Arocho v. Goodyear Tire & Rubber Co.

Decision Date04 February 2000
Docket NumberNo. 97-4180-SAC.,97-4180-SAC.
Citation88 F.Supp.2d 1175
PartiesWanda AROCHO, Plaintiff, v. GOODYEAR TIRE & RUBBER COMPANY, and Aetna Life Insurance Company, Defendants.
CourtU.S. District Court — District of Kansas

Charles R. Hay, Goodell, Anne M. Kindling, Stratton, Edmonds & Palmer, Topeka, KS, for Plaintiff.

John W. Cowden, Curtis C. Landherr, Patricia A. Rosa, Toni R. Wheeler, Baker, Sterchi, Cowden & Rice, L.L.C., Kansas City, MO, for defendants.


CROW, Senior District Judge.

The case comes before the court on the defendants' motion for summary judgment (Dk.34) and the plaintiff's motion for summary judgment (Dk.36). The plaintiff Wanda Arocho brings this action to recover benefits claimed under an Optional Contributory Life Insurance Plan ("Optional Plan") offered to her husband, Hector Arocho, as an employee of the defendant Goodyear Tire & Rubber Company ("Goodyear"). The plaintiff contends her husband enrolled in this Optional Plan issued to Goodyear by Aetna Life Insurance Company ("Aetna") and he paid insurance premiums to Goodyear for it. The defendants have refused to pay the plaintiff the proceeds under the Optional Plan after her husband's death. The defendants contend the proceeds are not payable as the plaintiff's husband died just two days before the Optional Plan's coverage became effective.


A court grants a motion for summary judgment under Rule 56 of the Federal Rules of Civil Procedure if a genuine issue of material fact does not exist and if the movant is entitled to judgment as a matter of law. The court is to determine "whether there is the need for a trial — whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will ... preclude summary judgment." Id. There are no genuine issues for trial if the record taken as a whole would not persuade a rational trier of fact to find for the non-moving party. Matsushita Elec. Indust. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

More than a "disfavored procedural shortcut," summary judgment is an important procedure "designed `to secure the just, speedy and inexpensive determination of every action.' Fed.R.Civ.P. 1." Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). At the same time, a summary judgment motion does not empower a court to act as the jury and determine witness credibility, weigh the evidence, or choose between competing inferences. Windon Third Oil and Gas v. Federal Deposit Ins., 805 F.2d 342, 346 (10th Cir.1986), cert. denied, 480 U.S. 947, 107 S.Ct. 1605, 94 L.Ed.2d 791 (1987).


For purposes of these motions, the court considers the following statements to be uncontroverted.

1. The plaintiff Wanda Arocho is the widow of Hector Arocho and the beneficiary of his life insurance policies and plans.

2. For all relevant time periods, Hector was an employee of the defendant Goodyear. Hector died on August 30, 1996.

3. In 1995, Aetna issued to Goodyear a Group Insurance Policy (GP-40154-C).

4. As a Goodyear employee, Hector was covered under the Basic Life Insurance Policy in the amount of $30,000.00. By letter dated July 15, 1996, Hector and other employees were informed that they could enroll for the Optional Plan:

An analysis of the Optional Contributory Life Insurance Plan shows that over 20% of our associates are not enrolled. Our records indicate that you are one of those who missed the opportunity to enroll during the last open enrollment period.

You currently have $30,000 of basic life insurance coverage. Under the Optional Contributory Life Insurance Plan you may elect to purchase ... of additional life insurance....

There will be an open enrollment for all active associates who are currently not enrolled for Optional Contributory Life Insurance. This open enrollment will be during the month of August with coverage to be effective on September 1, 1996. The first premium payment will not be deducted until September.

If you wish to enroll, simply complete the enclosed enrollment card and return it to your plant Human Resources representative no later than August 31, 1996.

(Dk.35, Ex. F). A Goodyear employee pays the entire premium for this optional coverage without any contribution from Goodyear.

5. Hector discussed with his family this opportunity to enroll for the optional coverage. They agreed to purchase the maximum amount of additional life insurance benefits.

6. Hector signed and turned in the enrollment form on July 29, 1996, requesting additional coverage in an amount equal to 300% of his basic life insurance coverage or $90,000.00 additional coverage. The enrollment form did not state an effective date for coverage. A Goodyear representative who has not been identified wrote "Effect. 9-1-96" and "Do not Pay" on the enrollment form.

