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FRANKLIN H. WILLIAMS INS. TRUST v. TRAVELERS INS.

March 24, 1994

FRANKLIN H. WILLIAMS INSURANCE TRUST, et al., Plaintiffs,
v.
THE TRAVELERS INSURANCE CO., Defendants.


STANTON


The opinion of the court was delivered by: LOUIS L. STANTON

Plaintiff Franklin H. Williams Insurance Trust ("Williams") sued defendant Travelers Insurance Co. ("Travelers") in the Supreme Court of the State of New York, New York County, seeking compensatory and punitive damages for violations of New York Insurance Law § 3214, breach of contract, and conversion. The crux of Williams' complaint is that Travelers paid interest on life insurance proceeds only from the date it received proof of an insured's death, rather than from the actual date of the insured's death. Invoking the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., Travelers removed the action to this court.

 Williams now moves to remand the case to state court and, in the alternative, for partial summary judgment. Travelers moves to dismiss the action pursuant to Fed. R. Civ. P. 12(b)(6), and, "in the event that the court elects to treat this as a motion for summary judgment defendant seeks the same relief under Federal Rule 56." (Def.'s Mem. at 1).

 Since both parties were aware that Travelers' motion might be treated as a motion for summary judgment, and both parties have submitted materials outside of the pleadings for the court's consideration, Travelers' motion to dismiss will be treated as a motion for summary judgment under Fed. R. Civ. P. 56. See Fed. R. Civ. P. 12(b); Kennedy v. Empire Blue Cross and Blue Shield, 989 F.2d 588, 592 (2d Cir. 1993).

 Legal Standard

 Summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). "Summary judgment is appropriate when, after drawing all reasonable inferences in favor of the party against whom summary judgment is sought, no reasonable trier of fact could find in favor of the nonmoving party." Lund's Inc. v. Chemical Bank, 870 F.2d 840, 844 (2d Cir. 1989). If a motion for summary judgment is properly supported, "the adverse party 'must set forth specific facts showing that there is a genuine issue for trial.'" Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986) (footnote omitted) (quoting Fed. R. Civ. P. 56(e)).

 Allegations

 The complaint alleges that when Mr. Williams (the insured) died, he was covered by a group term life insurance policy with Travelers, of which Williams is a beneficiary. (Compl. PP 4-5.) That policy was maintained by Chemical Bank, of which he had been a retired director. (Compl. P 4.)

 Williams, which sues on behalf of itself and all other similarly situated beneficiaries, claims that as a matter of policy and practice Travelers paid interest only from the date of receipt of proof of death, in violation of § 3214 of the New York Insurance Law which requires that the interest be paid from the date of the insured's death.

 Removal

 "A claim styled as a state common law cause of action is removable under ERISA if it 'relates to' an employee benefit plan within the meaning of section 514(a), 29 U.S.C. § 1144(a), and falls within the scope of the statute's civil enforcement provisions, found in section 502(a), 29 U.S.C. § 1132(a)." Smith v. Dunham-Bush, Inc., 959 F.2d 6, 8 (2d Cir. 1992) (citations omitted).

 ERISA defines an "employee welfare benefit plan" as

 
any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer . . . to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) 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 Travelers policy, according to the complaint, was maintained by Chemical to provide Mr. Williams' beneficiary a benefit in the event of his death.

 Williams' common law causes of action for breach of contract and conversion, grounded on the alleged violation of New York Insurance Law § 3214, contend that his life insurance benefit was improperly underpaid. Such claims "relate to" an employee benefit plan. See Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47-48, 107 S. Ct. 1549, 1553, 95 L. Ed. 2d 39 (1987) (phrase "relate to" has broad, common-sense meaning, in the normal sense that it "'has a connection with or reference to such a plan'"); Smith 959 F.2d at 10 (suit that attempts to ...


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