Bertoni v. Stock Bldg. Supply

• Citation: 989 So.2d 670
• Decision Date: 30 July 2008
• Docket Number: No. 4D07-4241.,4D07-4241.
• Parties: Barbara BERTONI, Appellant, v. STOCK BUILDING SUPPLY, f/k/a Carolina Holdings, Inc., f/k/a Stuart Lumber Company of Pompano Beach, Florida and Stuart Lumber Company of Fort Myers, Florida, and Stock Building Supply of Florida, Inc., Appellees.
• Court: Florida District Court of Appeals

989 So.2d 670

Barbara BERTONI, Appellant, v. STOCK BUILDING SUPPLY, f/k/a Carolina Holdings, Inc., f/k/a Stuart Lumber Company of Pompano Beach, Florida and Stuart Lumber Company of Fort Myers, Florida, and Stock Building Supply of Florida, Inc., Appellees.

No. 4D07-4241.

District Court of Appeal of Florida, Fourth District.

July 30, 2008.

Rehearing Denied October 2, 2008.

Paul M. Sullivan, Jr., West Palm Beach, for appellant.

Juan C. Enjamio of Hunton & Williams LLP, Miami and A. Todd Brown of Hunton & Williams LLP, Charlotte, for appellees.

TAYLOR, J.

Plaintiff Barbara Bertoni sued her deceased husband's former employer, asserting that the employer negligently failed to procure supplemental life insurance for her husband after he submitted an enrollment application for supplemental life insurance. The trial court entered summary judgment in favor of the employer, finding that plaintiff's negligence claim is preempted by the Employment Retirement Income Security Act of 1974, as amended ("ERISA"). Because we conclude that plaintiff's claim is not related to an ERISA plan and, thus, is not preempted, we reverse the final summary judgment and the order which struck plaintiff's demand for jury trial. We affirm, however, the order which denied plaintiff's request for leave to amend her complaint to add a claim for punitive damages, because the plaintiff failed to make a reasonable showing under section 768.72, Florida Statutes, for a recovery of punitive damages. See Holmes v. Bridgestone/Firestone, Inc., 891 So.2d 1188, 1191 (Fla. 4th DCA 2005).

In January 2000, Stock Building Supply, Inc. ("Stock") acquired certain assets of Stuart Lumber Co. of Ft. Myers. At that time, Stock hired the acquired company's employees, including John Patrick Bertoni. In February 2000, Tricia Helfrich, Stock's Human Resources Director, held three benefits enrollment meetings at the Ft. Myers location for the new associates. Mr. Bertoni was present for all three meetings. During the enrollment meetings, each associate was given a packet of benefits enrollment forms and information. One of the benefits offered by Stock was supplemental life insurance. This was provided through Sun Life Assurance Co. of Canada (Sun Life). Supplemental life insurance benefits were optional. To obtain such benefits during the February 2000 enrollment period, the associates at the Ft. Myers location were required to complete a Supplemental Life Insurance Enrollment Form which was included in each enrollment packet. If an associate indicated that he or she wanted supplemental life insurance coverage, Stock deducted the premium from the associate's paycheck and submitted those premiums to Sun Life. Stock showed the supplemental life insurance deduction as a separate line item deduction on associates' paychecks.

Also included in the packet given to associates was a General American Enrollment Form. The General American form was used to obtain health insurance coverage and to designate beneficiaries for basic life insurance coverage. Basic life coverage was provided to associates at no extra cost. Obtaining this basic coverage required only the designation of a beneficiary on the General American form. The Great American form contains a box entitled "Coverage Election." Within that box are eleven small boxes, one of which is entitled "*Supplemental Life." At the bottom of the larger box is the asterisk reference "*Supplemental Amount Applied For: $______." Helfrich's affidavit states that she expressly instructed associates to disregard the "coverage election" box on the General American form, because "it did not pertain to the associates' benefits and filling out that box would have no effect." Nonetheless, Bertoni checked the Supplemental Life box (and six others) on this form and filled in the amount "$150,000" as the supplemental life insurance amount applied for.

The General American form was then processed by Stock's Benefit Manager, Jennifer Jackson. Jackson stated in her affidavit that she ignored attempts to elect supplemental insurance in this manner and did not follow up to inquire if the associate desired supplemental life insurance coverage.

On January 4, 2002, Mr. Bertoni was diagnosed with cancer. He subsequently died without the supplemental life insurance protection which he had apparently attempted to procure.

