Gowen v. Assurity Life Ins. Co.

• Decision Date: 22 March 2013
• Docket Number: CV 512-034
• Parties: GEORGE MARK GOWEN, Plaintiff, v. ASSURITY LIFE INSURANCE CO. and RALPH V. AYCOCK, Defendants.
• Court: U.S. District Court — Southern District of Georgia

GEORGE MARK GOWEN, Plaintiff, v. ASSURITY LIFE INSURANCE CO. and RALPH V. AYCOCK, Defendants.

CV 512-034

United States District Court for the Southern District of Georgia Waycross Division

SO ORDERED: March 22, 2013

ORDER

Presently before the Court are Plaintiff's Motion to Remand this case to the State Court of Charlton County (Dkt. No. 10) and Defendant Aycock's Motion to Dismiss or Transfer Venue (Dkt. No. 3). Upon due consideration, both motions are DENIED.

I. INTRODUCTION

This action is predicated on the denial of disability income resulting from Defendants' alleged tortious actions. Specifically, Plaintiff alleges that Defendants misled him into procuring a five (5) year disability income policy when he bargained for a ten (10) year policy. Dkt. No. 1-2. Plaintiffasserts the following claims and remedies against Defendants: Declaratory Relief, Misrepresentation, Negligence, and Attorney's Fees. Id. The causes of action allegedly originated in Charlton County, Georgia. Id.

Plaintiff filed this action in the State Court of Charlton County, Georgia. Id. Pursuant to Georgia law, Defendant Aycock filed a Motion to Dismiss or Transfer Venue. Dkt. No. 3. Pursuant to 28 U.S.C. § 1446, Defendants removed the case to this Court. Dkt. No. 1. Defendants assert that the Court has subject matter jurisdiction because the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., completely preempts Plaintiff's state law claims. Id.

Plaintiff filed a motion to remand the case to State Court. Dkt. No. 10. The Court heard oral argument regarding the parties' motions on January 15, 2013.

II. CLAIMS AGAINST DEFENDANT ASSURITY

"[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant" to federal court. 28 U.S.C. § 1441(a). Original jurisdiction exists for, inter alia, cases arising under the Constitution, laws, or treaties of the UnitedStates." 28 U.S.C. § 1331. Ordinarily, the "well-pleaded complaint" rule determines whether a particular case arises under federal law. Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004). Specifically, the court has federal question jurisdiction if a federal question is presented on the face of the plaintiff's complaint. See Kemp v. Int'l Bus. Machines Corp., 109 F.3d 708, 712 (11th Cir. 1997) (citing Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 11 (1983)). The well-pleaded complaint rule directs the Court's "focus to the terms of the complaint as the plaintiff cho[se] to frame it." Id. If the plaintiff elects to bring only state law causes of action in state court, the complaint contains no federal question. In such case, the case may not be removed to federal court. Id.

"Because a federal question must appear on the face of the plaintiff's complaint to satisfy the well-pleaded complaint rule, a defense which presents a federal question cannot create removal jurisdiction." Id. "Thus, a case may not be removed to federal court on the ground of a federal question defense alone, even if that defense is valid." Id. (citation omitted); see, e.g., Franchise Tax Bd., 463 U.S. at 25-28 (holding that ERISApreemption defense, without more, does not create removal jurisdiction).

"[T]he removing party bears the burden of showing the existence of federal subject matter jurisdiction." Conn. State Dental Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1343 (11th Cir. 2009) (citing Pacheco de Perez v. AT&T Co., 139 F.3d 1368, 1373 (11th Cir. 1998)). "To determine whether the case should be remanded, the district court must evaluate the factual allegations in the light most favorable to the plaintiff and must resolve any uncertainties about state substantive law in favor of the plaintiff." Stillwell v. Allstate Ins. Co., 663 F.3d 1329, 1333 (11th Cir. 2011) (citing Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997)). The court may consider the plaintiff's pleadings as well as affidavits and deposition transcripts submitted by the parties. Id. at 1333 n.1; Crowe, 113 F.3d at 1538.Plaintiff is a Georgia resident. Dkt. No. 1-2 ¶ 1. Defendant Assurity Life ("Assurity") is a foreign corporation.¹ Id. ¶ 2. Defendant Aycock is a Georgia resident.² Id. ¶ 3.

Because Plaintiff and Defendant Aycock are both Georgia residents, this Court lacks diversity jurisdiction over the case. See 28 U.S.C. § 1332. Thus, the Court lacks subject matter jurisdiction unless Plaintiff's case arises under federal law. See id. § 1331. For the reasons stated below, this Court finds that Plaintiff's claims against Defendant Assurity are completely preempted by ERISA. Consequently, the Court has federal question jurisdiction over those claims.³

Plaintiff brought only state law claims. See Dkt. No. 1-2. Therefore, the Court lacks federal question jurisdiction under the well-pleaded complaint rule. See Conn. State Dental Ass'n, 591 F.3d at 1343. However, there is a narrow exception to the well-pleaded complaint rule. That exception "exists where the preemptive force of a federal statute is so extraordinary that it converts an ordinary state law claim into a statutory federal claim." Id. (citing Caterpillar, Inc. v. Williams, 482 U.S. 386, 393 (1987) and Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1212 (11th Cir. 1999) (quotation omitted)).

