• ERISA Preemption Defense Sufficient To Set Aside Default on State Law Claims (Middle District)
  • April 1, 2015
  • Law Firm: Fineman Krekstein Harris P.C. - Philadelphia Office
  • In Davis v. Metro. Life Ins. Co., the insured brought claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and bad faith under the Pennsylvania Unfair Insurance Practices Act (“UIPA”), 40 Pa. Cons. Stat. § 1171.1 et seq., pursuant to 42 Pa. Cons. Stat. Ann. § 8371, and, alternatively, for denial of benefits under the Employee Retirement Income Security Act (“ERISA”). The insured alleged that the Medical Center she worked for was a state-controlled entity not subject to ERISA, as the basis for bringing her state law claims. The insured took a default and the insurer moved to set aside the default, while the insured moved for a default judgment. The court granted the motion to set aside the default.

    The insured alleged, inter alia, that the carrier improperly denied her longer term disability benefits, failed to conduct a physical examination, used medical opinions from unlicensed physicians, ignored conflicting medical evidence from the SSA and the insured’s physician, and misrepresented that ERISA governed the insured’s claims.

    In addressing the meritorious defense element of the insurer’s motion, the insured had stated as an affirmative defense that all of the insured’s state law claims were preempted by ERISA. The court found that “to the extent that [the] employee benefit plan is subject to ERISA, her state law claims are likely preempted.” The insurer “need not conclusively establish that ERISA governs the plan to prevail on its motion to set aside the default, only that its defense is meritorious.” Thus, this was a meritorious defense to the state law claims, including the bad faith claims, and the default was set aside.

    Date of Decision: February 11, 2015

    Davis v. Metro. Life Ins. Co., CIVIL ACTION NO. 1:13-CV-2741, 2015 U.S. Dist. LEXIS 16292 (M.D. Pa. February 11, 2015) (Conner, J.)