’ employment with
Delta had terminated on May 15, 2009. (Id. ¶ 21.) Ms. Jennings
appealed the denial, asserting that her husband’s employment had
not been terminated and that Delta was responsible for paying
the premiums for his coverage while he was on Special Conflict
Military Leave of Absence as explained in Delta’s “Pilot’s Life
Insurance and Survivor Benefits Handbook.”1 (Id. ¶¶ 23-24.)

1

The Court is familiar with the Handbook because Plaintiffs
previously provided it to the Court in connection with their
opposition to defendant’s motion to dismiss in Estate of
Jennings ex rel. Jennings v. Metropolitan Life Ins. Co., Civ.
5

Metlife upheld the denial on February 20, 2012 and again on
September 10, 2013 for reasons consistent with those initially
stated. (Id. ¶¶ 25-26.)
B.

Procedural background

Plaintiffs filed this action on February 6, 2015 against
Delta and Xerox asserting claims for breach of contract and
negligence. Plaintiffs assert that Xerox failed “to accurately
interpret and carry out the instructions in the plaintiff’s
unambiguous correspondence” and “[n]egligently, carelessly and
wrongfully determin[ed] that plaintiff was not continually
eligible for life insurance benefits.” (Id. ¶ 38.) Plaintiffs
also assert tha Xerox’s negligence “constituted a Material
Breach of Contract and resulted in the wrongful cancellation of
. . . eligibility for life insurance benefits. . . .” (Id. ¶
40.) Plaintiffs claim that Delta was “negligent by failing to
pay premiums for basic life insurance coverage. . . .” (id. ¶

13-5376 (JBS). See Estate of Jennings ex rel. Jennings v.
Metropolitan Life Ins. Co., Civ. 13-5376 (JBS), 2014 WL 4723147,
at *3 n.3 (D.N.J. Sept. 22, 2014). Accordingly, the Handbook is
publicly available from Plaintiffs’ prior suit arising out of
the same subject matter and the Court may take notice of it in
resolving the pending motion. See City of Pittsburgh v. West
Penn Power Co., 147 F.3d 256, 259 (3d Cir. 1998) (“When deciding
a motion to dismiss, it is the usual practice for a court to
consider only the allegations contained in the complaint,
exhibits attached to the complaint and matters of public
record.”).
6

43) and this negligence caused “a Material Breach of Contract. .
. .” (Id. ¶ 44.)
Prior to this action, on September 10, 2013, the Estate
filed suit against Metlife pursuant to ERISA claiming benefits
due under the Plan. (Id. ¶ 33.) This Court granted Metlife’s
motion for summary judgment on September 22, 2014. See Estate of
Jennings ex rel. Jennings v. Metropolitan Life Ins. Co., Civ.
13-5376 (JBS), 2014 WL 4723147, at *9 (D.N.J. Sept. 22, 2014).
The Court concluded that “Metlife’s denial of Plaintiff’s claim
for benefits was proper and consistent with the Plan terms
because . . . no premiums were paid on Mr. Jennings’ behalf and
no life insurance coverage was in effect at the time of his
death.” Id. Additionally, the Court rejected the Estate’s
argument that Metlife should be held liable for errors by Xerox
in billing and cancellation decisions. Id. Importantly, however,
the Court made no determination regarding the liability of the
present Defendants, Xerox or Delta.
This suit and the instant motions followed. Plaintiffs
filed a consolidated opposition [Docket Item 20] and Defendants
each filed a reply [Docket Items 21 & 22.]
III. STANDARD OF REVIEW
A motion to dismiss under Fed. R. Civ. P. 12(b)(6) may be
granted only if, accepting all well-pleaded allegations in the
complaint as true and viewing them in the light most favorable

7

to the plaintiff, a court concludes that plaintiff failed to set
forth sufficient facts to state a claim for relief that is
plausible on its face. Bell Atlantic Corp. v. Twombly, 550 U.S.
544 (2007); Fleisher v. Standard Ins. Co., 679 F.3d 116, 120 (3d
Cir. 2012). “A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). However, legal conclusions are not entitled to the same
assumption of truth, and “[a] pleading that offers labels and
conclusions or a formulaic recitation of the elements of a cause
of action will not do.” Id. To determine if a complaint meets
the pleading standard, the Court must strip away conclusory
statements and “look for well-pled factual allegations, assume
their veracity, and then determine whether they plausibly give
rise to an entitlement of relief.” Bistrian v. Levi, 696 F.3d
352, 365 (3d Cir. 2012) (quotation omitted).
IV. DISCUSSION
Both Delta and Xerox argue that Plaintiffs’ claims are
preempted by ERISA. Defendants contend that Plaintiffs’ claims
“relate to” an ERISA plan because they rely on the existence of
the Plan and require interpretation of the Plan terms.
Defendants further assert that because ERISA claims can be
brought against non-fiduciaries, state law claims related to the

