*3 COHEN, Before DUGGAN DUNN, JJ. FOR REHEARING

ON MOTION COHEN, Justice. rehearing

Appellant’s motion for is 29, 1988, granted, opinion December our withdrawn, following is and the substi- tuted. judgment appeal

This is an from a damages employer because of an to an wrongful employee’s insurer’s denial of an Appellee, claim. group health insurance (“Er- Corporation. Erbauer Construction bauer”), Life American Insurance sued Pan (“Pan Am”), alleging Co. projects accepted, bad faith settle- dustrial were practices ment Decep- violations of the ultimately, it was sold for less than it (“DTPA”) tive Trade Practices Act and the would have been worth if Pan Am had not trial, nonjury Insurance Code. After a the wrongfully denied Gill’s claim. court awarded damages, $1.2 million actual error, In its first Pan Am plus million in additional $2.4 un- contends the trial court lacked mat DTPA, der the Insurance plus Code and the jurisdiction ter state because law fees, attorney’s interest, prejudgment preempted by Employee Retirement In $4,699,230.25. totaling (“ERISA”).1 Security come Act of 1974 Crystal Gill, two-year-old daughter *4 1144(a) Pan Am relies on 29 U.S.C.S. § Gill, employee, Dewey an Erbauer in- (1982), provides: which

jured in a mobile home fire on December provisions of this title and title IV 22, 1979. She suffered burns and smoke supersede any shall and all State laws damage, inhalation that caused brain ren- they may insofar as now or hereafter dering blind, spastic quadriplegic. her a any employee plan relate to benefit de- Hospital She was treated at Herman and at 4(a) scribed in section exempt and not the Shriner’s Burn Center in Galveston be- 4(b).... under section being fore transferred to a state institution In Neely’s TBA Sup Castillo Dealer Louisiana, in following Pan Am’s denial of Inc., ply, (Tex.App 776 S.W.2d 290 her claim under group Erbauer’s insurance . —Hous 1989, denied), ton writ we held [1st Dist.] policy. Hospital Hermann had earlier con- preemption provision ERISA’s was an parties tacted both to determine whether be, was, affirmative defense that could the child was covered under her father’s plead waived a defendant did who not policy insurance was told both that the defense and did not offer evidence or she was. Pan Am later denied findings in regarding obtain the trial court claim, in and November Hermann the defense. Id. at 292-94. Pan Am did Hospital sued both Erbauer and Pan Am less here to raise the defense than the Crystal hospital for Gill’s bills. Erbauer in defendant did Pan Am filed this Castillo. raised against cross-claim its co-defen- dant, the ERISA defense for Pan the first time in this Am. The Gills in intervened holding Court. We adhere to our in January suit discovery oc- Castil preemption curred over the lo and hold that years. next five defense was waived. Accord Great North Ameri Immediately trial, before on December Ball, can Stationers v. 770 S.W.2d 631 Hospital Hermann settled with both dism’d). — Dallas Am, Erbauer and Pan remaining and the claims were tried on point December 1986. Pan Am’s first of error is over- during trial, The Gills settled Am with Pan and trial continued on Erbauer’s cross- error, In second its Pan against claim Pan Am for to its Am contends: wrongful

business due to Pan Am’s denial judgment The trial court’s should be re- Dewey Gill’s claim for medical benefits. versed because claims [Erbauer’s] trial, At Erbauer showed that the market against appli- Pan Am are barred skilled, early in Houston in the 1980’s cable statutes limitations. employees very nonunion construction competitive. judgment Erbauer showed that as a This arose from a cross-claim claim, Hospital’s result of the denial of rumors original Gill’s filed Hermann suit providing adequate against parties. arose that it was not timely both filed workers, benefits to its its cross-claim in because within the limita- rumors, longer period, these Erbauer could no at- tions but it never served Pan Am quality employees. Consequently, tract Er- until it filed its amended cross-claim declined, reputation bauer’s for in- This bids December 1986. was more than (1982). seq. 1001 et §§ 1. 29 U.S.C.S. cases, cross-defendant’s years Pan Am denied Gill’s tions. such after had

