Burghart v. Connecticut General Life Ins. Co.

• Citation: 806 S.W.2d 324
• Decision Date: 19 March 1991
• Docket Number: No. 6-90-072-CV,6-90-072-CV
• Parties: Edna BURGHART, Appellant, v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY, Appellee.
• Court: Court of Appeals of Texas

Page 324

806 S.W.2d 324

Edna BURGHART, Appellant, v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY, Appellee.

No. 6-90-072-CV.

Court of Appeals of Texas,

Texarkana.

March 19, 1991.

Rodney Merwin, Houston, for appellant.

Gregory M. Sullivan, Kenneth G. Engerrand, Brown, Sims, Wise & White, Houston, for appellee.

Before CORNELIUS, C.J., and BLEIL and GRANT, JJ.

OPINION

BLEIL, Justice.

Edna Burghart appeals from the trial court's granting of a summary judgment in favor of Connecticut General Life Insurance Company. The primary question on appeal is whether a genuine issue of material fact exists as to whether Burghart's state law claims against the insurance company were preempted by federal law. We determine that summary judgment was improper because a fact issue exists as to whether the insurance plan is a plan pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C.A. §§ 1001-1461 (West 1985 & Supp.1990); furthermore, summary judgment should not have been granted because a cause of action was stated under ERISA even if that Act preempted the causes of action under state law. Therefore, we reverse the judgment and remand the cause for trial.

Burghart worked at Foley's, a division of Federated Department Stores. Through her employment, she purchased a long-term disability insurance policy with Connecticut General. Thereafter, she became disabled and demanded payment pursuant to the policy. Connecticut General denied liability and refused to pay. Burghart sued, alleging violations of the Deceptive Trade Practices-Consumer Protection Act, TEX.BUS. & COM.CODE ANN. § 17.41 et seq. (Vernon 1987), and Article 21.21 of the Texas Insurance Code, TEX.REV.CIV.STAT.ANN. art. 21.21 (Vernon 1981 & Supp.1991). Connecticut General thereafter filed a motion for summary judgment, alleging that Burghart's claims were preempted by the provisions of ERISA. The trial court granted Connecticut General's motion for summary judgment, and Burghart now appeals.

Burghart contends that the trial court improperly granted summary judgment, since a genuine issue of material fact existed as to whether her claims under the DTPA and the Texas Insurance Code were in fact preempted by ERISA. In a motion for summary judgment, the moving party has the burden of establishing that there is no genuine issue of material fact concerning its claim, and that it is entitled to judgment as a matter of law. Town North Nat'l Bank v. Broaddus, 569 S.W.2d 489, 494 (Tex.1978). A motion for summary judgment may be granted on pleadings, admissions, affidavits, or stipulations of a party which show that the moving party is entitled to judgment as a matter of law on the issues expressly set out in the motion or in an answer or in any other response. TEX.R.CIV.P. 166a(c). However, proof in support of a summary judgment must be independent of the pleadings. City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 (Tex.1979). Connecticut General's claim that Burghart's state law claims were preempted by ERISA was the sole ground raised in its motion for summary judgment.

In support of its position that Burghart's claims were preempted by ERISA, Connecticut General presented two affidavits. The first was the affidavit of Doreen Leibovitz. In her affidavit, Leibovitz attests to her employment at Foley's and her familiarity with benefit programs offered by the company. Additionally, she identifies the existence of each of the five elements that are necessary in order for a plan to be governed by ERISA. These elements are: that the plan is in existence; the plan is maintained by the employer; the plan provides long-term disability benefits to its participants; the plan is an insured employee welfare benefit plan; and that it was established pursuant to the provisions of ERISA. Kanne v. Connecticut Gen. Life Ins. Co., 859 F.2d 96, 98 (9th Cir.1988); see also Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 44-45, 107 S.Ct. 1549, 1551-52, 95 L.Ed.2d 39 (1987); see generally Cathey v. Metropolitan Life Ins. Co., 764 S.W.2d 286 (Tex.App.--Houston [1st Dist.] 1988), aff'd, 805 S.W.2d 387 (Jan. 30, 1991). ¹ Additionally, Leibovitz asserts that the plan was assigned an identification number by the United States Department of Labor. Finally, she attests that each of the statements were made with personal knowledge and as a result of her years of employment as vice president with Foley's and her responsibilities pertaining to benefits. Additionally, Connecticut General submitted the affidavit of Norman Ballmer. Ballmer attests that he is an employee of Connecticut General and that the plan was established by Federated Department Stores pursuant to the guidelines of ERISA.

In contravention to Connecticut General's summary judgment proof, Burghart submitted her own affidavit. She attests that the plan cannot be construed as an employee welfare benefit plan within the meaning of ERISA. She asserts that the disability insurance that she purchased from Connecticut General falls within a specific exception to ERISA's definition of employee welfare benefit plans. She states that: no contributions were made by her employer; her participation in the program was voluntary; the sole function of her employer with respect to the program was to collect premiums through payroll deductions; and that, to the best of her knowledge, Federated Department Stores received no consideration for any of their actions. These are the provisions that are specifically required by the Department of Labor in order to create an exception to ERISA. Kanne v. Connecticut Gen. Life Ins. Co., 859 F.2d at 98-99, citing 29 C.F.R. § 2510.3-1(j) (1987). The purchase of insurance, without any of the elements required by ERISA, does not by itself constitute an ERISA plan. See Donovan v. Dillingham, 688 F.2d 1367, 1375 (11th Cir.1982) (en banc).

Whether a plan is in fact an ERISA plan is a question of fact to be answered in light of all the surrounding facts and circumstances. Kanne v. Connecticut Gen. Life Ins. Co., ...