Partlow A v. Person
| Decision Date | 12 July 2011 |
| Docket Number | Case No. 11–11121. |
| Citation | 798 F.Supp.2d 878 |
| Parties | Ladonna PARTLOW as personal representative of the Estate of Farrell Partlow, Plaintiff, v. Julie Ann PERSON, Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
OPINION TEXT STARTS HERE
Andrew J. Thav, Thav & Ryke, Southfield, MI, David M. Davis, Hardy, Lewis, Birmingham, MI, for Plaintiff.
Steven T. Budaj, Detroit, MI, for Defendant.
This matter is before the Court on the plaintiff's motion to remand the case to the Wayne County, Michigan circuit court, where it was filed originally. The plaintiff brought an action to lay claim to the proceeds of a policy insurance on the life of Farrell Partlow, issued by General Motors Corporation as an employee benefit. The insurer, Metropolitan Life Insurance Company (Met Life), agreed to pay the proceeds to defendant Julie Ann Person (formerly Partlow), the named beneficiary. The plaintiff's complaint alleges that Ms. Person divorced the decedent and the judgment of divorce contains a waiver of his insurance benefits, and it seeks to require the defendant to pay those proceeds into the decedent's estate. The defendant removed the case to this Court alleging that the plaintiff's claims are preempted by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq. The plaintiff argues in her motion to remand that her state law claim is not completely preempted, and this Court would not have original jurisdiction over the matter as pleaded in the complaint. The plaintiff also seeks attorney's fees for the wrongful removal. The Court heard oral argument on the motion on June 27, 2011, after which the parties sought permission to file supplemental briefs, which the Court permitted. The Court now finds that the plaintiff's claim is not completed preempted by federal law, and the Court does not have subject matter jurisdiction. Therefore, the Court will grant the motion to remand. However, the Court does not believe an award of attorney's fees is warranted.
The decedent, Farrell Partlow, was an employee of General Motors and participated in a life insurance benefits plan through his employer and administered by Met Life. The parties agree that the plan was governed by ERISA. The decedent was married to defendant Julie Ann Person until they divorced on May 30, 2003. At some point before their divorce, the decedent completed a beneficiary designation form naming Julie Ann Person as the primary beneficiary under the life insurance policy. There is no dispute that the form is the last known beneficiary designation form filed with either General Motors or Met Life, or that the form named the defendant as the proper beneficiary.
The May 30, 2003 consent judgment contained Michigan's statutory insurance clause, which states that “any right either party has to the proceeds or other benefits of policies or cont[r]acts of life insurance, endowments, or annuity upon the life of the other as a named beneficiary or by assignment during or in anticipation of marriage are extinguished unless provided for elsewhere in this judgment.” Am. Compl., Ex. A, Consent Judgment for Divorce at 4. In a later paragraph, the consent judgment also states that “each party shall immediately execute and deliver to the other party all documents necessary to carry out the terms of this judgment, and upon failure to do so, copy of this judgment may be recorded with the same effects as [though] said deed, conveyance or other document had been personally executed by the failing party.” Id. at 5. The decedent apparently never filed an updated beneficiary designation form with his employer or the plan administrator changing the beneficiary of his life insurance.
Despite their divorce, the defendant contends that she remained “very close friends” with the decedent, they dated for approximately four years, and considered re-marrying each other. She says that during two discussions during 2004 and 2005, the decedent expressed that he wanted her to remain as the beneficiary on his life insurance plan.
On September 27, 2010, Farrell Partlow died. At some point shortly thereafter, the defendant alleges that Andrew Jay Thav, co-counsel for the plaintiff in the present matter, contacted her and instructed her to file a claim for the proceeds of the life insurance policy. There is no evidence of this communication in the record. Nonetheless, both the defendant and the plaintiff, who is the personal representative of the decedent's estate, filed claims for the proceeds. On October 18, 2010, Met Life sent the parties a letter stating that the proceeds were payable to the defendant as the last named beneficiary. The plaintiff contends, however, that the defendant's entitlement to the life insurance proceeds was terminated or waived by operation of the consent judgment of divorce and seeks to recover these funds from the defendant under state-law-based equitable remedies.
