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Anderson v. Union Central Life Insurance Co.

April 24, 2007


The opinion of the court was delivered by: R. Allan Edgar United States District Judge



Plaintiff Robin C. Anderson initially brought her complaint in the Chancery Court of Hamilton County, Tennessee. [Court Doc. No. 1-2]. Defendants Union Central Life Insurance Company ("UCLIC") and First Horizon National Corporation ("FHNC") (collectively "Defendants") removed the action to this Court. [Court Doc. No. 1]. Defendants have now moved to dismiss Plaintiff's state law claims, as well as for a more definite statement. [Court Doc. No. 2]. Plaintiff moves to remand this action to state court. [Court Doc. No. 4]. This Court has reviewed the record and the arguments of the parties and has determined that the parties must supplement the record and provide further briefing regarding whether this Court has jurisdiction over this action.

I. Background

The complaint states that "[t]his case arises out of the wrongful termination of a life insurance policy or expressed agreement upon plaintiff's life on December 31, 2006, upon which plaintiff and her deceased husband paid premiums out of a joint bank account for approximately 18 years." Complaint, ¶ I. The Complaint alleges that Plaintiff's husband worked for FHNC for twenty-five years before becoming disabled and being placed on long-term disability. Id. at ¶ II. Plaintiff further asserts in her complaint that UCLIC issued a group life insurance policy to FHNC. Plaintiff's husband apparently enrolled in the group plan, and FHNC deducted premiums for life insurance from his paycheck until he became disabled in 1995. Id. After 1995 Plaintiff alleges that her husband's premiums were waived, but that she maintained a life insurance policy through her husband's group policy and that the couple paid the premiums out of their joint bank account. Id.

After the Plaintiff's husband died on July 19, 2006, FHNC refunded the premiums Plaintiff and her husband had paid for Plaintiff's policy from August 2006 through December 2006. FHNC further informed Plaintiff that it had terminated her policy on the date of her husband's death. Complaint, ¶ III. Plaintiff refused to deposit the check and "rejected the wrongful termination." Id. Plaintiff alleges in her complaint that she "requested information from [FHNC] as to the procedure she would be eligible to continue her life insurance coverage through [FHNC] or otherwise convert it to an individual policy, by letter dated August 22, 2006." Id.

Plaintiff alleges she received a letter from FHNC indicating that she was not entitled to a conversion life insurance policy. Complaint, ¶ IV. Plaintiff attaches two unauthenticated letters to her motion to remand that appear to be from FHNC and UCLIC. The first letter from FHNC dated October 13, 2006 indicates that "[a]fter careful review Union Central Life Insurance has determined that they will not be able to convert your Dependent Life Insurance to an outside policy." [Court Doc. No. 4-1]. A letter from UCLIC to FHNC dated October 10, 2006 states that "[t]his letter is to advise you that after review of the Policy for the above listed Policyholder, the Premium Waiver Provision does not apply to dependents of the insured. Therefore, the conversion option would not apply to those dependents." Id.

Plaintiff's complaint alleges that the group life insurance policy plainly provides for conversion. The record includes a copy of the UCLIC Group Insurance Policy (the "Policy"). The Policy indicates that "Dependent Term Life Insurance" is available. The Policy also contains a section describing a "conversion privilege" for dependent term life insurance policies. [Court Doc. No. 7-2, p. 20].

Plaintiff's complaint alleges that UCLIC's denial of her right to a conversion policy "was fraudulent and issued to her to defeat her rights for which she paid a premium since 1988." Complaint, ¶ VI. It further contends that she never received a copy of the Policy and that she relied upon an "implied agreement that she would be entitled to insurance upon the term of her life upon the continued payment of a premium." Id. Plaintiff finally alleges that she "was compelled to pay a separate premium upon her life insurance policy for an additional eleven (11) years after her husband's disability commenced." Id. The complaint seeks relief in the form of forty thousand dollars, or the face value of the policy, for the "wrongful termination" of the Policy and forty thousand dollars as punitive damages for the "misrepresentation and fraudulent termination of her policy." Complaint, ¶ VI. The complaint states no federal cause of action, nor does it cite to any federal statutes.

II. Analysis

Defendants may remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). Further, 28 U.S.C. § 1331 provides that "district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. The defendant seeking removal has the burden of proving jurisdiction in the district court. See Williamson v. Aetna Life Ins. Co., __ F.3d ___, 2007 WL 845862 *4 (6th Cir. 2007). The Sixth Circuit has cautioned that " '[b]ecause lack of jurisdiction would make any decree in the case void and the continuation of the litigation in federal court futile, the removal statute should be strictly construed and all doubts resolved in favor of remand.' " Eastman v. Marine Mech. Corp., 438 F.3d 544, 549-550 (6th Cir. 2006) (quoting Brown v. Francis, 75 F.3d 860, 864-65 (3d Cir. 1996)).

Defendant removed the case to this Court pursuant to 28 U.S.C. § 1331 alleging federal question jurisdiction because Plaintiff's complaint relates to rights arising under the terms of a group life insurance policy governed exclusively by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. Defendants allege that because Plaintiff claims to be the beneficiary of an "employee benefit plan" as that term is defined under ERISA, her remedy lies solely with ERISA, 29 U.S.C. § 1132(a)(1)(B). Defendants further argue that Plaintiff's state law claims are pre-empted by ERISA.

ERISA provides in Section 502(a) that either a participant or a beneficiary may bring a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan."

29 U.S.C. § 1132(a)(1)(B). In addition, 29 U.S.C. § 1144(a) states in part, ". . . the provision of this subchapter . . . shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section ...

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