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Interlocutory Appeal: 8th Cir.

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  • Interlocutory Appeal: 8th Cir.

    In a relatively straight forward case from the 8th Circuit, the court reviews the district court's decision to dismiss the Plaintiff's claims. In relevant part:

    The Amended Complaint alleges that Moore’s claims are not preempted by ERISA because “no employer-sponsored insurance policy was ever in place from which to claim the benefits sought.” The pleadings establish that this is simply not true. The Amended Complaint alleges that Apple Central’s failure to enroll James Moore in voluntary term life insurance coverage, while representing that it had done so by withholding premiums, caused Moore to lose voluntary term insurance benefits in the amount of $160,000. Recall that James Moore’s enrollment form attached to the complaint showed that he applied for $93,000 in basic, employer-paid coverage and $310,000 in voluntary, employee-paid additional coverage -- all offered within the same ERISA plan. Moore alleges that $160,000 “represent[s] the difference between the elected coverage and the guaranteed benefit voluntarily paid by Guardian.” Thus, from the face of the Amended Complaint, it is apparent that Moore was paid plan benefits, a fact the record now confirms. In opposing this interlocutory appeal, Apple Central submitted to the district court an August 2013 letter from Guardian to Moore explaining that it had paid Moore $243,000 in life insurance benefits -- $93,000 in basic benefits and $150,000 in voluntary term coverage. Guardian did not pay the additional $160,000 Moore claims in this lawsuit.
    These undisputed facts establish that Moore’s claims for additional plan benefits are within the purview of ERISA’s exclusive remedies. As Guardian’s payment of benefits confirms, James Moore was a “participant” in Apple Central’s employee welfare benefit ERISA plan. See 29 U.S.C. § 1002(7). Moore, as James Moore’s designated plan beneficiary, is a person who may bring an action to recover ERISA remedies. See id. §§ 1002(8), 1132(a). The plan’s life insurance benefits are funded by Guardian’s group policy. Construing its policy, Guardian has paid $243,000 in plan benefits and declined to pay an additional $160,000. If Guardian misapplied the policy, Moore has a claim for plan benefits under § 1132(a)(1)(B) (assuming no other defenses apply). On the other hand, if Guardian properly denied the $160,000 claim because Apple Central as plan administrator failed to properly submit required information, Moore may assert a claim under § 1132(a)(3) alleging that Apple Central breached its fiduciary duty as plan administrator. Recent cases make clear that such a claim may seek the amount of benefits denied as an equitable make-whole or “surcharge” remedy if Apple Central breached its fiduciary duty by failing to obtain voluntary term life coverage James Moore applied and paid for. Moore argues her state law claims against Apple Central are not ERISApreempted
    because, in Davila’s terms, they implicate legal duties independent of Apple Central’s ERISA duties. 542 U.S. at 210. We disagree. Moore’s “claims implicate no independent legal duty that [Apple Central] owed [and] concern only the way in which [Apple Central] . . . breached [its plan-administrator] duties while administering [James Moore’s] benefits.” Prince v. Sears Holdings Corp., 848 F.3d 173, 178 (4th Cir. 2017); accord Parkman, 439 F.3d at 771-72. Any promise Apple Central made or duty it owed to procure James Moore’s elected voluntary insurance derived from its role as ERISA plan administrator. See 29 U.S.C. §§ 1002(16)(A)(ii), (B)(i); Silva, 762 F.3d at 716 n.8 (describing a plan administrator’s fiduciary responsibilities). Indeed, the enrollment form Guardian provided expressly instructed Apple Central employees to return the form “to your employer,” reflecting Apple Central’s role as a primary ERISA entity.
    Apple Central’s role as ERISA administrator and fiduciary distinguishes this case from our decision in Wilson v. Zoellner, 114 F.3d 713 (8th Cir. 1997), on which Moore heavily relies. In Wilson, the plaintiff sued an independent insurance agent for negligently misrepresenting the coverage offered by the employer’s health insurance policy. Id. at 715. We concluded that the claim was not ERISA preempted because it would not “affect[] the relations between primary ERISA entities . . . includ[ing] the employer, the plan, the plan fiduciaries, and the beneficiaries” or “impose new duties on plan administrators.” Id. at 718-19 (quotation omitted). Here, Moore’s claims affect relations between primary ERISA entities and the scope of Apple Central’s duties as plan administrator.
    The entire opinion is attached below.
    Attached Files