UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 07-1168
JACQUELINE MOORE, individually and as administrator of the
Estate of Keith Karwacki, deceased,
Plaintiff - Appellant,
v.
LIFE INSURANCE COMPANY OF NORTH AMERICA, a foreign corporation;
CIGNA CORPORATION, d/b/a Cigna Group Insurance, a foreign
corporation,
Defendants - Appellees,
and
METROPOLITAN LIFE INSURANCE COMPANY, a foreign corporation,
Defendant,
v.
SHARON L. KARWACKI; DEBORAH NAUGHTON,
Third Party Defendants - Appellees.
Appeal from the United States District Court for the Northern
District of West Virginia, at Wheeling. Frederick P. Stamp, Jr.,
Senior District Judge. (5:05-cv-00169-FPS)
Submitted: April 7, 2008 Decided: May 15, 2008
Before MOTZ, TRAXLER, and KING, Circuit Judges.
Reversed and remanded by unpublished per curiam opinion.
Brent K. Kesner, Ellen R. Archibald, KESNER, KESNER & BRAMBLE,
PLLC, Charleston, West Virginia, for Appellant. John C. Lynch, Jon
S. Hubbard, TROUTMAN SANDERS LLP, Virginia Beach, Virginia; Damon
L. Ellis, MANI & ELLIS, PLLC, Charleston, West Virginia; Scott
Steven Blass, BORDAS & BORDAS, Wheeling, West Virginia for
Appellees.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Jacqueline Moore appeals the district court’s orders granting
Appellees LINA/CIGNA’s motion to dismiss her state law claims as
preempted under the Employee Retirement Income Security Act
(“ERISA”), 29 U.S.C. § 1132(a)(1)(B) (2000) and granting
LINA/CIGNA’s motion for summary judgment as to the remaining claim.
I.
Around 2:00 a.m. on February 28, 2003, Moore’s son, Keith
Karwacki, was driving his motorcycle without a helmet at an
estimated speed of 80 to 100 mph in a posted speed limit zone of 40
mph. When he lost control and crashed into the rear of a street
sweeper traveling around 5 mph in the far right lane of an open
highway, he died instantly on impact. A toxicology report found
that Karwacki’s blood alcohol content was 0.16 percent at the time
of the crash, double Florida’s legal limit of 0.08 percent.
Investigating police officers concluded Karwacki was the sole cause
of the crash due to the influence of alcohol.
Karwacki was employed by American Airlines. Through his
employment, he was covered by an insurance policy issued by Life
Insurance Company of North America (“LINA”) and CIGNA Corporation
(“CIGNA”) that included accidental death and dismemberment (“AD&D”)
benefits. Moore submitted a claim for AD&D benefits to LINA, which
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denied the claim because it did not consider Karwacki’s death an
accident, due to his intoxication.1
After exhausting administrative appeals, Moore filed a lawsuit
in West Virginia state court asserting various state law claims.
Moore denied that the policy fell under ERISA, but later amended
her complaint to include, in the alternative, a single count under
ERISA should it be determined that the AD&D policy was subject to
ERISA. LINA/CIGNA thereafter removed the case to federal court and
filed a motion to dismiss Moore’s state law claims as preempted by
ERISA. The district court subsequently granted LINA/CIGNA’s Rule
12(b)(6) motion to dismiss, denied Moore’s Rule 59(e) motion to
alter or amend that decision, denied Moore’s Rule 54(b) motion to
certify the ruling as final, and granted LINA/CIGNA’s later motion
for summary judgment as to the remaining ERISA claim.
II.
On appeal, Moore first claims the district court erred when it
granted LINA/CIGNA’s Rule 12(b)(6) motion to dismiss her state law
claims, arguing that the AD&D policy is not subject to ERISA. We
review the district court’s decision to grant a motion to dismiss
de novo. See Brooks v. City of Winston—Salem, 85 F.3d 178, 181
(4th Cir. 1996). The factual allegations in the complaint must be
1
CIGNA was not involved in the administration of benefit
claims under the plan.
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accepted as true and those facts must be construed in the light
most favorable to the plaintiff. Edwards v. City of Goldsboro, 178
F.3d 231, 244 (4th Cir. 1999). A Rule 12(b)(6) dismissal motion
tests the sufficiency of a complaint, it does not resolve contests
surrounding the facts, the merits of a claim, or the applicability
of defenses. Republican Party of N.C. v. Martin, 980 F.2d 943, 952
(4th Cir. 1992).
With few exceptions, ERISA applies to all employee benefit
plans established or maintained by an employer engaged in commerce.
29 U.S.C.A. § 1003(a)(West 1999 & Supp. 2007). “The existence of
a plan may be determined from the surrounding circumstances to the
extent that a reasonable person could ascertain the intended
benefits, beneficiaries, source of financing, and procedures for
receiving benefits.” Custer v. Pan Am. Life Ins. Co., 12 F.3d 410,
417 (4th Cir. 1993) (quoting Donovan v. Dillingham, 688 F.2d 1367,
1373 (11th Cir. 1982) (en banc)). “Thus, for ERISA to apply, there
must be (1) a plan, fund or program, (2) established or maintained
(3) by an employer, employee organization, or both, (4) for the
purpose of providing a benefit, (5) to employees or their
beneficiaries.” Custer, 12 F.3d at 417. By regulation, certain
group insurance programs are excluded from ERISA if they meet four
requirements:
(1) No contributions are made by the employer or
employee organization;
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(2) Participation in the program is completely
voluntary for employees or members;
(3) The sole functions of the employer or employee
organization with respect to the program are,
without endorsing the program, to permit the
insurer to publicize the program to employees or
members, to collect premiums through payroll
deductions or dues checkoffs and to remit them to
the insurer; and
(4) The employer or employee organization receives no
consideration in the form of cash or otherwise in
connection with the program, other than reasonable
compensation, excluding any profit, for
administrative services actually rendered in
connection with payroll deductions or dues
checkoffs.
