Scheub v. Berkshire Life Insurance Company of America et al
| M.D. John D Scheub |
| The Guardian Life Insurance Company of America and Berkshire Life Insurance Company of America |
| 1:2021cv10576 |
| April 7, 2021 |
| US District Court for the District of Massachusetts |
| Jennifer C Boal |
| Richard G Stearns |
| Labor: E.R.I.S.A. |
| 28 U.S.C. § 1001 |
| Plaintiff |
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| Filing 17 Judge Richard G. Stearns: ELECTRONIC ORDER entered. Having denied the motion to remand, the court enters the following briefing schedule:Defendants shall provide plaintiff Dr. John Scheub with a Proposed Record for Judicial Review by June 25, 2021. The Proposed Record shall consist of all non-privileged documents or videographic materials contained in Berkshire Life Insurance Company of America or The Guardian Life Insurance Company's claim files concerning the administrative review of plaintiff's claim and all applicable plan documents in defendants' possession. Defendants must provide a privilege log for any documents withheld from the Proposed Record.Upon receiving the Proposed Record, plaintiff shall review and notify defendants' counsel in writing by July 16, 2021 of all medical or personal identifier information she seeks to redact, or file under seal. Alternatively, if confidential information thoroughly permeates the record, either party may file a motion to seal the entire Record for Judicial Review, on or before July 6, 2021. If after receiving the Proposed Record, plaintiff claims that it is inaccurate or incomplete, he must notify defendants' counsel in writing by July 30, 2021. Any disagreement regarding the record must be filed with the court by August 13, 2021. Any request for an entitlement to discovery must also be filed by August 13, 2021. If no disagreements or requests are filed, defendants' dispositive motion must be filed by August 30, 2021, with plaintiff's response due by September 24, 2021. The court expects the parties to adhere to these dates unless good cause arises dictating extension. (Zierk, Marsha) |
| Filing 16 Judge Richard G. Stearns: ELECTRONIC ORDER entered denying #10 Motion to Remand to State Court. In the motion before the court, plaintiff Dr. John Scheub seeks a remand of his action against defendants Berkshire Life Insurance Company of America and the Guardian Life Insurance Company of America, arguing that defendants' improperly invoked ERISA preemption as the basis for removal of his case from the Massachusetts Superior Court. After reviewing the documents and pleadings submitted by both parties in support of their jurisdictional arguments, the court finds that there is adequate evidence to meet defendants' burden that ERISA governs Dr. Scheub's claim for reinstatement of his full disability benefits.The parties agree that Donovan v. Dillingham, 688 F.2d 1367, 1370 (11th Cir. 1982) controls. See Wickman v. Northwestern Nat'l Ins. Co., 908 F.2d 1077, 1082 (1st Cir. 1990) (First Circuit adopting the Donovan test for determining the existence of an ERISA employee benefit plan). Under the Donovan test, an employee welfare benefit plan must consist of five elements: "(1) a plan, fund, or program, (2) established or maintained, (3) by an employer or by an employee organization, or by both, (4) for the purpose of providing... disability... benefits, (5) to participants or the beneficiaries." Donovan, 688 F.2d at 1370. Conversely, under the U.S. Department of Labor's Safe Harbor provision, insurance programs are excluded from ERISA only when all four criteria of the regulation are satisfied: (1) the employer makes no contributions on behalf of its employees; (2) participation in the program is voluntary; (3) the employer's sole functions are to collect premiums and remit them to the insurer, and, without endorsing the program, to allow the insurer to publicize the program to its employees; and (4) the employer receives no consideration for its efforts, other than reasonable compensation for administrative services necessary to collect premiums. See 