CeCelia Ibson v. United Healthcare Services
776 F.3d 941
| 8th Cir. | 2014Background
- CeCelia Ibson and family were covered under a group health plan through her law firm; UHS administered the coverage.
- From 2006–2008 the family received extensive care; beginning in 2008 UHS informed providers (erroneously) that Ibson had no coverage and sought recoupment.
- UHS acknowledged errors (incorrect SSN or misassigned ID), promised corrections in an April 4, 2008 email but failed fully to stop denials/recoupments; UHS ultimately paid the claims by March 9, 2010.
- Ibson sued on September 27, 2012 asserting state-law claims: breach of contract, negligence, and bad faith, and sought punitive damages and a jury trial.
- District court struck the jury demand (holding claims completely preempted by ERISA) and granted summary judgment to UHS on the ground that Ibson’s suit was time-barred by a three-year contractual limitations clause.
- The Eighth Circuit affirmed preemption (ERISA covers the plan and the claims could be brought under §1132) but reversed summary judgment because the record did not support as a matter of law that a contract “final decision” or other limitations trigger barred the suit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the insurance arrangement an ERISA "employee welfare benefit plan"? | Ibson argued she was not an "employee" (shareholder) and thus not covered by ERISA. | UHS argued the arrangement met ERISA plan criteria. | Held: Plan is an ERISA employee welfare benefit plan (benefits, class, funding, procedures all present). |
| Does the ERISA safe-harbor exemption apply? | Ibson did not rely on safe-harbor. | UHS argued plan covered by ERISA; safe-harbor inapplicable because employer contributed to premiums. | Held: Safe-harbor inapplicable; firm made contributions so ERISA governs. |
| Are Ibson’s state-law claims preempted by ERISA’s complete-preemption doctrine? | Ibson contended claims were state-law contract/bad-faith about cancellation and not ERISA-governed. | UHS argued claims duplicate remedies under ERISA §1132 and are completely preempted. | Held: Claims are completely preempted—they duplicate/supplant ERISA remedies, so jury demand properly struck. |
| Was summary judgment proper because Ibson’s suit was time-barred by the policy’s three-year contractual limitations? | Ibson argued the contract limitations did not apply (different triggers) and disputed any final-decisions date. | UHS argued the limitations period had run (district court relied on first limitations clause; UHS later argued April 4, 2008 email was final decision). | Held: Reversed summary judgment — factual record does not establish as a matter of law that the contractual limitations period barred the suit; remanded for further proceedings. |
Key Cases Cited
- Estes v. Fed. Express Corp., 417 F.3d 870 (8th Cir. 2005) (standard of review for preemption/jury-strike issues)
- Petersen v. E.F. Johnson Co., 366 F.3d 676 (8th Cir. 2004) (elements for establishing an ERISA plan)
- Robinson v. Linomaz, 58 F.3d 365 (8th Cir. 1995) (employer purchase of insurance can create an ERISA plan)
- Prudential Ins. Co. of Am. v. Doe, 76 F.3d 206 (8th Cir. 1996) (shareholders may be beneficiaries under ERISA plans)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (U.S. 2004) (ERISA §1132 complete-preemption doctrine converts state-law benefit claims into federal claims)
- Metro. Life Ins. Co. v. Taylor, 481 U.S. 58 (U.S. 1987) (preemption principles for ERISA enforcement)
- Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (U.S. 1987) (state remedies that duplicate or supplement ERISA remedies are preempted)
- Duchek v. Blue Cross & Blue Shield of Neb., 153 F.3d 648 (8th Cir. 1998) (borrowing state statute of limitations for ERISA benefit actions)