five “brings Pan Am contends him April general appearance claim on before service, filing, purposes charges not mere him because court for all limitations, necessary toll cross-claim, the statute it whether be filed notice failure to obtain service allowed Erbauer’s appearance his or after answer before four-year two-year and the limita- both the plaintiff’s 2 R. McDonald at demand.” periods expire December tions before distinguish are 275. Pan Am’s authorities none involves cross-claim able because against a co-defendant. trial, Immediately held before the court hearing on Pan Am’s to dismiss due motion although Pan Am Finally, we note that testimony at limitations. There was no regarding limi at trial presented evidence argument hearing, only of counsel. tations, any relief on that did ask for attorney Am’s that Pan Am had stated pretrial the court overruled its basis after with citation and had not been served have not been directed motion. We cross-claim, but ad- copy received brief, judgment, motion for mo post-trial had asked that mitted that Erbauer trial, request findings for new lawyer respond- Am be served. law, post- or other *5 fact and conclusions ed, “We do not know whether the Commis- request relief based on limitations. trial for effected service ... sioner of Insurance the trial court’s oral have reviewed We sought of know -that we issuance not. We overruling pretrial Am’s motion order paid dol- our fifteen it. We know we Am obtained an to dismiss because Pan fee, once, twice.” The filing not but lar has ruling, and because Erbauer adverse orally the motion to trial court overruled that the limitations defense not contended dismiss. however, decline, to con We was waived. point of error as construe Pan Am’s We from the trial concern evidence sider erroneously judge complaint that the trial because Pan ing limitations defense the to dismiss. pretrial its motion overruled during any relief not ask for Am did place the record found no other We have The the trial based on limitations. after requested counsel where Pan Am’s trial therefore, it record, did at must stand as on limitations. relief based Pan Am’s pretrial motion. time of the the findings or con request of fact failure to held that service Texas courts have concerning the affirmative clusions of law required one defendant is not when citation limitations, it had the on which defense against another defen files a cross-claim the 335, review of Cornelius, proof, precludes 120 Tex. 39 burden Early v. dant. hearing.2 pretrial Fuel after the 6, (1931); record made Empire Gas S.W.2d 8 451, (Tex. Abilene, En Noble, v. Westwood 454 MBank N.A. 36 See Co. v. S.W.2d (Tex.Civ. 246, adopted); Inc., 252 Sul 723 S.W.2d App.1931, judgm’t ergy, Comm’n writ); no Pinnacle 194 S.W. App. 108 Tex. Doyle, livan v. — Eastland Co., Eng’g (1917); L Tool Co. Carter v. G & Homes Inc. v. R.C.L. Offshore (Tex.Civ. Utah, 428 S.W.2d Inc. 640 S.W.2d — Houston 1968, writ); n.r.e.); no Gallo ref’d App. Antonio Dist.] Tex.R. [14th — San (Tex. Moeser, 82 S.W.2d way v. 299. Civ.P. writ); 2 R. Civ.App. — Eastland point of error is over- Am’s second McDonald, District Civil Practice in Texas (rev.1982). If a 7.56 County Courts error, Pan Am point of In its third is not entitled to notice cross-defendant its dis abused argues that the trial court cross-claim, notify it can failure to failing the unserved to strike limita cretion defense of give to a valid not rise have actu- Am did not that Pan witness testified appeal, the trial testimo- Pan Am cites On found there support The trial lawyer limitations of the claim. ny its al notice "unconvincing Pan Am was evidence” testified that and insufficient No witness defense. receive citation and did not the cross-claim. served with not was unaware Pan Am pursuant 21a. No to Tex.R.Civ.P. cross-claim upon its motion for denying new based cross-claim. Pan Am relies on Tex.R.Civ.P. 73, which To deliver- newly discovered evidence. obtain allows sanctions pleadings ing parties to adverse in accord- newly new trial based on discovered evi- ance Tex.R.Civ.P. dence, party must show trial court mandatory; is not rule states that 1) light come that: evidence has may. its discretion ... “court order ... 2) trial; it is due to lack of since stricken_” pleading sooner; such Tex.R.Civ.P. diligence produced that it was not added). (emphasis 3) cumulative; the new evidence is not 4) the new evidence is so material that it purpose Rule 72 prevent is to probably produced a different would surprise. Here, the trial court made granted. result if a new trial were Jack- following supplemental finding of fact con- Winkle, son v. Van cerning surprise Am: issue of to Pan (Tex.1983). The standard of review we unconvincing There was and insufficient apply to the of a must denial motion for evidence to establish that Pan American judge trial is whether new abused her Company Life Insurance or its counsel discretion. were not aware of and did not have actu- original al evidence of the answer and motion, In its Pan Am contended its new- cross-claim filed Erbauer Construc- evidence, ly discovered affidavits from for- Corporation cross-plaintiff as employees discussing mer of Erbauer other against Pan American Life Insurance possible company’s causes of the economic Company as cross-defendant. difficulties, investiga- discovered finding This of fact has not at- been Pan Am following tor hired trial. did not *6 Moreover, appeal. tacked on the court trial delay action to start take the of trial or finding to requested refused make a of fact request prior a continuance to trial to knowledge Pan Am that had no actual pursue discovery. further As stated of Erbauer’s cross-claim December before above, Am Pan filed its motion for continu- 2, 1986. day ance on last trial. Pan Am has of diligence establish used due failed to that it A trial court if it abuses discretion attempting the new discover evidence. any guiding

