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Meadows v. Unum Group Corp.

United States District Court, S.D. Mississippi, Eastern Division

June 15, 2018

ROGER G. MEADOWS, deceased, by and through his Administrator, SHARON MEADOWS, and his Heirs at Law, MIRANDA MEADOWS and LEE ANN MEADOWS PLAINTIFFS
v.
UNUM GROUP CORP., formerly operating as UNUM PROVIDENT CORP.; PROVIDENT LIFE & ACCIDENT INS. CO. and other unknown and unnamed entities DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          KEITH STARRETT UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the Motion for Declaratory Judgment to Assert Exceptions to Pre-emption and to Declare Plan “Non-ERISA” (“Motion for Declaratory Judgment”) [10] filed by Plaintiffs Roger G. Meadows, deceased, by and through his Administrator, Sharon Meadows, and his Heirs at Law, Miranda Meadows and Lee Ann Meadows (collectively “Plaintiffs”), and the Motion for Partial Summary Judgment [21] filed by Unum Group Corp. (“Unum”) and Provident Life & Accident Insurance Co. (“Provident”) (collectively “Defendants”). Both motions deal exclusively with the issue of whether the subject benefits plan was an employee welfare benefit plan subject to the Employee Retirement Income Security Act (“ERISA”). After considering the submissions of the parties, the record, and the applicable law, the Court finds that the subject plan was an ERISA benefit plan. The Motion for Declaratory Judgment [10] is therefore not well taken and should be denied, and the Motion for Partial Summary Judgment [21] is well taken and should be granted.

         I. BACKGROUND

         Plaintiffs originally filed this action against Defendants in the Circuit Court of Jones County, Mississippi, bringing claims of breach of contract and bad faith denial of coverage. Defendants removed to this Court on December 22, 2017, pursuant to 28 U.S.C. § 1441, alleging federal question jurisdiction under 28 U.S.C. § 1331 and diversity jurisdiction under 28 U.S.C. § 1332.

         Plaintiff Roger G. Meadows (“Dr. Meadows”) was employed by Hattiesburg Clinic (the “Clinic”) as a physician from 2006 until 2012. As a physician, he was eligible to participate in the Supplemental Income Protection Plan (the “Plan”) offered by the Clinic for certain eligible employees. Under the Plan, eligible employees would apply for individual policies that would be issued by Provident[1] under the terms of the Plan, and the premiums of these policies would be paid for by the Clinic. Pursuant to the Plan, Dr. Meadows applied for and received a disability income policy through Provident. (See Application [21-4].)

         In February 2012, Dr. Meadows suffered a gunshot would during a confrontation with the Jones County Sheriff's Department. He submitted a claim under his disability income policy with Provident on April 18, 2012, and was later terminated from his employment with the Clinic on April 28, 2012. In January 2014, Provident determined that Dr. Meadows was not eligible for benefits under his policy. On November 16, 2016, Dr. Meadows died. His heirs now bring this action, seeking damages for wrongfully denied benefits.

         II. DISCUSSION

         The question before the Court in both Plaintiffs' Motion for Declaratory Judgment [10] and Defendants' Motion for Partial Summary Judgment [21] is whether the Plan was an employee benefit plan subject to ERISA, thereby preempting Plaintiffs' state law claims.

         The Fifth Circuit has “devised a comprehensive test for determining whether a particular plan qualifies as an ‘employee welfare benefit plan'” subject to ERISA. Meredith v. Time Ins. Co., 980 F.2d 352, 355 (5th Cir. 1993). Under this test, the Court must “ask whether a plan: (1) exists; (2) falls within the safe-harbor provision established by the Department of Labor; and (3) satisfies the primary elements of an ERISA ‘employee benefit plan'-establishment or maintenance by an employer intending to benefit employees.” Id. If a plan meets all of these requirements, it is an ERISA employee welfare benefit plan and therefore subject to preemption. See id.

         A. A Plan Exists

         To determine if a plan exists, the Court “must determine whether from the surrounding circumstances a reasonable person could ascertain the intended benefits, beneficiaries, source of financing, and procedures for receiving benefits.” Meredith, 980 F.2d at 355 (quoting Donovan v. Dillingham, 688 F.2d 1367, 1373 (11th Cir. 1993)). In this case, it is readily apparent that the circumstances indicate that a plan exists. The “intended benefits” are the disability insurance benefits under the policies, the “beneficiaries” are the eligible Clinic employees, the “source of financing” is the premiums paid by the Clinic, and the “procedures for receiving benefits” are the procedures under the policies. See id.

         Despite Plaintiffs' assertions, the fact that Dr. Meadows received an individual policy does not mean that a plan did not exist. The Fifth Circuit has held that an individual policy issued to a beneficiary can still be part of an overarching ERISA employee welfare benefit plan. Hollis v. Provident Life and Accident Ins. Co., 259 F.3d 410, 414 (5th Cir. 2001). Because the surrounding circumstances indicate that a plan did in fact exist, the Court finds that this prong of the test has been met.

         B. Safe-Harbor Provision

         Under the safe-harbor provision, a plan can only be exempt from ERISA if it meets four criteria: “(1) the employer does not contribute to the plan; (2) participation is voluntary; (3) the employer's role is limited to collecting premiums and remitting them to the insurer; and (4) the employer received no profit from the plan.” Meredith, ...


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