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TALAMINE v. UNUM LIFE INS. CO. OF AMERICA

September 23, 1992

HOLLIS A. TALAMINE, Plaintiff,
v.
UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant.



The opinion of the court was delivered by: MARVIN E. ASPEN

 MARVIN E. ASPEN, District Judge:

 This action arises out of the termination of plaintiff Hollis A. Talamine's disability benefits. Talamine initially filed this action in the Circuit Court of Cook County against defendant Unum Life Insurance Company of America ("Unum"), alleging breach of contract and violation of § 154.6 of the Illinois Insurance Code, Ill. Rev. Stat. ch. 73, § 766.6. Unum removed the case to this court on the ground that the action arose under the laws of the United States, namely the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. See Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 67, 107 S. Ct. 1542, 1548, 95 L. Ed. 2d 55 (1987) (well-pleaded complaint rule does not prohibit removal when ERISA preemption is a defense). Unum moves to dismiss the complaint. For the reasons set forth below, we grant the motion.

 I. Background

 Talamine alleges the following facts in her complaint which, along with all reasonable inferences therefrom, we take as true for the purposes of the current motions. Meriwether v. Faulkner, 821 F.2d 408, 410 (7th Cir.), cert. denied, 484 U.S. 935, 98 L. Ed. 2d 269, 108 S. Ct. 311 (1987). On and prior to September 1, 1988, Talamine was an employee of Foote, Cone & Belding Communications, Inc. ("FCB"). FCB was the named insured of a Group Long Term Disability Insurance Policy issued by Unum, effective September 1, 1988. Talamine has paid, and continues to pay, the premiums necessary for the maintenance of the policy. At some unspecified date subsequent to September 1, 1988, Talamine became disabled as that term is defined under the policy. Specifically, she suffered from a perforated toxic megacolon which, along with related problems, precluded her from performing the material duties of her regular occupation. Pursuant to the policy, Unum paid Talamine disability benefits from December 2, 1989 to December 2, 1991. Unum terminated the benefits effective April 2, 1992, via a letter dated April 21, 1992. Unum in part based the termination upon communications from Dr. Robert F. Motley of the Internal Medicine Specialty Group, Montrose, Colorado and a "Physical Capabilities Evaluation #3" of Thomas L. Jacobs & Associates, Inc., dated February 5, 1992. Talamine's attorney wrote to Unum on May 14, 1992, demanding that her disability benefits be restored. Upon Unum's refusal, Talamine filed this action.

 II. Discussion

 The crux of Unum's motion to dismiss is twofold. First, Unum argues that ERISA preempts Talamine's claims, both of which are premised on state law. Second, in the event that this court construes Talamine's complaint as an ERISA claim for benefits, Unum maintains that the complaint must be dismissed for failure to exhaust administrative remedies. We begin our analysis with the preemptive effect of ERISA.

 A. Preemption

 The preemptive effect of ERISA turns on congressional intent. Maciosek v. Blue Cross & Blue Shield, 930 F.2d 536, 539 (7th Cir. 1991). Critical to this inquiry are the following three provisions of ERISA: (1) the pre-emption clause; (2) the savings clause; and (3) the deemer clause. The pre-emption clause, noteworthy for its sweeping breadth, provides:

 29 U.S.C. § 1144(a). From this broadly designated area of exclusive federal concern, the savings clause returns to the states the power to regulate insurance, banking, and securities:

 Except as provided in subparagraph (B) [the deemer clause], nothing in this subchapter shall be construed to exempt or relieve any person from any law of any State which regulates insurance, banking, or securities.

 Id. § 1144(b)(2)(A). Finally, pursuant to the deemer clause, an employee benefit plan governed by ERISA shall not be deemed an insurance company, an insurer, or engaged in the business of insurance for purposes of state laws purporting to regulate insurance companies or contracts:

 Neither an employee benefit plan . . . nor any trust established under such a plan, shall be deemed to be an insurance company or other insurer, bank, trust company, or investment company or to be engaged in the business of insurance or banking for the purposes of any law of any State purporting to regulate insurance ...


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