acts without reference to rules Further, principles properly Id. these affidavits are arbitrary in an or unreason Aquamarine Op impeachment manner. as able Downer v. characterized rebuttal erators, 238, (Tex.1985), testimony 701 regarding Inc. S.W.2d 241-42 of Erbauer’s evidence denied, 1159, rt. 476 U.S. 106 S.Ct. damages. Pan Am has not met its burden ce 2279, (1986). 90 L.Ed.2d 721 fact mere produced evidence that this would may a trial court decide a matter with granted. result if different a new trial were differently its discretionary authority note, Finally, again, we the trial court’s appellate from what an court decide would finding prove that Pan Am not did its un- in a similar is abuse circumstances not an Every rea- awareness cross-claim. Here, Am was of discretion. Id. Pan presumption be made sonable should on than served with the cross-claim more of in favor of orders the trial court review day trial. set three weeks before On We find refusing new trials. Id. no abuse trial, not ready it announced and did of discretion. day of request a continuance until the final of point Am’s fourth error is over- Pan proof com The burden of is on the trial. ruled. plaining party to show an abuse of discre fifth, seventh, ninth, In its and tenth Hardin, tion. Hardin v. 597 S.W.2d error, argues points Pan Am that there (Tex.1980). Pan Am met 349-50 has not evidence, factually is is no that there this burden. evidence, support the trial insufficient point Am’s third over- error is findings of court’s fact. error, for a fac The standard of review point In its fourth challenge requires insufficiency this complains the trial tual Am court erred 152 only the em- all of the of a claim affect weigh to examine and would

Court evidence, Corp., ployee, employer. v. Texas Brine Pan Am was but Lofton (Tex.1986), aside S.W.2d set of a claim would have aware that denial findings only they are fact if so beyond employ- the individual ramifications overwhelming weight contrary to reputation ee and could affect busi- they clearly wrong are the evidence that credibility of Erbauer. ness Bain, unjust. Cain v. 709 S.W.2d argues Pan Am that the award (Tex.1986). considering In a “no evi sup $1,200,000 damages is in actual challenge, must consider dence” this Court In Bat ported by the evidence. Southwest evidence and reasonable inferenc Owen, Corp. 131 Tex. tery v. that, from when es drawn the evidence (1938),the court stat 1098-99 S.W.2d light, sup in their most viewed favorable fol proper measure of as ed jury finding. port the verdict or court lows: Texaco, Co., v. 729 S.W.2d Inc. Pennzoil [1st Dist.] recovery may that a be had order — Houston n.r.e.). writ ref’d This Court must profits, of lost the amount of the account to the disregard all evidence and inferences by competent must evi- loss be shown contrary. is more than a If there certainty. reasonable Where dence with support finding, scintilla of evidence al- the business shown have been challenge cannot be sus the no evidence profit ready making established Stafford, v. 726 S.W.2d

tained. Stafford the time when the contract was breached (Tex.1987). When the evidence of committed, pre-existing or the tort such as to prove a fact so weak fered to vital cir- together any facts and profit, surmise or more than create mere do no cumstances, may indicate with reason- existence, is no suspicion of its the evidence profits lost. certainty the amount able and, effect, scintilla, legal more than a the amount of permissible It is to show Con/Chem, Inc., no evidence. Kindred in a plaintiff corre- done business (Tex.1983). remote, period not too sponding of time during the time and the business error fifth ad

Pan Am’s *7 recovery sought. which relating to findings of fact dresses the causation, the amount foreseeability, and damages incurred Erbauer. actual of the consisted of testimo- Erbauer’s evidence challenges the trial court’s Pan Am also com- company and a ny officers fact, finding that denial of the sixteenth contract, petitor received a which that had claim caused direct and foreseeable Gills’ Er- initially intended for he testified was expert testi harm to Pan Am. Erbauer’s Erbauer, Dr. president bauer. court, fied, questioned when Walker, expert testified as an also Charles claim for medical denial of a improper that and loss of concerning business evaluation problems could cause substantial benefits profits. future seeking to retain a firm for a construction relationship is that Q: How valuable force. Fur productive and work skilled and employees, its Erbauer had with that ther, to the expert testified as this same major and industrial with established marketing necessary competition and keen might want to clients, to who outsiders large of the bidding lists remain on marketplace? enter the channel, ship along the industrial clients thing of real be the A: It would years during the boom particularly value. same early This and 1980’s. late 1970’s you well, do If Q: right sir. All findings [sic] supports of fact testimony also — Walker, if Dr. and opinion, you have an 24, 25, 26, and that relate numbers present good- its maintained had Erbauer foreseeability. Am had causation have heard will, that we if the events writing group construction experience in courtroom, which occurred here in this group manager of plans, and its insurance oc- 11th, had not April wrongful denial after acknowledged that claims curred, what Erbauer would have been testimony reconstructed from the of the able to goodwill sale witness and its and follows below: [sic] operating assets for? $67,500 Additional cost of interest — AA: minimum of three million dollars. $35,000 Cost of additional CPA reviews— Q: Okay. And, profits $190,000 Lost from you how did ITC arrive at contract— that, sir? profits $400,- Lost from Exxon contract — A: I took six times the five hundred dollars, profits

thousand Lost from got and I Haldeman contract— three million $300,000 dollars. Damage goodwill $1,800,- Q: Why you did multiple use the six Erbauer —

times the earnings? Total damages alleged by Erbauer— A: I being very conservative. $2,792,500 Q: right [sic], Now, All sir. excuse me. you say thousand,” required