8

Plan against non-fiduciaries are preempted by ERISA.
Alternatively, Defendants argue that the state law claims are
barred by the statute of limitations.
Plaintiffs respond by arguing that their negligence and
breach of contract claims are not preempted by ERISA because the
claims do not “relate to” the Plan as required by the statute.
Plaintiffs assert that the ERISA preemption cases cited by
Defendants are factually distinguishable from the present case
and that ERISA does not preempt claims against non-fiduciaries.
Additionally, Plaintiffs argue that their claims should be
converted to ERISA claims without requiring a new pleading if
this court determines that the claims are preempted.2
A.

Plaintiffs’ claims “relate to” an ERISA plan

The Court begins by considering whether Plaintiffs’ state
law claims “relate to” an employee benefit plan covered by
ERISA. With ERISA, Congress created a comprehensive regulatory
scheme to promote uniform standards for the regulation of
employment benefit plans that “provide medical, surgical, or
hospital care, or benefits in the event of sickness, accident,
disability, or death.” Pilot Life Ins. Co. v. Dedeaux, 481 U.S.
41, 44 (1987) (citing 29 U.S.C. § 1002(1)(A)). The statute also

2

Defendants reject Plaintiffs’ suggestion that the Court should
simply convert Plaintiffs’ state law claims to ERISA claims
because this would not afford Defendants proper notice as
required by the Federal Rules of Civil Procedure.
9

provides for “appropriate remedies, sanctions, and ready access
to the Federal courts” for violations of the Act. 29 U.S.C. §
1001(b). ERISA contains an express preemption provision which
states:
Except as provided in subsection (b) of this section, the
provisions of this subchapter and subchapter III of this
chapter shall supersede any and all State laws insofar as
they may now or hereafter relate to any employee benefit plan
described in section 1003(a) of this title and not exempt
under section 1003(b) of this title.
29 U.S.C. § 1144(a).
The Supreme Court has broadly interpreted the ERISA
preemption clause, finding that a law “relates to” a benefit
plan “if it has a connection with or reference to such a plan.”
Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96 (1983). See also
Shiffler v. Equitable Life Assur. Soc. of U.S., 838 F.2d 78, 81
(3d Cir. 1988) (noting that the Supreme Court has given “relate
to” “the broadest common sense meaning”).3 A state law cause of

3

The Court is unpersuaded by Plaintiffs’ argument that the
Supreme Court’s decision in New York State Conference of Blue
Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645
(1995), limited the preemptive scope of ERISA or somehow altered
the relevant preemption analysis. In Travelers, the Court ruled
that a New York statute imposing a surcharge on patients covered
by select insurers was not preempted by ERISA because the
statute “affect[s] only indirectly the relative prices of
insurance policies, a result no different from myriad state laws
in areas traditionally subject to local regulation, which
Congress could not possibly have intended to eliminate.” Id. at
668. However, as noted subsequently by the Third Circuit,
Travelers did not establish a broad rule for ERISA preemption
applicable beyond the fairly narrow facts of that case. See
Kollman v. Hewitt Associates, LLC, 487 F.3d 139, 147-48 (3d Cir.
10

action “relates to” an employee benefits plan if, without the
plan, there would be no cause of action. 1975 Salaried Ret. Plan
for Eligible Employees of Crucible, Inc. v. Nobers, 968 F.2d
401, 406 (3d Cir. 1992) (citing Ingersoll-Rand Co. v. McClendon,
498 U.S. 133, 139 (1990)); Our Lady of Lourdes Health Sys. v.
MHI Hotels, Inc. Health & Welfare Fund, 2009 WL 4510130, at *3
(D.N.J. Dec. 1, 2009) (holding that state law claims were
preempted by ERISA because “the existence of the plan was
essential to the suit and the courts would have been required to
look to those plans to resolve the dispute”). State law claims
relating to an employment plan are preempted by ERISA even if
there is no corresponding federal remedy under the statute.
Aetna Health Inc. v. Davila, 542 U.S. 200, 216 (2004)
(“Congress' intent to make the ERISA civil enforcement mechanism
exclusive would be undermined if state causes of action that
supplement the ERISA § 502(a) remedies were permitted, even if
the elements of the state cause of action did not precisely
duplicate the elements of an ERISA claim.”); Menkes v.
Prudential Ins. Co. of Am., 762 F.3d 285, 296 (3d Cir. 2014)
(holding that state law claims for punitive damages were

