{ "id": 11708301, "name": "JAMES A. MIDDLETON, JR. and JULIE T. MIDDLETON v. THE RUSSELL GROUP, LTD. (formerly ADS, INC.), BROOKE LICENSING, and LIFE INSURANCE COMPANY OF GEORGIA", "name_abbreviation": "Middleton v. Russell Group, Ltd.", "decision_date": "1997-04-15", "docket_number": "No. COA96-355", "first_page": "1", "last_page": "30", "citations": [ { "type": "official", "cite": "126 N.C. App. 1" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "121 L. Ed. 2d 783", "category": "reporters:federal", "reporter": "L. Ed. 2d", "weight": 2, "opinion_index": -1 }, { "cite": "23 ALR5th 75", "category": "reporters:specialty", "reporter": "A.L.R. 5th", "opinion_index": -1 }, { "cite": "67 ALR2d 1086", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "opinion_index": -1 }, { "cite": "59 ALR2d 371", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "opinion_index": -1 }, { "cite": "48 ALR Fed. 390", "category": "reporters:federal", "reporter": "A.L.R. Fed.", "opinion_index": -1 }, { "cite": "35 ALR3d 907", "category": "reporters:specialty", "reporter": "A.L.R. 3d", "opinion_index": -1 }, { "cite": "33 ALR4th 579", "category": "reporters:specialty", "reporter": "A.L.R. 4th", "weight": 2, "opinion_index": -1 }, { "cite": "87 ALR3d 429", "category": "reporters:specialty", "reporter": "A.L.R. 3d", "opinion_index": -1 }, { "cite": "34 ALR3d 245", "category": "reporters:specialty", "reporter": "A.L.R. 3d", "opinion_index": -1 }, { "cite": "53 ALR3d 664", "category": "reporters:specialty", "reporter": "A.L.R. 3d", "opinion_index": -1 }, { "cite": "126 ALR Fed. 97", "category": "reporters:federal", "reporter": "A.L.R. Fed.", "opinion_index": -1 }, { "cite": "796 F.Supp. 403", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 3774464 ], "year": 1992, "pin_cites": [ { "page": "405-06" } ], "opinion_index": 0, "case_paths": [ "/f-supp/796/0403-01" ] }, { "cite": "29 U.S.C. \u00a7\u00a7 1165", "category": "laws:leg_statute", "reporter": "U.S.C.", "pin_cites": [ { "page": "(1)" } ], "opinion_index": 0 }, { "cite": "29 U.S.C. \u00a7 1163", "category": "laws:leg_statute", "reporter": "U.S.C.", "pin_cites": [ { "page": "(2)" } ], "opinion_index": 0 }, { "cite": "29 U.S.C. \u00a7 1166", "category": "laws:leg_statute", "reporter": "U.S.C.", "weight": 3, "pin_cites": [ { "page": "(a)(1)" }, { "page": "(a)(4)" }, { "page": "(a)(1)" } ], "opinion_index": 0 }, { "cite": "29 U.S.C. \u00a7 1162", "category": "laws:leg_statute", "reporter": "U.S.C.", "weight": 2, "pin_cites": [ { "page": "(3)" }, { "page": "(2)(A)(i)" } ], "opinion_index": 0 }, { "cite": "29 U.S.C. \u00a7 1161", "category": "laws:leg_statute", "reporter": "U.S.C.", "opinion_index": 0 }, { "cite": "29 U.S.C. \u00a7\u00a7 1161-67", "category": "laws:leg_statute", "reporter": "U.S.C.", "opinion_index": 0 }, { "cite": "851 F.Supp. 210", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 3878239 ], "year": 1993, "pin_cites": [ { "page": "214", "parenthetical": "\"Should Plaintiffs prevail on any of their state law claims against CBG, they will not be entitled to Plan benefits but will be limited to a recovery of damages against CBG itself.\"" } ], "opinion_index": 0, "case_paths": [ "/f-supp/851/0210-01" ] }, { "cite": "33 F.3d 995", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 10529602 ], "year": 1994, "pin_cites": [ { "page": "999", "parenthetical": "mental anguish damages not element of misrepresentation claim" } ], "opinion_index": 0, "case_paths": [ "/f3d/33/0995-01" ] }, { "cite": "336 S.E.2d 402", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "opinion_index": 0 }, { "cite": "314 N.C. 670", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4695567, 4694192, 4687347, 4697398, 4688025 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc/314/0670-05", "/nc/314/0670-02", "/nc/314/0670-01", "/nc/314/0670-03", "/nc/314/0670-04" ] }, { "cite": "332 S.E.2d 730", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "pin_cites": [ { "page": "732" } ], "opinion_index": 0 }, { "cite": "76 N.C. App. 284", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527051 ], "year": 1985, "pin_cites": [ { "page": "287" } ], "opinion_index": 0, "case_paths": [ "/nc-app/76/0284-01" ] }, { "cite": "367 S.E.2d 609", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1988, "pin_cites": [ { "page": "611" } ], "opinion_index": 0 }, { "cite": "322 N.C. 200", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2516944 ], "year": 1988, "opinion_index": 0, "case_paths": [ "/nc/322/0200-01" ] }, { "cite": "890 F.2d 760", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 12031422 ], "year": 1989, "pin_cites": [ { "page": "763-64", "parenthetical": "same for Texas law prohibiting unfair competition or practices in the insurance business" } ], "opinion_index": 0, "case_paths": [ "/f2d/890/0760-01" ] }, { "cite": "920 F.2d 457", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10543322 ], "year": 1990, "pin_cites": [ { "page": "467-70", "parenthetical": "misrepresentation claim under New York insurance law is not within the scope of the savings clause" } ], "opinion_index": 0, "case_paths": [ "/f2d/920/0457-01" ] }, { "cite": "12 F.3d 410", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 10526062 ], "year": 1993, "pin_cites": [ { "page": "419-20" } ], "opinion_index": 0, "case_paths": [ "/f3d/12/0410-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 58-63-15", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 0 }, { "cite": "801 F.2d 659", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10547924 ], "year": 1986, "pin_cites": [ { "page": "600", "parenthetical": "\"ERISA clearly preempts [plaintiffs] common law claims of breach of contract and estoppel.\"" } ], "opinion_index": 0, "case_paths": [ "/f2d/801/0659-01" ] }, { "cite": "90 L. Ed. 2d 980", "category": "reporters:federal", "reporter": "L. Ed. 2d", "year": 1986, "opinion_index": 0 }, { "cite": "476 U.S. 1170", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 12641, 12802, 12775, 12937, 12397, 12976, 12850, 12882, 12917, 12950, 13018, 12732 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/us/476/1170-02", "/us/476/1170-09", "/us/476/1170-04", "/us/476/1170-11", "/us/476/1170-08", "/us/476/1170-01", "/us/476/1170-12", "/us/476/1170-05", "/us/476/1170-10", "/us/476/1170-06", "/us/476/1170-03", "/us/476/1170-07" ] }, { "cite": "780 F.2d 419", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1531070 ], "weight": 2, "year": 1985, "pin_cites": [ { "page": "422", "parenthetical": "claims for intentional infliction of emotional distress, breach of implied covenant of good faith and fair dealing, breach of contract, and violation of Virginia's Unfair Trade Practices Act preempted by ERISA" }, { "page": "423-24" } ], "opinion_index": 0, "case_paths": [ "/f2d/780/0419-01" ] }, { "cite": "498 U.S. 52", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6218767 ], "weight": 3, "year": 1990, "pin_cites": [ { "page": "58", "parenthetical": "\"The preemption clause is conspicuous for its breadth.\"" }, { "page": "364", "parenthetical": "\"The preemption clause is conspicuous for its breadth.\"" }, { "page": "139" } ], "opinion_index": 0, "case_paths": [ "/us/498/0052-01" ] }, { "cite": "498 U.S. 133", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6220346 ], "weight": 3, "year": 1990, "pin_cites": [ { "page": "139" }, { "page": "484" }, { "page": "484", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/us/498/0133-01" ] }, { "cite": "360 S.E.2d 107", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "opinion_index": 0 }, { "cite": "320 N.C. 638", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4723523, 4726053, 4726533, 4730695 ], "year": 1987, "opinion_index": 0, "case_paths": [ "/nc/320/0638-02", "/nc/320/0638-03", "/nc/320/0638-01", "/nc/320/0638-04" ] }, { "cite": "354 S.E.2d 746", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "pin_cites": [ { "page": "751" } ], "opinion_index": 0 }, { "cite": "85 N.C. App. 281", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12169838 ], "year": 1987, "pin_cites": [ { "page": "289" } ], "opinion_index": 0, "case_paths": [ "/nc-app/85/0281-01" ] }, { "cite": "463 U.S. 85", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6191473 ], "weight": 4, "year": 1983, "pin_cites": [ { "page": "96-97" }, { "page": "501" }, { "page": "97-100" }, { "page": "501-02" } ], "opinion_index": 0, "case_paths": [ "/us/463/0085-01" ] }, { "cite": "29 U.S.C. \u00a7 1144", "category": "laws:leg_statute", "reporter": "U.S.C.", "weight": 2, "pin_cites": [ { "page": "(a)" }, { "page": "(b)(2)(A)", "parenthetical": "known as the \"savings clause\"" } ], "opinion_index": 0 }, { "cite": "28 U.S.C. \u00a7 1961", "category": "laws:leg_statute", "reporter": "U.S.C.", "pin_cites": [ { "page": "(a)" } ], "opinion_index": 0 }, { "cite": "940 F.2d 971", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10526636 ], "year": 1991, "pin_cites": [ { "page": "983-84" } ], "opinion_index": 0, "case_paths": [ "/f2d/940/0971-01" ] }, { "cite": "417 S.E.2d 233", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "pin_cites": [ { "page": "235" } ], "opinion_index": 0 }, { "cite": "331 N.C. 738", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2501988 ], "year": 1992, "pin_cites": [ { "page": "742" } ], "opinion_index": 0, "case_paths": [ "/nc/331/0738-01" ] }, { "cite": "339 S.E.2d 799", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1986, "pin_cites": [ { "page": "801" } ], "opinion_index": 0 }, { "cite": "79 N.C. App. 585", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8522212 ], "year": 1986, "pin_cites": [ { "page": "589" } ], "opinion_index": 0, "case_paths": [ "/nc-app/79/0585-01" ] }, { "cite": "473 U.S. 134", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6196892 ], "weight": 4, "year": 1985, "pin_cites": [ { "page": "144", "parenthetical": "punitive