Harman v. Standard Ins. Co.
| Decision Date | 30 September 2021 |
| Docket Number | Case No. 8:18-cv-1441-KKM-TGW |
| Citation | 564 F.Supp.3d 1187 |
| Parties | Larry P. HARMAN, D.O., Plaintiff, v. STANDARD INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Middle District of Florida |
Lee Delton Gunn, IV, Gunn Law Group, PA, Scott A. Arthur, Joseph F. Diaco, Jr., PA, Tampa, FL, for Plaintiff.
Kristina B. Pett, Washington, DC, Danielle E. Shure, Wendy L. Furman, McDowell Hetherington LLP, Boca Raton, FL, for Defendant.
Kathryn Kimball Mizelle, United States District Judge The parties filed cross motions for summary judgment. (Docs. 59, 60.) Defendant Standard Insurance Company argues that the Court should grant summary judgment in its favor because the Employment Retirement Income Security Act (ERISA) governs the plaintiff's breach-of-contract claim and, under ERISA, Standard correctly determined that Plaintiff is not entitled to disability benefits under his insurance plan. (Doc. 59 at 2.)1 Plaintiff Larry Harman argues that the Court should grant summary judgment on two of Standard's affirmative defenses because Florida law—not ERISA—applies to Harman's claim, including his demand for attorney's fees. (Doc. 60 at 1–2.)
Following an order referring the parties’ motions for summary judgment, the Magistrate Judge issued a Report and Recommendation. (Doc. 75.) That report recommends granting Harman's motion for summary judgment to the extent Harman argues that ERISA does not govern his insurance policy with Standard. (See id. ) But the report also recommends granting Standard's motion for summary judgment to the extent Standard argues that Harman's legal disability preceded his factual disability; therefore, Standard correctly denied Harman's disability claim and the Magistrate Judge recommends granting summary judgment to Standard on this basis. (Id. )
Both parties objected to the Report and Recommendation. (Docs. 76, 77.) Standard objects to the Magistrate Judge's conclusion that ERISA does not govern Harman's claims. (Doc. 76.) Harman objects to the Magistrate Judge's conclusion that Harman's legal disability preceded his factual disability, which would preclude all relief. (Doc. 77.)
After reviewing the relevant filings and evidence, the Court sustains Standard's objection and concludes that ERISA governs Harman's insurance policy because his former employer "established" the plan under which he obtained the reissued policy. Specifically, the Court concludes that Harman merely revived the policy his former employer initially "established" after it lapsed, and he has not so transformed the policy such that it is no longer the same one. Since ERISA covered the initial policy, it still applies post-termination and conversion. Therefore, ERISA preemption applies to Harmon's insurance claims under the policy.
Ultimately, this first issue becomes academic, as the Court agrees with the Report and Recommendation's conclusion that Harman's legal disability preceded his factual disability. As a result, the Report and Recommendation is ADOPTED-IN-PART . Standard's objection to the report's resolution on the issue of whether ERISA governs Harman's insurance policy is SUSTAINED . The remaining objections are OVERRULED . Therefore, the Court GRANTS summary judgment in favor of Standard Insurance.
The Court reviews de novo those portions of a Report and Recommendation to which parties object. See 28 U.S.C. § 636(b)(1)(C). The district judge may accept, reject, or modify the magistrate judge's findings or recommendations. Id.
Summary judgment is appropriate if no genuine dispute of material fact exists and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A fact is material if it might affect the outcome of a case under governing law. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). To overcome summary judgment, the opposing party must point to evidence in the record showing that a genuine issue for trial exists. Celotex Corp. v. Catrett , 477 U.S. 317, 323–24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Neither Standard nor Harman object to the Magistrate Judge's factual findings. Rather, each party argues that the Magistrate Judge omitted "material facts." (Doc. 76 at 1–2 (); Doc. 77 at 2 ().) As a result, the Court adopts the Magistrate Judge's factual findings. See Harrigan v. Metro Dade Police Dep't Station #4 , 977 F.3d 1185, 1191 (11th Cir. 2020). Additionally, the Court considered the omitted facts discussed in the objections to the Report and Recommendation. (Docs. 76, 77.)
Having adopted the factual findings and considered the parties’ proffered facts,2 the Court will address why ERISA governs Harman's claims. Then, the Court will explain why Harman was legally disabled before the relevant time period.
