Jordan v. Reliable Life Ins. Co.

• Decision Date: 09 September 1988
• Docket Number: Civ. A. No. 88-AR-0543-S.
• Citation: 694 F. Supp. 822
• Parties: Carolyn L. JORDAN, etc., Plaintiff, v. RELIABLE LIFE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Alabama

694 F. Supp. 822

Carolyn L. JORDAN, etc., Plaintiff, v. RELIABLE LIFE INSURANCE COMPANY, Defendant.

Civ. A. No. 88-AR-0543-S.

United States District Court, N.D. Alabama, S.D.

September 8, 1988.

As Amended September 9, 1988.

James J. Thompson, Jr., Hare, Wynn, Newell and Newton, Birmingham, Ala., for plaintiff.

Dan H. McCrary, Balch & Bingham, Birmingham, Ala., Robert C. von Ohlen, Jr., pro hac vice, Lord, Bissell & Brook, Chicago, Ill., for Reliable Life Ins. Co.

MEMORANDUM OPINION

ACKER, District Judge.

Defendant, Reliable Life Insurance Company, has moved to strike the jury demand that accompanied a complaint originally filed in the state court by plaintiff, Carolyn L. Jordan, as executrix under the will of James I. Jordan, deceased. The action was brought on a group policy of accidental death insurance written by Reliable. The policy designated Mr. Jordan's estate as beneficiary in the event of Mr. Jordan's accidental death. The policy contained an exclusion for death occurring in an airplane in which the insured was serving as pilot or member of the flight crew. The only disputed issue of fact is a simple one, namely, whether or not Mr. Jordan, who admittedly died in an air crash, was himself acting as a member of the crew at the time of the crash. The case was removed from the state court to this court by Reliable on the basis of diversity and the alleged existence of a federal question.

If a question arises as to whether or not Mrs. Jordan, the beneficiary under this insurance policy, is entitled to a jury trial, it does so from the fact that the policy was a group policy covering certain salaried officials of Vulcan Materials Company as part of an employee benefit package allegedly governed by the Employment Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq. (ERISA). Mr. Jordan was a salaried employee of Vulcan Materials. Reliable contends that Mr. Jordan's suit is an ERISA claim for benefits and that, therefore, the Eleventh Circuit's Chilton v. Savannah Foods and Industries, Inc., 814 F.2d 620, 623 (11th Cir.1987), precludes trial by jury because Chilton precludes trial by jury of any claim involving an ERISA Plan.

The Pertinent Facts

In order to ferret out the facts upon which Reliable's motion turns, the court submitted certain interrogatories to Reliable. Some of those interrogatories and Reliable's answers are as follows:

1. Name the person or persons who made the decision to deny plaintiff's claim.

ANSWER: Ronald Bove.

2. Describe precisely the relationship between the person or persons named in answer to interrogatory No. 1 above and Reliable Life Insurance Company.

ANSWER: Ronald Bove is the Vice President of Claims for National Accident Insurance Underwriters, Inc. (NAIU) which is the managing underwriter for the Reliable Life Insurance Company with respect to policy nos. 1037-ADALP-02 and 1037-ABAKF-02.

3. Name and give the address of the "plan administrator" under the alleged ERISA plan which defendant claims is here involved.

ANSWER: Vulcan Materials Company P.O. Box 7497 Birmingham, Alabama 35233.

4. Name and give the address of any and all "fiduciaries" under the alleged ERISA plan which defendant claims is here involved.

ANSWER: Under Plaintiff's ERISA claim, Vulcan Materials Company, P.O. Box 7497, Birmingham, Alabama 35223 is a fiduciary. If a "fiduciary" under ERISA is interpreted to be anyone who exercises any discretionary authority with regard to paying a claim under policy nos. 1037-ADALP-02 and 1037-ABAKF-02, the Reliable Life Insurance Company, Webster Groves, Missouri, and National Accident Insurance Underwriters, Inc., 500 Park Boulevard, Itasca, Illinois XXXXX-XXXX could also be considered "fiduciaries."

5. What part, if any, did Vulcan Materials Company play in making the decision not to pay plaintiff's claim?

ANSWER: Vulcan Materials played no role in the decision not to pay plaintiff's claim.

6. What effect, if any, would payment of this claim have on Vulcan Materials Company or on any employee benefit plan of Vulcan Materials Company?

ANSWER: None, to defendant's knowledge, as a result of this claim.

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8. Is it defendant's contention that all group insurance policies issued by it covering employees of particular employers are governed by ERISA?

ANSWER: No.

9. If defendant's answers to the interrogatory next above is "no," set forth in detail how defendant makes the distinction between group policies as to whether or not they are governed by ERISA?