2007) (“In the Travelers decision, the Court did not establish a
generally applicable rule that could be used to determine
preemption in different fact situations. Therefore, we must make
the preemption decision in light of the purpose underlying §
514(a) and, of course, the applicable precedents from opinions
of the Supreme Court and this court.”).
11

preempted by ERISA because Congress decided not to include the
option for a punitive damages remedy in the statute).4
Because the purpose of the preemption clause was to
establish ERISA as the exclusive method for seeking legal remedy
related to an employee benefit plan, allowing state law claims
relating to the plan would undermine this purpose. Barber v.
Unum Life Ins. Co. of Am., 383 F.3d 134, 140 (3d Cir. 2004)
(citing Davila, 542 U.S. at 209). Therefore, state law causes of
action, such as negligence for failure to pay benefits under the
plan “relate to” the plan and are preempted by ERISA. See
Brenner v. Chase Manhattan Mortgage Corp., 2002 WL 655211, at *1
(D.N.J. Jan. 3, 2002) (holding that state law claims for
negligence in failing to enroll Plaintiff in benefits plan was
in essence a claim for benefits and was thus preempted by
ERISA).
The Third Circuit has ruled that claims “relate to” an
employee benefit plan when the court must look to the terms of
the plan to determine the merits of the claim. Kollman v. Hewitt
Associates, LLC, 487 F.3d 139, 150 (3d Cir. 2007). In Kollman,
plaintiff filed suit against a third-party company handling
administrative duties for his benefits plan, including the

4

In light of this recent Third Circuit precedent, Plaintiffs’
reliance on a footnote in Painters of Philadelphia Dist. Council
No. 21 Welfare Fund v. Price Waterhouse, 879 F.2d 1146 (3d Cir.
1989), for the opposite conclusion is inapposite.
12

creation and management of a website which provided estimates of
participants’ total benefits under the plan. Id. at 141.
Plaintiff alleged professional malpractice against the thirdparty company for failure to provide accurate benefits
information on their website. Id. The Third Circuit
distinguished between state law claims which are preempted by
ERISA and state law claims which are not preempted by ERISA. Id.
at 149-50. The Court of Appeals explained that certain state law
claims that “do not interfere with the essential role of an
ERISA plan” such as claims for unpaid rent and failure to pay
creditors are not preempted. Id. at 150. In contrast, the Court
of Appeals found that Kollman’s claim was preempted by ERISA
because it “goes to the essence of the function of an ERISA
plan-the calculation and payment of the benefit due to a plan
participant.” Id. Indeed, Kollman’s claim required the court to
consult the plan terms to determine whether the calculations,
among other things, were erroneous. Id.
The Court also finds guidance in the factually analogous
case of Rowello v. Healthcare Benefits, Inc., 2013 U.S. Dist.
LEXIS 152631 (D.N.J. Oct. 23, 2013). In Rowello, the plaintiff
estate asserted negligence and breach of contract claims against
the decedent’s employer for wrongfully denying plaintiff’s claim
for supplemental life insurance benefits. Id. at *4. Plaintiff
alleged that the decedent had completed and submitted the

13

necessary forms to effectuate an increase in his life insurance
coverage, yet the insurer denied that the increase ever took
effect. Id. at *4-5. After noting that plaintiff essentially
sought “to use state law as an alternative to ERISA for
enforcing the policy terms,” id. at *12, the court found
plaintiff’s negligence and breach of contract claims preempted
by ERISA because they “relate[d] to” an ERISA plan. Id. at *18.
The instant action presents a similar situation to Kollman
and Rowello because the claims are brought by a beneficiary of
the Plan and require interpretation of the Plan terms. The
allegations in the Complaint clearly implicate the Plan terms.
For example, Plaintiffs allege that Xerox “[n]egligently,
carelessly and wrongfully determin[ed] that the plaintiff was
not continually eligible for life insurance benefits under the
terms of the Plan.” (Compl. ¶ 38(3).) Similarly, Plaintiff
alleges that Delta was “careless and negligent with regard to
its determination of decedent’s employment status and to his
continuing eligibility under the terms of the above stated Plan,
and was careless and negligent by failing to pay premiums . . .
.”5 (Id. ¶ 43.) The determination regarding coverage and