There are two types of ERISA preemption: complete (or super) preemption and defensive (or conflict) preemption. See id. at 1343-44. Complete preemption provides a basis for removal. Id. at 1344. Defensive preemption does not. Id. Consequently, the Court has subject matter jurisdiction only if ERISA completely preempts Plaintiff's state law claims.

"Congress may preempt an area of law so completely that any complaint raising claims in that area is necessarily federal in character and[,] therefore[,] necessarily presents a basis for federal court jurisdiction." Kemp, 109 F.3d at 712 (citing Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987)). Complete preemption "convert[s] state law claims into federal claims." Id. Consequently, complete preemption "allow[s] a defendant to remove the case to federal court." Id.

"Complete preemption under ERISA derives from ERISA's civil enforcement provision, § 502(a)." Conn. State Dental Ass'n, 591 F.3d at 1344. Section 502(a) is codified at 29 U.S.C. § 1132(a). Section 1132(a) "has such 'extraordinary' preemptive power that it 'converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.'" Id. (citing Taylor, 481 U.S. at 65-66). Thus, state law claims seeking relief available under§ 1132(a) are recharacterized as ERISA claims. Kemp, 109 F.3d at 712 (citing Taylor, 481 U.S. at 67). Consequently, any "cause[] of action within the scope of the civil enforcement provisions of § [1132(a)] [is] removable to federal court." Conn. State Dental Ass'n, 591 F.3d at 1344 (alterations in original; citation omitted).

Determining whether § 1132(a) completely preempts a plaintiff's claims requires two inquiries: "(1) whether the plaintiff could have brought its claim under § [1132(a)]; and (2) whether no other legal duty supports the plaintiff's claim." Id. at 1345 (citing Davila, 542 U.S. at 210).⁴

Defensive preemption "is a substantive defense to preempted state law claims." Id. at 1344 (citing Jones v. LMR Int'l, Inc., 457 F.3d 1174, 1179 (11th Cir. 2006)). It "arises from ERISA's express preemption provision, § 514(a), which preemptsany state law claim that 'relates to' an ERISA plan." Id. (citing 29 U.S.C. § 1144(a)) (footnote omitted). Because defensive preemption is a defense, it is not a basis for removal. Id. (citing Gully v. First Nat'l Bank, 299 U.S. 109, 115-16 (1936)); see also Ervast v. Flexible Prods. Co., 346 F.3d 1007, 1012 n.6 (11th Cir. 2003) (Defensive preemption "provides only an affirmative defense to state law claims and is not a basis for removal.").

A. Claims Against Defendant Assurity

To establish complete preemption, Defendant Assurity must show that Plaintiff could have brought his claim under 29 U.S.C. § 1132(a). Borrero v. United Healthcare of N.Y., Inc., 610 F.3d 1296, 1301 (11th Cir. 2010) (quoting Davila, 542 U.S. at 210). Plaintiff could have brought his claim under § 1132(a) if four (4) requirements are met: (1) there is a relevant ERISA plan, (2) Plaintiff has standing to sue under ERISA, (3) Defendant Assurity is an ERISA entity, and (4) Plaintiff seeks compensatory relief akin to that available under § 1132(a). See Butero, 174 F.3d at 1212 (citations omitted); Conn. State Dental Ass'n, 591 F.3d at 1350 (citing Davila, 542 U.S. at 211-12 andMarin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 947-49 (9th Cir. 2009)).

In addition to showing that Plaintiff could have brought his claim under § 1132, Defendant Assurity must show that "no legal duty (state or federal) independent of ERISA or the plan terms is violated." Davila, 542 U.S. at 210; see also Conn. State Dental Ass'n, 591 F.3d at 1353.

1. ERISA Plan

The disability policy at issue is a relevant ERISA plan. An ERISA plan "does not have to be in writing." Suggs v. Pan Am. Life Ins. Co., 847 F. Supp. 1324, 1330 (S.D. Miss. 1994). Moreover, a formal document designated as "the Plan" is not required to establish that an ERISA plan exists. Id. (citing Mem'l Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d 236, 241 (5th Cir. 1990)). "[T]he purchase of an insurance policy does not, in and of itself, establish the existence of an ERISA plan." Id. However, such a "purchase is evidence of the establishment of a plan . . . [and] the purchase of a policy or multiple policies covering a class of employees offers substantial evidence that a plan . . . has been established." Id. (quoting Mem'l Hosp. Sys., 904 F.2d at 242 and Donovan v.Dillingham, 688 F.2d 1367, 1373 (11th Cir. 1982) (en banc)). Ultimately, the existence of an ERISA plan is a question of fact, to...