damages not allowed under \u00a7 1132(a)(2), authorizing recovery for breach of fiduciary duty" }, { "page": "105", "parenthetical": "punitive damages not allowed under \u00a7 1132(a)(2), authorizing recovery for breach of fiduciary duty" }, { "page": "144" }, { "page": "105" } ], "opinion_index": 0, "case_paths": [ "/us/473/0134-01" ] }, { "cite": "483 U.S. 711", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 28269 ], "weight": 2, "year": 1987, "pin_cites": [ { "page": "716" }, { "page": "592" } ], "opinion_index": 0, "case_paths": [ "/us/483/0711-01" ] }, { "cite": "491 U.S. 274", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6213071 ], "weight": 4, "year": 1989, "pin_cites": [ { "page": "282" }, { "page": "239" } ], "opinion_index": 0, "case_paths": [ "/us/491/0274-01" ] }, { "cite": "875 F.2d 330", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 3468316, 10529166 ], "year": 1989, "opinion_index": 0, "case_paths": [ "/us-app-dc/277/0297-01", "/f2d/875/0330-01" ] }, { "cite": "684 F.Supp. 1097", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 7400891 ], "year": 1988, "pin_cites": [ { "page": "1105" } ], "opinion_index": 0, "case_paths": [ "/f-supp/684/1097-01" ] }, { "cite": "465 U.S. 886", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11338115 ], "weight": 3, "year": 1984, "pin_cites": [ { "page": "899" }, { "page": "902" }, { "page": "901-02", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/us/465/0886-01" ] }, { "cite": "817 F.2d 920", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1671096 ], "year": 1987, "pin_cites": [ { "page": "929" } ], "opinion_index": 0, "case_paths": [ "/f2d/817/0920-01" ] }, { "cite": "975 F.2d 934", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10517554 ], "year": 1992, "pin_cites": [ { "page": "942" } ], "opinion_index": 0, "case_paths": [ "/f2d/975/0934-01" ] }, { "cite": "478 U.S. 546", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6209707 ], "weight": 3, "year": 1986, "pin_cites": [ { "page": "566" } ], "opinion_index": 0, "case_paths": [ "/us/478/0546-01" ] }, { "cite": "505 U.S. 557", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1481026 ], "weight": 2, "year": 1992, "opinion_index": 0, "case_paths": [ "/us/505/0557-01" ] }, { "cite": "987 F.2d 1017", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10516057 ], "year": 1993, "pin_cites": [ { "page": "1029", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/f2d/987/1017-01" ] }, { "cite": "935 F.2d 761", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10539111 ], "year": 1991, "pin_cites": [ { "page": "763" } ], "opinion_index": 0, "case_paths": [ "/f2d/935/0761-01" ] }, { "cite": "29 U.S.C. \u00a7 1132", "category": "laws:leg_statute", "reporter": "U.S.C.", "weight": 3, "pin_cites": [ { "page": "(g)(1)" }, { "page": "(g)" } ], "opinion_index": 0 }, { "cite": "140 S.E.2d 416", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1965, "pin_cites": [ { "page": "418", "parenthetical": "the principal is bound by the acts of the agent within the agent's .express authority" } ], "opinion_index": 0 }, { "cite": "263 N.C. 718", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8572714 ], "year": 1965, "pin_cites": [ { "page": "721", "parenthetical": "the principal is bound by the acts of the agent within the agent's .express authority" } ], "opinion_index": 0, "case_paths": [ "/nc/263/0718-01" ] }, { "cite": "76 N.W.2d 311", "category": "reporters:state_regional", "reporter": "N.W.2d", "year": 1956, "opinion_index": 0 }, { "cite": "296 F.2d 76", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 218640 ], "year": 1961, "opinion_index": 0, "case_paths": [ "/f2d/296/0076-01" ] }, { "cite": "195 F.Supp. 72", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 46090 ], "year": 1961, "opinion_index": 0, "case_paths": [ "/f-supp/195/0072-01" ] }, { "cite": "432 P.2d 731", "category": "reporters:state_regional", "reporter": "P.2d", "weight": 2, "year": 1967, "opinion_index": 0 }, { "cite": "231 N.W.2d 665", "category": "reporters:state_regional", "reporter": "N.W.2d", "case_ids": [ 895003 ], "year": 1975, "opinion_index": 0, "case_paths": [ "/minn/304/0464-01" ] }, { "cite": "636 P.2d 935", "category": "reporters:state_regional", "reporter": "P.2d", "case_ids": [ 2171525 ], "year": 1981, "opinion_index": 0, "case_paths": [ "/or/292/0038-01" ] }, { "cite": "730 F.Supp. 1120", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 11647544 ], "year": 1989, "opinion_index": 0, "case_paths": [ "/f-supp/730/1120-01" ] }, { "cite": "398 S.E.2d 772", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 672491 ], "year": 1990, "opinion_index": 0, "case_paths": [ "/ga-app/197/0540-01" ] }, { "cite": "301 U.S. 196", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 547673 ], "weight": 4, "year": 1937, "pin_cites": [ { "page": "204-05" }, { "page": "1041", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/us/301/0196-01" ] }, { "cite": "96 S.E.2d 431", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1957, "pin_cites": [ { "page": "436" } ], "opinion_index": 0 }, { "cite": "245 N.C. 461", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8613118 ], "year": 1957, "pin_cites": [ { "page": "467" } ], "opinion_index": 0, "case_paths": [ "/nc/245/0461-01" ] }, { "cite": "278 S.E.2d 507", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1981, "pin_cites": [ { "page": "515", "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "303 N.C. 203", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8572633 ], "year": 1981, "pin_cites": [ { "page": "215", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/nc/303/0203-01" ] }, { "cite": "841 F.Supp. 1523", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 11296435 ], "year": 1993, "pin_cites": [ { "page": "1536" } ], "opinion_index": 0, "case_paths": [ "/f-supp/841/1523-01" ] }, { "cite": "808 F.Supp. 192", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 3836344 ], "year": 1992, "pin_cites": [ { "page": "196" } ], "opinion_index": 0, "case_paths": [ "/f-supp/808/0192-01" ] }, { "cite": "851 F.Supp. 235", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 3878004 ], "weight": 3, "year": 1994, "pin_cites": [ { "page": "239" }, { "page": "239" }, { "page": "240" } ], "opinion_index": 0, "case_paths": [ "/f-supp/851/0235-01" ] }, { "cite": "898 F.2d 887", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10537635 ], "year": 1990, "pin_cites": [ { "page": "888-89" } ], "opinion_index": 0, "case_paths": [ "/f2d/898/0887-01" ] } ], "analysis": { "cardinality": 1896, "char_count": 66903, "ocr_confidence": 0.749, "pagerank": { "raw": 3.290152928107569e-07, "percentile": 0.8712784027176874 }, "sha256": "537221410b7aec0c2072ea5e9d670110705a33c6938629129809eea5cc68628f", "simhash": "1:8b6ac0a6b74c1df6", "word_count": 10607 }, "last_updated": "2023-07-14T19:11:14.463583+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges GREENE and MARTIN, John C. concur." ], "parties": [ "JAMES A. MIDDLETON, JR. and JULIE T. MIDDLETON v. THE RUSSELL GROUP, LTD. (formerly ADS, INC.), BROOKE LICENSING, and LIFE INSURANCE COMPANY OF GEORGIA" ], "opinions": [ { "text": "WYNN, Judge.\nOn 27 April 1992, Charlie Russell, owner and president of defendant ADS, Inc. (subsequently changed to \u201cThe Russell Group\u201d and hereinafter referred to as \u201cADS/Russell\u201d) hired plaintiff James Allen Middleton, Jr. as an advertising consultant. As part of the employment agreement, ADS/Russell agreed to enroll Middleton and his family in its employee health insurance plan.\nUnder a contract with defendant Brooke Licensing (a holding company also owned by Charlie Russell), defendant Life of Georgia (\u201cLOG\u201d) provided the health insurance coverage for ADS/Russell employees through a \u201cself-accounting\u201d plan of insurance. The plan required Brooke Licensing to act as the policyholder, plan sponsor, and plan administrator. The plan also required the employee to submit medical bills to ADS/Russell which in turn kept the records, determined which employees were eligible for coverage, and forwarded claim forms to LOG for payment. LOG, however, kept no records of covered employees, and acquired knowledge of named insured only upon the forwarding of a claim form from ADS/Russell.\nThe record on appeal indicates that ADS/Russell generally paid sixty-five percent of the premium cost for insurance coverage and the employee paid the remaining thirty-five percent via payroll deduction. (Nothing in the plan itself governed whether the employer, the employee, or a combination of both paid the premium.) Each month, ADS/Russell forwarded to Brooke Licensing a lump sum for the premiums and a list of covered employees. Brooke Licensing, in turn, forwarded to LOG one lump sum check without the list of covered employees.\nIn July 1992, Middleton signed a form requesting enrollment for family health insurance coverage and authorizing ADS/Russell to deduct his share of the premiums from his paycheck. No deductions were ever made from Middleton\u2019s paycheck for any portion of the health insurance premium, nor did ADS/Russell inform Middleton that he would need to pay for his share of the health insurance premium. Moreover, until Middleton\u2019s employment termination in August 1992, ADS/Russell listed him as a covered employee and paid the total family coverage insurance premium for him to Brooke Licensing. Brooke Licensing, in turn, included Middleton in the premium calculations paid to LOG.\nApproximately one month after ADS/Russell terminated Middleton\u2019s employment, a brick wall fell on his wife, Julie, seriously injuring her. After admitting her for medical treatment, Moses Cone Hospital called LOG to verify health insurance coverage. LOG referred the hospital to ADS/Russell which through Vicki Hill, the ADS/Russell employee in charge of health insurance, informed the hospital that Mrs. Middleton was covered.