The parties do not dispute some important facts. For instance, the parties agree that ERISA governed Harman's original insurance plan when he worked as a cardiac electrophysiologist with Caleel and Associates. And Harman puts forth no argument that his insurance policy falls within ERISA's safe harbor provisions. See Anderson v. UNUM Provident Corp. , 369 F.3d 1257, 1263 n.2 (11th Cir. 2004). So, the dispute centers on whether ERISA continues to govern Harman's policy after he left his position with Caleel and Associates, allowed his policy to lapse, and then had it reissued. The Court concludes that Glass v. United of Omaha Life Insurance Co. , 33 F.3d 1341 (11th Cir. 1994), controls here and compels the conclusion that ERISA governs Harman's plan.
ERISA covers employee benefit plans. 29 U.S.C. § 1003(a). An employee benefit plan is (1) a "plan, fund, or program" (2) established or maintained (3) by an employer (4) for the purpose of providing disability or other benefits (5) to participants or their beneficiaries. Donovan v. Dillingham , 688 F.2d 1367, 1371 (11th Cir. 1982) (en banc). Whether ERISA governs a benefits plan is a question for the Court to decide. Moorman v. UnumProvident Corp. , 464 F.3d 1260, 1266 (11th Cir. 2006).
Standard's objection to the Report and Recommendation turns on the meaning of "established." (Doc. 76.) Although the Eleventh Circuit has provided guidance on whether a plan is "maintained" such as to fall within the ambit of ERISA,3 it has provided less clarity on the meaning of "established." It has instead instructed courts to consider "the surrounding circumstances" to determine if a plan was "established" by inquiring whether those circumstances would inform "a reasonable person" of the "intended benefits, a class of beneficiaries, the source of financing, and procedures for receiving benefits." Donovan , 688 F.2d at 1373. This deductive view of whether an employee plan has been "established" comports with the term's common legal meaning, defined as "to settle, make, or fix firmly; to enact permanently;" or "to make or form; to bring about or into existence." Black's Law Dictionary (11th ed. 2019).
And, most importantly as Standard argues, this Court must follow the Eleventh Circuit's only relevant precedent touching upon post-termination, conversion policies: Glass v. United of Omaha Life Insurance Company , 33 F.3d 1341 (11th Cir. 1994), which holds that a plan is established for ERISA preemption purposes if the right to enroll arose only from the initial ERISA plan and remained part of a group plan, id. at 1347. So, ERISA governs Harman's individual insurance plan if the reissued policy arose solely out of the policy Caleel and Associates initially established and if he remained part of the group plan after conversion.
Starting at the beginning, Harman's initial insurance plan was undeniably established by Caleel and Associates. When Harman began working for Caleel and Associates, he obtained disability insurance through his employer from Minnesota Mutual Life (later assumed by Standard). (Doc. 59-2 at 18–41.) Harman's policy included a Future Income Protection Agreement (FIPA) option. (Doc. 59-2 at 66–67.) Caleel and Associates paid premiums on Harman's insurance policy while he worked there and continued to do so for nearly two years after he ended his employment with them in 1998. (Doc. 59-2 at 21; Ex. 6 & 10.) And Harman enjoyed the employee group rate discount when paying the policy's premiums. (Doc. 59-2 at 43.)
Harman's policy lapsed in October 1999 due to nonpayment of premiums. (Doc. 63-1 at 2.) But in January 2000, Harman reapplied for his policy and exercised his FIPA option. (Doc. 63-1 at 2.) Harman's insurance policy reissued that same month. (Doc. 2 at 5.) The reissued policy bears the same policy number as when he worked with Caleel and Associates; lists the "Original Policy Date" as October 10, 1996; includes a stamped "Policy Amended" notice throughout; and enjoys the same discount based on the employee group rate. (Doc. 2 at 5; Doc. 59-2, Ex. 4.) Harman's policy also included his FIPA option. (Doc. 63-1 at 2.)
Harman argues ERISA no longer governs his reissued policy because Caleel and Associates no longer maintained Harman's reissued policy. (See Doc. 83 at 5.) This argument misunderstands the relevant inquiry. The pivotal issue is whether the reissued policy was "established"—not "maintained"—by Caleel and Associates. And it was.
Caleel and Associates established Harman's original policy that he received during his employment. After that plan lapsed, Harmon reinstated the policy, but he did not obtain a new individual plan. Instead, he reinstated Caleel and Associates’ old plan. (Doc. 63-1 at 2.) After he resumed his premium payments, his policy number remained the same, he received the same reduced employee group rate, and he exercised a FIPA option...
To continue reading
Request your trial