MAY 2011 BAD FAITH CASES
COURT DISMISSES BREACH OF CONTRACT AND BAD FAITH CLAIMS BECAUSE THEY ARE PRE-EMPTED BY ERISA (Middle District)

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The plaintiff was employed as a phlebotomist by Quest Diagnostics from 2004 until 2008, when he had to quit because he was “emotionally and physically incapable of dealing with the stress related to his position.”  He applied for long-term disability benefits to Quest’s insurer, but the insurer denied the claim after determining that medical documentation did not support him remaining out of work any longer.

The insured then filed a Complaint against the insurer including counts for breach of contract and bad faith, but the insurer filed a motion to dismiss because it believed that the Complaint brought state law claims that were preempted by the Employee Retirement Income Security Act (“ERISA”).

The court agreed with the insurer, stating that “Section 514(a), the express preemption provision of ERISA, provides that ERISA ‘shall supersede any and all State laws insofar as they … relate to any employee benefit plan’ covered by the statute.”  The breach of contract and bad faith claims were both alleged under state law and directly related to the employee benefit plans, so the court dismissed the Complaint and gave the plaintiff 21 days to file an amended Complaint.

Date of Decision:  May 4, 2011

Kirshy v. Life Ins. Co. of N. Am., Civil Action No. 3:10-CV-2345, United States District Court for the Middle District of Pennsylvania, 2011 U.S. Dist. LEXIS 47686, (May 4, 2011) (Caputo, J.)

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COURT DISMISSES BREACH OF CONTRACT AND BAD FAITH CLAIMS BECAUSE THEY ARE PRE-EMPTED BY ERISA (Middle District)”


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