29 C.F.R. § 2510.3-1(j) (2007). There must be some payment and
manifestation of intent by the employer or employee organization to
provide a benefit to the employees or the employees’ beneficiaries
of the type described in 29 U.S.C. § 1002(1).
Here, the district court found that the policy was subject to
ERISA and, therefore, that the state law claims were preempted.
However, when evaluating whether ERISA preempted the state law
claims, LINA/CIGNA had not yet provided a copy of the policy at
issue or a summary of its provisions to the court. Consequently,
the district court relied solely upon the allegations of Moore’s
complaint and, in particular, Moore’s alternative assertion in the
amended complaint that the policy is part of an “employee benefit
plan” pursuant to the provisions of ERISA. The district court also
relied upon Moore’s allegations that all premiums for the policy
had been paid as due, that the insurance companies provided
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benefits for one of the statute’s specified benefit purposes, and
that the policies issued by LINA/CIGNA provided benefits to
eligible employee participants, including intended beneficiary
Karwacki.
The parties did not address the § 2510.3-1(j) exception prior
to LINA/CIGNA’s 12(b)(6) motion to dismiss, and the district court
did not address the exception in its order. However, Moore
contended from the outset that her claims did not fall within
ERISA, asserted the ERISA claim only in the alternative, and argued
that the alternative count should not be considered an
acknowledgment of the policy’s status as an ERISA plan. In
addition, Moore asserted that the motion to dismiss under ERISA was
premature because LINA/CIGNA had not yet served their Rule 26(a)(1)
disclosures and because discovery on the issue was necessary to
determine the status of the policy. In short, Moore asked that the
court stay or defer ruling on the motion to dismiss her state law
claims under ERISA until LINA/CIGNA had established that the policy
was, in fact, an ERISA plan.
Shortly after the district court granted the motion to
dismiss, Moore filed a motion to alter or amend the order under
Rule 59(e), along with a copy of the policy, based specifically
upon the exception, arguing that new facts had come to light
(including production of the policy claim file and a copy of the
policy at issue) that demonstrated that the policy was not subject
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to ERISA as a matter of law and, more specifically, that § 2510.3-
1(j) applied. In the alternative, Moore sought relief under Rule
54(b), asking the district court to certify the Rule 12(b)(6)
dismissal as a final and appealable order.
The district court denied the motion to alter or amend on
procedural grounds, ruling that because Rule 59(e) motions only
apply to final judgments and the Rule 12(b)(6) motion was an
interlocutory ruling, the Rule 59(e) motion was not appropriate.
The district court also denied Moore’s Rule 54(b) request to
certify the Rule 12(b)(6) ruling as final. Consequently, the
district court did not reach the merits of the § 2510.3-1(j)
exception and has, to date, never specifically addressed the
question of whether the exception applies.2
III.
We conclude that the district court erred in granting
LINA/CIGNA’s motion to dismiss Moore’s state law claims based
solely upon the allegations of the complaint and, in particular,
upon the alternative ERISA count that Moore alleged in the event
the policy was demonstrated to be subject to ERISA. While the
§ 2510.3-1(j) exception was not raised by Moore until the motion to
2
We express no opinion as to the merits of the exception, but
note that it appears that American Airlines collected premiums
through payroll deductions, but apparently did not contribute
anything itself. It is unclear if it had any other function.
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alter or amend was filed, the AD&D policy was not before the
district court for consideration at the time the Rule 12(b)(6)
motion was granted. Moore at all times argued in opposition to
that motion that a ruling was premature and specifically requested
that the ruling be delayed pending LINA/CIGNA’s production of
information and evidence refuting her primary allegation that the
claims arose not under an ERISA plan, but rather pursuant to West
Virginia state law.3
We agree that the district court’s dismissal of Moore’s state
law claims for failure to state a claim under Rule 12(b)(6) was
premature and, without further inquiry of LINA/CIGNA or examination
of the policy at issue, in error. Accordingly, we reverse the
district court’s order granting LINA/CIGNA’s motion to dismiss the
state law claims and remand the case to the district court for
further proceedings as to whether the policy is subject to ERISA or
excluded under the § 2510.3-1(j) exception. We also vacate the
district court’s decision granting LINA/CIGNA’s motion for summary
3
The proper vehicle for Moore to have raised a motion to
reconsider was Rule 54(b), which also provides that, in the absence
of certification under the first sentence, “the order or other form
of decision is subject to revision at any time before the entry of
judgment adjudicating all the claims and the rights and liabilities
of all the parties.” Fed. R. Civ. P. 54(b). Here, Moore filed a
motion to alter or amend under Rule 59(e) and, in the alternative,
for certification under Rule 54(b). Although we conclude that the
Rule 12(b)(6) dismissal was erroneous in its own right, we think it
would have been proper for the district court to have reconsidered
the interlocutory ruling under the second sentence of Rule 54(b)
and, thereby, to have addressed the § 2510.3-1(j) exception at that
time.
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judgment as to Moore’s alternative ERISA count, expressing no
opinion as to the merits of that decision. Should the district
court determine that the AD&D policy is subject to ERISA on remand
and dismiss the state law claims anew on that basis, it is free to
reconsider the motion for summary judgment as to the ERISA count at
that time. We dispense with oral argument because the facts and
legal contentions are adequately presented in the materials before
the court and argument would not aid the decisional process.
REVERSED AND REMANDED
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