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WEINSTEIN v. PAUL REVERE INS. CO.

July 23, 1998

JUDITH WEINSTEIN, Plaintiff,
v.
PAUL REVERE INSURANCE COMPANY, Defendant.



The opinion of the court was delivered by: KUGLER

OPINION

 KUGLER, UNITED STATES MAGISTRATE JUDGE:

 Presently before the Court is the motion by Mark R. Rosen, Esquire, attorney for Plaintiff Judith Weinstein, for an order remanding this action to New Jersey Superior Court, Law Division, Burlington County. Defendant Paul Revere Insurance Company ("Paul Revere") opposes this motion. After careful review of the parties' submissions and for the reasons set forth below, the Court denies the plaintiff's motion to remand.

 I. FACTUAL AND PROCEDURAL HISTORY

 This action arises from an insurance coverage dispute. The plaintiff was employed by Radiology Associates of Graduate Hospital ("Radiology Associates") as a radiologist from June 1, 1993 until September 2, 1997. Plaintiff's Amended Complaint P 1 ("Complaint"). Pursuant to the Employment Agreement ("Employment Agreement") entered into between Ms. Weinstein and Radiology Associates and as part of her benefits package, Ms. Weinstein was entitled to acquire an individual disability insurance policy in her name. Id. at P 2. The Agreement provided that Radiology Associates would pay certain premiums on her behalf to purchase the policy. Id. In August 1993, Ms. Weinstein was presented with an application for an individual disability insurance policy by Ronald Lorch, an insurance broker for Radiology Associates. Id. at P 3. Ms. Weinstein prepared the application listing herself as the owner. Id. On or about September 1, 1993, Ms. Weinstein obtained an individual disability insurance policy from Paul Revere ("Policy"). Id. at 6. On this date, Radiology Associates paid the balance of the premiums owed under the Policy for the remainder of 1993. Id. at P 8. The Policy provided $ 1700 per month in disability benefits in the event plaintiff became disabled. Id. at P 6.

 In January 1994, Paul Revere notified Radiology Associates that the payment of premiums for its employees was in arrears. Id. at P 10; Id. at Exhibit E. A second notice of past due accounts was sent to Radiology Associates in February 1994. See Defendant's Opposition Brief at Exhibit 4. Both of the notices identified Ms. Weinstein's Policy premiums as past due. When payments were not forthcoming, the Policy purportedly lapsed.

 In July 1996, Ms. Weinstein suffered an injury rendering her disabled. Complaint at P 11. On June 5, 1997, the plaintiff submitted to Paul Revere a Notice of Disability form indicating that she had been completely disabled from November 18, 1996 to the date of the Notice. Deft. Opp. Brief at 2 & Exhibit 5. The Notice stated that the cause of her disability was bilateral brachial plexopathy. Id.

 In response to Ms. Weinstein's Notice, Paul Revere informed the plaintiff by letter dated July 7, 1997 that the Policy had lapsed on January 1, 1994 before she allegedly became disabled and, thus, she could not recover benefits under the Policy. Complaint at Exhibit F. The letter also indicated that she could submit evidence to show that the policy remained current.

 On January 15, 1998, the plaintiff filed suit against Paul Revere in Superior Court of New Jersey, Law Division, Burlington County, alleging state law causes of action for breach of insurance contract and bad faith denial of her insurance claim. Paul Revere removed the case to federal court on March 2, 1998 on the basis of federal question jurisdiction, contending that the disability policy owned by the employee was part of a group disability plan covered by the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. §§ 1001 et seq. and, thus, that plaintiff's state law claims are preempted.

 The plaintiff filed the instant motion on March 31, 1998. In this motion, the plaintiff challenges the removal of this action by the defendant on the basis that her state law claims are not preempted by ERISA, and moves to remand the case to state court for lack of federal subject matter jurisdiction. In addition, the plaintiff contends that, even if the plaintiff's claims are subject to ERISA, the state court holds concurrent jurisdiction over this matter and, thus, removal was not justified. Lastly, the plaintiff challenges the removal petition on the grounds that it was procedurally defective.