\nShortly thereafter, Ms. Hill discovered from the company\u2019s records that Middleton\u2019s share of the premium had never been deducted from his paycheck, nor had he paid his premium share directly to the company. She also learned that the company terminated Middleton\u2019s employment on 31 August 1992. To address these concerns, Ms. Hill prepared a letter dated 25 September 1992 notifying Middleton of his right to continuation coverage under the medical insurance plan and attached the appropriate form for him to elect coverage under the federal act entitled the Consolidated Omnibus Reconciliation Act (\u201cCOBRA\u201d). The letter also informed him that he had not paid his share of the premiums and requested full payment of his past premium share. However, the letter was never mailed to Middleton because Charlie Russell made a determination that if Middleton had not paid his share of the premiums, he never had health insurance coverage and therefore ADS/Russell was not obligated to provide him any COBRA continuation coverage.\nAs a result of her extended hospitalization, Mrs. Middleton amassed $356,454.61 in medical bills. (The parties stipulate that the LOG policy would have paid $351,960.28 of this total.) On receiving a letter from the Middletons\u2019 attorney demanding coverage for the medical bills, LOG called Vicki Hill at ADS/Russell who responded that neither Middleton nor his dependents were covered because he failed to pay his share of the premiums. Accordingly, LOG refused to pay Mrs. Middleton\u2019s medical bills.\nOn 19 October 1993, plaintiffs sued ADS/Russell, Brooke Licensing, and LOG asserting claims for: (1) breach of contract; (2) failure to provide benefits under ERISA; (3) injunctive relief to provide COBRA benefits; (4) constructive fraud; (5) negligent misrepresentation; and (6) unfair and deceptive trade practices. Defendants\u2019 subsequent attempt to remove this action to federal court was thwarted by the federal district court\u2019s remand to our state courts. Thereafter, ADS/Russell and Brooke Licensing answered denying the plaintiffs\u2019 allegations, and alternatively cross-claimed against LOG for benefits under the plan. Likewise, LOG denied the allegations of the complaint and cross-claim, and asserted a cross-claim against ADS/Russell and Brooke Licensing for breach of contract.\nBefore trial, the court granted defendants\u2019 motions for summary judgment on all state law claims except negligent misrepresentation. At the close of all evidence, the trial court directed a verdict for LOG on the claim of negligent misrepresentation. As a result, the trial court submitted two issues to the jury which it answered as follows:\n1. Was the Middleton family covered, on September 22, 1992, by a policy of health insurance issued by [LOG] to Brooke Licensing covering ADS/Russell employees?\nAnswer: No\n2. Was the Middleton family eligible for COBRA coverage?\nAnswer: Yes\n(The trial court also submitted a third question regarding the claim of negligent misrepresentation against ADS/Russell and Brooke Licensing, but instructed the jury not to answer it if they answered \u201cyes\u201d to either of the first two questions.)\nIn accordance with the jury\u2019s verdict, the trial court entered an order and judgment holding that ADS/Russell and Brooke Licensing failed to comply with their legal obligation to inform Middleton of his right to continued health insurance coverage under COBRA. The Court also held that although LOG had no obligation to give Middleton COBRA notice, and was not a co-fiduciary with regard to giving notice, the insurer was still responsible for paying Mrs. Middleton\u2019s medical bills under COBRA. From this judgment, all parties appeal.\nLOG\u2019S APPEAL\nOn appeal, LOG contends that the trial court erred by: (I) holding LOG liable for the Middletons\u2019 medical expenses where Brooke Licensing, the plan administrator, failed to give plaintiffs notice of their rights under COBRA, and plaintiffs neither made an election nor paid a premium for COBRA coverage; (II) awarding attorneys\u2019 fees to plaintiffs; (III) enhancing plaintiffs\u2019 attorneys\u2019 fees by a factor of 1.5; and (IV) failing to grant judgment for LOG on its cross-claim against the other defendants. We affirm the trial court\u2019s decision to hold LOG liable for plaintiffs\u2019 medical bills and award attorneys\u2019 fees, but reverse its decision to enhance the attorneys\u2019 fees by a factor of 1.5, and remand LOG\u2019s cross-claim for further consideration.\nI.\nLOG first argues that the trial court erred by finding it liable for plaintiffs\u2019 medical bills where Brooke Licensing, the plan administrator, failed to give Middleton notice of his rights under COBRA, and Middleton never made an election nor paid a premium for COBRA \u2018coverage. We disagree.\nIt is well-settled that the period of time that a qualified beneficiary has to elect continuation coverage is tolled until he or she has received notice of the right to purchase said coverage:\n[T]hat the election period must begin on or before the day when the qualified beneficiary would lose coverage and must not end before the date that is 60 days after the later of (1) the day when qualified beneficiary would lose coverage or (2) the dav when the Qualified beneficiary is sent notice of the right to elect coverage. Thus if a plan administrator fails to advise the Qualified beneficiary of his or her rights, the qualified beneficiary mav have the right, to elect coverage until such time as notice is received.\nERISA: A Comprehensive Guide 362 (Martin Wald and David E. Kenty eds., 1991) (emphasis added). See also Communication Workers of America, Dist. One v. NYNEX Corp., 898 F.2d 887, 888-89 (2d Cir. 1990); Ward v. Bethenergy Mines, Inc., 851 F.Supp. 235, 239 (S.D.W.Va. 1994); Hubicki v. Amtrak Nat\u2019l Passenger R.R. Co., 808 F.Supp. 192, 196 (E.D.N.Y. 1992). For example, in Ward v. Bethenergy Mines, the plaintiff should have been notified of his COBRA conversion rights as early as February 1990; however, he was not notified of such until April 1991. The district court stated that the plaintiff \u201cthen timely elected to receive such coverage,\u201d thereby implying that the election period was tolled for over a year until he received proper notice'. 851 F.Supp. at 239.\nIn the instant case, the insurance policy issued by LOG recognizes that the election period is tolled until a qualified beneficiary receives notice of his right to COBRA coverage:\nInsurance may be continued temporarily as follows: . . .\n2. If an employee\u2019s insurance terminates due to:\n(i) termination of his employment; ... he has the right to request temporary continuance of Comprehensive Medical Expense Benefits for up to 18 months for himself and his covered dependents. To continue coverage, we must be advised within 60 davs after the employee receives notice of his right to continue coverage and must be paid the full premium within 45 davs of the employee\u2019s election to continue coverage, (emphasis added).\nIt is undisputed that plaintiffs have never received notice of their right to continue coverage, and therefore neither the 60 days to elect coverage nor the 45 days thereafter to pay a premium has begun to run. Since the record indicates that Middleton has never received the statutorily required notice, as in Ward, the plaintiffs\u2019 election period and corresponding duty to pay the premiums have been, and apparently remain, tolled until such notice is provided. However, requiring defendants to now provide the statutorily required notice would be pointless in light of plaintiffs\u2019 present action seeking payment under COBRA. Accordingly, we affirm the trial court\u2019s award of coverage; however, we must remand for a determination of the amount of any co-payment, deductibles or premiums that must be deducted from plaintiffs\u2019 recovery. Ward v. Bethenergy Mines, 851 F.Supp. at 240; Van Hoove v. Mid-America Bldg. Maintenance, Inc., 841 F.Supp. 1523, 1536 (D.Kan. 1993).\nEven assuming for the sake of argument that we accept LOG\u2019S contention that plaintiffs were not entitled to recover benefits under the plan for failure to elect continuation coverage or pay premiums, we would still affirm the trial court\u2019s decision to hold LOG liable for plaintiffs\u2019 unpaid medical expenses. LOG contends that it should not be held responsible for ADS/Russell and Brooke Licensing\u2019s mistake since it Rad neither the ability nor the authority to determine whether the Middletons were entitled to coverage. ADS/Russell and Brooke Licensing object to LOG\u2019S characterization of itself as a \u201cmere claims processor.\u201d We need not address this issue, however, because regardless of whether LOG had the power to review the decision to terminate plaintiffs\u2019 coverage, we find that the other defendants\u2019 mistake is imputed to LOG under an agency theory.\nLOG correctly states the well-settled rule in this jurisdiction that \u201cthe employer in a group insurance policy is not ordinarily the agent of the insurer.\u201d Bank v. Insurance Co., 303 N.C. 203, 215, 278 S.E.2d 507, 515 (1981) (emphasis added); Rivers v. Insurance Co., 245 N.C. 461, 467, 96 S.E.2d 431, 436 (1957). In Bank, our Supreme Court relied upon Boseman v. Insurance Co., 301 U.S. 196, 81 L. Ed. 1036 (1937), where the U.S. Supreme Court stated:\nEmployers regard group insurance not only as protection at low cost for their employees but also as advantageous to themselves in that it makes for loyalty, lessens turn-over and the like. When procuring the policy, obtaining applications of employees, taking payroll deduction orders, reporting changes in the insured group, paying premiums and generally doing whatever may serve to obtain and keep the insurance in force, employers act not as agents of the insurer but for their employees or for themselves.