The opinion of the court was delivered by: JAMES WARE
This case involves questions of whether ERISA governs life insurance provided by a society for professional accountants. The action is for life insurance benefits brought by Joyce Fisher as Trustee for The Fisher Family Trust, Joyce Fisher as Executrix of the Estate of Dana Alan Fisher, and Joyce Fisher, individually. The decedent, Dana Alan Fisher, a certified public accountant, acquired a life insurance policy under the American Institute of Certified Public Accountants Insurance Trust (AICPA Insurance Plan) on October 1, 1978.
Plaintiffs filed this action in state court in November, 1991, alleging (1) breach of contract for Defendants' failure to pay $ 500,000 in life insurance benefits; (2) breach of the implied covenant of good faith and fair dealing; (3) breach of fiduciary duties; (4) constructive fraud; (5) intentional misrepresentation; (6) concealment; (7) negligent misrepresentation; (8) negligent infliction of emotional distress; and (9) intentional infliction of emotional distress. On December 26, 1991, Prudential removed the action to this Court.
Defendants move for Summary Adjudication that Plaintiffs' State Law Claims are Preempted by the Employee Retirement Insurance Security Act ("ERISA"). Having reviewed the respective pleadings, the Court finds that ERISA applies and preempts all of Plaintiffs' state law claims. Accordingly, the Court GRANTS Defendants' Motion for Summary Adjudication for the reasons discussed below.
A. The AICPA Insurance Plan
The American Institute of Certified Public Accountants ("AICPA") Insurance Plan is administered by the AICPA to CPA's and CPA firms. The Plan is part of the AICPA Insurance Trust. Both the Insurance Plan and the Insurance Trust were established by the AICPA, a trade association of CPA's and accounting firms.
The Insurance Trust consists of a single trust, with a single Trustee, and a single insurer for its life and disability program. The plan consists of: (1) the "Group Insurance Plan", which provides life and accidental death and dismemberment coverage to CPA subscribers and all of their eligible employees, (2) the "CPA Plan," which provides life and accidental death and dismemberment coverage to CPA subscribers, and (3) the "Long-Term Disability Income Plan" which provides long-term disability benefits to CPA subscribers. To be eligible for the Insurance Plan, subscribers must be individual members of the AICPA or a sponsoring society, or both. Furthermore, to apply for coverage under the AICPA Plan, a subscriber must also apply for membership in the Trust.
In order to begin or increase participation under the "Group Insurance Plan" component, the firm or proprietor must have at least one eligible employee, other than the proprietor, partner or firm member, who is to become insured according to the Plan on the date the new or increased participation begins for the firm. Under the Group Insurance Plan, all eligible full-time employees of the firm must be insured under the Plan at all times, along with the eligible proprietor, partners or firm members.
The administration of the Insurance Plan is accomplished as if the three plans which comprise the Insurance Plan are a single unit. The Plan is underwritten by Prudential and administered by the Trust's designated Plan Agent, Rollins, Hudig, Hall Co. ("RHH"), formerly known as Rollins Burdick Hunter Co. Solicitation for all three Plans and the determination of eligibility to apply for coverage are overseen by RHH as the Trust's designated Plan Agent. All requests for coverage that are deemed eligible are thereafter reviewed and accepted or denied by Prudential. Prudential also performs all claims-handling for the Insurance Plan from a single office. The Trustee, Bankers Trust Company, periodically sends Prudential a single wire transfer which covers the gross premiums for all three plans. In turn, Prudential places all premiums in a single fund. The parties providing administrative services for each component plan of the AICPA Insurance Plan are all the same. The same consultants, printers and clerical support staff handle each of the three component plans under the multibenefit Plan. Furthermore, all administrative expenses, including Trustee, Plan Agent and legal fees, are charged to the single trust.
The Insurance Trust files ERISA Form 5500 (Annual Return/Report of Employee Benefit Plan) on behalf of all three components. The form treats the three components as a unit. Form 5500, in line 34, totals the assets and liabilities of the Insurance Trust and the three component plans, all as part of a single administrative unit. The assets of all three plans are shown on line 34 both separately and in total. The administrative expenses are shown on Schedule C as a single unit.
B. Plaintiffs' Coverage Under the AICPA Insurance Plan
Dana A. Fisher was a Certified Public Accountant. As a certified public accountant he was entitled to be a member of the American Institute of Certified Public Accountants and his state CPA society. By reason of his status as a CPA and his membership in the AICPA he was eligible to purchase life insurance from Prudential, through the AICPA.
Mr. Fisher first applied and obtained life insurance coverage in the amount of $ 100,000 under the CPA Plan effective February 1, 1976. He later applied for and received life insurance coverage in the amount of $ 200,000 under the Group Insurance Plan effective October 1, 1987, and long-term disability coverage under the Long-Term Disability Insurance Plan effective May 1, 1982. In ...