Cathy Reynolds v. Metropolitan Life Ins. Co.

FILED
NOT FOR PUBLICATION
MAR 29 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
CATHY A. REYNOLDS, 2008 No. 15-15710
REVOCABLE TRUST, et al.,
D.C. No.
Plaintiff-Appellants, 2:12-cv-00417-JAM-DAD
v.
MEMORANDUM*
METROPOLITAN LIFE INSURANCE
CO.,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of California
John A. Mendez, District Judge, Presiding
Argued and Submitted March 13, 2017
San Francisco, California
Before: FERNANDEZ and WATFORD, Circuit Judges, and STATON,** District
Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Josephine L. Staton, United States District Judge for
the Central District of California, sitting by designation.
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Plaintiffs appeal the district court’s order granting summary judgment in
favor of Defendant declaring that Plaintiffs’ state-law claims are pre-empted by
ERISA. We affirm.
An order granting summary judgment and the conclusion that a state-law
claim is pre-empted by ERISA are reviewed de novo. See Greany v. Western Farm
Bureau Life Ins. Co., 973 F.2d 812, 816 (9th Cir. 1992).
ERISA contains a broad pre-emption provision that applies when a state law
“relate[s] to” employee benefit plans. 29 U.S.C. § 1144(a); Pilot Life Ins. Co. v.
Dedeaux, 481 U.S. 41, 45 (1987). “A law ‘relates to’ an employee benefit plan . . .
if it has a connection with or reference to such a plan.” Shaw v. Delta Air Lines,
Inc., 463 U.S. 85, 96–97 (1983). A state law may be pre-empted “even if the law
is not specifically designed to affect such plans, or the effect is only indirect.”
Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139 (1990).
Here, Plaintiffs claimed benefits under two life insurance policies held by
the same individual. One was an ERISA-governed group life insurance policy
(“ERISA Policy”), and the other was an individual life insurance policy obtained
through a right to conversion provided by the ERISA Policy. The ERISA Policy
contains a “One Payment Only” provision that applies when a policyholder holds
both the ERISA Policy and a converted policy. Under the terms of the “One
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Payment Only” provision, the beneficiaries may recover benefits under the ERISA
Policy only if the converted policy is returned to the insurer without any claim.
When Plaintiffs filed claims under both policies, Defendant necessarily had to
consider the “One Payment Only” provision in the ERISA Policy to decide
whether to pay benefits under either policy. Thus, the converted policy relates to
the ERISA Policy.
Although Plaintiffs argue that Waks v. Empire Blue Cross/Blue Shield, 263
F.3d 872 (9th Cir. 2001), governs this case, Waks did not address situations in
which a policyholder holds an ERISA policy and a converted policy
simultaneously, and the ERISA policy contains provisions that affect interpretation
of the converted policy. Such is the case here, and ERISA therefore preempts
Plaintiffs’ state-law claims.
AFFIRMED.