\nId. at 204-05, 81 L. Ed. at 1041 (emphasis added).\nNonetheless, the use of the word \u201cordinarily\u201d in the general rule indicates a recognition that there may be occasions in which an agency relationship does exist between an employer and insurer. Indeed, a number of other jurisdictions have held that when an employer takes an action to procure group insurance coverage for its employees, the employer acts as the agent of its employees; however, once the policy is issued, when the employer performs duties incident to the administration of the coverage which are commonly performed by the insurer, the employer is acting as the agent of the insurer. See Miles v. Great Southern Life Ins. Co., 398 S.E.2d 772 (Ga. Ct. App. 1990); Clements v. Continental Casualty Ins. Co., 730 F.Supp. 1120 (N.D.Ga. 1989); Paulson v. Western Life Ins. Co., 636 P.2d 935 (Or. Sup. Ct. 1981); Norby v. Bankers Life Co., 231 N.W.2d 665 (Minn. Sup. Ct. 1975); Elfstrom v. New York Life Insurance Co., 432 P.2d 731 (Ca. Sup. Ct. 1967); Clauson v. Prudential Ins. Co. of America, 195 F.Supp. 72 (D.C.Mass. 1961), aff\u2019d, 296 F.2d 76 (1st Cir. 1961); Kaiser v. Prudential Ins. Co., 76 N.W.2d 311 (Wis. Sup. Ct. 1956).\nWe hold that the facts of the instant case warrant a divergence from the conventional rule. An employer who performs administrative functions, as in the instant case, is deemed to be the agent of the insurer. The rationale for our decision is best summarized by the following passage from Elfstrom v. New York Life Ins. Co., 432 P.2d at 738:\nThe most persuasive rationale for adopting the view that the employer acts as the agent of the insurer ... is that the employee has no knowledge or control over the employer\u2019s actions in handling the policy or its administration. An agency relationship is based upon consent by one person that another shall act in his behalf and be subject to his control ... It is clear from the evidence regarding procedural techniques here that the insurer-employer relationship meets this agency test with regard to the administration of the policy, whereas that between the employer and its employees fails to reflect true agency. The insurer directs the performance of the employer\u2019s administrative acts, and if these duties are not undertaken properly the insurer is in a position to exercise more constricted control over the employer\u2019s conduct.\n(citations omitted).\nIf the instant case had involved a \u201cstandard accounting\u201d plan, LOG would have been responsible for administering the insurance coverage. However, LOG voluntarily put itself in a position where it had no knowledge of which specific employees were covered, it established the procedures by which all medical claims were handled, provided the forms to be used, and trained ADS/Russell personnel. By choosing to structure its relationship with Brooke Licensing as a \u201cself-accounting\u201d plan, LOG elected to delegate the responsibility of maintaining records of insured employees and to rely upon Brooke Licensing\u2019s determination as to whether a specific employee, such as Middleton, was covered.\nMoreover, the record on appeal shows that ADS/Russell and Brooke Licensing\u2019s failure to notify the Middletons of their rights to continuation coverage was not a matter of inadvertence; instead, ADS/Russell and Brooke Licensing made a conscious decision that COBRA did not apply because Middleton had not paid his share of the premiums. Accordingly, we hold that LOG must bear the consequences of its agent\u2019s mistaken decision to terminate plaintiffs\u2019 coverage. See Morpul Research Corp. v. Westover Hardware, Inc., 263 N.C. 718, 721, 140 S.E.2d 416, 418 (1965) (the principal is bound by the acts of the agent within the agent\u2019s .express authority).\nIn sum, we affirm the trial court\u2019s decision to hold LOG liable for plaintiffs\u2019 medical bills but remand for a determination of any co-payment, deductibles or premiums that must be deducted.\nII.\nAll defendants object to the trial court\u2019s order requiring the payment of plaintiffs\u2019 attorneys\u2019 fees by ADS/Russell and Brooke Licensing in the amount of $78,563.41 and by LOG in the amount of $19,640.85.\n29 U.S.C. \u00a7 1132 provides that in any action brought under ERISA, \u201cthe court in its discretion may allow a reasonable attorney\u2019s fee and costs of action to either party.\u201d 29 U.S.C. \u00a7 1132(g)(1). Thus, the abuse of discretion standard governs review of the award of attorneys\u2019 fees. Perroti v. Seiter, 935 F.2d 761, 763 (6th Cir. 1991).\nFactors ordinarily considered in viewing requests for attorneys\u2019 fees under 29 U.S.C. \u00a7 1132(g) include: (1) degree of opposing parties\u2019 culpability or bad faith; (2) ability of opposing parties to satisfy an award of attorneys\u2019 fees; (3) whether an award of attorneys\u2019 fees against the opposing party would deter other persons acting under similar circumstances; (4) whether the parties requesting attorneys\u2019 fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA itself; and (5) the relative merits of the parties\u2019 positions. Quesinberry v. Life Ins. Co. of North America, 987 F.2d 1017, 1029 (4th Cir. 1993) (citation omitted).\nUpon review of the record in the instant case, we conclude that the trial court did not abuse its discretion in awarding attorneys\u2019 fees to plaintiffs. The trial court found, and we agree, that attorneys\u2019 fees were appropriate because ADS/Russell and Brooke Licensing\u2019s failure to provide COBRA notice prevented the Middletons from paying their medical bills and forced them to defend a lawsuit filed by Moses Cone Hospital. Although the parties dispute whether ADS/Russell required Middleton to pay part of the premium, the trial court noted that no one from ADS/Russell ever sent Middleton a bill, invoice, or statement, or in any other way requested payment for his share of the health insurance premium. Moreover, ADS/Russell had previously allowed other employees to pay their share of the premium several months past due. Thus, we find no abuse of discretion in the trial court\u2019s appropriation of attorneys\u2019 fees against ADS/Russell and Brooke Licensing.\nThe trial court also held LOG responsible for attorneys\u2019 fees even though LOG was not responsible for providing COBRA notice and did not participate in the decision to cut coverage to plaintiffs. The trial court found that LOG asserted several defenses in addition to those raised by ADS/Russell and Brooke Licensing, forcing plaintiffs to spend time and money to rebut LOG\u2019S contentions. LOG fails to show how the trial court\u2019s rationale was an abuse of discretion. Accordingly, we affirm the imposition of attorneys\u2019 fees against LOG.\nIII.\nAgain, all defendants object to the trial court\u2019s decision to enhance plaintiffs\u2019 award of attorneys\u2019 fees by a factor of 1.5. In support of their objection, they cite City of Burlington v. Dague, 505 U.S. 557, 120 L. Ed. 2d 449 (1992), in which the U.S. Supreme Court overruled the enhancement of attorneys\u2019 fees based on the contingency risk of a case. Defendants contend that the trial court improperly awarded a contingency enhancement.\nAlthough plaintiffs had a contingency arrangement with their attorneys, the record shows the trial court did not enhance the fees to compensate plaintiffs\u2019 attorneys for the risk to which they subjected themselves. In the Order and Judgment, the trial court explained its rationale for the enhancement:\nIn this matter... [t]he legal issues involved were complicated and the case was strenuously defended. The failure of [defendants] to provide COBRA notice to the plaintiffs and the resulting delay of almost three years between the date the medical bills were incurred and the date of this judgment have caused substantial hardship to the plaintiffs, including requiring them to defend a lawsuit filed by Moses Cone Hospital. The quality of legal representation provided by plaintiffs\u2019 counsel was exemplary and efficient. For all of these reasons, the Court will award attorneys\u2019 fees at an appropriate hourly rate and will also enhance the attorneys\u2019 fee award at a factor of 1.5.\n(emphasis added).\nThus, the trial court articulated three reasons for enhancing the attorneys\u2019 fees: (1) to reward plaintiffs\u2019 attorneys for a job-well-done; (2) to reflect the complexity of the issues; and (3) to compensate plaintiffs for the hardship they suffered as a result of the delayed payment of their medical expenses. Although nothing in the trial court\u2019s reasoning indicates that it enhanced plaintiffs\u2019 fees based on a contingency risk, we nevertheless find that the trial court erred in several ways.\nFee enhancement for quality of representation is permissible in \u201crare and exceptional cases\u201d where the attorney\u2019s work is so superior and outstanding that it far exceeds the client\u2019s expectations and normal levels of competence. See Pennsylvania v. Delaware Valley Citizens\u2019 Council for Clean Air (Delaware Valley I), 478 U.S. 546, 92 L. E. 2d 439 (1986). In Delaware Valley I, the Supreme Court counseled:\nBecause considerations concerning the quality of a prevailing counsel's representation normally are reflected in the reasonable hourly rate, the overall quality of performance ordinarily should not be used to adjust the lodestar, thus removing any danger of \u201cdouble counting.\u201d\nId. at 566, 92 L. E. 2d at 457.