When provide “five hundred is that five court with evidence provide hundred thousand sufficient to the earn- ings reasonable basis to profits and the estimate the loss corporation? of the damages. assess Corp. Coast Inv. Yes, sir, A: year ending the fiscal Gulf Rothman, (Tex.1974). 858- September 30th, of 1980. The trial court awarded Erbauer less than Q: right What, All fact, did [sic]. half of the alleged. The evi- Erbauer sell its operating assets that it dence in the record is sufficient to find acquired four, had through these five or damages. causation and years business, six what did it sell its point Pan Am’s fifth of error is over- operating assets for? price A: The sale was one million one fifty-seven

hundred and thousand and Pan Am’s seventh of error five hundred dollars. challenges findings concerning Q: Am’s failure to right And, properly process pay All if I subtract [sic]. Erbauer’s claim on behalf policy three of the million—excuse me—if I subtract beneficiary, Crystal Gill, and of Pan Am’s one fifty- million one hundred and [sic] handling of the claim in bad faith. The seven thousand and five hundred dollars testimony beneficiary, Gill, Dewey million, from three if I do the sub- personnel manager, Ms. Louise [sic], get straction I eight one million Harshman, manag and of Pan Am’s claims forty-two hundred and thousand and five support findings. er Mr. Gill testified Now, hundred assuming dollars. he coverage wanted insurance for his my correct, substraction Dr. [sic] *8 dependents, completed and that he the nec Walker, you opinion do have an as to the essary personnel form at Erbauer’s office. damage good to Erbauer’s will caused manager Pan Am’s claims testified that a the act of Pan American Life Insurance participant policy was covered the retro Company? actively requested from the time he the Yes, A: sir. coverage. Hubbard, Ms. Louise Harshman Q: And, opinion? what is that personnel manager Erbauer, testified eight, A solely A: million and and based telephoned Foster, that she Mark Er- this item. one Am, bauer’s contact with Pan both before proceeded prepare The witness then to concerning coverage and after the fire on the chart court’s summariz- blackboard family. the Gill She testified that at both ing alleged damages. Although the times, this family Foster confirmed the Gill had accepted plain- chart was into evidence as medical benefits. Pan Am’s claims office tiff’s exhibit it is not before this Court. paid the initial Er- medical bills sent alleged expenses, bauer, the increased liability but later denied and refused damage Further, profits, goodwill pay any lost result- further claims. Pan ing presented from the of Am denial the claim can be no evidence that it conducted findings to him in of

any investigation denying tions the before after attributed fact. suffi- the claim. We hold evidence was

cient. point Am’s of error is over- Pan eleventh ruled. point

Pan Am’s seventh of error is over- ruled. error, point its Pan Am In sixth complains that the trial court committed points In its ninth and tenth overruling reversible its motion for error error, sup Pan Am attacks the evidence day on the final continuance of trial. findings 1) porting trial court’s of: its granting for continu or denial of motion Erbauer; 2) misrepresentations to certain the sound discretion ance within proscribed by art. 21.213 of the Insur acts not be disturbed unless trial court and will 3) Code; DTPA. violations of the ance abuse of discre the record discloses a clear seq. 17.41 et Ann. Tex.Bus. & Com.Code Carter, Villegas v. tion. (Vernon 1987). Testimony from both the brief, (Tex.1986). In Pan Am cites its purchased poli who officers at Erbauer Clay, Peterson v. S.W. Iiams, cy and from Mark Foster and James writ); (Tex.Civ.A p p.—Amarillo how Am, discus agents of Pan recounted the ever, proper this case addresses stan surrounding purchase of the poli sions applied to be to a motion for a contin dard cy. Pan Am knew Erbauer’s needs uance, diligence e.g., due to demonstrate represented policy would meet light during evidence comes to when new policy them. The included an “inadvertent this trial. There is no evidence before coverage provided for error” clause that attempted any Am dis Court that Pan if clerical mistake even Erbauer made a during intervening period covery be processing an enrollee. Sufficient evidence the case reset on tween the time when was court, fact, presented to the as trier of trial on De 3 and the start December holding findings that Pan support of fact Pan Am’s motion for cember misrepresented the knowingly Am cover trial, day came on the last continuance it age provide under the and services would “ready for after Pan Am had announced policy. 29. Pan Am trial” on December 3 and both nine and ten are over- Points of error not in its how the does address brief ruled. grant its motion for con court’s refusal of an rose to the level abuse tinuance error, point In eleventh Pan its the trial court’s Again, discretion. we note challenge to Am evidence makes no finding prove Am that Pan did findings regarding express repre of fact do claim. We unaware of Erbauer’s agent, by Pan Mark Fos sentations Am’s its discre find that the trial court abused ter, to Er- 20 and on December declining grant this motion Dewey dependents his Gill and bauer close of trial. Er- coverage under had medical benefits is over- Am’s sixth of error re policy. The record insurance bauer’s that she testified flects that Ms. Hubbard error, 20 and 27 to eighth point on December called Foster Although Fos judgment Gills’insurance. of the trial argues discuss the that the Am *9 not receive the evi ter testified that he did be reversed because court must calls, judge support the omitted is the sole the trier fact dence insufficient settling and the Am’s faith finding that Pan bad credibility the witnesses of Er- proximate cause testimony. Rego was the weight given their the claim to be Tex.R.Civ.P. Brannon, damages. Under bauer’s fact, supported where findings of ref’d n.r. omitted —Houston [14th Dist.] evidence, or more where one by and e.). presented The trial court was ground recovery have elements of a representa Foster made the evidence that 1990). (Vernon Supp. 21.21 § See Tex.Ins.Code Ann. court, gress been found the trial designed are to be provide ERISA minimum presumed support judgment. equitable standards that would assure “the case, the instant we have resolved the plans is- character” of such and their financial sufficiency sues of of the evidence in favor express poli- soundness. Id. The statute’s of Erbauer. Pan Am’s expert own ac- protect cies are to partici- interests of knowledged consequences of a rumor pants and in employee beneficiaries benefit company that a construction pro- plans (1) was not by: requiring minimum disclosure viding promised benefits employees. to its reporting information; (2) of financial Iiams, Further, group conduct, Am’s claims establishing responsi- standards manager, testified that Pan Am bility, obligation was also for fiduciaries of aware of the wrongful (3) ramifications of a plans; those providing appropriate denial of a claim. He remedies, sanctions, also testified that no ready access to investigation performed to further de- 1001(b). the federal courts. 29 U.S.C.S. § termine the merits of the claim once it was ERISA contains an extensive en- civil Upon complete denied. examination of structure, by forcement which certain enu- record, we find sufficient evidence to plaintiffs may sue, alia, merated inter support the finding omitted of causation benefits, clarify recover and to enforce between Pan Am’s bad faith denial of the rights plans, under their benefit or to ob- claim and damages. required tain information to be furnished eighth point

