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Hamilton v. Provident Life & Accident Insurance Co.

June 3, 2008


The opinion of the court was delivered by: Chief Judge Curtis L. Collier


Before the Court is the motion of plaintiff Howard K. Hamilton, M.D. ("Plaintiff") to remand this case to the Tennessee state courts under 28 U.S.C. § 1447 (Court File No. 8). Provident Life & Accident Insurance Co. ("Provident") has responded (Court File No. 14), and Plaintiff has replied to this response (Court File No. 15). For the reasons set out below, the Court will GRANT Plaintiff's motion to remand.


Plaintiff Howard K. Hamilton ("Plaintiff") is a diagnostic radiologist. He purchased a disability insurance policy from Provident. In 2003, Plaintiff began to experience vision problems and was diagnosed as having floaters in both of his eyes. Plaintiff's vision was substantially impaired. Plaintiff determined in 2006 he could no longer work as a diagnostic radiologist. Plaintiff then attempted to claim total disability benefits under the policy he purchased from Provident. When Provident denied Plaintiff's request for benefits, he filed suit in the Circuit Court of Hamilton County, Tennessee.

Provident removed the action to this court because they claim the policy is covered by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461. Plaintiff now moves the Court to remand the action back to the Tennessee state courts because they claim the policy is not part of an employee benefit plan, and therefore there is no federal question jurisdiction in this case.

B. The Applicable Policies

In 1986, Cleveland Radiology entered into a salary allotment agreement with Provident (Court File No. 14, Ex. 1-B). The form indicates Cleveland Radiology would "pay in full the required premiums," and would not merely "make salary deductions [and to] remit such premiums to [Provident.]" (Id.)

Plaintiff obtained two disability insurance policies with Provident while employed by Cleveland Radiology. The first policy was issued effective December 1, 1987. When Plaintiff filled out the application for the first policy he indicated his "employer [would] pay for all disability coverage to be carried . . . with no portion of the premium to be included in [his] taxable income." (Court File No. 14, Ex. 2). In 1993, Plaintiff applied for additional coverage under the same policy.

The second policy application was completed years later and answers the question in the opposite manner. Plaintiff argues the question is confusing, and the second application indicates the first application was filled out in error (Court File No. 15 at 4).


Generally, any civil action brought in state court over which the federal courts have original jurisdiction may be removed by a defendant to the federal district court for the district and division "embracing the place where such action is pending." 28 U.S.C. § 1441(a). The party seeking removal carries the burden of establishing the district court has original jurisdiction over the matter by a preponderance of the evidence. Long v. Bando Mfg. of Am., Inc., 201 F.3d 754, 757 (6th Cir. 2000). Removal petitions are strictly construed, with all doubts resolved against removal. Her Majesty the Queen in Right of the Province of Ontario v. City of Detroit, 874 F.2d 332, 339 (6th Cir. 1989). "All doubts as to the propriety of removal are resolved in favor of remand." Smith v. Nationwide Property and Cas. Ins. Co., 505 F.3d 401, 405 (6th Cir. 2007) (citations omitted).

Removal jurisdiction is identical with federal question jurisdiction under 42 U.S.C. § 1331. Long, 201 F.3d at 758. Under § 1331, federal courts apply the "well-pleaded complaint" rule, which requires a court to consider only whether a properly pleaded complaint presents a federal question. Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). "[U]nder the present statutory scheme as it has existed since 1887, a defendant may not remove a case to federal court unless the plaintiff's complaint establishes that the case 'arises under' federal law." Franchise Tax Bd. Of State of Cal. v. Constr. Laborers Vacation, 463 U.S. 1, 10-11 (1983). One exception to this rule are causes of action where a federal statute "wholly displaces the state-law cause of action through complete preemption." Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 8 (2003). ERISA is one such federal statute. Peters v. Lincoln Elec. Co., 285 F.3d 456, 467 (6th Cir. 2002).


Provident argues the policy at issue in this case is part of an employee welfare benefit plan governed by ERISA. If Provident is correct, Plaintiff's state law claims relating to that policy are preempted and federal law applies to determine recovery. See 29 U.S.C. § 1144(a); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 56-57, 107 S.Ct. 1549, 1557-58, 95 L.Ed. 2d 39 (1987). An "employee welfare benefit plan" is defined by ERISA as "any plan, fund, or program . . . established or maintained by an employer . . . for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, . . . medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment." 29 U.S.C. § 1002(1). The United States Court of Appeals for the Sixth Circuit has developed a three-step factual analysis for determining whether a benefit plan satisfies the statutory definition set out in § 1002(1). Thompson v. American Home Assurance Co., 95 F.3d 429, 434 (6th Cir.1996). See also Agrawal v. Paul Revere Life Ins. Co., 205 F.3d 297, 299-300 (6th Cir.2000). First, a court must apply the Department of Labor "safe harbor" regulations to determine whether the program is exempt from ERISA. Thompson, 95 F.3d at 434. Second, a court should determine whether there was a "plan" by considering ...

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