Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

MYERSCOUGH, INC. v. FORTIS BENEFITS INS. CO.

February 28, 2000

MYERSCOUGH, INC., A CORPORATION, D/B/A MURPHY RUG & FURNITURE COMPANY, THOMAS R. MYERSCOUGH AND RAGAN MYERSCOUGH, PLAINTIFFS,
V.
FORTIS BENEFITS INSURANCE COMPANY AND PAT ROGERS ASSOCIATION, INC., DEFENDANTS.



The opinion of the court was delivered by: Richard Mills, District Judge.

OPINION

Does a minority shareholder have standing to maintain a suit based on the denial of medical benefits under ERISA?

Yes.

Motion to remand to state court is DENIED.

BACKGROUND

The eight count complaint in this case was originally filed in the Circuit Court for the Seventh Judicial Circuit of Sangamon County, Illinois. In the complaint, Plaintiffs brought several claims against Defendants, including breach of contract and several tort claims, based on the alleged denial of insurance benefits.

Defendants filed a notice of removal on September 1, 1999. In the notice of removal, Defendants state that this Court has jurisdiction over the case because it is based on the denial of insurance benefits under the terms of a group health plan that constitutes an employee welfare benefits plan under ERISA, 29 U.S.C. § 1001 et. seq.

Plaintiffs contest this Court's subject matter jurisdiction over the case and seek remand. Plaintiffs argue that this case is not governed by ERISA because Plaintiff Thomas Myerscough is a part-owner of Myerscough, Inc., and as such he is not a "participant" or a "beneficiary" in any welfare plan governed by ERISA. Rather, Plaintiffs argue, as a part owner of Myerscough, Inc., Mr. Myerscough is an "employer" and hence not covered by ERISA.

The parties were ordered to submit supplemental briefing as to the legal and factual issues raised by this motion to remand. The briefing has now been submitted and the motion is ready for resolution.

ANALYSIS

The burden to show the existence of federal subject matter jurisdiction is generally on the party seeking to remove a case to federal court. See, e.g., Chase v. Shop 'N Save Warehouse Foods, Inc., 110 F.3d 424, 427 (7th Cir. 1997).

In order to come within the coverage of ERISA, a plaintiff must be either a "participant" or a "beneficiary" of a plan. 29 U.S.C. § 1132(a). A participant is defined as an "employee or former employee of an employer . . . who is or may become eligible to receive a benefit. . . ." 29 U.S.C. § 1002(7). A beneficiary is defined as "a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder." 29 U.S.C. § 1002(8).

Beneficiaries who are also deemed to be "employers," however, may not come within the scope of ERISA due to the antiinurement provisions at 29 U.S.C. § 1002(5), which provides that "the assets of a plan shall never inure to the benefit of any employer. . . ." 29 U.S.C. § 1103(c)(1). An employer is defined as "any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan." 29 U.S.C. § 1002(5). This definition is mostly circular and rather uninformative, but it is rather broad and thus likely includes most of those persons usually thought of as employers.

If a person is deemed to be an employer under this provision, the anti-inurement provision may take away his standing. In determining whether the anti-inurement provision applies to a given situation, courts often appropriately focus on the express language and purposes of the provision. See Giardono v. Jones, 867 F.2d 409, 412 (7th Cir. 1989). This provision is designed to prevent those who exercise control over the funds of a plan from selfdealing or improper ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.