Pan Am’s of error is over- 1132(a) (1982). ERISA. 29 U.S.C.S. § The statute mandates that most ERISA actions be heard exclusively in federal judgment The of the trial court is af- court, jurisdiction but allows concurrent firmed. federal and state courts for speci- certain types fied of claims. 29 U.S.C.S. 1132. § DUNN, J., dissents. DUNN, Justice, dissenting. Preemption ERISA respectfully I dissent. To uniformity further the end of Appellant’s first presents of error comprehensive regulation, the stat ERISA questions related several for our considera- ute preemption provi also contains broad (1) preempt tion: Does sions, ERISA which super state that ERISA “shall matter of (2) Erbauer’s state law claims? sede they and all State laws insofar as Would standing Erbauer’s lack of may to sue employ now hereafter relate to an under question pre- ERISA affect the plan” ee benefit covered the Act. 29 (3) emption? If preempt (1982). ERISA does provision U.S.C.S. This suit, does Pan American’s failure to assert broadly, construed and the United States preemption as a defense in the trial Supreme court Court has held preemp that the constitute a waiver of its scope ERISA conten- tive of ERISA’s civil enforcement (4) tions? and If preemption applies, provisions ERISA powerful is “so displace as to waived, and was not entirely did the state court any state cause of action....” jurisdiction to hear Metropolitan Erbauer’s claim Taylor, Ins. Co. v. Life through any 58, 107 under 1542, 1546-47, derivative U.S. S.Ct. 95 L.Ed.2d (1987). theories? Any relating suit to ERISA “is purely law, a creature of federal notwith Employee Retirement Income Securi- standing pro the fact that state law would ty by Congress Act was enacted as a com- vide a cause of action in the absence of prehensive system regulate employee [ERISA].” plans, employ- benefit “in the interests of beneficiaries, protec- expansive preemption ees and their for the ERISA’s section *10 States, superseded tion of the revenue of the United defines state laws are which as: laws, rules, provide decisions, regulations, and to for the free flow of com- “all or 1001(a) (1982). law, having merce.” 29 To other U.S.C.S. State action the effect of § interests, 1144(c)(1). public any further these national Con- of State.” 29 U.S.C.S. § 156 Rather, of state law

Thus, preemption preempts both state common ERISA's ERISA of on the to which the The definition claims focuses conduct statutory law and law. 1294, preemption provi- applied. Cefalu, is 871 F.2d at ERISA’s “state” under law itself, only but of ERISA payment includes not the state and whether the bene- sion subdivisions, political agen- subject of the any of its the true claim. also fits are cies, purport instrumentalities that case Supreme Texas Court A recent directly or regulate employee plans, benefit briefly meaning of the term touched on the 1144(c)(2). indirectly. 29 Given U.S.C.S. § pre- with to” in connection ERISA “relates preemption clause is broadly how ERISA’s Ames, 776 S.W.2d 154 emption. Ames v. construed, given phrased the ex- Ames, (Tex.1989). interpreted the court ERISA, purpose of “state tensive remedial language in terms of to” ERISA’s “relates beyond scope of found to be laws action. purpose of the state law or few.” v. preemption] are [ERISA Cefalu Ames, According to the decision Co., 1294 F.2d 871 B.F. Goodrich ac- preemption applies if the state ERISA (5th Cir.1989), v. Martin quoting Jackson attempt regulate explic- is areas an (11th F.2d 1499 Cory., 805 Marietta ERISA, only instead of itly governed Cir.1986). plan ERISA so indirectly relating to an is question for consideration first conflict does not with that the action mat- preempts ERISA whether Al- purposes. Id. at 157-58. ERISA’s claims. state law ter of Erbauer’s ERISA though the court in Ames held that claims asserted there pro- preempt preemption section did

