Perry v. Prudential Co. of America
| Decision Date | 26 January 2012 |
| Docket Number | CIVIL ACTION NO. 11-559-CN |
| Parties | CHRISTINE W. PERRY v. THE PRUDENTIAL COMPANY OF AMERICA |
| Court | U.S. District Court — Middle District of Louisiana |
CONSENT CASE
RULING & ORDER
This matter is before the Court on the Motion to Remand (R. Doc. 5) filed by plaintiff, Christine Perry ("Mrs. Perry"), and the Motion to Dismiss the Complaint Pursuant to Fed. R. Civ. P. 12(b)(6) (R. Doc. 2) filed by defendant, the Prudential Insurance Company of America ("Prudential"). Both motions have been opposed (R. Docs. 6 and 7), and reply memoranda (R. Docs. 9 and 13) have also been filed in response to the oppositions.
FACTS & PROCEDURAL BACKGROUND
On July 25, 2011, Mrs. Perry filed this suit against Prudential in the 18th Judicial District Court, Parish of West Baton Rouge, State of Louisiana. In the petition, she alleges the following facts. On November 11, 1994, Mrs. Perry became employed by Global Industries, Inc. ("Global"), which provided a Group Life Insurance Benefit Program ("the Plan") to its employees through Prudential. At that time, she was married to her husband, Charles F. Perry ("Mr. Perry"). On or about January 10, 1999, Mrs. Perry contacted Global (whom she contends is the agent of Prudential under the Plan) and enrolled Mr. Perry in the Plan since his life insurance with his previous employer had ceased. Prudential thereafter issued a life insurance policy on her husband in the amount of $50,000.00 in death benefits through the Plan. Mrs. Perry was the beneficiary on that policy, and shecontends that she began paying premiums on the policy in January 1999. Mr. and Mrs. Perry obtained a divorce on December 10, 2004. Mrs. Perry allegedly informed Global's human resources division of her divorce in December 2004 and cancelled her husband's medical coverage at that time. She contends, however, that she continued to pay monthly premiums on her husband's life insurance policy after their divorce until his death on July 25, 2006, because she was advised by Global's human resources division that the life insurance policy was still in effect on her husband, and she avers that she did not have knowledge of the policy conditions because she never received a copy of the policy or its contents. She further alleges that her employer deducted the monthly premiums for the life insurance payments from her salary until her husband's death and properly remitted them to Prudential.
Following Mr. Perry's death, Mrs. Perry filed a claim with Prudential, on August 15, 2006, for the $50,000.00 in death benefits under the policy discussed above. Prudential denied her claim on September 7, 2006, on the basis that Mr. and Mrs. Perry's divorce terminated the coverage under the policy (i.e., Mr. Perry was not a "qualified dependent" under the terms of the policy following the divorce). Mrs. Perry did not appeal her administrative claim and instead filed the present suit, wherein she alleges that Prudential was aware of her divorce but yet continued to accept premium payments for the death benefits provided under the policy, and such conduct constitutes a "new implied life insurance contract" between Mrs. Perry and Prudential for the period after the divorce through Mr. Perry's death. She also contends that Prudential's group contract with her employer provided for term life coverage for ex-spouses like Mr. Perry, which Mrs. Perry would have purchased on her husband had she been informed that such coverage existedand that the coverage under the policy discussed above had terminated upon her divorce. In her prayer for relief, she seeks "judgment in her favor decreeing a new implied contract existed for the life insurance benefits for $50,000.00 she was denied for the amount of the death benefits she would have received for a like life insurance policy, or in the alternative, [that she] be awarded the amount [Prudential] was enriched and the amount [she] was impoverished an[d] for all costs of these proceedings." See, R. Doc. 1-2.
Prudential removed Mrs. Perry's suit to this Court on August 16, 2011, on the basis of both federal question jurisdiction pursuant to 28 U.S.C. §1331 and diversity jurisdiction pursuant to 28 U.S.C. §1332. In the Notice of Removal, Prudential contends that Mrs. Perry's claims, in whole or in part, arise under and are completely preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §1001, et seq. and therefore invoke federal question jurisdiction. Prudential further contends that, because Mrs. Perry and Prudential are citizens of different states and more than $75,000.00, exclusive of interest and costs, is in controversy in this matter, diversity jurisdiction exists herein.
