Letner v. Unum Life Ins. Co. of America

• Decision Date: 03 August 2001
• Docket Number: No. 5:00CV270-SPM.,5:00CV270-SPM.
• Citation: 203 F.Supp.2d 1291
• Parties: Lisa LETNER, Plaintiff, v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant.
• Court: U.S. District Court — Northern District of Florida

203 F.Supp.2d 1291

Lisa LETNER, Plaintiff, v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant.

No. 5:00CV270-SPM.

United States District Court, N.D. Florida, Panama City Division.

August 3, 2001.

COPYRIGHT MATERIAL OMITTED

Daniel Mark Soloway, Daniel M. Soloway PA, Pensacola, FL, for Plaintiff.

Jonathan Matthew Fordin, Proskauer, Rose, Goetz & Mendelsohn, Boca Raton, FL, for Defendant.

ORDER

MICKLE, District Judge.

This cause comes for consideration upon the magistrate judge's report and recommendation (doc. 13). The parties have been furnished a copy and afforded an opportunity to file objections. No objections have been filed. Pursuant to 28 U.S.C. § 636(b)(1), I have determined that the report and recommendation should be adopted. Accordingly, it is hereby

ORDERED AND ADJUDGED:

1. The magistrate judge's report and recommendation (doc. 13) is adopted and incorporated by reference in this order.

2. Plaintiff's Motion for Remand to State Court (doc. 5) is granted. This case is remanded to the Circuit Court, Fourteenth Judicial Circuit, in and for Jackson County, Florida.

3. The Court retains jurisdiction to award attorney's fees and costs to Plaintiff for Defendant's improper removal. If Plaintiff wishes to pursue an award for such fees and costs, Plaintiff shall submit to the Court, within ten (10) days of the date of this order, affidavits in support of any costs and actual expenses, including attorney's fees, so incurred. Any objections to the claimed fees and costs must be filed by Defendant within ten (10) days of the date of service of Plaintiff's supporting affidavits. An order will be entered at that time regarding the amount of fees and costs to be awarded.

4. The clerk shall return this case to the undersigned no later than August 27, 2001.

REPORT AND RECOMMENDATION

WAGNER, United States Magistrate Judge.

I. Procedural Background

On or about October 13, 2000, Plaintiff Lisa R. Letner ("Letner") filed the instant action in the Circuit Court for Jackson County, Florida. In her complaint, Letner asserts a breach of contract claim and seeks to recover benefits under a long term disability policy issued by Defendant UNUM Life Insurance Company of America ("UNUM"). Letner also requests declaratory relief. On November 10, 2000, UNUM filed a notice of removal pursuant to 28 U.S.C. § 1446. UNUM claims that Letner's policy is an employee benefit plan that is subject to federal jurisdiction under the pre-emption doctrine pursuant to Employee Retirement Income Security Act (ERISA). On or about November 28, 2000, Letner moved to remand the action to the state court on the grounds that her claim is simply a state law breach of contract claim which is not subject to ERISA.

If Letner's policy falls within the purview of ERISA, then it was proper for this case to be removed to federal court. If, on the other hand, Letner's policy is not an ERISA plan, then the federal courts have no jurisdiction of this case; it should not have been removed from the Florida state court where it was filed, and the case must be remanded to that state court.

Due to the lack of necessary information on the record, and although clearly not required, the court provided the parties with the opportunity to submit additional evidence on the jurisdictional issue. (Doc. 10). Both parties presented evidence on the issue of whether Letner's insurance policy is an employee welfare benefit plan within the meaning of ERISA's pre-emption clause that would support the exercise of federal jurisdiction.¹ (Docs. 11 & 12). After reviewing all the evidence, the court is unable to state as a matter of law that the facts support the exercise of federal subject matter jurisdiction under the ERISA provisions.

Specifically, in the instant case, UNUM has failed to provide any reliable factual basis that would demonstrate (1) that Letner's insurance policy qualified as an employee benefit plan that is subject to ERISA; (2) that Letner's insurance policy is not excluded from the safe harbor provisions which exempt a "plan" from the confines of ERISA, or (3) that Letner's employer established or maintained the plan.

II. Findings of Fact

1. Prior to or during 1992, Rodney Rich ("Rich"), an independent insurance broker, established an account with Jackson Hospital ("Jackson") in Marianna, Florida. A group policy was issued to Jackson which provided long term disability benefits for certain employees. Defendant UNUM was the group insurance carrier. Doc. 6, Exhibit A, Rich affidavit, ¶ 4.

