Harris v. Provident Life and Acc. Ins. Co., 91-36128

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Citation: 26 F.3d 930
• Docket Number: No. 91-36128,91-36128
• Parties: , 18 Employee Benefits Cas. 1567 Lawrence C. HARRIS, Jr.; Mary Harris, Plaintiffs-Appellants, v. PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, Tennessee corporation; Lincoln Memorial Park, Inc., Oregon corporation; Service Corporation International, Texas corporation, Defendants- Appellees.
• Decision Date: 07 June 1994

Page 930

26 F.3d 930 63 USLW 2032, 18 Employee Benefits Cas. 1567 Lawrence C. HARRIS, Jr.; Mary Harris, Plaintiffs-Appellants,
v.
PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, Tennessee
corporation; Lincoln Memorial Park, Inc., Oregon
corporation; Service Corporation
International, Texas
corporation,
Defendants-
Appellees. No. 91-36128. United States Court of Appeals,
Ninth Circuit. Argued and Submitted March 2, 1993.
Decided June 7, 1994.

Page 931

Steven Kahn, Kahn & Kahn, Portland, OR, for plaintiffs-appellants.

Victoria L. Rudometkin, Portland, OR, for defendants-appellees.

Appeal from the United States District Court for the District of Oregon.

Before: TANG, POOLE, and RYMER, Circuit Judges.

Opinion by Judge TANG.

TANG, Senior Circuit Judge:

Lawrence and Mary Harris (collectively the "Harrises") appeal the grant of summary judgment against them on their state law causes of action for misrepresentation and breach of contract, and their ERISA claim for breach of fiduciary duty. See Harris v. Provident Life & Accident Ins. Co., 776 F.Supp. 1450 (D.Or.1991). The Harrises argue that the district court erred by (1) finding that their state law claims were preempted by ERISA, (2) failing to decide whether the Harrises had brought a claim for equitable estoppel under ERISA, and (3) finding that none of the defendants was a fiduciary. We have jurisdiction under 28 U.S.C. Sec. 1291. Because we find that the district court lacked jurisdiction over this case, we vacate the district court's judgment and remand with instructions to dismiss.

BACKGROUND

Lincoln Memorial Park, Inc. ("Lincoln") hired Lawrence Harris to sell funeral service programs. Lincoln employees were generally covered by a benefit plan sponsored by Service Corporation International ("SCI"), Lincoln's parent corporation. The benefit plan was administered by Provident Life & Accident Insurance Company ("Provident"), but SCI would assist Provident in determining employee eligibility under the plan.

Carl Chadowski ("Chadowski"), Lincoln's manager and sales director, told the Harrises that they and their dependents were covered under Lincoln's medical insurance plan as of the date of Lawrence Harris' first sale. "Chadowski made these representations 1) with the knowledge that they were false or with reckless or negligent disregard for the truth; and 2) with the intent that [the Harrises] would rely upon them." Harris, 776 F.Supp. at 1452.

Lawrence Harris made his first sale on October 9, 1989. Shortly thereafter, on October 30, the Harrises sought medical coverage for their alcoholic son who needed either inpatient or outpatient treatment, inpatient treatment being more expensive. At that time, Chadowski again told the Harrises that they were covered under Lincoln's health plan.

To assure coverage, the Harrises called Provident. Although Provident could not find the Harrises in their system, Provident told the Harrises that they were covered up to $25,000 if Lincoln confirmed that they were eligible for benefits. Believing coverage existed, the Harrises obtained inpatient treatment for their son and incurred costs of $13,208.65. Thereafter, Provident refused to

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reimburse the Harrises because, under the benefit plan, coverage did not start until December 1, 1990.

The Harrises filed suit in state court against Lincoln and Provident, alleging state law claims of misrepresentation and breach of contract. Lincoln and Provident removed the case to federal court pursuant to 28 U.S.C. Sec. 1441, contending that ERISA preempted the Harrises' claims. ¹ The Harrises did not object to removal.

Subsequently, Lincoln and Provident argued that the Harrises failed to state a claim under ERISA and moved for judgment on this defense. Before the district court ruled on the motion, the Harrises filed an amended complaint adding Chadowski and SCI as defendants and alleging an additional claim of breach of fiduciary duty under ERISA against Lincoln, Provident, Chadowski, and SCI (collectively the "defendants"). The district court thereafter granted judgment in favor of the defendants. The Harrises timely appeal.

STANDARD OF REVIEW

Removal is a question of federal subject matter jurisdiction reviewed de novo. Gould v. Mutual Life Ins. Co., 790 F.2d 769, 771 (9th Cir.), cert. denied, 479 U.S. 987, 107 S.Ct. 580, 93 L.Ed.2d 582 (1986). "The burden of establishing federal jurisdiction falls on the party invoking removal." Id. (quotations and citations omitted).

DISCUSSION

Although no objection was made to removal, we must still address whether federal jurisdiction exists. FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 229, 110 S.Ct. 596, 607, 107 L.Ed.2d 603 (1990) ("federal courts are under an independent obligation to examine their own jurisdiction"); Freeman v. Jacques Orthopaedic & Joint Implant Surgery Medical Group, 721 F.2d 654, 655 (9th Cir.1983) ("it is this court's duty to see to it that the District Court's jurisdiction, defined and limited by statute, is not exceeded"); Washington Local Lodge No. 104 v. International Bhd. of Boilermakers, 621 F.2d 1032, 1033 (9th Cir.1980) ("When jurisdiction may not exist, however, the court must raise the issue even if the parties are willing to stipulate to federal jurisdiction.").

In determining the existence of removal jurisdiction, we ordinarily look to the complaint as originally filed, and not as amended. O'Halloran v. University of Washington, 856 F.2d 1375, 1379 (9th Cir.1988). However, the rule is different if a litigant does not object to removal, or objects but fails to apply for an interlocutory appeal to preserve an attack on removal jurisdiction. Sorosky v. Burroughs Corp., 826 F.2d 794, 798-99 (9th Cir.1987). In such a case, the threshold issue is "whether the federal district court would have had original jurisdiction of the case" at final judgment. Grubbs v. General Elec. Credit Corp., 405 U.S. 699, 702, 92 S.Ct. 1344, 1347, 31 L.Ed.2d 612 (1972). ² According to Grubbs,

a judgment of a district court may be upheld, even though there was no right to removal, if (1) the case is tried on the merits; and (2) the federal court would have had jurisdiction had the case been filed in federal court in the posture it had at the time of the entry of final judgment.

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Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1065 (9th Cir.1979) (emphasis added) (citing Grubbs ); accord...