Oct 17, 2018
In Gulf Coast Plastic Surgery, Inc. v. Standard Ins. Co., 2008 U.S. Dist. LEXIS 43314 (E.D. La., June 3, 2008), the district court remands a case back to state court. The case was originally brought by a doctor who asked his insurance agent to increase the level of his disability insurance from $6,000 to $10,000 a month. The agent received the instructions and reported back to the doctor that he had done what was necessary to increast the coverage. However, when the doctor later became disabled and filed a claim, the insurer indicated that the only coverage in place was a policy in the amount of $6,000, rather than $10,000. The doctor sued the agent in state court asserting a state law negligence claim. The agent removed the case to federal court asserting that ERISA preempted the doctor's state law claim. The claimant asked the court to remand arguing that the negligence claim was not preempted. The district court agreed stating:
"Plaintiffs' claims do not require the interpretation or administration of an ERISA plan and they do not implicate a relationship between ERISA entities. They arise from the alleged acts and omissions of an independent insurance agent whose duties toward plaintiffs are governed entirely by state law and do not require the interpretation of plaintiffs' disability policy. Hillyer [the insurance agent] has not cited a single case in which a court has concluded that ERISA § 502(a) completely preempts claims against an independent insurance agent similar to those that plaintiffs bring here."
Case law is clear that state law claims against insurance agents who are negligent in their activities selling policies to ERISA plan sponsors are not preempted.
Post a Comment to "No Preemption of Negligence Claims Against Insurance Agent"To reply to this message, enter your reply in the box labeled "Message", hit "Post Message."