\nA review of the case law indicates a strong presumption against exceptional performance enhancements. See Lipsett v. Blanco, 975 F.2d 934, 942 (1st Cir. 1992). \u201c[Exceptional performance is generally a function of the competence and experience that is reflected in the reasonable hourly rate.\u201d Hall v. Ochs, 817 F.2d 920, 929 (1st Cir. 1987). To support such an enhancement, fee applicants must \u201coffer specific evidence to show that the quality of service rendered was superior\u201d and the courts are obligated to elucidate with particularity the reasons why the lodestar figure (reasonable hours multiplied by reasonable rate) is not a reasonable compensatory fee. Blum v. Stenson, 465 U.S. 886, 899, 79 L. Ed. 2d 891, 902 (1984); McKenzie v. Kennickell, 684 F.Supp. 1097, 1105 (D.D.C. 1988), aff'd, 875 F.2d 330 (D.C. Cir. 1989).\nIn the instant case, the trial court\u2019s order contains none of the facts which justify a fee enhancement based on exceptional performance. The trial court merely states in a conclusive fashion that \u201c[t]he quality of legal representation provided by plaintiffs\u2019 counsel was exemplary and efficient.\u201d We hold that this finding is insufficient under Blum to justify a fee enhancement for exceptional performance.\nThe trial court also enhanced plaintiffs\u2019 attorneys\u2019 fees based on the complexity of the issues. However, in Blum, the Court held that the \u201cnovelty and complexity of the issues presumably [are] fully reflected in the number of billable hours recorded by counsel and thus do not warrant an upward adjustment in a fee . . . Neither complexity nor novelty of the issues, therefore, is an appropriate factor in determining whether to increase the basic fee award.\u201d Id. at 898-99, 79 L. Ed. 2d at 901-02 (emphasis added). Accordingly, the trial court in the instant case erred when it enhanced the fee to reflect the difficulty of the matter.\nLastly, the trial court enhanced plaintiffs\u2019 attorneys\u2019 fees because of the hardship they suffered as a result of the delayed payment of their medical expenses. Citing Missouri v. Jenkins, 491 U.S. 274, 105 L. Ed. 2d 229 (1989), plaintiffs argue that enhancement is permissible to reflect a delay in payment.\nIn Jenkins, the court observed:\nWhen plaintiffs\u2019 entitlement to attorney\u2019s fees depends on success, their lawyers are not paid until a favorable decision finally eventuates, which may be years later . . . Meanwhile, their expenses of doing business continue and must be met. In setting fees for prevailing counsel, the courts have regularly recognized the delay factor, either by basing the award on current rates or by adjusting the fee based on historical rates to reflect its present value.\nId. at 282, 105 L. Ed. 2d at 239 (quoting Pennsylvania v. Delaware Valley Citizens\u2019 Council for Clean Air (Delaware Valley II), 483 U.S. 711, 716, 97 L. Ed. 2d 585, 592 (1987)).\nThus, Jenkins recognizes a delay in payment to plaintiffs\u2019 counsel as an appropriate basis for fee enhancement. However, in the instant case, the trial court enhanced the attorneys\u2019 fees for defendants\u2019 delay in providing insurance money so that plaintiffs could pay their medical bills, rather than for the delay in payment to plaintiffs\u2019 counsel. We agree with defendants\u2019 contention that the trial court\u2019s motive in doing so was to penalize them for their breach of fiduciary duty. This clearly was not a permissible justification. See Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 144, 87 L. Ed. 2d 96, 105 (1985) (punitive damages not allowed under \u00a7 1132(a)(2), authorizing recovery for breach of fiduciary duty). Accordingly, we hold that the trial court erred by enhancing plaintiffs\u2019 attorneys\u2019 fees on the grounds that defendants forced plaintiffs to wait three years to pay their medical bills.\nSince we find that the trial court\u2019s findings are insufficient, we reverse that part of the award providing for an enhancement of plaintiffs\u2019 attorneys\u2019 fees by a multiplier of 1.5. On remand, we do not constrain the trial court from revisiting this issue and determining whether factors exist for an enhancement of attorneys\u2019 fees under the guidance of Blum and Jenkins.\nIV.\nLastly, LOG contends that the trial court erred in failing to grant judgment in its favor on its cross-claim against ADS/Russell and Brooke Licensing. The trial court found that although ADS/Russell and Brooke Licensing were negligent, this negligence did not proximately cause any damage to LOG. Since it is undisputed that LOG would have been required to pay plaintiffs\u2019 medical expenses if ADS/Russell had notified Middleton of his right to continuation coverage, we agree with the trial court\u2019s conclusion that the insurer suffered ho loss in payment of the medical expense as provided in the insurance policy.\nHowever, in reaching this conclusion, it appears that the trial court focused only on LOG\u2019S liability for Mrs. Middleton\u2019s medical expenses. LOG contends that if ADS/Russell and Brooke Licensing had not negligently determined that the Middletons were not entitled to coverage, it would have paid Mrs. Middleton\u2019s medical bills and would not have incurred the additional expenses necessary to defend the Middletons\u2019 lawsuit nor incurred the costs taxed to it by the trial court. LOG maintains that the trial court should have found ADS/Russell and Brooke Licensing liable to LOG for these particular expenses. After carefully reviewing the record, we find merit to LOG\u2019S contention.\nThe agreement executed by Brooke Licensing and LOG provides:\nThe Policyholder shall reimburse Life of Georgia for any Judgment or settlement (including attorneys\u2019 fees) if the Court rendering the Judgment or the agency making the award was caused bv the negligence, fraud or criminal conduct of the Policyholder, its officers, directors, employees or agents.\n(emphasis added).\nThe record indicates that LOG specifically requested in its cross-claim that the cost of this action be taxed against ADS/Russell and Brooke Licensing. Furthermore, the record shows that LOG\u2019S counsel raised this issue with the trial court:\nThe Russell Group breached its duty, and that breach was the proximate cause of this entire litigation. But for the breach of duty, none of us would be here. We \u2014 our client, Life of Georgia, would not be paying us for seven days to try this case. They wouldn\u2019t have been paying for the last two years of litigation costs.\nSince it does not appear that the trial court addressed all the damages that LOG sought, we reverse the trial court\u2019s judgment against LOG on its cross-claim, and remand the case to the trial court for a determination of any further damages LOG may be entitled to recover from ADS/Russell and Brooke Licensing.\nADS/RUSSELL AND BROOKE TJCENSTNG\u2019S APPEAL\nIn their appeal to this court, ADS/Russell and Brooke Licensing contend that the trial court erred by: (I) submitting inadequate and confusing issues and instructions on the alleged agreement between ADS/Russell and Middleton for payment of premiums; (II) allowing plaintiffs to testify about the extent of the injuries suffered by Mrs. Middleton; (III) allowing Middleton to testify about his family\u2019s financial difficulties; (IV) apportioning plaintiffs\u2019 medical expenses jointly and severally among the defendants; (V) finding that Brooke Licensing\u2019s buy-out agreement with LOG did not include the Middleton dispute; (VI) failing to reduce the judgment to recognize plaintiffs\u2019 settlement with Moses Cone Hospital; (VII) applying the 8% state interest rate instead of the federal rate of 3.45% on plaintiffs\u2019 ERISA claim for unpaid benefits; and (VIII) concluding that LOG was not a fiduciary in regards to giving plaintiffs notice of their rights to COBRA coverage.\nWe decide these issues, in seriatum, by holding that the trial court: (1) properly instructed the jury; (2) properly allowed testimony regarding Mrs. Middleton\u2019s injuries and plaintiffs\u2019 financial distress; (3) erred by imposing joint and several liability among the defendants; (4) properly found that Brooke Licensing\u2019s buy-out agreement with LOG did not include the Middleton dispute; (5) properly decided not to reduce the judgment; (6) properly decided to apply the 8% state interest rate; and (7) appropriately chose not to address ADS/Russell\u2019s and Brooke Licensing\u2019s arguments as to whether LOG was a co-fiduciary in regards to giving plaintiffs notice of their rights to COBRA coverage.\nI.\nADS/Russell and Brooke Licensing first contend that the trial court erred by failing to submit their defense to the jury and by misleading the jury to believe that they must choose between the two interpretations of the contract that plaintiffs offered. We disagree.\nIn his lawsuit, Middleton alleged that ADS/Russell had agreed to pay all of his health insurance premiums as part of the employment agreement. In the alternative, he alleged that ADS/Russell had agreed to deduct the cost of his contribution for the premiums from his pay. In response, ADS/Russell and Brooke Licensing pled Middleton\u2019s failure to pay premiums as . a defense to plaintiffs\u2019 claim, i.e., the employee contribution was a condition of coverage that plaintiff failed to meet. They argued that because Middleton requested that ADS/Russell pay his company directly for his services, plaintiff was under an obligation to insure payment for his share of the premiums.