10 F.3d 605 (9th Cir. 1993), 92-35058, Employers Ins. of Wausau v. Plaid Pantries, Inc.

Docket Nº:92-35058.
Citation:10 F.3d 605
Party Name:EMPLOYERS INSURANCE OF WAUSAU, Creditor-Appellee, v. PLAID PANTRIES, INC., Debtor-Appellant.
Case Date:November 01, 1993
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 605

10 F.3d 605 (9th Cir. 1993)



PLAID PANTRIES, INC., Debtor-Appellant.

No. 92-35058.

United States Court of Appeals, Ninth Circuit

November 1, 1993

Argued and Submitted May 5, 1993.

Page 606

Leon Simson, James R. Herald (argued) and Richard H. Allan, Ball, Janik & Novack, Portland, OR, for debtor-appellant.

Jan D. Sokol and James T. Yand, Stafford Frey Cooper & Stewart, Portland, OR, for creditor-appellee.

Appeal from the United States District Court for the District of Oregon.

Before: PREGERSON and KLEINFELD, Circuit Judges; LEGGE, District Judge. [*]

LEGGE, District Judge:

Debtor-appellant Plaid Pantries, Inc. ("Plaid") appeals from the district court's decision that creditor-appellee Employers Insurance of Wausau's ("Wausau") claim for unpaid workers' compensation insurance premiums was entitled to priority payment from Plaid's bankruptcy estate, 137 B.R. 405. We have jurisdiction under 28 U.S.C. Sec. 158(d), and review the conclusions of the district and bankruptcy courts on this issue of law de novo. In re Daniels-Head & Assoc., 819 F.2d 914, 918 (9th Cir.1987). There are no material facts in dispute.


This case presents a narrow but significant legal issue: Are unpaid workers' compensation premiums entitled to priority payment from a bankruptcy estate under 11 U.S.C. Sec. 507(a)(4)? Section 507(a)(4) grants contributions to an "employee benefit plan" a fourth level of priority preference. Section 507 states that, "The following expenses and claims have priority in the following order: .... Fourth, allowed unsecured claims for contributions to an employee benefit plan...."

The term "employee benefit plan" is not defined by that statute.


The material facts are not in dispute. Wausau provided health, life and disability benefits to the employees of Plaid under a workers' compensation insurance plan. The premiums were paid by Plaid. Plaid filed for bankruptcy, and it did not pay $325,888 of pre-petition premiums owed to Wausau for that coverage. Wausau filed a priority claim for $59,029, which represents that portion of the $325,888 which was incurred within 180 days of the bankruptcy filing; see 11 U.S.C. Sec. 507(a)(4)(A).

The bankruptcy court held that the workers' compensation premiums were not contributions to an "employee benefit plan", and consequently that Wausau was not entitled to priority payment. The district court reversed the bankruptcy court's conclusion. It held that as a matter of both public policy and statutory construction, the term "employee benefit plan" should have the same meaning under Section 507(a)(4) as it has under the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. Sec. 1001, et seq. The district court determined that under ERISA, workers' compensation is an employee benefit plan, and that the premiums for that coverage are therefore entitled to priority payment under the Bankruptcy Code.

Page 607


We affirm the district court's judgment, but for the reasons stated below. We conclude that workers' compensation insurance is an "employee benefit plan" under Section 507(a)(4). We therefore need...

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