 II. DISCUSSION

 A. REMOVAL STANDARD

 Generally, a defendant may remove a civil action filed in state court if the federal court would have had original jurisdiction over the matter. 28 U.S.C. § 1441(b) *fn1" If there has been a procedural defect in the petition or if the federal court determines that it lacks subject matter jurisdiction over the case, the federal court may remand the case to state court. 28 U.S.C. 1447(c) *fn2" Removal statutes are strictly construed and all doubts are resolved in favor of remand. See Batoff v. State Farm Ins., 977 F.2d 848, 851 (3d Cir. 1992); Miller v. Riddle Memorial Hosp., 1998 U.S. Dist. LEXIS 7752, No. 98-392, 1998 WL 272167, at *2 (E.D. Pa. May 28, 1998).

 Federal district courts are courts of limited jurisdiction, and, as stated previously, a civil action brought in state court may be removed to federal court only if the plaintiff originally could have filed the complaint in federal court. 28 U.S.C. § 1441(b). Generally, a federal claim must appear on the face of a well-pleaded complaint in order to confer federal question jurisdiction for removal under section 1441. Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 353 (3d Cir. 1995). The Supreme Court has recognized an exception to the well-pleaded complaint rule referred to as the "complete preemption exception." The complete preemption exception acknowledges Congress' authority to completely preempt certain causes of action under state law so that "any civil complaint raising this select group of claims is necessarily federal in character." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64, 95 L. Ed. 2d 55, 107 S. Ct. 1542 (1987).

 B. COVERAGE UNDER ERISA

 The Court must determine whether the plaintiff's individual disability insurance policy is covered by ERISA. If the policy at issue falls within the purview of ERISA, it may be proper for this case to be decided by the federal district court. If, on the other hand, the policy was not an ERISA plan, then the federal courts have no jurisdiction and this matter must be remanded to the state court from which it was removed.

 The Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. §§ 1001 et seq. is a comprehensive statute "that subjects a wide variety of employee benefit plans to complex and far-reaching rules designed to protect the integrity of those plans and the expectations of their participants and beneficiaries." Crumley v. Stonhard, Inc., 920 F. Supp. 589, 592 (D.N.J. 1996), aff'd, 106 F.3d 384 (3d Cir. 1996) (quoting Barrowclough v. Kidder, Peabody & Co., 752 F.2d 923, 929 (3d Cir. 1985).

 In the ERISA context, the Supreme Court has held that the complete preemption exception supports removal of state causes of action that fit within the scope of ERISA's civil enforcement provisions set forth at 29 U.S.C. § 1132. Metropolitan Life Ins. Co, 481 U.S. at 66-67. The statute permits, in relevant part, a participant or beneficiary to bring a civil action "to recover benefits due to him under the terms of his plan, or to clarify his rights to future benefits under the terms of the plan . . . ." 29 U.S.C. § 1132 (a)(1)(B).

 The United States Court of Appeals for the Fifth Circuit has articulated a three-part test to determine whether an insurance coverage scheme falls within the purview of ERISA. Hansen v. Continental Ins. Co., 940 F.2d 971, 976-77 (5th Cir. 1991); Green v. Long Term Disability Plan for Employees of Denny's, Inc., 1998 U.S. Dist. LEXIS 1998, No. 97-2250, 1998 WL 61044 (E.D. La. Feb. 13, 1998). Although not explicitly adopted by the Third Circuit, elements of this test have been applied by district courts in this Circuit to determine whether a benefit plan is covered by ERISA. Alston v. Atlantic Elec. Co., 962 F. Supp. 616 (D.N.J. 1997); Miller, 1998 WL 272167. First, the Court must ascertain whether there is a "plan" as required by the ERISA definition of "employee welfare benefit plan" set forth at 29 U.S.C. § 1002(1); Hansen, 940 F.2d at 976-77. Second, the Court must determine ...


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