\nThe trial court first addressed the issue of premium payments in its charge to the jury as follows:\nThe Middletons must prove to you the following four things: first, that Mr. Middleton enrolled for family coverage in the plan, and all the evidence is that he did; second, that Mr. Middleton was an employee under the plan; third, that either AD.S./Russell agreed to pay the premiums for family coverage without contribution from Mr. Middleton or that A.D.S./Russell agreed to deduct the premium costs from its monthly payments for Mr. Middleton\u2019s work;\nIn this case it is undisputed that Mr. Middleton never contributed to the cost of his health insurance premiums, and vou must decide whether that was because A.D.S./RusselI had agreed to pay those premiums without contribution of Mr. Middleton. because A.D.S./RusselI agreed to deduct those premiums, or because Mr. Middleton failed to make those payments when he knew that he should to have coverage.\n(emphasis added.)\nADS/Russell and Brooke Licensing contend that the trial court failed to submit their defense to the jury and misled the jury to believe that they must choose between the two interpretations of the contract plaintiffs offered. However, the record indicates that the court presented both parties\u2019 position on why the premiums were never paid. Moreover, the trial court explained that the plaintiffs had the burden of proving the four elements in order to prevail on their claim. Thus, defendants\u2019 objection is without merit.\nADS/Russell and Brooke Licensing also contend that the trial court failed to indicate what the jury should do if it found that Middleton did not meet his burden of proof or if it believed that the evidence supported their contention that Middleton had agreed but failed to pay his share of the premium. We disagree.\nThe record shows that the trial court instructed the jury that if they were unable to find in plaintiffs\u2019 favor on any one of the four elements, including the issue of who was responsible for premium payments, they were to move on to the next issue. Thus, defendants\u2019 objection is without merit.\nFinally, ADS/Russell and Brooke Licensing object to the trial court\u2019s charge to the jury contending that it presumed the existence of a valid employment contract. They argue that it prevented the jury from deciding whether the lack of mutual agreement on the terms of payment for health insurance coverage affected the enforceability of the employment contract. We disagree.\nThroughout the trial, ADS/Russell and Brooke Licensing\u2019s defense rested on the contention that Middleton had agreed to pay his premiums, but failed to do so. They did not join in LOG\u2019s defense that Middleton was not an employee. Only on appeal do they argue that there was no meeting of the minds as to all provisions of the employment contract between ADS/Russell and Middleton, and that the employment contract was therefore invalid. Essentially, defendants complain that the trial court did not properly instruct the jury on what to do if it found the parties never agreed on who was responsible for making Middleton\u2019s premium payments. However, the record reveals that the trial court instructed the jury that if it were unable to make this determination, it should decide in defendants\u2019 favor. Thus, we conclude that defendants\u2019 argument is without merit.\nII.\nADS/Russell and Brooke Licensing next object to Middleton\u2019s testimony that his son called him and told him that a wall had fallen on his wife; that Mrs. Middleton was in intensive care for an extended period of time; and that she was on the verge of death for several weeks. They also object to Mrs. Middleton\u2019s testimony that she lost a lung. Defendants contend that the plaintiffs only offered this testimony to evoke sympathy from the jury and thus, it should have been excluded as irrelevant. We disagree.\nEvidence is relevant if it provides a complete story or shows the chain of circumstances leading to the claims in dispute. Santora, McKay & Ranieri v. Franklin, 79 N.C. App. 585, 589, 339 S.E.2d 799, 801 (1986). \u201cEvidence which is essentially background in nature is universally offered and admitted as an aid to understanding.\u201d Id.\nIn the instant case, the Middletons\u2019 testimony provided a backdrop and complete picture of what occurred in this case, and was therefore relevant. We do not believe that the trial court acted improperly by allowing plaintiffs to inform the jury as to the particulars of an accident that caused over a quarter of a million dollars worth of medical expenses. Therefore, we overrule the defendants\u2019 objection.\nIII.\nThe defendants also object to Middleton\u2019s testimony on direct examination that he considered himself a wealthy man prior to the date of his wife\u2019s injury. Over objection, he then testified that he no longer considered himself wealthy because: \u201cWe don\u2019t have anything. Everything we have we have given to the hospital on a note against our home and our property, everything. We have lost our company. We have lost everything we have.\u201d Defendants contend that this testimony should not have been allowed at the trial and that it was unnecessarily prejudicial, entitling them to a new trial. We disagree.\nGenerally, this type of testimony is not allowed. However, when a party first raises an issue, it opens the door to questions in response to that issue and cannot later object to testimony regarding the subject raised. See State v. Norman, 331 N.C. 738, 742, 417 S.E.2d 233, 235 (1992).\nIn the instant case, Liz Greeson, an employee of Moses Cone Hospital, testified that ADS/Russell informed her that they would not provide coverage for Mrs. Middleton\u2019s treatment. On cross-examination, counsel for ADS/Russell and Brooke Licensing specifically asked Ms. Greeson whether she had made a notation that the \u201cMiddletons were very wealthy.\u201d In so doing, ADS/Russell and Brooke Licensing opened the door to Middleton\u2019s testimony regarding his wealth. Accordingly, we hold that the trial court properly overruled defendants\u2019 objection to that testimony.\nIV.\nADS/Russell and Brooke Licensing also contend that the trial court erred in holding all defendants jointly and severally liable in the amount of $351,960.28. The plan called for Brooke Licensing to reimburse LOG $35,000 per insured prior to 31 October 1992 and $50,000 per insured from 1 November 1992 until 31 October 1993. As ADS/Russell and Brooke Licensing point out, the trial court recognized in the judgment that the claim should be paid according to the terms of the contract: \u201cLife of Georgia should pay $266,090.28 and ADS/Russell and Brooke Licensing should pay $85,000.\u201d They contend that the court erred by ignoring this conclusion of law and ordering joint and several liability among all three defendants for the full amount. We agree.\nAn ERISA action to recover benefits due is one of contract, not of tort. As such, extracontractual damages are not available in a suit to recover unpaid benefits. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. at 144, 87 L. Ed. 2d at 105.\nIn the instant case, the defendants had contractually allocated the insurance risk among themselves. Thus, the trial court had no basis for imposing joint and several liability for the full amount of the unpaid claims. Accordingly, we reverse the trial court\u2019s decision to impose joint and several liability and remand the issue with instructions to enter a judgment for damages reflecting the allocation contractually agreed upon by the parties.\nV.\nADS/Russell and Brooke Licensing next contend that the trial court erred in finding that its buy-out agreement with LOG did not include the Middleton dispute. We disagree.\nBrooke Licensing terminated the LOG insurance plan as of 1 November 1994 and paid LOG $231,000 to buy out the plan. Through the buy-out agreement, Brooke Licensing \u201cbought out all of [it\u2019s] responsibility on any claims for the past four years.\u201d ADS/Russell and Brooke Licensing argue that the buy-out agreement released Brooke Licensing from continuing responsibility for claims and that Mrs. Middleton\u2019s medical bills constituted a \u201cclaim,\u201d albeit a disputed one. Therefore, they maintain, LOG is responsible for the total amount awarded to plaintiffs and is not entitled to a $85,000 reimbursement from Brooke Licensing.\nHowever, the trial court found, and we agree, that the Middleton dispute was not a claim because ADS/Russell told LOG that plaintiffs were never insured under the plan. Therefore, the trial court did not err in finding that the buy-out agreement was not meant to include Mrs. Middleton\u2019s bills.\nVI.\nADS/Russell and Brooke Licensing next contend that under the agreement between plaintiffs and Moses Cone Hospital, a payment of approximately $292,000 would extinguish the hospital debt and therefore, the trial court erred by failing to reduce the judgment to reflect this lower figure. We disagree.\nAt the time of the trial, plaintiffs owed Moses Cone Hospital $341,894.25. Contrary to defendants\u2019 contention, the settlement agreement between Moses Cone Hospital and plaintiffs does not allow plaintiffs to simply pay the hospital $292,000, thereby extinguishing the debt. Rather, the agreement requires that the Middletons pay the hospital the entire proceeds they receive from this lawsuit after litigation expenses and attorneys\u2019 fees are deducted. While the hospital agreed to make certain adjustments if the net proceeds paid to the plaintiffs are insufficient to satisfy the entire principal and interest owed, those adjustments would be made only after all of the net proceeds are paid to the hospital. Thus, plaintiffs will not receive payment in excess of the amount necessary to pay medical expenses as defendants contend. Accordingly, we hold that the trial court did not err by failing to reduce the judgment to an amount less than the actual medical expenses.\nVII.