The plaintiff filed a single count complaint in the Wayne County, Michigan circuit court on December 14, 2010, followed by an amended complaint on December 29, 2010, which contains no material changes. On December 14, 2010, the plaintiff also filed an ex parte motion for a temporary restraining order, preliminary injunction, and order to show cause. On December 15, 2010, a state circuit court judge entered a temporary restraining order that enjoined the defendant from dissipating the funds received from Met Life. That court converted its order to a preliminary injunction on January 7, 2011. The state court scheduled a second show cause hearing for January 28, 2011. There is no evidence in the record explaining what happened at that hearing.
The defendant contends that she did not receive service of the state court papers until February 25, 2011. By then, the state court had heard a summary judgment motion filed by the plaintiff and granted it from the bench. No order had entered, however, and before the court entered one, the defendant filed her notice of removal on March 17, 2011. In her removal notice, the defendant argues that the plaintiff's claim was pre-empted by ERISA, and she alleges that this Court has federal question jurisdiction.
On April 21, 2011, the plaintiff filed the present motion to remand the matter to state court based on a lack of subject matter jurisdiction.
This case quite obviously involves a dispute over life insurance proceeds that come from an ERISA-governed plan. And the plaintiff seeks to enforce a statutory insurance provision in the judgment of divorce that plainly is preempted by ERISA. See Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141, 121 S.Ct. 1322, 149 L.Ed.2d 264 (2001). But the plaintiff's state court complaint does not include a claim against the plan administrator or otherwise seek benefits from the plan itself. It contains only a state law cause of action between citizens of the same state. Subject matter jurisdiction, therefore, is questionable.
Federal district courts are courts of “limited jurisdiction,” and the burden of establishing subject matter jurisdiction rests with the defendant in this case as the party removing the case and asserting federal jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). “Because lack of jurisdiction would make any decree in the case void and the continuation of the litigation in federal court futile, the removal statute should be strictly construed and all doubts resolved in favor of remand.” Brown v. Francis, 75 F.3d 860, 864–65 (3d Cir.1996) (quoting Abels v. State Farm Fire & Cas. Co., 770 F.2d 26, 29 (3d Cir.1985)); see also Her Majesty The Queen In Right of the Province of Ontario v. City of Detroit, 874 F.2d 332, 339 (6th Cir.1989); Jacada (Europe), Ltd. v. Int'l Mktg. Strategies, Inc., 401 F.3d 701, 704 (6th Cir.2005) (citing Coyne v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir.1999)), abrogated on other grounds by Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008).
Section 1441(a) of Title 28 provides that “any 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 or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” There is no suggestion that the parties to this action are citizens of different states, and therefore there can be no subject matter jurisdiction under 28 U.S.C. § 1332(a). However, federal courts have jurisdiction over actions “arising under the Constitution, laws, or treaties of the United States,” 28 U.S.C. § 1331, and such a case may be removed by the defendant if the complaint is based on federal law. See 28 U.S.C. § 1441(b). If a matter over which this Court lacks subject matter jurisdiction is removed to this Court, 28 U.S.C. 1447(c). Federal courts “look to the complaint at the time of removal ... and determine whether the action was properly removed in the first place.” Ahearn v. Charter Twp. of Bloomfield, 100 F.3d 451, 453 (6th Cir.1996).
Federal courts use the “well-pleaded complaint” rule to determine “arising under” jurisdiction. Long v. Bando Mfg. of Am., Inc., 201 F.3d 754, 758 (6th Cir.2000). That rule provides that “ ‘federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint.’ ” Ibid. (quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987)). “[T]he party who brings the suit is master to decide what law he will rely upon.” The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25, 33 S.Ct. 410, 57 L.Ed. 716 (1913).
General speaking, a case “arises under” federal law if the “cause[ ] of action...
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