Daughtry v. Birdsong Peanuts

• Decision Date: 07 September 2001
• Docket Number: No. Civ.A. 01-D-704-S.,Civ.A. 01-D-704-S.
• Citation: 168 F.Supp.2d 1287
• Parties: Ralph Michael DAUGHTRY, et al., Plaintiffs, v. BIRDSONG PEANUTS, et al., Defendants.
• Court: U.S. District Court — Middle District of Alabama

168 F.Supp.2d 1287

Ralph Michael DAUGHTRY, et al., Plaintiffs, v. BIRDSONG PEANUTS, et al., Defendants.

No. Civ.A. 01-D-704-S.

United States District Court, M.D. Alabama, Southern Division.

September 7, 2001.

Wallace Davis Malone, III, Farmer, Farmer, Malone & Sherrer, P.A., William Bernhart Walheim, Jr., Maynard, Cooper & Gale, P.C., Birmingham, AL, for plaintiffs.

Jason R. Eubanks, Alan Carpenter Livingston, Lee & McInish, Dothan, AL, for defendants.

MEMORANDUM OPINION AND ORDER

DE MENT, District Judge.

Before the court is the Motion To Remand ("Motion") filed on July 13, 2001 by Ralph Michael Daughtry, individually and as Executor of the Estate of David W. Daughtry, deceased; Kenneth Dale Daughtry; and David Scott Daughtry (collectively "Plaintiffs"). After careful consideration of the arguments of the parties, the relevant law, and the record as a whole, the court finds that Plaintiffs' Motion To Remand is due to be denied.

I. BACKGROUND

Plaintiffs originally filed their Complaint and First Amended Complaint in the Circuit Court of Dale County, Alabama.¹ Plaintiffs allege state law causes of action for breach of contract, the tort of outrage, fraud and misrepresentation, promissory fraud, suppression, negligent and wanton hiring and supervision, and negligence and wantonness.²

Plaintiffs assert that in May 1990, their father, David W. Daughtry, deceased, obtained a group life insurance policy through his employer, Defendant Birdsong Corporation³, for whom he worked until approximately the time of his death.⁴ In addition, Plaintiffs state that when their father received the life insurance policy, he was married to Linda Daughtry, whom he listed as the beneficiary of the policy at that time, and from whom, at the time of his death, he had been divorced for several years.⁵ Plaintiffs further assert that

[o]n several occasions during the months of October through December, 2000, [David W.] Daughtry communicated to defendants Segers and Crozier, and other agents, employees and representatives of [other Defendants] that he wanted the [Plaintiffs] made the sole beneficiaries of the Policy. On such occasions, and other occasions during such time period, the Defendants and their agents, employees and representatives communicated assurances and promises to and represented to [David W.] Daughtry and the [Plaintiffs] that they, the Defendants:

a. Would cause the beneficiaries on the Policy to be changed to solely the [Plaintiffs]; and

b. Would change the beneficiaries under the Policy to solely the [Plaintiffs]; and

c. Had "taken care of" and caused the beneficiaries on the Policy to be changed to solely the [Plaintiffs] and "to quit worrying about it;" and

d. Had "taken care of" and changed the beneficiary on the Policy to solely the [Plaintiffs] and to "quit worrying about it;" and

e. Would "see to it" that the [Plaintiffs] received the proceeds under the Policy upon the death of [David W.] Daughtry.⁶

Plaintiffs also assert that their father died on December 18, 2000, that they are not listed as the sole beneficiaries of the policy, as their father had requested, and that their father's ex-wife is still listed as the sole beneficiary of the policy.⁷

Defendants removed this case to the United States District Court for the Middle District of Alabama on June 13, 2001,⁸ based on "arising under" or "federal question" jurisdiction,⁹ alleging that Plaintiffs' state law claims fall within or are preempted by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461, for three reasons.

First, Defendants argue that Plaintiffs' claims fall under ERISA based on 29 U.S.C. § 1132(e)(1), which provides that "state courts of competent jurisdiction and district courts of the United States shall have concurrent jurisdiction" of actions by beneficiaries to recover benefits under an employee benefit plan.¹⁰ Second, Defendants argue that Plaintiffs' claims are expressly preempted by ERISA based on 29 U.S.C. § 1144(a), which provides that ERISA "supersede[s] any and all State laws insofar as they may now or hereafter relate to any employee benefit plan...."¹¹ Finally, Defendants argue that Plaintiffs' claims are "completely preempted" by ERISA because Congress intended ERISA to subsume state law as it relates to beneficiaries' recovery of benefits under employee benefit plans.¹²

On July 13, 2001, Plaintiffs filed a Motion To Remand this case to the Circuit Court of Dale County, Alabama.¹³