\nADS/Russell and Brooke Licensing next contend that the trial court erred by applying the 8% state interest rate instead of the federal rate of 3.45% on plaintiffs\u2019 ERISA claim for unpaid benefits. We disagree.\nIn Hansen v. Continental Ins. Co., 940 F.2d 971, 983-84 (5th Cir. 1991), the 5th Circuit held that while there is an applicable federal statute governing postjudgment interest, see 28 U.S.C. \u00a7 1961(a), there is no equivalent statute governing prejudgment interest, and therefore, the appropriate source of guidance should be state law. Because it was the statutory rate of interest applicable in claims brought under North Carolina, the trial judge in the instant case imposed 8% prejudgment interest on ADS/Russell and Brooke Licensing from 1 March 1993 to 1 September 1995 adding $70,392 to the defendants\u2019 liability. Moreover, we note that the court also settled on 8% because it matches the interest rate applicable to the balance plaintiffs owed to Moses Cone Hospital and thus reflects the true harm caused by the defendants.\nSince the trial court appropriately looked to state law to determine that 8% was the proper rate for prejudgment interest, we affirm its decision.\nVIII.\nPlaintiffs join ADS/Russell and Brooke Licensing in objecting to the trial court\u2019s determination that LOG was not a co-fiduciary in regards to giving COBRA notice. They contend LOG should have reviewed ADS/Russell\u2019s decision to deny coverage and could have issued the COBRA notification itself. Since we affirm the trial court\u2019s decision to hold LOG liable for plaintiffs\u2019 medical bills, we need not address this argument.\nMIDDLETONS\u2019 APPEAL\nIn their appeal to this court the Middletons contend that the trial court erred by: (I) dismissing all of plaintiffs\u2019 state law claims, except for negligent misrepresentation; (II) ruling that their claim for negligent misrepresentation against ADS/Russell and Brooke Licensing was limited to amounts due under the insurance policy; and (III) granting LOG\u2019S motion for directed verdict on the negligent misrepresentation claim at the close of the evidence. We affirm the trial court\u2019s decision to dismiss plaintiffs\u2019 state law claims and to limit plaintiffs\u2019 recovery to the amounts due under the insurance policy. We do not address the merits of plaintiffs\u2019 final argument.\nI.\nPlaintiffs first contend the trial court erred in dismissing their state law claims because the claims did not make reference to or have a connection with an ERISA plan. They argue that the claims are general legal theories that function irrespective of the existence of an ERISA plan. We disagree.\nThe trial court granted defendants\u2019 motion for summary judgment on all of plaintiffs\u2019 state law claims, except for negligent misrepresentation against ADS/Russell and Brooke Licensing, on the grounds that they were preempted by ERISA.\nERISA provides that its provisions \u201cshall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.\u201d 29 U.S.C. \u00a7 1144(a). A claim relates to an ERISA plan when it has a connection with or makes reference to an ERISA plan. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97, 77 L. Ed. 2d 490, 501 (1983). If the state claim does not concern the substance of the plan or its regulation and the plan is only tangentially or incidentally involved, the claim does not \u201crelate\u201d to the plan and there is no preemption. Welsh v. Northern Telecom, Inc., 85 N.C. App. 281, 289, 354 S.E.2d 746, 751, disc. review denied, 320 N.C. 638, 360 S.E.2d 107 (1987).\nIt is important to note that the preemption provision of ERISA is to be broadly construed. See Shaw v. Delta Air Lines, 463 U.S. at 97-100, 77 L. Ed. 2d at 501-02; Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139, 112 L. Ed. 2d 474, 484 (1990); FMC Corp. v. Holliday, 498 U.S. 52, 58, 112 L. Ed. 2d 356, 364 (1990) (\u201cThe preemption clause is conspicuous for its breadth.\u201d). In Ingersoll-Rand, the U.S. Supreme Court noted that Congress meant for there to be an expansive interpretation of the words \u201crelate to\u201d:\nUnder this \u201cbroad common-sense meaning,\u201d a state law may \u201crelate to\u201d a benefit plan, and thereby be pre-empted, even if the law is not specifically designed to affect such plans, or the effect is only indirect.\nId. at 139, 112 L. Ed. 2d at 484 (citations omitted).\nA review of the case law reveals that courts have consistently preempted state law claims which involve redress for mishandling benefit claims or other maladministration of employee benefit plans. See e.g., Powell v. Chesapeake & Potomac Telephone Co. of Virginia, 780 F.2d 419, 422 (4th Cir. 1985) (claims for intentional infliction of emotional distress, breach of implied covenant of good faith and fair dealing, breach of contract, and violation of Virginia\u2019s Unfair Trade Practices Act preempted by ERISA), cert. denied, 476 U.S. 1170, 90 L. Ed. 2d 980 (1986); Salomon v. Transamerica Occidental Life Ins. Co., 801 F.2d 659, 600 (4th Cir. 1986) (\u201cERISA clearly preempts [plaintiffs] common law claims of breach of contract and estoppel.\u201d).\nIn the subject case, plaintiffs alleged breached of contract because \u201cADS/Russell Group did not provide the promised health insurance coverage.\u201d They alleged constructive fraud because \u201c [defendants took advantage of their position of trust by providing [Middleton] with inaccurate information about his health insurance coverage and by failing to provide health insurance coverage for plaintiff.\u201d We find that all of plaintiffs\u2019 claims are premised on allegations of wrongfully denied insurance coverage, and are therefore preempted by ERISA. Accordingly, we affirm the trial court\u2019s finding that ERISA preempted these claims.\nPlaintiffs next contend that even if their state law claims \u201crelated to\u201d an employee benefit plan, they should not have been preempted because ERISA has an exception for state law claims which regulate insurance. 29 U.S.C. \u00a7 1144(b)(2)(A) (known as the \u201csavings clause\u201d). Plaintiffs maintain that their common law claims apply to insurance companies and therefore regulate insurance. Were we to accept plaintiffs\u2019 logic, then every state cause of action would be able to survive ERISA preemption. Thus, we reject plaintiffs\u2019 argument.\nPlaintiffs next allege that their state statutory claim for relief, i.e., unfair and deceptive trade practices, is saved from preemption because it regulates insurance. We disagree.\nThe essence of plaintiffs\u2019 unfair and deceptive trade practice claim is that LOG \u201cmisrepresented that there was no medical insurance coverage for [them] under LOG\u2019S policy.\u201d Plaintiffs contend that LOG\u2019s misrepresentations violated N.C. Gen. Stat. \u00a7 58-63-15 (1) (1991), whose purpose it is to regulate the business of insurance. However, the law is well-settled that a state cause of action for improper claim processing or administration filed against an insurer does \u201cnot bear upon the \u2018business of insurance\u2019 within contemplation of ERISA\u2019s insurance savings clause and thus is not saved from preemption by ERISA.\u201d Powell v. Chesapeake & Potomac Telephone Co., 780 F.2d at 423-24. See also Custer v. Pan American Life Ins. Co., 12 F.3d 410, 419-20 (4th Cir. 1993); DeBruyne v. Equitable Life Assur. Soc\u2019y of the United States, 920 F.2d 457, 467-70 (7th Cir. 1990) (misrepresentation claim under New York insurance law is not within the scope of the savings clause); Ramirez v. Inter-Continental Hotels, 890 F.2d 760, 763-64 (5th Cir. 1989) (same for Texas law prohibiting unfair competition or practices in the insurance business). Therefore, we affirm the trial court\u2019s decision to dismiss plaintiffs\u2019 state law claims.\nPlaintiffs next find fault with the trial court\u2019s ruling that their claim for negligent misrepresentation against ADS/Russell and Brooke Licensing was limited to amounts due under the insurance policy. Plaintiffs contend that they were also entitled to punitive damages and damages for emotional distress. We disagree.\nBoth parties agree that although North Carolina recognizes a cause of action for negligent misrepresentation, the courts have not specifically addressed the extent of damages available therein. However, in Raritan River Steel Co. v. Cherry, Bekaert & Holland, 322 N.C. 200, 367 S.E.2d 609 (1988), our Supreme Court expressly adopted the standards for liability in negligent misrepresentation actions set forth in the Restatement (Second) of Torts \u00a7 552 (1977). Id. at 203, 367 S.E.2d at 611. Also, North Carolina courts mirror the Restatement in recognizing contributory negligence as a bar to recovery for negligent misrepresentation. See e.g., Stanford v. Owens, 76 N.C. App. 284, 287, 332 S.E.2d 730, 732, disc. review denied, 314 N.C. 670, 336 S.E.2d 402 (1985).\nSince North Carolina has expressly adopted the Restatement\u2019s definition of negligent misrepresentation and its position regarding contributory negligence, it reasonably follows that our courts should apply the Restatement\u2019s measure of damages for negligent misrepresentation claims:\n1. The damages recoverable for a negligent misrepresentation are those necessary to compensate the plaintiff for the pecuniary loss to him of which the misrepresentation is a legal cause, including (a) the difference between the value for what he has received in the transaction and its purchase price . . . and (b) pecuniary loss suffered otherwise as a consequence of the plaintiff\u2019s reliance upon the misrepresentation.\nRestatement (Second) of Torts \u00a7 552B (1977). See also Karas v. American Family Ins. Co. Inc., 33 F.3d 995, 999 (8th Cir. 1994) (mental anguish damages not element of misrepresentation claim). Therefore, we conclude the trial court correctly limited plaintiffs\u2019 damages to the lost insurance coverage.