On March 1, 2004, Barbara Bertoni, the intended beneficiary of the supplemental life insurance benefits, sued Stock Building Supply, Inc., f/k/a Stuart Lumber Co. of Pompano Beach, Florida and Stuart Lumber Co. of Ft. Myers, Florida, Stock Building Supply of Florida, Inc., Sun Life Assurance Co. of Canada, and Sun Life Assurance Co. of Canada (U.S.), in a three-count complaint alleging breach of contract and negligence. On April 7, 2004, the Sun Life defendants removed the action to federal court. On June 8, 2004, while the matter was pending before the federal district court, Plaintiff amended her complaint, alleging only common law negligence and an ERISA breach of fiduciary duty claim against the employer defendants (the claims against the Sun Life defendants had by this point been dismissed). On August 13, 2004, the federal district court dismissed plaintiff's negligence action, concluding that it was preempted by ERISA's express preemption provision. On November 2, 2005, the federal court remanded the action, finding that Barbara Bertoni lacked standing to sue under ERISA (the sole remaining count of her complaint). The remand order provided:

ORDERED and ADJUDGED that Plaintiff's Motion for Judgment on the Pleadings and Remand to State Court for Lack of Subject Matter Jurisdiction [DE 45] is GRANTED. Accordingly, the above-styled matter is REMANDED to the Fifteenth Circuit Court in and for Palm Beach County, Florida, for consideration of any non-ERISA common law claims of Plaintiff.

After remand to the state court, Plaintiff moved for leave of court to amend her complaint to assert a claim for punitive damages. The trial court denied her motion to claim punitive damages and granted the defendants' motion to strike the plaintiff's demand for jury trial.

The defendant moved for summary judgment, contending: (a) that plaintiff could not re-assert the negligence action which had been dismissed by the federal district court; (b) that plaintiff's negligence claim was preempted by ERISA; and (c) that the facts of record could not support a negligence claim. The trial court granted the motion for summary judgment on ERISA preemption grounds.

A ruling on a motion for summary judgment is reviewed de novo. Florida Bar v. Greene, 926 So.2d 1195, 1200 (Fla.2006). Summary judgment is designed to test the sufficiency of the evidence. It is appropriate where it is apparent from the record that there is no genuine issue of material fact and the moving party is entitled to relief as a matter of law. Id. This appeal primarily concerns an issue of law, namely, whether, as the trial court determined, ERISA preempts plaintiff's common law negligence action.

ERISA was passed by Congress in 1974 to "safeguard employees from the abuse and mismanagement of funds that had been accumulated to finance various types of employee benefits." MEBA Med. & Benefits Plan v. Lago, 867 So.2d 1184, 1188 (Fla. 4th DCA 2004) (quoting Massachusetts v. Morash, 490 U.S. 107, 112-113, 109 S.Ct. 1668, 104 L.Ed.2d 98 (1989)). ERISA's civil enforcement mechanism has been described by the Supreme Court, as follows:

Under the civil enforcement provisions of § 502(a), a plan participant or beneficiary may sue to recover benefits due under the plan, to enforce the participant's rights under the plan, or to clarify rights to future benefits. Relief may take the form of accrued benefits due, a declaratory judgment on entitlement to benefits, or an injunction against a plan administrator's improper refusal to pay benefits.

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 53, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987). The participant or beneficiary may also sue for breach of fiduciary duty and seek removal of the fiduciary. Id. As the federal district court found, the plaintiff in this case lacks standing to utilize the ERISA civil enforcement mechanism because she does not fit the statutory definitions of a "participant" or a "beneficiary." See 29 U.S.C. 1002(7), (8) (2007).

At the outset, we distinguish between the concepts of "complete preemption" and "defensive preemption." "Complete preemption" exists where Congress has created a comprehensive remedial scheme. In such cases, federal jurisdiction exists even if the face of the complaint does not plead federal claims. Autonation, Inc. v. United Healthcare Ins. Co., 423 F.Supp.2d 1265, 1268 (S.D.Fla.2006). Thus, complete preemption is a jurisdictional doctrine which converts state law claims into federal claims for purposes of removal. Id. The elements of complete preemption are as follows:

First, there must be a relevant ERISA plan. Second, the plaintiff must have standing to sue under that plan. Third, the defendant must be an ERISA entity. Finally, the complaint must seek compensatory relief akin to that available under [§ 502(a)]; often this will be a claim for benefits due under a plan.

Cotton v. Mass. Mut. Life. Ins. Co., 402 F.3d 1267, 1281 (11th Cir.2005) (quoting Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1212 (11th Cir.1999)). Because the federal district court concluded that plaintiff had no standing, it followed that complete preemption did not exist. Thus, lacking removal jurisdiction over plaintiff's state law claims, the court properly entered its remand order, leaving it to the state court to resolve the remaining "defensive preemption" question.

"Defensive" (or "conflict") preemption does not furnish federal subject matter jurisdiction. Rather, defensive preemption provides an affirmative defense to certain state law claims and calls for their dismissal where the state claim "relates...