The opinion of the court was delivered by: Herndon, District Judge
I. Introduction and Background
Now before the Court is American United Life Insurance Company's motion to strike (Doc. 8). Specifically, American United Life Insurance Company moves the Court to strike from Burns' complaint all requests for relief pursuant to the Illinois Insurance Code and all requests pursuant to any state law theory because Burns' claims are governed by the Employee Retirement Income Security Act, 29 U.S.C. § 1002(1), ("ERISA"). Burns opposes the motion arguing that her claims are not preempted by ERISA as Boulevard Healthcare Management, the entity to whom the disability policies were issued, was not her employer (Doc. 17). Based on the following, the Court finds that Plaintiff's claims are preempted and grants the motion to strike.
On May 31, 2005, Venita Burns filed suit against American United Insurance Company ("American United") in the St. Clair County, Illinois Circuit Court (Doc. 2). Burns' complaint alleges wrongful cancellation of a group short term and long term disability policy (Count I) and consumer fraud (Count II). Specifically, the complaint alleges that prior to August 24, 2003, American United issued a group short term and long term disability policy to employees of Willowcreek Rehabilitation and Nursing Center, Inc. and that Burns was an employee of Willowcreek (Doc. 2, ¶ ¶ 1 & 2). In Count I, Burns alleges that American United's conduct in canceling the policy was vexatious and unreasonable and seeks damages and other remedies pursuant to Illinois Insurance Code, 215 ILCS § § 5/155, 5/357.5, 5/357.9(a). In Count II, Burns alleges that American United's conduct of canceling her insurance policy constituted consumer fraud.
On June 30, 2005, American United removed the case to this Court based on federal question jurisdiction, 28 U.S.C. § 1331, and diversity jurisdiction, 28 U.S.C. § 1332 (Doc. 1). American United's notice of removal states that the Court has federal question jurisdiction over Burns' claims in that she seeks damages for conduct related to the alleged denial of group disability insurance benefits under an employee welfare benefit plan, thus her claims are preempted by ERISA. Further, the notice of removal states that the Court has diversity jurisdiction because Burns is a citizen of Illinois, American United is a citizen of Indiana and the amount in controversy exceeds $75,000.*fn1
Thereafter, American United moved to strike portions of Burns' complaint (Doc. 8). First, American United argues that Section 143.15 of the Illinois Insurance Code is not applicable to the group disability policy at issue as that section applies only to auto insurance, fire insurance and personal line insurance policies. Second, American United argues that the remaining portions of the Illinois Insurance Code, § § 5/155, 5/357.5 and 5/357.9(a) and the state law claims are completely preempted by ERISA. Burns counters that ERISA does not apply as Boulevard Healthcare Management was not her employer, thus, there is no preemption of the state law remedies. Burns also contends that even if ERISA does apply, it does not preempt state laws regulating insurance.
First, Defendant argues that section 143.15 is not applicable to the group disability plan at issue in Plaintiff's complaint. The Court agrees. Section 215 ILCS 5/143.15 does not apply to the group long term disability policy issued by American United. Section 143.15 states:
Mailing of cancellation notice. All notices of cancellation of insurance as defined in subsections (a), (b) and (c) of Section 143.13 must be mailed at least 30 days prior to the effective date of cancellation to the named insured and mortgagee or lien holder, if known, at the last mailing address known to the company. All notices of cancellation shall include a specific explanation of the reason or reasons for cancellation. However, where cancellation is for nonpayment of premium, the notice of cancellation must be mailed at least 10 days before the effective date of the cancellation. For purposes of this Section, the mortgagee or lien holder, if known, may opt to accept notification electronically. Further, section 143.11 provides:
Cancellation provisions. All companies authorized to transact in this State the kinds of business enumerated in Section 4 of the "Illinois Insurance Code" shall include in their policies, except life, accident and health, fidelity and surety, and ocean marine policies, a cancellation provision setting out the manner in which such policies may be cancelled. However, nothing contained in Section 143.12 through Section 143.24 shall apply to contracts of reinsurance or to contracts procured by agents under the authority of Section 445.
Section 143.11 specifically states that the cancellation provisions set forth in Sections 143.12 through 143.24 are inapplicable to "accident and health" insurance policies as defined in 215 ILCS 5/4. Section 4 defines the term "accident and health" insurance to include insurance covering disability. The policy at issue in the case is a group short term and long term disability policy. Thus, section 143.15 is not applicable. Thus, the Court strikes the reference to section 143.15 in Plaintiff's complaint.
Next, the Court finds that Plaintiff's request for relief under 215 ILCS 5/357.5 is not applicable to the group disability insurance policy at issue in this case. The express language of 215 ILCS 5/362a states that section 357.5 is inapplicable to group policies. Section 362a states:
Non-application to certain policies. The provisions of sections 356a to 359a, both inclusive, shall not apply to or affect (1) any policy of workers' compensation insurance or any policy of liability insurance with or without supplementary expense coverage therein; or (2) any policy or contract of reinsurance; or (3) any group policy of insurance (unless otherwise specifically provided); or (4) life insurance, endowment or annuity contracts, or contracts supplemental thereto which contain only such provisions relating to accident and sickness insurance as (a) provide additional benefits in case of death or dismemberment or loss of sight by accident, or as (b) operate to safeguard such contracts against lapse, or to give a special surrender value or special benefit or an annuity in the event that the insured or annuitant shall become totally and permanently disabled, as defined by the contract or supplemental contract.
Accordingly, Section 5/357.7 does not apply to the group policy at issue, thus, the Court strikes the reference to Section ...