Mathis v. American Group Life Ins. Co.

Decision Date17 October 1994
Docket NumberNo. 4:93CV1086 JCH.,4:93CV1086 JCH.
Citation873 F. Supp. 1348
PartiesRobert MATHIS and June Mathis, Plaintiffs, v. AMERICAN GROUP LIFE INSURANCE COMPANY, et al., Defendants.
CourtU.S. District Court — Eastern District of Missouri


Philip J. Ohlms, Barklage and Barklage, St. Charles, MO, Robert K. DuPuy, Lamarca and Landry, West Des Moines, IA, for plaintiffs Robert Mathis, June Mathis.

Tyce Stuart Smith, Sr., Smith and Hutcheson, Waynesville, MO, for defendant American Group Life Ins. Co.

Fred A. Ricks, Jr., Stanley G. Schroeder, Sr., McMahon and Berger, St. Louis, MO, for defendants, third-party plaintiffs Ins. Administrative Corp., Const. Service Ins. Trust fka Const. Service Industry Trust.

James L. Hawkins, Greensfelder and Hemker, St. Louis, MO, L. Graves Stiff, III, Thomas L. Selden, Birmingham, AL, for third-party defendant Harbert Intern., Inc.


HAMILTON, District Judge.

This matter is before the Court on several motions of Defendants Construction & Service Insurance Trust (hereinafter "C & SIT") and Insurers Administrative Corporation (hereinafter "IAC"): (1) Defendants' Motion to Dismiss Portions of Plaintiffs' First Amended Complaint; (2) Defendants' Motion to Strike Claims for Punitive and Extracontractual Damages from Plaintiffs' First Amended Complaint; and (3) Defendants' Motion to Strike Plaintiffs' Demand for Jury Trial.

Plaintiffs first filed their complaint on May 10, 1993. Subsequently, in an Order entered April 15, 1994, the Court granted Plaintiffs leave to file an Amended Complaint. Plaintiffs filed their First Amended Complaint that same day. Plaintiffs assert five ERISA claims against Defendants. Count I alleges that Defendants wrongfully denied Plaintiffs health care benefits due under an ERISA plan. Count II asserts that Defendants breached their fiduciary duties under ERISA. Count IV asserts that Defendants failed to provide Plaintiffs with information regarding the ERISA plan. Count V claims that Defendants failed to give Plaintiffs statutorily required notice of their right to continue coverage (COBRA notice). Count VI alleges a breach of co-fiduciary duty. In Count III, Plaintiffs assert a federal common law claim based on equitable estoppel. In Counts VII-X Plaintiffs plead various Missouri common law claims.

Plaintiff Robert Mathis is a former employee of Harbert International, Inc. Plaintiff Robert Mathis alleges that during his employment with Harbert, he was enrolled in an ERISA group health benefit plan provided by Defendant C & SIT and administered by American Group Life Insurance Company. Plaintiff was terminated from Harbert on September 12, 1990. Plaintiff contends that the following day he executed a document changing his health insurance coverage from a family plan to an individual plan. Plaintiff claims that he had sufficient funds in his hour bank account with the Trust to provide him with individual health coverage until July 1, 1991.

Plaintiffs contend that Robert Mathis was admitted to Missouri Hospital on May 9, 1991 and diagnosed as needing immediate heart surgery. According to Plaintiffs, their daughter notified Corporate Benefit Administrators Inc., administrator for the Trust, to precertify Mr. Mathis' coverage for heart surgery. Plaintiffs contend that their daughter was informed that Mr. Mathis' coverage would remain in effect until July 1, 1991 and that his surgery would be precertified. Plaintiff Robert Mathis further contends that following surgery he was informed by Defendant IAC that he did not have insurance coverage for the surgery and related health care.

Defendants C & SIT and IAC, move this Court to dismiss portions of Plaintiffs' First Amended Complaint, strike Plaintiffs' claims for punitive and extracontractual damages, and to strike Plaintiffs' demand for a jury trial.


Defendants C & SIT and IAC seek dismissal of Counts III, VII, VIII, IX, and X of Plaintiffs' First Amended Complaint for failure to state a claim pursuant to Fed. R.Civ.P. 12(b)(6). In passing on a motion to dismiss, a court must view the allegations in the complaint in the light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). A cause of action should not be dismissed for failure to state a claim unless, from the face of the complaint, it appears beyond a reasonable doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957); Jackson Sawmill Co. v. United States, 580 F.2d 302, 306 (8th Cir.1978), cert. denied, 439 U.S. 1070, 99 S.Ct. 839, 59 L.Ed.2d 35 (1979).