7. Hector's pay statement for the period of August 12-18, 1996, shows that Goodyear deducted $36.00 for the Optional Plan. On September 30, 1996, Goodyear forwarded to Aetna a lump sum of deductions from employees' wages which included the amount deducted from Hector's wages.

8. There has not been any payment of proceeds under the Optional Plan after Hector's death. Goodyear's stated reason for not paying those proceeds is that the insurance was not in effect when Hector died. His death occurred on August 30, 1996, two days before September 1, 1996, the effective coverage date stated in the letter of July 15, 1996. Aetna's stated reason for not paying those proceeds is that Goodyear did not submit a claim for benefits under the Optional Plan.

9. Goodyear's "Death Claim Log" dated September 25, 1996, shows that Goodyear submitted a claim with regard to Hector Arocho on that date along with an Employer's Statement of Proof of Death for the Basic Life Insurance Policy of $30,000.00. The plaintiff received the $30,000.00 in benefits under that policy.

10. In a letter dated June 4, 1997, to the plaintiff's attorney, Ms. Robyn Crane, an attorney for Goodyear, wrote, in part:

The July 15th letter, which was sent from Akron to several locations, also stated that the first premium payment would be deducted until September. That statement was not applicable to our Topeka plant which deducts premiums one month in advance. Hence, the premium deducted from Mr. Arocho's August 18, 1996 pay would have applied for September coverage if it had gone into effect. That premium was refunded. (We also refund premiums deducted in advance relating to employees who retire.)

(Dk.37, Ex. H). On December 22, 1997, Goodyear issued a check to the Estate of Hector Arocho in the amount of $36.00 with an attached statement indicating it was a refund of life insurance premium.


The defendants seek summary judgment arguing that the plaintiff brings state-law claims for breach of contract, waiver and estoppel, and breach of fiduciary duty and that these claims are preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. In response, the plaintiff essentially concedes any state law claims would be preempted by ERISA, but she maintains her complaint still alleges appropriate ERISA claims. Specifically, the plaintiff couches her claims in federal terms as a claim for breach of contractual rights under the employee benefit plan, a claim of waiver and estoppel under federal common law, and a claim for breach of fiduciary obligations under the plan. In reply, the defendants contest that the plaintiff has ever pleaded an ERISA claim and oppose giving the plaintiff an opportunity now to amend her complaint to assert one.

Through its preemption clause, 29 U.S.C. § 1144(a), ERISA preempts all state laws insofar as they "relate to any employee benefits plan." See Dang v UNUM Life Ins. Co. of America, 175 F.3d 1186, 1190 (10th Cir.1999). "`A law relates to an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan.'" Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 138, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990) (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983)). "A common law cause of action which `relates to' ERISA is preempted unless it falls within one of the exceptions to § 514(a) [29 U.S.C. § 1144(a) ]." Cannon v. Group Health Service of Oklahoma, Inc., 77 F.3d 1270, 1273 (10th Cir.), cert. denied, 519 U.S. 816, 117 S.Ct. 66, 136 L.Ed.2d 27 (1996). "State law contract claims are preempted `if the factual basis of the cause of action involves an employee benefit plan.'" Caldwell v. Western Atlas Intern., 871 F.Supp. 1392, 1395 (D.Kan.1994) (quoting Kelso v. General Am. Life Ins. Co., 967 F.2d 388, 390 (10th Cir.1992)). "State common law claims based on the doctrine of estoppel by conduct `relate to' a benefit plan," and they "are therefore preempted by ERISA." Peckham v. Gem State Mut. of Utah, 964 F.2d 1043, 1051 (10th Cir. 1992). A breach of fiduciary duty claim is the type of claim that courts consistently have found preempted by ERISA. Cannon, 77 F.3d at 1273.

In light of the above authority and the plaintiff's concession, the court finds that to the extent alleged in her amended complaint the plaintiff's state law claims are preempted by ERISA. The procedural dispute remaining is whether the complaint should be dismissed, whether the plaintiff's complaint should be construed to allege proper actions under ERISA, or whether the plaintiff should be allowed leave to amend her complaint. The defendants removed this action asserting ERISA governed the life insurance policy under which the plaintiff sought...

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