5

When discussing Mr. Jennings’ employment status in the
Complaint, Plaintiffs specifically refer to Delta’s “Pilot’s
Life Insurance and Survivor Benefits Handbook,” which defines
two types of military leave. (Compl. ¶ 24.) By its own terms,
the Handbook is a Summary Plan Description provided to
participants as required by ERISA. Although the Handbook does
14

eligibility for the Plan and the payment of the premiums involve
the essential functions of the benefits plan. Without the Plan,
Plaintiffs would have no cause of action against Xerox or Delta.
In other words, the Court will have to look at the terms of
the Plan to determine whether Delta was required “to pay
premiums for basic life insurance coverage for decedent who was
on Special Conflict Military Leave beyond May 15, 2009” (id.)
and whether Xerox was negligent in “determining that plaintiff
was not continually eligible for life insurance benefits under
the terms of the Plan.” (Id. ¶ 38(3).) See Menkes v. Prudential
Ins. Co. of Am., 762 F.3d 285, 296 (3d Cir. 2014) (“Because
these claims [for breach of contract, breach of implied covenant
of good faith and fair dealing, and breach of fiduciary duty]
explicitly require reference to the plan and what it covers,
they are expressly preempted.”). Moreover, the damages claimed
“in the amount of $501,725.00” (id. ¶ 40) is the amount
allegedly owed to the estate had the benefits plan been
effective for Mr. Jennings at the time of his death, which
suggests that, just like the claims in Rowello, Plaintiffs’
claims here seek to use state law to enforce the Plan terms.

not constitute the
the life insurance
Accordingly, it is
Insurance coverage
status, as defined

official Plan terms, it provides a summary of
and survivor benefits provided by the Plan.
clear that eligibility for Basic Life
depends on a participant’s military leave
by the Plan terms.
15

Therefore, the Court finds that Plaintiffs’ claims for
negligence and breach of contract “relate to” the Plan for
purposes of ERISA preemption.6
B.

Claims against non-fiduciaries are preempted by ERISA

The Court now turns to Plaintiffs’ assertion that ERISA
does not preempt state law claims against non-fiduciaries.
Defendants contend that because claims against non-fiduciaries
are permitted under ERISA, state law claims “related to” an
ERISA plan against non-fiduciaries are preempted.
Under ERISA, an entity is a fiduciary in regard to an
employee benefits plan if:
(i) he exercises any discretionary authority or discretionary
control respecting management of such plan or exercises any
authority or control respecting management or disposition of
its assets, (ii) he renders investment advice for a fee or
other compensation, direct or indirect, with respect to any
moneys or other property of such plan, or has any authority
or responsibility to do so, or (iii) he has any discretionary
authority
or
discretionary
responsibility
in
the
administration of such plan.
29 U.S.C. § 1002(21)(A).
6

Plaintiffs cite Pizlo v. Bethlehem Steel Corp., 884 F.2d 116
(4th Cir. 1989) to argue that their state law claims are not
preempted by ERISA. In that case, the Fourth Circuit ruled that
the plaintiffs’ state law claims for breach of contract,
promissory estoppel and negligent misrepresentation did not
“relate to” an ERISA plan and thus were not preempted by ERISA
because they “do not bring into question whether Plaintiffs are
eligible for plan benefits, but whether they were wrongfully
terminated from employment after an alleged oral contract of
employment for a term.” Id. at 120. The present action is easily
distinguished because Plaintiffs’ claims here directly call into
question whether Mr. Jennings was “eligible for life insurance
benefits under the terms of the Plan.” (Compl. ¶ 39(2).)
16