2. The declaration page to the group policy expressly states that the plan was issued to "Jackson Hospital for its employees" and was identified by Number 292674. The group policy expressly states that it is covered by ERISA. Id. ¶ 6.

3. Jackson limited coverage of the group policy to its "regular" (non-management) employees. Id. The group's policy benefits were fixed and contingent upon the individuals' employment with Jackson. The group policy was also subject to unilateral cancellation by either UNUM or Jackson. Id. ¶ 10.

4. Letner was excluded from coverage under the terms of the group policy by Jackson because she was a management employee. There came a time when Jackson provided Rich with access to its management employees. Rich met with Jackson's management employees, including Letner, and offered them the opportunity to purchase individual, executive-professional policies. Id. ¶ ¶ 7-9.

5. Letner applied for and purchased a separate and distinct policy from the group plan. Id. Although UNUM was the insurer for Letner's policy, Jackson did not sponsor the policy. Id. ¶ ¶ 19-10.

6. Letner, as opposed to Jackson, owned the policy and was the named insured. Letner's policy was not contingent on her employment with Jackson and was not subject to cancellation by Jackson or UNUM. Id. ¶ 10.

7. Jackson did not make any financial contribution toward Letner's policy. Id. ¶ 11. Jackson simply withheld Letner's premiums through payroll deduction and forwarded them to UNUM. Id. ¶ 12. Jackson was not compensated by UNUM for this ministerial task. Id.

III. Discussion

A. Removal Jurisdiction.

A 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 the district court of the United States. 28 U.S.C. § 1441(a). Removal is appropriate only if the district court has original jurisdiction. 28 U.S.C. § 1447. Since removal jurisdiction raises significant federalism concerns, lower courts are directed to construe removal statutes strictly. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir.1996). It is well settled that all doubts should be construed against removal. Burns v. Windsor Insurance Co., 31 F.3d 1092, 1094-95 (11th Cir.1994); Univ. of S. Alabama v. American Tobacco Co., 168 F.3d 405, 409 (11th Cir.1999) (quoting the United States Supreme Court [lower federal courts] "should proceed with caution in construing constitutional and statutory provisions dealing with [their] jurisdiction") (citations omitted). UNUM bears the burden to prove the existence of federal jurisdiction that will properly support removal.² Diaz, 85 F.3d at 1505; Mellman v. Sprint Communications Co., 975 F.Supp. 1458, 1460 (N.D.Fla.1996).

B. ERISA and Removal.

Generally, an action arises under federal law only if issues of federal law are raised in the plaintiff's well-pleaded complaint. See: Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). The "complete preemption" doctrine is an exception to this rule. See: Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1211-12 (11th Cir.1999). This doctrine provides that to the extent that Congress has displaced a plaintiff's state law claim, the state law claim will be recharacterized as a complaint arising under federal law. Id.; See also: Rivers v. Health Options Connect, Inc., 96 F.Supp.2d 1370 (S.D.Fla.2000) (providing an extensive analysis on the preemption doctrine).

When ERISA was enacted in 1974, Congress' intent was two fold — to provide protection for employees and at the same time encourage employers to voluntarily establish pension and benefit plans. Williams v. Wright, 927 F.2d 1540, 1543 (11th Cir.1991). Nevertheless, Congress' primary focus was "to protect working men and women from abuses in the administration and investment of private retirement plans and employee welfare plans." Donovan v. Dillingham, 688 F.2d 1367, 1370 (11th Cir.1982) (en banc). Once an employer voluntarily establishes a plan, Congress' intent was to ensure that its employees would actually receive the promised benefits. Williams, 927 F.2d at 1543. Thus, through ERISA, Congress established the minimum standards for the vesting of employee benefits, funding of benefits, carrying out fiduciary responsibilities, governmental reporting requirements, and participant disclosure requirements. Donovan, 688 F.2d at 1370 citing H.R.REP. No. 93-533, 93rd Congress, 2d Sess., reprinted in U.S.C.C.A.N. 4639 (1974).

ERISA is to be liberally construed; however, even if preemption is at issue, removal must still be approached with great care. Caterpillar v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987); See generally: California Div. of Labor Standards Enforcement v. Dillingham Constr., Inc., 519 U.S. 316, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997). Thus, a plaintiff may not seek to defeat federal jurisdiction under ERISA by artfully pleading his claim as a state breach of contract claim. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 62-66, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). Likewise, a defendant may not convert a state-law claim into one arising under ERISA in an attempt to select the forum or to escape state law remedies otherwise available to plaintiff. See: Caterpillar, 482 U.S. at 399, 107 S.Ct. 2425; See e.g.: Hunt...