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REHABILITATION INST. OF CHICAGO v. GROUP ADMRS.

December 16, 1993

REHABILITATION INSTITUTE of CHICAGO, Plaintiff,
v.
GROUP ADMINISTRATORS, Ltd., Defendant.


Rosemond, Jr.


The opinion of the court was delivered by: W. THOMAS ROSEMOND, JR.

TO THE HONORABLE CHARLES R. NORGLE, SR., a District Judge of the United States District Court for the Northern District of Illinois.

 Plaintiff Rehabilitation Institute of Chicago commenced this action on January 13, 1993 in the Circuit Court of Cook County, Illinois, Law Division. On February 11, 1993, defendant Group Administrators filed a Notice of Removal petitioning this Court to remove the case pursuant to 28 U.S.C. ยงยง 1441 and 1443, and a Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Plaintiff has contested defendant's Motion to Dismiss and has filed a Motion to Remand the case to state court. Defendant's motion to dismiss is hereby denied, and plaintiff's motion to remand is granted, for the reasons set forth below.

 BACKGROUND.

 When considering a motion to dismiss for failure to state a claim, the Court must accept all well-pleaded facts as true, and draw all reasonable inferences therefrom in favor of the plaintiff. *fn1" The motion to dismiss may be granted only if the plaintiff can prove no set of facts upon which relief may be granted. *fn2" The well-pleaded facts for this case are as follows.

 Plaintiff Rehabilitation Institute ("Rehab Institute") is a domestic charitable corporation which maintains a hospital and renders medical services. *fn3" From April 8 through April 14 and from April 16 through June 6, 1991, Rehab Institute rendered hospital and medical services to Daniel Casey. The total cost of these services was $ 59,211.46. *fn4"

 On April 15, 1991, Rehab Institute contacted an agent of defendant Group Administrators, the administrator of Casey's health insurance plan under the Employment Retirement Income Security Act of 1974 (ERISA), *fn5" for the purpose of determining whether or not Casey's care - which apparently was necessitated by self-inflicted injuries - was covered under the ERISA plan. Defendant responded shortly thereafter by assuring Rehab Institute that there was no exclusion for self-inflicted injuries, and by describing specifically the coverage that was available. *fn6" As a result of these assurances, Rehab Institute provided Casey with the care he needed. *fn7"

 Subsequently, however, Group Administrators refused to reimburse Rehab Institute for the care it provided, and has continued to do so despite repeated demands for payment. This litigation ensued, with plaintiff maintaining that defendant should be estopped under Illinois law from refusing to remit payment for services that it represented were covered by Casey's ERISA plan. Rather than deny plaintiff's allegations, defendant maintains that plaintiff's complaint fails to state a claim upon which relief may be granted. Specifically, defendant maintains that plaintiff's complaint fails to state a cause of action under Illinois law for equitable estoppel, and that even if the complaint does state a cause of action under Illinois law, the cause of action is preempted by ERISA. *fn8" Plaintiff concedes that state law claims are generally preempted by ERISA. However, it has attempted to distinguish its claim by arguing that because it is a third-party health care provider who is neither a beneficiary nor an assignee of the ERISA plan, its claim for damages is not "related to" the ERISA plan. *fn9"

 ANALYSIS.

 A. Sufficiency of the Estoppel Claim.

 Before proceeding to the preemption issue, the Court must determine whether plaintiff's complaint pleads a cause of action under Illinois law. Rehab Institute's complaint asserts that it is entitled to recover the funds it spent in treating Daniel Casey under the doctrine of promissory estoppel. Promissory estoppel is generally invoked in situations where some performance has been rendered by a party despite the lack of a binding contract. *fn10" Under Illinois law, the doctrine contains four elements: (1) a promise; (2) which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee; (3) which in fact induced such action or forbearance; and (4) resulting injury or detriment to the promisee. *fn11" Where all four of these elements are present, the promise will be enforced in order to avoid injustice. *fn12"

 In its motion to dismiss, Group Administrators maintains that Rehab Institute failed to allege that any promise was made pertaining to Mr. Casey's coverage and treatment. *fn13" However, plaintiff's complaint clearly alleges that Group Administrators' agent represented that "coverage was available" for the treatment. *fn14" In light of the purpose behind Rehab Institute's query (determining whether or not it would be reimbursed by the insurance company for its care of Mr. Casey), this statement satisfies the promise element for purposes of stating a promissory estoppel claim. *fn15" In this context it is also clear that Group Administrators knew or should have known that its representation would induce action on the part of Rehab Institute (i.e., that Rehab Institute would admit and treat Mr. Casey on the basis of its representation as to available coverage). The complaint also contains specific allegations that Rehab Institute acted in reasonable reliance on this promise, and that it was injured as a result. *fn16" Accordingly, Rehab Institute has adequately pled a cause of action under the doctrine of promissory estoppel. *fn17"

 B. Preemption.

 Having found that plaintiff has stated a cause of action under Illinois law, the Court must determine whether or not that cause of action is preempted under ERISA. ERISA preempts "any and all State laws insofar as they . . . relate to any employee benefit plan." *fn18" This preemption clause has been described as "conspicuous for its breadth." *fn19" The United States Supreme Court has held that a law "relates to" a benefit plan, and is therefore preempted, if it has even an indirect impact on an ERISA plan. *fn20" However, the Supreme Court has also noted that ERISA preemption analysis must be "guided by respect for the separate spheres of governmental authority preserved in our federalist system," *fn ...


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