Although the Third Circuit found in Painters of
Philadelphia Dist. Council No. 21 Welfare Fund v. Price
Waterhouse, 879 F.2d 1146 (3d Cir. 1989) that plaintiff had no
implied cause of action against a non-fiduciary defendant under
ERISA, the Supreme Court has subsequently ruled that ERISA
permits claims against non-fiduciary parties in interest. Harris
Trust & Sav. Bank v. Salomon Smith Barney, Inc., 530 U.S. 238,
241 (2000). Additionally, the Third Circuit in Kollman ruled
that a state professional malpractice claim against a nonfiduciary was preempted by ERISA because the claim related to
the plan. Kollman, 487 F.3d at 150.
The Court of Appeals distinguished Kollman from Painters,
noting that the plaintiff in Painters was the plan itself,
rather than a beneficiary or recipient of the plan. Id. at 14849. The court explained that the purpose of the preemption
provision was to eliminate state law claims that interfered with
ERISA plans to avoid conflicting state and local regulation of
such plans, but a claim brought by the plan itself alleging
negligent activity that injured the plan was not the type of
claim Congress intended to eliminate. Id. at 149. In Kollman,
however, the claim brought by a plan participant implicated the
essential function of the plan, specifically the calculation of
plan benefits. Id. at 150. Because the claim interfered with the

17

plan and plaintiff’s claim required consideration of the plan
terms to determine whether the calculation of benefits was
correct, the court concluded that the state law claim against a
non-fiduciary was preempted by ERISA. Id.
In the present case, assuming arguendo that Defendants are
properly considered non-fiduciaries, Plaintiffs’ claims for
breach of contract and negligence are preempted by ERISA because
a beneficiary of the plan rather than the plan administrator is
bringing the claims and the claims relate to the plan itself.
The situation here is analogous to Kollman because the claims
are brought by the Estate of a plan participant and attack the
administration of the plan, namely the determination of whether
benefits are owed, who was responsible for paying premiums under
the Plan, and whether Mr. Jennings’ insurance coverage was
active at the time of his death.7 Claims of a beneficiary against

7

Although Plaintiffs argue that finding preemption in this case
would result in a situation in which “a records keeper or
employer with no relationship to an ERISA plan who negligently
acted would be immune from liability” (Pl. Opp. at 7), it clear
on the face of the Complaint that Defendants had an integral
role in essential plan functions which could expose them to
liability under the statute. Plaintiffs allege that Xerox
cancelled all of Mr. Jennings’ coverages and that Delta failed
to pay premiums on his behalf as required by the Plan documents.
As such, Xerox and Delta are not remote third parties unrelated
to the administration of the Plan, and the Court finds
Plaintiffs’ suggestion that Defendants had no relationship to
the Plan unsupported by the facts of the case as alleged in the
Complaint. Indeed, courts have opined that an employer’s failure
to make premium payments could support a breach of fiduciary
duty claim under ERISA. See McFadden v. R&R Engine & Mach. Co.,
18

the plan and those involved in the administration of the plan
are precisely the type of claims preempted by ERISA. Plaintiffs
have failed to cite any binding authority to the contrary.8
Therefore, the Court finds that Plaintiffs’ claims against
Defendants Delta Air Lines, Inc. and Xerox Business Services,

102 F. Supp. 2d 458, 468 (N.D. Ohio 2000) (collecting and
discussing cases); see also Williams v. Holographic Label
Converting, Inc., Civ. 07-646, 2007 WL 2361451, at *2 (D. Minn.
Aug. 15, 2007); Krippendorf v. Mitchell, Civ. 05-00888, 2006 WL
118376, at *3 (E.D. Ark. Jan. 13, 2006); Kress v. Dutchtown S.
Cmty. Corp., Civ. 11-1537, 2012 WL 2374710, at *3 (E.D. Mo. June
22, 2012). Of course, in so stating, the Court expresses no
opinion as to whether Plaintiffs may have a viable cause of
action against Defendants under ERISA.
8 Plaintiffs cite Munoz v. Prudential Ins. Co. of Am., 633 F.
Supp. 564 (D. Colo. 1986) in support of the assertion that state
law claims against non-fiduciaries are not preempted by ERISA.
In that case, the court determined that the defendant was a nonfiduciary because it “was involved solely in the processing of
claims,” while “[d]eterminations of enrollment, claims
eligibility and review of any claims processed by defendant,
however, were expressly and solely left in the hands of [the
employer],” who the court deemed fiduciaries of the plan. Id. at
568. In this case, the situation is factually dissimilar because
Plaintiffs allege that Xerox played a role in “determining that
plaintiff was not continually eligible for life insurance
benefits under the terms of the Plan” (Compl. ¶ 38(3)) and Delta
acted in “its determination of decedent’s employment status and
as to his continuing eligibility for life insurance under the
terms of the above stated Plan. . . .” (Id. ¶ 43.) Moreover, in
Sparks v. Mo-Kan Iron Workers Pension Fund, 765 F. Supp. 566
(W.D. Mo. 1990), the court relied on a line of cases holding
that ERISA does not preempt state claims against a nonfiduciary. Id. at 569. Having found the precedent in this
Circuit to the contrary, the court is unmoved by the reasoning
in Sparks.
19

