Richard v. Blue Cross & Blue Shield, 90-469-M

• Decision Date: 18 March 1992
• Docket Number: No. 90-469-M,90-469-M
• Citation: 604 A.2d 1260
• Court: Rhode Island Supreme Court
• Parties: Kathryn A. RICHARD et al. v. BLUE CROSS & BLUE SHIELD. P.

Page 1260

604 A.2d 1260

Kathryn A. RICHARD et al. v. BLUE CROSS & BLUE SHIELD.

No. 90-469-M.P.

Supreme Court of Rhode Island.

March 18, 1992.

Peter Mathieu, Dennis S. Baluch, Baluch, Mahoney & Gianfrancesco, Providence, for plaintiffs.

Paula Silberthau, Matthew F. Medeiros, Flanders & Medeiros, Providence, for defendant.

OPINION

SHEA, Justice.

This matter comes before the Supreme Court on the plaintiffs' petition for the issuance of a writ of certiorari to review a grant of partial summary judgment in favor of the defendant. We affirm.

Henry Richard (Richard), as parent and guardian of Kathryn A. Richard (Kathryn), non sui juris and non compos mentis, brought this action for breach of contract against Blue Cross & Blue Shield of Rhode Island (Blue Cross) pursuant to G.L.1956 (1985 Reenactment) § 9-1-33 after Blue Cross terminated coverage for Kathryn's in-patient treatment at the Institute for Living, a hospital located in Connecticut. Blue Cross subsequently moved for partial summary judgment. The trial court ruled that Richard's state law claims were pre-empted by the Federal Employee Retirement Income Security Act (ERISA) and that he had no claim against Blue Cross under § 9-1-33 because it is not an insurer within the meaning of the statute.

The summary-judgment motion of Blue Cross was based upon information disclosed during the deposition of Richard. It revealed that he is the owner and principal manager of Kirkbrae Country Estates, Inc. As an employee Richard received health-care benefits under a plan with Blue Cross offered through the Rhode Island Builders Association (association). Kathryn is covered as a handicapped dependent under her father's plan with Blue Cross. These health-care plans were offered at no cost to all employees of Kirkbrae Glen, Inc., and Kirkbrae Country Estates, Inc. (Kirkbrae corporations). The association sends the Kirkbrae corporations quarterly statements for premiums. The Kirkbrae corporations pay the statements with corporate checks that are listed as a deduction on the corporations' tax returns. According to Richard the health-care plans have been available to employees of the Kirkbrae corporations for many years, and there are no plans to change this practice.

Richard presents two arguments on appeal. In the first he claims that the trial court erred in ruling that ERISA pre-empts the state law claims. He argues that the trial court was in error because the motion for summary judgment was granted in spite of the existence of a factual question. He also asserts that the trial court erred in its determination that an ERISA plan existed.

The law concerning a motion for summary judgment pursuant to Rule 56 of the Superior Court Rules of Civil Procedure is well settled. If there are no material facts in dispute, the case is ripe for summary judgment. Golderese v. Suburan Land Co., 590 A.2d 395, 396 (R.I.1991). Here the trial court's decision was based upon undisputed facts presented through the deposition testimony of Richard.

The ERISA statute applies to "any employee benefit plan if it is established or maintained--(1) by any employer engaged in commerce or in any industry or activity affecting commerce; or (2) by any employee organization or organizations representing employees engaged in commerce or in any industry or activity affecting commerce; or (3) by both." 29 U.S.C.A. § 1003(a) (West 1985).

An "employee benefit plan" is defined in part as an "employee welfare benefit plan." 29 U.S.C.A. § 1002(3). "Employee welfare benefit plan" is defined as the following:

"[A]ny plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services, or (B) any benefit described in section 186(c) of this title (other than pensions on retirement or death, and insurance to provide such pensions)." 29 U.S.C.A. § 1002(1).

The First Circuit has had the opportunity to consider what constitutes an employee-welfare-benefit plan. The court determined that an employee-welfare-benefit plan must have:

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