ERISA’s broad benefits, emphasized supersedes all state laws for conversion that ERISA vides plan had employee benefit that the ERISA benefit involved “relate to” or actions that terminated, longer required by the Act. 29 U.S.C.S. so the claim plans covered plan’s the lan- terms or Congress interpretation that of the intended provision be at 158. preemption plan. Id. guage any regulation of ERISA’s interpre- Thus, distinguishable common sense from the its broadest given Ames Dedeaux, 481 at preemption v. Pilot Ins. Co. in which typical tation. situation Life L.Ed.2d 39 95 107 S.Ct. U.S. issue. “re- (1987). of action If a state law cause Following Supreme Court’s standard it is plan, ERISA benefit to” an lates preemption Life, lower Pilot broad was not even if the state law preempted, such as those have held that claims courts apply employee designed specifically to preempted by are by Erbauer here asserted plans may regulate them benefit has example, the Fifth Circuit For ERISA. indirectly. claims preempts state law that ERISA held Supreme ex- Life, Court In Pilot negligence, duty, fiduciary for breach of “relates or action plained that a state law contract, and estoppel, equitable breach plan normal sense in the to” benefit v. MEBA Medical Hosp. fraud. Hermann phrase, if it has a connection (5th Plan, F.2d & Benefits plan. such a U.S. reference to Cir.1988). have held Texas courts Although the claim 107 S.Ct. at practic deceptive trade state law claims here, improper for the Life, as Pilot law, and es, insurance violations state benefits, the em- of a claim processing fair good faith and duty breach underlying fo- plan was the ployee benefit they based are preempted when dealing are litigation, the state and because cus of surrounding pay upon the circumstances related of action law causes common plan nonpayment of an ment or by ERISA. plan, they preempted were v. See, Ins. Co. e.g., Cadillac benefit. (Tex. Co., S.W.2d ap- Distrib. L.P.C. clause does preemption ERISA’s granted Oct. Antonio App. dealing directly with only to state laws ply — San wrongful insur (ERISA 18, 1989) preempts Shaw covered ERISA. subject matters claims); Gorman 85, 98, 103 ance cancellation Airlines, Inc., 463 U.S. v. Delta Life America, (1983). Ins. Co. North 77 L.Ed.2d S.Ct. *11 157 “fiduciary” writ The term includes an adminis- [1st Dist.] — Houston (ERISA officer, requested) preempts trator, trustee, or custodian of the Tex.Ins.Code claim); 1002(14). 29 plan. Ann. art. 21.21 Sams v. N.L. In benefit U.S.C.S. An § dus., Inc., (Tex.App.— person desig- 735 486 means so S.W.2d “administrator” a 1987, writ) (ERISA by plan, plan sponsor, Houston no nated benefit [1st Dist.] preempts person by Secretary breach contract and or chosen conversion a claims); plan sponsor Texas Em if no other adminis- Giles v. Instruments Labor or (Tex. Plan, ployees 715 29 Pension S.W.2d 58 trator can be identified. U.S.C.S. n.r.e.) App. 1002(23). ref’d § — Dallas (ERISA preempts misrepresen DTPA and split authority ques a on the There is claims). tation assignees tion of of ERISA claims whether authorities, In light standing I find bring these would under suit § that the matter of cross- Compare Dep’t Northeast ILGWU Health by claim preempted ERISA. Erbauer Fund & v. Teamsters Local Un Welfare sought injuries damages consequential for Fund, ion 764 F.2d No. 229 Welfare to its business it claimed had occurred (3d Cir.1985) (assignees 154 n. 6 have no a as direct result of American’s failure ERISA) under standing Misic v. pay plan. benefits under the ERISA Building Employees Serv. Health & Wel Thus, at the Erbauer’s claim was core Trust, (9th 789 F.2d 1378 n. 4 fare the allegedly improper determination Cir.1986) (assignees may sue behalf of beneficiary’s entitlement to or the benefits beneficiaries). However, or participants improper processing of the claim under express both of these cases involved as plan. Erbauer’s cause of action could not signments, type implied not the deriva judicial inquiry be decided without into first standing might arguably impli tive be employee’s entitlement to or benefits by cated here reason of the beneficiaries’ Pan American’s administration the em- (the Gills’) participation in the suit. Er- ployee Clearly, plan. benefit such claima right bauer sued its own it “relates to” has a or or connection with as the result sustained American’s employee plan. reference to the benefit Pi- mishandling of Dewey Gill’sclaim for bene Life, lot 481 U.S. at 107 at 1552. S.Ct. fits, not expressly on behalf of its employee, beneficiary. argues that it lacks ERISA, standing to sue under which allows standing employer An has no in its own participants beneficiaries or to enforce right ERISA, under to sue it is not because provisions. pre- Erbauer claims that ordinarily participant, beneficiary, “a or fi here, emption if apply does because duciary,” required as U.S.C.S. did, remedy under Erbauer would have Jones, 1132(a). Giardono v. 867 F.2d § federal law. (7th Cir.1989). Most courts 412-13 right to sue under have restricted Standing to Under ERISA Sue i.e., parties, ERISA to “enumerated” those Id.; ac- statute provides enforcement listed in the itself. Hermann civil 1286; a brought by participant, Hosp., to be Grand Union Co. v. tions Ass’n, beneficiary, fiduciary, Employers or as defined Food Labor Relations ERISA, (D.C.Cir.1987); 29 808 Secretary or of Labor. F.2d Whitworth States, 1132(a). Storage Co. v. U.S.C.S. Bros. Central § (6th Cir.1986), denied, 221, 228 F.2d cert. A or “participant” employee includes an 1007, 107 S.Ct. 93 L.Ed.2d 701 U.S. become, is, employee may former who (1987); Combs, 796 F.2d Dime Coal Co. v. eligible from type to receive of benefit (11th Cir.1986); Dep’t Northeast employer’s plan. his benefit 29 U.S.C.S. Fund, 764 F.2d Health & ILGWU Welfare 1002(7)(1982). “beneficiary” A means a § at 154 n. designated by person participant “implied” court has statu- plan, One federal the benefit as entitled to a benefit 1002(8). authority parties tory for nonenumerated plan. under U.S.C.S. *12 ERISA, preempts change a not fact that ERISA three-part to under on the sue based suit, Pre- test. Fentron Indus. National Erbauer’s as discussed above. See Fund, subject 674 F.2d Shopmen emption Pension focuses on the matter Cir.1982). Fentron, (9th claim, Under statu party bringing on suit. the not the implied if authority sue tory well-defined, to will be com- It would circumvent the (1) potential injury plaintiff has suffered an regulatory purposes of ERISA prehensive fact, (2) arguably in the zone of falls within party’s a lack of to allow nonenumerated designed to pro interests statute standing nullify comprehen- to the statute’s tect, (3) can that the statute itself show preemption provisions. Hermann sive preclude expressly not Id. does suit. provides ERISA Hosp., 845 F.2d at 1290. supersede any that it “shall and all State courts, above, as most stated they may insofar as now hereafter laws Circuit, including expressly Fifth have plan” an covered employee relate to benefit extending rejected ERISA’s the notion of 1144. The stat- Act. 29 U.S.C.S. specified parties § to other than those reach exception for state laws al- ute makes no Hosp., 845 F.2d Hermann the statute. relating an ERISA lowing a to bene- Hosp. The claim at 1289. court Hermann brought by party plan is a not specifically held that “non-enumerated" fit standing “Any to under and all parties do not have sue to under ERISA. entitled sue agreed with the Second reasonably ERISA. court includes state state laws” “only Congress empowered brought by Circuit that a nonenumer- causes of action jurisdic extend matter grant and It is unfortunate that Erbauer party. ated judiciary, ... and that tion of the federal may deprived a claim he would other- be grant jurisdic infer a courts are standing to assert under state wise legislative mandate.” tion absent clear law, preemption, but for federal law but Union Print quoting at Pressroom a court to does not allow that circumstance Security Fund v. Con League ers Income statute, language ignore the Co., 700 F.2d Assurance tinental cover- Congressional that ERISA’s intent (2d denied, Cir.), 464 U.S. cert. judicial and the age comprehensive, be (1983). The court 78 L.Ed.2d S.Ct. scope preemp- of ERISA precedent on legis silence of ERISA’s concluded that the tion. Congress’ intent history indicated lative Further, plaintiffs au- I note even provi standing/jurisdictional that ERISA’s may ERISA not re- to sue under thorized Hosp., 845 sions be exclusive. Hermann damages, as such extracontractual cover at 1288. F.2d here, sought by for a breach Erbauer those Thus, 1132(a)(l)(B)’s apply remedies § fiduciary duty arising improper from the “Con- participants or beneficiaries. untimely a claim for bene- processing of provision no gress simply made Ins. Co. v. fits. Massachusetts Mut. Life par- 1132(a)(1)(B) than persons other Russell, 105 S.Ct. 473 U.S. including sue, ticipants and beneficiaries (1985). Although 87 L.Ed.2d their behalf.” persons purporting to sue and benefi- participants ERISA allows Health & Dep’t ILGWU See Northeast benefits, reme- plan to recover the ciaries 154 n. 6. Fund, 764 F.2d Welfare party, a nonenumerated dy available to or benefi- participant was not a Erbauer injury alleged in an extracon- the additional although Pan plan, and ciary under the same as that arguably tractual claim Erbauer to characterize attempts American It is party. a nonenumerated asserted of ERISA fiduciary purposes as a intended to allow Congress unlikely that I do this status. standing, denies standing to sue under parties with standing the issue of Erbauer’s not address dam- extracontractual to recover ERISA, ques- fiduciary under to sue as group that ERISA ages, when court. to the federal properly left not sue for such designed protect may ERISA. See Hermann standing or under find that I would Hosp., 845 F.2d at ERISA does standing to sue under lack question I next turn to the Federal or State whether Court Jurisdiction *13 its Pan American waived defense of ERISA provides ERISA for exclusive federal failing preemption by to assert in the it jurisdiction in court certain circumstances trial court. and state and for concurrent federal court