ANSWER: A group policy would be covered by ERISA if all of the following conditions are met:

(1) The policy is part of a "employee welfare benefit plan" or a "employee pension benefit plan" within the meaning of sections 3(1) or 3(2)(A), respectively, of the Employee Retirement Income Security Act of 1974 (ERISA). (29 U.S.C. §§ 1002(1) & (2)(A)).

(2) The plan of which the policy is a part is established or maintained by: (i) an employer engaged in commerce or in any industry or activity affecting commerce; (ii) an employee organization or organizations representing employees engage sic in commerce or in any industry or activity affecting commerce; or (iii) both (i) and (ii) (29 U.S.C. § 1003).

(3) The plan of which the policy is a part is not excluded from ERISA's coverage by virtue of section 4(b) thereof (29 U.S.C. § 1003(b)), i.e., the plan is not a governmental plan or a church plan with respect to which no election has been made under section 410(d) of the Internal Revenue Code, the plan is not maintained solely for the purpose of complying with applicable workmen's compensation laws or unemployment compensation or disability insurance laws, the plan is not maintained outside the United States primarily for the benefit of the persons substantially all of whom are nonresident aliens, and the plan is not an unfunded excess benefit plan within the meaning of section 3(36) of ERISA (29 U.S.C. § 1002(36)).

If the above three requirements are met with respect to a policy, ERISA will generally govern the policy since under section 514(a) of ERISA, the provisions of Title 1 of ERISA will supersede "any and all State laws insofar that they may now or hereafter relate to any employee benefit plan ..."

* * * * * *

12. Does Reliable Life Insurance Company contend that the burden of proof is on the plaintiff to prove that defendant or anyone else, abused its discretion in denying this alleged ERISA claim?

ANSWER: Plaintiff has the burden of proving that defendant was arbitrary or capricious in interpreting the plan with regard to this claim. In addition, it is defendant's position that the facts of this case so clearly establish that James I. Jordan was piloting or serving as a member of the crew of the flight in question that under any arguably relevant standard of review, policy nos. 1037-ADALP-02 and 1037-ABAKF-02 do not provide coverage for this claim.

* * * * * *

14. Is plaintiff's claim an equitable claim or a law claim or some other kind of claim?

ANSWER: Plaintiff's Complaint alleges that her claim is brought pursuant to the Employment Retirement Income Security Act of 1974. Courts examining this issue characterize such claims as equitable in that they involve an alleged entitlement to benefits and require an interpretation of the terms of the plan.

15. Is the only factual dispute between the parties whether or not plaintiff's decedent was a passenger at the time of his death?

ANSWER: Investigation revealed that James I. Jordan's death resulted from injuries sustained while he was piloting or serving as a member of the crew of an aircraft. For that reason, the claim was denied. At this time, defendant does not believe there are any material factual issues in dispute.

16. Was the insurance coverage here involved a part of a larger benefit package or plan afforded by Vulcan Materials Company to its employees or to some portion of its employees?

ANSWER: Defendant Reliable Life has no knowledge regarding the benefit package offered by Vulcan Materials Company to its employees other than the Accidental Death Group Insurance policy at issue in this litigation.

In addition to these answers to the court's interrogatories, Reliable, in its answer to Mrs. Jordan's complaint, says:

ANSWER

1. Defendant Reliable Life denies that James I. Jordan was "riding as a passenger" in an aircraft on November 8, 1986 as it approached Dannelly Field, near Montgomery, Alabama.

2. Defendant Reliable Life admits that James I. Jordan suffered fatal injuries as a result of the crash of his aircraft on November 8, 1986.

3. Defendant Reliable Life admits that James I. Jordan was employed by Vulcan Materials Company.

4. Defendant Reliable Life admits that James I. Jordan was not acting within the scope of his employment at the time of the aircraft crash.

5. Defendant Reliable Life admits that it issued an Accidental Death Group Insurance Policy to Vulcan Materials Company subject to the conditions, limitations, exclusions and other terms contained therein.

6. Defendant Reliable Life admits that James I. Jordan was an insured person under Vulcan Materials Company Accidental Death Group Insurance Policy, subject to the conditions, limitations, exclusions and other terms contained therein.

7. Defendant Reliable Life denies that Exhibit "A" attached to plaintiff's amended complaint is the insurance policy issued to Vulcan Materials Company.

8. Defendant Reliable Life admits that plaintiff has made a demand for an accidental death benefit in connection with the death of her husband in the aforesaid aircraft crash.

9. Defendant Reliable Life denies that it refused to comply with the terms of the policy, and avers that no benefits are payable to plaintiff under the terms of the policy.

10. Defendant Reliable Life admits that it has made no payment to plaintiff.

11. Defendant Reliable Life denies that it has breached any contractual duty to plaintiff or plaintiff's decedent, James I. Jordan.

12. Defendant Reliable Life

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