On September 6, 2011, Prudential filed a motion to dismiss, wherein it seeks dismissal of Mrs. Perry's suit on the basis that her claims were untimely filed, that she failed to exhaust her administrative remedies prior to filing suit, that her claims are preempted by ERISA, and that she failed to state a claim under ERISA for which relief can be granted. On September 15, 2011, Mrs. Perry filed a motion to remand on the basis that neither diversity nor federal question jurisdiction exists in this case.
LAW & ANALYSIS
Prudential argues that Mrs. Perry's claims in this matter arise under ERISA because the Plan provided by Mrs. Perry's employer is a plan of insurance benefits covered by ERISA. In her remand motion, Mrs. Perry does not dispute that her employer's plan is governed by ERISA and that she remained a participant in the Plan until after the loss at issue. However, she contends that the claims asserted in her petition do not arise under ERISA. Specifically, she asserts that, although initially she did have in effect a life insurance policy for her husband under the ERISA-governed Plan, that policy terminated upon her divorce from Mr. Perry when he became ineligible for benefits, and she therefore is not claiming benefits under that policy in this suit. Instead, she contends that her claim for death benefits in this suit is based upon an implied contract of insurance for her ex-husband that was created when Prudential continued to accept premiums from her after her divorce (and with knowledge of her divorce) and that such implied contract bears the same death benefit as the ERISA Plan policy. She argues that such implied contract of insurance does not fall under and is not related to the Plan governed by ERISA () and is instead governed solely by Louisiana state law. She also argues that her unjust enrichment claim does not arise under or relate to ERISA because such claim is for premiums paid and is not a claim for benefits under an insurance contract covered by an ERISA Plan. According to Mrs. Perry, her unjust enrichment claim instead seeks an equitable remedy governed by state law that prevents Prudential from enriching itself at the expense of Mrs. Perry by accepting premiums but not paying benefits upon Mr. Perry's death.
The undersigned, however, agrees with Prudential that Mrs. Perry's claims, despiteher attempts to recast them as solely state law in nature, are nevertheless connected with or related to the ERISA plan in which she participated until after her husband's death and are therefore preempted by ERISA. See, 29 U.S.C. §§1144(a), 1132(a)(1)B)(ERISA broadly preempts "any and all state laws insofar as they may now or hereafter relate to any employee benefit plan"); Cromwell v. Equicor-Equitable HCA Corp., 944 F.2d 1272, 1275 (6th Cir. 1991)("It is not the label placed on a state law claim that determines whether it is preempted but whether in essence such claim is for the recovery of an ERISA plan benefit").1 Such attempts to "duplicate, supplement or supplant" ERISA's civil enforcement remedy to recover benefits allegedly owed under an ERISA benefit plan by recharacterizing the claims as state law claims have routinely been rejected, and the state law claims havebeen held preempted by ERISA.2 In short, where a plaintiff seeks a payment of benefitsallegedly due because of loss of coverage under an ERISA plan (or, alternatively, a refund of premiums paid), as is the case in the present matter,3 his/her only remedy is under ERISA.4 Removal of this matter based upon federal question subject matter jurisdictionunder ERISA was therefore appropriate.5
In addition to removal being appropriate, the undersigned also finds that this case is subject to dismissal pursuant to Fed. R. Civ. P. 12(b)(6) for several reasons.6 First, the U.S. Fifth Circuit Court of Appeals has held that, where a plaintiff has limited herself to state law claims that are preempted by ERISA and has not sought to add any claims under ERISA, such state law claims are not only subject to removal but are also subject to dismissal or judgment on the pleadings. Quality Infusion Care Inc. v. Humana Health Plan of Texas, Inc., 2008 WL 3471861, **10 (5th Cir. 2008) .7 ,8 Secondly, Mrs. Perry has failed to come forward with any competent evidence to refute that produced by Prudential supporting the following contentions: (1) that the Plan in question is one subject to and governed by ERISA; (2) that Mrs. Perry's claims herein were not timely filed because they were not filed within the three (3) year limitations period set forth in the Plan; and (3) that Mrs. Perry failed to exhaust her administrative remedies prior to filing this suit as required by the Plan.
To establish that the Plan in question is governed by ERISA, Prudential produced a copy of the Plan itself, the Summary Plan Description, and the Group Contract between Prudential and Global. See, Exhibit D to Prudential's motion and Exhibit D to Prudential's opposition...
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