Thus, a motion to dismiss is likely to be granted "only in the unusual case in which a plaintiff includes allegations that show on the face of the complaint that there is some insuperable bar to relief." Fusco v. Xerox Corp., 676 F.2d 332, 334 (8th Cir.1982).

Defendants C & SIT and IAC seek dismissal of Counts III and VII through X on grounds that these are state law claims that they "relate to" an ERISA plan and are preempted by ERISA.

Defendant C & SIT seeks dismissal from Count IV which sets forth a claim for damages under ERISA § 502, 29 U.S.C. § 1132(c)(1)(B), based on Defendants' alleged failure to furnish certain Plan information to Plaintiffs. Defendant C & SIT seeks dismissal from Count IV on grounds that such relief may only be recovered from the Plan Administrator and C & SIT did not occupy that role.

Defendants C & SIT and IAC seek dismissal from Count V which seeks recovery of damages under ERISA § 502(c)(1)(A), 29 U.S.C. 1132(c)(1)(A) for Defendants' alleged failure to provide Plaintiff Robert Mathis with proper notice of entitlement to continue health coverage (COBRA notice) under ERISA § 606, 29 U.S.C. § 1166. Defendants C & SIT and IAC seek dismissal from this count on grounds that such a claim can only brought against the then Plan Administrator, who Plaintiffs identify as Defendant American Group Life Insurance Company.

Defendant C & SIT also seeks dismissal from Counts III and VI. These counts set forth claims for damages based on fiduciary breach under 29 U.S.C. §§ 1105, 1109, and 1132(a)(3). Defendant C & SIT seek dismissal from these claims on grounds that Plaintiffs fail to plead sufficient facts to establish that C & SIT was a fiduciary as defined by ERISA.


Defendants IAC and C & SIT move for dismissal of Counts III and VII through X of Plaintiffs' First Amended Complaint on grounds that these Counts allege state law claims that "relate to" an employee benefit plan and are preempted by ERISA. ERISA's preemption provision is sweeping:

The provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title.

29 U.S.C. § 1144(a) (emphasis added). "The pre-emption clause is conspicuous for its breadth." FMC Corp. v. Holliday, 498 U.S. 52, 58, 111 S.Ct. 403, 407, 112 L.Ed.2d 356 (1990). The purpose of the clause was to "`establish pension plan regulation' as exclusively a federal concern." Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 45-46, 107 S.Ct. 1549, 1552, 95 L.Ed.2d 39 (1987) (quoting Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523, 101 S.Ct. 1895, 1906, 68 L.Ed.2d 402 (1981)).

The central issue in this case is whether Plaintiffs' state law claims "relate to" an employee benefit plan. The Supreme Court has explained that a state law "relates to" an employee benefit plan "in the normal sense of the phrase, if it has a connection with or reference to such a plan." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97, 103 S.Ct. 2890, 2900, 77 L.Ed.2d 490 (1983). The state law need not be "specifically designed to affect employee benefit plans." Id. at 98, 103 S.Ct. at 2900. In Pilot Life, supra, the Court held that an employee's breach of contract and tort claims against his plan's insurer "related to" the plan, because both claims were based on "alleged improper processing of a claim for benefits under an employee benefit plan." 481 U.S. at 47-48, 107 S.Ct. at 1553.

Similarly, the Supreme Court in Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 141-42, 111 S.Ct. 478, 484, 112 L.Ed.2d 474 (1990), held that ERISA preempted an employee's state law claim that his employer had wrongfully discharged him to avoid making pension fund contributions on his behalf. In so holding, the Court noted that "to prevail, a plaintiff must plead, and the court must find, that an ERISA plan exists and that the employer had a pension-defeating motive in terminating the employment." Id. at 140, 111 S.Ct. at 483. In contrast, the Court in Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 108 S.Ct. 2182, 100 L.Ed.2d 836 (1988), held that ERISA did not preempt a state's general garnishment statute, even though the plan participants were subject to collection. The fact that garnishments would impose substantial administrative burdens and costs on employee benefit plans did not mean the garnishment statute "related to" such plans for preemption purposes. Id. at 831-41, 108 S.Ct. at 2186-91.

The Eighth Circuit has considered the following factors in determining whether a state law "relates to" an employee benefit plan:

whether the state law negates an ERISA plan provision ..., whether the state law affects relations between primary ERISA entities ..., whether the state law impacts the structure of ERISA plans ..., whether the state law impacts the administration of ERISA plans ..., whether the state law has an economic impact on ERISA plans ..., whether preemption of the state law is consistent with other ERISA provisions ..., and whether the law

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