Settles v. Golden Rule Ins. Co., Civ. A. No. 88-2541-O.

• Citation: 715 F. Supp. 1021
• Decision Date: 08 June 1989
• Docket Number: Civ. A. No. 88-2541-O.
• Parties: Patricia Joanne SETTLES, Plaintiff, v. GOLDEN RULE INSURANCE CO. and Jim Toyne Insurance, Inc., Defendants.
• Court: U.S. District Court — District of Kansas

715 F. Supp. 1021

Patricia Joanne SETTLES, Plaintiff, v. GOLDEN RULE INSURANCE CO. and Jim Toyne Insurance, Inc., Defendants.

Civ. A. No. 88-2541-O.

United States District Court, D. Kansas.

June 8, 1989.

Dwight D. Sutherland, Watson, Ess, Marshall & Enggas, Olathe, Kan., and Philip J. Adams, Jr., Watson, Ess, Marshall & Enggas, Kansas City, Mo., for plaintiff.

James D. Griffin, Diana M. Moore, Blackwell, Sanders, Matheny, Weary & Lombardi, Anthony F. Rupp, Shugart, Thomson & Kilroy, Overland Park, Kan., Thomas G. Kokoruda, Shughart, Thomson & Kilroy, Kansas City, Mo., and Guy E. McGaughey, Jr., McGaughey & McGaughey, Lawrenceville, Ill., for defendants.

MEMORANDUM AND ORDER

EARL E. O'CONNOR, Chief Judge.

This matter is before the court on the defendant Golden Rule Insurance Company's (Golden Rule's) motion to dismiss the complaint of the plaintiff Patricia Joanne Settles (Settles) for failure to state a claim on which relief may be granted. See Fed. R.Civ.P. 12(b)(6). For the reasons discussed below, we grant the motion.

In considering a motion to dismiss, the factual allegations of the plaintiff's complaint must be accepted as true, and the court must draw all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); Curtis Ambulance v. Shawnee County Board of County Commissioners, 811 F.2d 1371, 1374-75 (10th Cir.1987). A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of her claim which would entitle her to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957); Morgan v. City of Rawlins, 792 F.2d 975, 978 (10th Cir.1986). We must determine not whether the plaintiff will ultimately prevail, but whether she is entitled to offer evidence to support her claims. Scheuer, 416 U.S. at 236, 94 S.Ct. at 1686.

With these standards in mind, we turn to Settles' complaint and Golden Rule's motion. Stated briefly, the facts underlying this lawsuit are as follows: Settles' husband, William, was an employee of Long Motor Corporation and was covered by a group health insurance plan issued by Golden Rule. He was notified that his coverage was terminated, and he allegedly suffered a heart attack and died as a result of this notification. Settles' complaint alleges causes of action for (1) breach of contract, (2) the tort of outrage, (3) fraudulent denial of insurance coverage, and (4) wrongful death of the plaintiff's decedent.

Initially, Golden Rule contends that all of Settles' claims relate to an employee benefit plan, and that such claims are precluded by the Employee Retirement Income Security Act (ERISA). Settles asserts that ERISA does not preclude her claims because Golden Rule is not a fiduciary as defined by ERISA. Alternatively, she contends that claims such as hers typically are not precluded under ERISA.

Settles asserts that the "court must examine whether Golden Rule had fiduciary duties, since those duties are within the scope of ERISA while purely ministerial acts are not." Robbins v. First American Bank of Virginia, 514 F.Supp. 1183 (N.D. Ill.1981). We disagree. In Robbins, the court had to determine whether the defendant could be liable as a fiduciary under ERISA. However, although ERISA provides for unique liability for fiduciaries, the scope of its coverage is not limited to fiduciaries. Rather, the statute is extremely broad, regulating all aspects of employee welfare benefit plans. Consequently, even if Golden Rule is not a fiduciary, ERISA may preempt Settles' claims.

ERISA states the following with regard to preemption:

Except as provided in subsection (b) of this section (the saving clause, which states that nothing in the subchapter preempts state laws regulating insurance, banking, or securities) , the provisions of this subchapter and subchapter III of this chapter shall supercede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.

29 U.S.C. § 1144(a). Thus, ERISA comprehensively regulates employee welfare benefit plans, and "if a state law `relates to ... employee benefit plans,' it is preempted." Pilot Life Insurance Company v. Dedeaux, 481 U.S. 41, 45, 107 S.Ct. 1549, 1552, 95 L.Ed.2d 39, 46 (1987). In Pilot Life, an employee was injured on the job, and his employer terminated and reinstated his benefits under a plan a number of times during the course of several years. Id. at 44, 107 S.Ct. at 1551, 95 L.Ed.2d at 45. The employee brought an action alleging common law tort and contract claims. Id. The Supreme Court recognized

that the civil enforcement provisions of ERISA § 502(a) are the exclusive vehicle for actions by ERISA-plan participants and beneficiaries asserting improper processing of a claim for benefits, and that varying state causes of action for claims within the scope of § 502(a) would pose an obstacle to the purposes and objectives of Congress.

Id. at 52, 107 S.Ct. at 1555, 95 L.Ed.2d at 50-51.

ERISA preemption extends beyond circumstances involving the processing of claims; the Tenth Circuit has recognized that "the scope of ERISA preemption ... is very broad." Straub v. Western Union Telegraph Co., 851 F.2d 1262, 1263 (10th Cir.1988). In Straub, the plaintiff was covered by the defendant's pension plan, and the defendant allegedly failed to include him in an increase in pension benefits and inform him of the effect his employment transfer might have on his benefits. Id. The court held that ERISA preempted the plaintiff's claims for breach of contract and negligent misrepresentation. Id. at 1264.

Other courts have held that various state law causes of action, most involving processing of claims, are preempted by ERISA. See Johnson v. District 2 Marine Engineers Beneficial Association, 857 F.2d 514, 517-18 (9th Cir.1988) (the plaintiffs submitted a claim for liver transplant expenses, the claim was denied, and the plan later amended to explicitly exclude claims for liver transplants as experimental surgery; the Ninth Circuit held that the plaintiffs' causes of action for fraud and emotional distress were preempted by ERISA); Reilly v. Blue Cross & Blue Shield United of Wisconsin, 846 F.2d 416, 424-26 (7th Cir.1988) (the plaintiffs' claim for in vitro fertilization was denied; the Seventh Circuit held that the plaintiffs' causes of action for breach of fiduciary duty, conspiracy, fraud, and bad faith were preempted by ERISA); Pane v. RCA Corp., 667 F.Supp. 168, 173 (D.N.J.1987) (the plaintiff alleged that the defendant wrongfully withheld benefits from him under a severance plan; the court held that the plaintiff's causes of action for breach of the agreement and intentional infliction of emotional distress were preempted by ERISA); Smith v. Electronic Data Systems Corp., 657 F.Supp. 1242, 1243 (D.Colo.1987) (the plaintiff filed a claim which was denied because the plaintiff was no longer employed with the defendant; the court held that the plaintiff's cause of action for...