jurisdiction types other of ERISA ac- brought tions. For most suits under of ERISA Waiver ERISA, federal have the courts exclusive comprehensive Despite the of scope 1132(e)(1). jurisdiction. 29 U.S.C.S. The § coverage its preemp ERISA and extensive exception only to federal court exclusive provisions, recent decisions have held jurisdiction is that state courts have con- applicability the statute’s can be jurisdiction brought current suits hear to waived in some instances. These decisions 1132(a)(1)(B), under 29 U.S.C.S. which al- § drawn a distinction between ERISA beneficiary participant lows a or to sue: as a choice-of-law as issue ERISA a to benefits him under recover due to the If application choice-of-forumissue. the of plan; terms of his question, is a choice-of-law fail the rights to enforce his under the terms of timely to it ure assert has held to been plan; the or a Neely’s constitute waiver. Castillo v. clarify rights his to future benefits Inc., TBA Dealer Supply, plan. under the terms the (Tex.App. 294 [1st Dist.] — Houston 1132(a)(1)(B)allows only Because suit § denied); Stationers, writ North Am. Great beneficiary, participant a or Erbauer’s Ball, Inc. v. S.W.2d claim on its face fall does not within its requested); —Dallas see also Thus, provisions. justicia- if has a Erbauer Dueringer Co., v. General Am. Ins. claim, necessarily ble must fall within the Life (5th Cir.1988). 842 F.2d 129-30 jurisdiction courts, exclusive of the federal according express provisions to the of 29 If, hand, on application the other 1132(e). U.S.C.S. § forum, ERISA involves a choice of fail- issue, disregarding standing Even I ure assert it in the trial court does note that the substance of Erbauer’s claim constitute a waiver. See International against Pan American not in way was Longshoremen’s Davis, Ass’n v. 476 U.S. analogous benefits, to a suit to recover 380, 391-92, 1904, 1912-13, 106 S.Ct. beneficiary’s rights, clarify enforce a or to (1986). Although L.Ed.2d 389 four dissent- participant’s rights future benefits justices ing would have held that Davis 1132(a)(1)(B). Instead, under the claim § preemption federal affecting even alleged improper handling Pan American’s waived, choice forum be feder- could benefits, employee’s claim for al statute Na- involved in Davis was the closely analogous most one for Act, tional Labor Relations and not ERISA. fiduciary duty breach of under U.S.C.S. dissenting opinion premised on brought may by partici- a which be § Act fact the National Labor Relations pant, beneficiary, fiduciary. 29 U.S.C.S. question preemption was silent on the 1132(a)(2). Thus, though question § Congres- jurisdiction, state court and that standing fiduciary as Erbauer’s to sue preemption sional intent as to of a state resolved, I if has not been find that even clear from Act. forum not at all a fiduciary, found to were be express is not That the case with ERISA’s jurisdic- suit fall within the would exclusive designation jurisdiction of exclusive federal tion of the federal courts. U.S.C.S. jurisdiction when is concurrent in 1132(e). state courts. I note that the Gills intervened in the To decide whether this case involves original party plaintiffs, suit as and their question merely choice-of-forum status beneficiaries have con- as would question, I choice-of-law first examine upon the state court the concurrent ferred grant jurisdiction jurisdiction to hear their ERISA claims un- ERISA’s to the courts. 1132(a)(1)(B). der U.S.C.S. § FLORES, Appellant, settled all their claims before the