29 C.F.R. 2510.3-1(j). Dr. Scheub argues that his "policies were not established or maintained by his employer, nor has Berkshire Life provided evidence that they were." Pl.'s Mtn to Remand at 4-5. An employer need not however administer a plan for it to fall within ERISA's ambit. See Brundage-Peterson v. Compcare Health Servs. Ins. Corp., 877 F.2d 509, 511 (7th Cir. 1989) ("[T]he contingent feature of a true welfare benefits plan is unaffected by the delegation of administration of the plan to an insurance company with delegation in fact contemplated by the statute."); Robinson v. Linomaz, 58 F.3d 365, 368 (8th Cir. 1995) ("[T]here is no requirement that the employer play any role in the administration of the plan in order for it to be deemed an [employee welfare benefit plan] under ERISA."); Randol v. Mid-West National, 987 F.2d, 1547, 1550, n.5 (11th Cir. 1993)("[a]commercially purchased insurance policy in which the procedures for receiving benefits are all dictated by the insurance carrier can constitute a plan for ERISA purposes"). Nor must the employer furnish employees with formal Plan documents. See Donovan, 688 F.2d at 1372 ("ERISA does not... require a formal written plan."). In the instant case, defendants have offered documents demonstrating that Dr. Scheub's employer, Upper Cape Anesthesia, P.C., paid the premiums for Dr. Scheub and the other Upper Cape employees on their billing list. As a result, the Upper Cape employees, including Dr. Scheub, received a group plan discount (Group DD884) that was not available to individuals insuring themselves privately. Moreover, on each of the four disability insurance applications completed by Dr. Scheub (in 1993, 1994, 2004, and 2009) during his employment at Upper Cape, he represented that 100% of the premium for the policies would be paid by Upper Cape. For example, on his application for the 2004 Berkshire Retirement Protection Plus policy, he stated that the premium was being paid, "By my employer as part of an employee benefit under a Qualified Sick Pay Plan (QSPP)." Rugg Aff. 8-9. He further represented that the premium would be paid "[w]ith funds bonused to me by my employer under an executive bonus plan." Id. Any claim that Dr. Scheub did not understand the legal import of his statements has no bearing on their effect. See Spritz v. Lishner, 355 Mass. 162, 164 (1969) ("One who signs a contract will be held to its terms whether or not he or she reads it or claims to not have understood its provisions."); Simon v. Simon, 35 Mass. App. Ct. 705, 714 (1994) (same, release agreement).Dr. Scheub, for his part, offers checks showing that he paid premiums in October of 2020, and January and March of 2021, from his personal checking account after he retiring from Upper Cape, arguing that "[i]f there was a plan, [he] is no longer a participant in it." Pl.s' Mtn to Remand at 13, citing Demars v. Cigna Corp., 173 F.3d 443 (1st Cir. 1999). However, the Demars decision involved a former employee's purchase of an individual long-term disability policy and a claim of disability that arose after she was terminated by her employer. In this case, Dr. Scheub is claiming benefits defined by the Upper Cape plan in effect at the time that he retired and not those structured by an entirely new policy. Cf. Vartanian v. Monsanto Co., 14 F.3d 697, 702 (1st Cir. 1994) (a retired employee's rights as a participant in his prior employer's plan fall squarely within the "zone of interests" that ERISA is designed to protect). Karen Rugg, Berkshire's Vice President of Disability Underwriting, testifies that the additional coverage Dr. Scheub obtained after leaving Upper Cape was triggered by his exercise of an option guaranteed under his 1995 Policy [G6573750] and, as he requested, "the premium billing [was] added to the existing billing for the 1995 Policy," which remained in force. Rugg Aff. 10. Dr. Scheub filed a claim for partial disability in May of 2017 (while employed at Upper Cape) under the policy purchased by the Upper Cape Plan. He now claims total disability under the very same policy one that is clearly governed by ERISA. See Paul Revere Life Ins. Co v. Bromberg, 382 F.3d 33, 35 (1st Cir. 2004) (holding that ERISA applied to an "individually funded, post-termination" policy purchased by plaintiff while he "was insured under [the] policy in effect at the time of the alleged injury."); Massachusetts Cas. Ins. Co. v. Reynolds, 113 F.3d 1450, 1453 (6th Cir. 1997) ("post-employment coverage was [not]... 