II. REMAND STANDARD

It is well-settled that a defendant, as the party removing an action to federal court, has the burden to establish federal jurisdiction. See Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir.1996). The removal statute should be construed narrowly. See Diaz 85 F.3d at 1505 (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 107-09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941)). Thus, where there is a dispute about federal jurisdiction, uncertainties are resolved in favor of remand. Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir.1994) (citations omitted). "A presumption in favor of remand is necessary because if a federal court reaches the merits of a pending motion in a removed case where subject matter jurisdiction may be lacking it deprives a state court of its right under the Constitution to resolve controversies in its own courts." Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999). Furthermore, any order by a federal court lacking subject matter jurisdiction, other than an order of dismissal or remand, is void. See Christopher v. Stanley-Bostitch, Inc., 240 F.3d 95, 100 (1st Cir.2001); Shirley v. Maxicare Texas, Inc., 921 F.2d 565, 568 (5th Cir.1991).

III. DISCUSSION

As previously stated, Defendants removed this case to federal court, pursuant to 28 U.S.C. § 1441, claiming that the court has original subject matter jurisdiction over this civil action based on "arising under" jurisdiction using ERISA.¹⁴ "[A] cause of action `arises under' federal law only when the plaintiff's well-pleaded complaint raises issues of federal law." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987) (citing Gully v. First Nat'l Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936); Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908)); see also Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1212 (11th Cir.1999). In this case, Plaintiffs' Complaint, as amended, only raises issues of state law.¹⁵ Plaintiffs do not plead a cause of action under 29 U.S.C. § 1132(e)(1) or any other federal law. Thus, Defendants' first argument, that Plaintiffs could have brought this case in the United States District Court for the Middle District of Alabama under 29 U.S.C. § 1132(e)(1), cannot be the basis for federal subject matter jurisdiction for purposes of removal.

Defendants' second argument, that Plaintiffs' state law claims may be expressly preempted by ERISA, invokes 29 U.S.C. § 1144(a). Under 29 U.S.C. § 1144(a), ERISA is used as an affirmative defense to state law claims, and thus the Eleventh Circuit has labeled this type of ERISA preemption as "defensive preemption." Butero, 174 F.3d at 1211-12. As an affirmative defensive, defensive preemption does not appear on the face of a well-pleaded complaint, and, thus, it likewise cannot be the basis for federal subject matter jurisdiction for purposes of removal. Taylor, 481 U.S. at 63-64, 107 S.Ct. 1542; Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 475, 118 S.Ct. 921, 139 L.Ed.2d 912 (1998); Kemp v. Int'l Bus. Machs., 109 F.3d 708, 712 (11th Cir.1997); Butero, 174 F.3d at 1211-12.

Defendants' third argument, that Plaintiffs' state law claims may be completely preempted, has been well-established by both the United States Supreme Court and the Eleventh Circuit Court of Appeals. Butero, 174 F.3d at 1211-12 (citing Taylor, 481 U.S. at 63-64, 107 S.Ct. 1542). See also Rivet, 522 U.S. at 475, 118 S.Ct. 921. Complete preemption exists when Congress so completely preempts an area of law that any civil complaint raising a certain group of claims is necessarily federal in character. Taylor, 481 U.S. at 63-64, 107 S.Ct. 1542; see also Butero, 174 F.3d at 1211-12. ERISA was intended to completely preempt state law claims involving rights of participants and beneficiaries to recover benefits under employee benefit plans. See Taylor, 481 U.S. at 63-66, 107 S.Ct. 1542.

When a statute, such as ERISA, completely preempts a field of law, a coexisting principle of the well-pleaded complaint rule is implicated. That principle provides that "`a plaintiff may not defeat removal by omitting to plead necessary federal questions.'" Rivet, 522 U.S. at 475, 118 S.Ct. 921 (quoting Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 22, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)). "If a court concludes that a plaintiff has `artfully pleaded' claims in this fashion, it may uphold removal even though no federal question appears on the face of the plaintiffs complaint." Rivet, 522 U.S. at 475, 118 S.Ct. 921. Such "artful pleading" "allows removal where federal law completely preempts a plaintiffs state-law claim."¹⁶ Id.

Thus, in the case at hand, the court must determine whether Plaintiffs omitted pleading necessary federal questions. The key to determining whether Plaintiffs omitted pleading necessary federal questions lies in the determination of whether or not Plaintiffs are beneficiaries of the decedent's life insurance policy according to 29 U.S.C. § 1132(a)(1)(B). If they are, then Plaintiffs' state law claims are completely preempted.¹⁷

Whether or not Plaintiffs are beneficiaries under the specific facts in the case at hand has not been addressed by the United States Supreme Court or the Eleventh Circuit Court of Appeals. Section 1132(a)(1)(B) of ERISA provides that "[a] civil action may be brought by a participant or beneficiary to...