LLC, even if they are considered non-fiduciaries, are preempted
by ERISA.9
C.

Plaintiffs are granted leave to amend

Plaintiffs request, in the event the Court is inclined to
grant Defendants’ motions to dismiss, that the Court convert
their state law claims to ERISA claims, thus avoiding any need
for refiling. Plaintiffs contend that “when a plaintiff files a
complaint that contains a state law claim that is within the
scope of ERISA section 502(a), the claim is transformed into an
ERISA section 502(a) federal claim.” Carducci v. Aetna U.S.
Healthcare, 247 F. Supp. 2d 596, 607 (D.N.J. 2003), rev'd sub
nom. Levine v. United Healthcare Corp., 402 F.3d 156 (3d Cir.
2005). Delta responds that although the court has discretion to
allow a plaintiff to amend the complaint, the court must not
allow an amendment if the additional claims would be futile. See
Dipeppe v. Local 623, 1999 WL 1705151, at *1 (D.N.J. Mar. 31,
1999). Xerox contends that Plaintiffs’ reliance on Carducci is
misplaced because the “principal reason” for the court’s
decision to convert the state law claims to ERISA claims in that
case was “the extensive motion practice already engaged in by

9

Because the Court finds Plaintiffs’ state law claims preempted
by ERISA, there is no need for the Court to address Defendants’
arguments that these claims should be dismissed on other
grounds, including Defendants’ argument that they are barred by
the statute of limitations.
20

the parties.” Carducci, 247 F. Supp. 2d at 607. Both Defendants
assert that the state law claims cannot simply be “transformed”
into ERISA claims because this would violate the Federal Rules
of Civil Procedure, which require plaintiffs to provide
defendants adequate notice of the claims and allegations against
them. Fed. R. Civ. P. 8.
Although the court in Carducci allowed the state claims to
be treated as ERISA claims to defeat a motion to dismiss,
Carducci relied heavily on the extensive motion practice in the
case and that the defendants were aware that the state claims
would be preempted by ERISA. Carducci, 247 F. Supp. 2d at 607.
In fact, the court had ruled almost a year earlier that the
claims were claims for benefits under section 502(a) of the
ERISA statute, giving defendants sufficient notice that the
plaintiff had a valid benefits claim under ERISA. Id. Carducci,
however, is the exception rather than the rule. Other courts in
the Third Circuit have immediately dismissed state law claims
found to be preempted by ERISA without considering conversion.
See Tannenbaum v. Unum Life Ins. Co. of Am., 2006 WL 2671405, at
*9 (E.D. Pa. Sept. 15, 2006); Cecchanecchio v. Cont'l Cas. Co.,
2001 WL 43783, at *5 (E.D. Pa. Jan. 19, 2001); Miller v. Aetna
Healthcare, 2001 WL 1609681, at *2 (E.D. Pa. Dec. 12, 2001).
In the present case, the Court now confronts the first
motions filed. There is no history of motion practice comparable

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to that in Carducci. Nor have Plaintiffs identified anything
else in the record or the procedural history of this case to
warrant the unusual accommodation they request. Instead, the
Court finds that Defendants are entitled to notice as provided
by the Rules. Accordingly, the Court rejects Plaintiffs’ request
to merely convert their pleading to state claims under ERISA.
Plaintiffs, however, are granted leave to file an amended
complaint setting forth appropriate ERISA claims against these
defendants within 21 days, as the Court finds that such an
amendment may not be futile.
V. CONCLUSION
In light of the foregoing, the Court will grant Defendants’
motions to dismiss and dismiss Plaintiffs’ claims for breach of
contract and negligence without prejudice to Plaintiffs’ filing
of an Amended Complaint setting forth appropriate ERISA claims
within 21 days. An accompanying order will be entered.

August 27, 2015
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

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