'conversion' coverage... [but rather] 'continuation coverage' preempted by ERISA."). Because ERISA preempts Dr. Scheub's state-law claims as a matter of law, removal was proper and the motion to remand is therefore DENIED. (Zierk, Marsha) |
| Filing 15 AFFIDAVIT of Karen Rugg in Opposition re #10 MOTION to Remand to State Court filed by Berkshire Life Insurance Company of America, The Guardian Life Insurance Company of America. (Attachments: #1 Exhibit A, #2 Exhibit B, #3 Errata C, #4 Exhibit D, #5 Exhibit E, #6 Exhibit F, #7 Exhibit G, #8 Exhibit H, #9 Exhibit I, #10 Exhibit J, #11 Exhibit K, #12 Exhibit L)(Hamilton, Joseph) |
| Filing 14 Opposition re #10 MOTION to Remand to State Court filed by Berkshire Life Insurance Company of America, The Guardian Life Insurance Company of America. (Hamilton, Joseph) |
| Filing 13 ANSWER to Complaint (Notice of Removal) by The Guardian Life Insurance Company of America, Berkshire Life Insurance Company of America. (Hamilton, Joseph) |
| Filing 12 CERTIFICATE OF CONSULTATION pursuant to LR 7.1 re #10 MOTION to Remand to State Court by Jonathan M. Feigenbaum on behalf of John D Scheub. (Feigenbaum, Jonathan) |
| Filing 11 MEMORANDUM in Support re #10 MOTION to Remand to State Court filed by John D Scheub. (Attachments: #1 Affidavit Exhibit 1 Scheub Declaration, #2 Affidavit Exhibit 2 Fanger Declaration)(Feigenbaum, Jonathan) |
| Filing 10 MOTION to Remand to State Court by John D Scheub.(Feigenbaum, Jonathan) |
| Filing 9 STATE COURT Record. (Pacho, Arnold) |
| Filing 8 NOTICE of Appearance by Nancy E. Gunnard on behalf of Berkshire Life Insurance Company of America, The Guardian Life Insurance Company of America (Gunnard, Nancy) |
| Filing 7 ELECTRONIC NOTICE of Case RE-Assignment. Judge Richard G. Stearns assigned to case. If the trial Judge issues an Order of Reference of any matter in this case to a Magistrate Judge, the matter will be transmitted to Magistrate Judge Jennifer C. Boal. (Finn, Mary) |
| Filing 6 Refusal to Consent to Proceed Before a US Magistrate Judge. . (Hamilton, Joseph) |
| Filing 5 NOTICE of Appearance by Jonathan M. Feigenbaum on behalf of John D Scheub (Feigenbaum, Jonathan) |
| Filing 4 CORPORATE DISCLOSURE STATEMENT by Berkshire Life Insurance Company of America, The Guardian Life Insurance Company of America. (Hamilton, Joseph) |
| Filing 3 Certified Copy of Notice of Removal Provided to Defense Counsel by Email. (Jones, Sherry) |
| Filing 2 NOTICE of Case Assignment. Magistrate Judge Jennifer C. Boal assigned to case. Plaintiff's counsel, or defendant's counsel if this case was initiated by the filing of a Notice of Removal, are directed to the Notice and Procedures regarding Consent to Proceed before the Magistrate Judge which can be downloaded #here. These documents will be mailed to counsel not receiving notice electronically. Pursuant to General Order 09-3, until the Court receives for filing either a consent to the Magistrate Judge's jurisdiction or the reassignment of the case to a District Judge, the initial assignment of a civil case to the Magistrate Judge is a referral to the Magistrate Judge under 28 USC 636(b) for all pretrial non-dispositive matters and Report and Recommendations, but not for the Rule 16(b) scheduling conference. (Finn, Mary) |
| Filing 1 NOTICE OF REMOVAL by Berkshire Life Insurance Company of America, The Guardian Life Insurance Company of America ( Filing fee: $ 402, receipt number 0101-8715994 Fee Status: Filing Fee paid) (Attachments: #1 Exhibit A, #2 Exhibit B, #3 Civil Cover Sheet and Category Sheet)(Hamilton, Joseph) |
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