the Gills Anita action, causes of Erbauer’s litigated to claims were STORES, INC., Appellee. H.E. BUTT Despite the judgment appealed. un- procedural history having a benefi- usual No. 13-89-384-CV. time, I ciary participate in the suit at one *14 Texas, Appeals Court of jurisdiction not infer derivative would Corpus Christi. claims from the fact over Erbauer’s jurisdiction the court would have had April 1990. claims. Courts have hear the Gills’ERISA Rehearing Overruled June statutory authority grant of to extend a clearly ex- jurisdiction, especially one as

pressed by Congress as in ERISA. Con- given jurisdic-

gress here has concurrent specific hear to the state courts brought by participants or

kinds claims

beneficiaries. asserted type of claim

Because the the exclusive was one reserved to courts, appli-

jurisdiction the federal preemption involved

cation of ERISA forum,

mandatory rather than federal that could

merely question a choice-of-law or a federal in either a state be resolved 661 S.W.2d 297. See also Thus, American’s failure court. trial court preemption ERISA assert waived, expressly ERISA because jurisdiction to consid-

preempts state court type of claim asserted here.

er at all the Ass’n, Longshoremen’s

See International 1912-13; 391-92, at at 106 S.Ct.

476 U.S.

Castillo, (1) sum, ERISA I would hold matter of Erbauer’s

preempts

claim, whether Erbauer regard to without ERISA, (2) the to sue under standing

has such that claim was

nature of Erbauer’s jurisdiction exclusive within the

falls courts, (3) preemp-

federal because forum mandatory choice of

tion involves ques- merely a choice-of-law than

rather (4) waived, here,

tion, it was to hear Er- jurisdiction had no

state court claim. preempted

bauer’s judgment of the trial

I would reverse the case. dismiss

court and