\nIII.\nFinally, plaintiffs object to the directed verdict granted in LOG\u2019s favor on the negligent misrepresentation claim at the close of the evidence. Since we have already determined that plaintiffs are entitled to plan benefits, we need not address the merits of their state law claim against LOG. See Smith v. Cohen Benefit Group, Inc., 851 F.Supp. 210, 214 (M.D.N.C. 1993) (\u201cShould Plaintiffs prevail on any of their state law claims against CBG, they will not be entitled to Plan benefits but will be limited to a recovery of damages against CBG itself.\u201d).\nCONCLUSION\nFor the reasons set forth above, we affirm in part and reverse in part, and remand with instructions to the trial court to: (1) reduce defendants\u2019 liability for plaintiffs\u2019 medical bills by the amount of any co-payment, deductibles or premiums; (2) determine whether the evidence supports the making of findings to support an enhancement of attorneys\u2019 fees based on exceptional performance; (3) determine whether LOG may be entitled to any further recovery from ADS/Russell and Brooke Licensing on its cross-claim; and (4) enter a judgment for damages which reflects the allocation contractually agreed upon by the defendants.\nAffirmed in part, Reversed and Remanded in part.\nJudges GREENE and MARTIN, John C. concur.\n. LOG also offered businesses a more expensive option in which it was solely responsible for administering insurance. Under this \u201cstandard accounting\u201d plan, employees would send claims forms directly to LOG which was responsible for processing them and making determinations of eligibility.\n. ADS/Russell provided a health plan for its employees under the provisions of COBRA, codified at 29 U.S.C. \u00a7\u00a7 1161-67. The applicable portions of COBRA have been summarized as follows:\nCOBRA provides that employers must allow former employees the opportunity to continue health care coverage under the employer\u2019s plan if a qualifying event occurs. 29 U.S.C. \u00a7 1161. Such coverage usually is provided by the employer at the employee\u2019s expense, not to exceed 102% of the employer\u2019s cost. 29 U.S.C. \u00a7 1162(3). The plan administrator must give appropriate notice of COBRA rights on two separate occasions. Under 29 U.S.C. \u00a7 1166(a)(1), covered employees and their spouses must be notified of their rights under COBRA at the time of commencement of coverage under the plan. The second round of notice-giving is triggered by a qualifying event. 29 U.S.C. \u00a7 1166(a)(4). Termination of employment is a qualifying event. 29 U.S.C. \u00a7 1163(2). In the event of termination of a covered employee, an employer must notify the administrator of the group health plan within thirty days of the termination. 29 U.S.C. \u00a7 1166(a)(1). The plan administrator, in turn, must notify the discharged employee and other qualified beneficiaries within fourteen days of their COBRA rights and allow them at least sixty days to decide whether or not to elect continuation of their group health plan coverage. 29 U.S.C. \u00a7\u00a7 1165(1), 1166(a)(4) and (c), 1167(3)(B). Discharged employees generally may elect such coverage for up to eighteen months following their termination. 29 U.S.C. \u00a7 1162(2)(A)(i)\nPhillips v. Riverside, Inc., 796 F.Supp. 403, 405-06 (E.D.Ark. 1992).\nIndeed, while the record shows that in the normal course of events, ADS/Russell was responsible for determining which employees were eligible for coverage, the following passage from the insurance agreement entered into by LOG and Brooke Licensing appears to indicate that LOG retained for itself the power to make coverage decisions:\nFurnishing and Verification of Information. You [Brooke] will furnish Us [LOG] all information We need to administer the coverage and to determine premiums under this policy. You must also provide Us proof We may reasonably require with respect to this policy or any Insured under this policy. We have the right to review Your payroll and personnel records which may have a bearing on the insurance under this policy.", "type": "majority", "author": "WYNN, Judge." } ], "attorneys": [ "Smith, Foll\u00edn & James, L.L.P., by J. David James, for plaintiffs.", "Floyd Allen and Jacobs, L.L.P., by Jack W. Floyd and Constance Floyd Jacobs, for defendants The Russell Group, Ltd. and Brooke Licensing.", "Frazier, Frazier & Mahler, L.L.P., by Harold C. Mahler, Cynthia R. Jarrell, and Torin L. Fury, for defendant Life Insurance Company of Georgia. '" ], "corrections": "", "head_matter": "JAMES A. MIDDLETON, JR. and JULIE T. MIDDLETON v. THE RUSSELL GROUP, LTD. (formerly ADS, INC.), BROOKE LICENSING, and LIFE INSURANCE COMPANY OF GEORGIA\nNo. COA96-355\n(Filed 15 April 1997)\n1. Insurance \u00a7 351 (NCI4th)\u2014 former employee \u2014 group health insurance \u2014 absence of COBRA notice of right to continue \u2014 tolling of election and premium payment\nWhere plaintiff former employee has never been given the Statutorily required notice of his right after the termination of his employment to continue his health insurance coverage under COBRA, plaintiffs election period and corresponding duty to pay the premium remain tolled until such notice is provided. Therefore, plaintiff is entitled to health insurance coverage under the employer\u2019s plan even though he has never made an election or paid a premium for continuation of coverage.\nAm Jur 2d, Employment Relationship \u00a7 207; Insurance \u00a7 1863.\nConstruction and application of ERISA provisions governing continuation coverage under group health plans (29 USCS \u00a7\u00a7 1161 et seq.). 126 ALR Fed. 97.\n2. Insurance \u00a7 351 (NCX4th)\u2014 former employee \u2014 group health insurance \u2014 employer as insurer\u2019s agent \u2014 employer\u2019s failure to give COBRA notice \u2014 liability of insurer\nAn employer which performed administrative functions with respect to group health insurance provided for its employees was the agent of the health insurer so that the insurer was liable for the employer\u2019s mistake in determining that a former employee and his family were not entitled to health insurance continuation coverage under COBRA and the employer\u2019s failure to give the former employee notice of his COBRA rights. Therefore, the insurer was liable for medical expenses incurred by the former employee\u2019s wife after the termination of his employment less any co-payment, deductibles, or premiums that must be deducted.\nAm Jur 2d, Insurance \u00a7 1851.\nImputation of servant\u2019s or agent\u2019s contributory negligence to master or principal. 53 ALR3d 664.\n3. Retirement \u00a7 22 (NCI4th)\u2014 ERISA action \u2014 award of attorney fees\nThe trial court did not err by awarding attorney fees to plaintiffs, a former employee and his wife, in an ERISA action against the employer, the employee benefit plan administrator and the group health insurer where failure by the employer and the plan administrator to provide notice to plaintiff former employee of his right to continue health insurance under COBRA after his termination prevented plaintiffs from paying medical bills and forced them to defend a hospital\u2019s lawsuit, and although the insurer was not responsible for providing COBRA notice, the insurer asserted several defenses in addition to those asserted by the other defendants and forced plaintiffs to spend time and money to rebut those contentions.\nAm Jur 2d, Insurance \u00a7 1772.\nRemedies and measure of damages for wrongful cancellation of life, health, and accident insurance. 34 ALR3d 245.\nInsured\u2019s right to recover attorneys\u2019 fees incurred in declaratory judgement action to determine existence of coverage under liability policy. 87 ALR3d 429.\n4. Costs \u00a7 37 (NCI4th); Retirement \u00a7 22 (NCI4th)\u2014 ERISA action \u2014 enhancement of attorney fees\n\u25a0 In an ERISA action by a former employee and his wife in which the employer\u2019s group health insurer was found liable for medical expenses incurred by the wife after the employee was terminated because the employer and its benefits plan administrator failed to give the employee notice of his right to continued health insurance coverage under COBRA, the trial court erred by enhancing an award of attorney fees to plaintiffs against all defendants by 1.5 where the court\u2019s order stated that the award was enhanced (1) to reward plaintiffs\u2019 attorneys for a job well-done, (2) to reflect the complexity of the issues, and (3) to compensate plaintiffs for the hardship they suffered as a result of the delayed payment of their medical expenses. The trial court\u2019s finding that the quality of legal representation provided by plaintiffs\u2019 counsel was \u201cexemplary and efficient\u201d was insufficient to justify a fee enhancement for exceptional performance; the complexity of the issues was reflected in counsel\u2019s billable hours and was not an appropriate basis for fee enhancement; and enhancement of counsel fees was not a proper method to penalize defendants for breach of their fiduciary duty in failing to pay plaintiffs\u2019 medical bills.\nAm Jur 2d, Attorneys at Law \u00a7 244.\nWhat constitutes bad faith on part of insurer rendering it libel for statutory penalty imposed for bad faith in failure to pay, or delay in paying, insured\u2019s claim. 33 ALR4th 579.\n5. Damages \u00a7 3 (NCI4th)\u2014 cross-claim \u2014 litigation expenses as damages\nDefendant health insurer\u2019s cross-claim against defendant employer and defendant employee benefits administrator is remanded for a proper determination of damages where the trial court correctly found that defendant insurer suffered no loss in the payment of plaintiffs\u2019 medical expenses from negligence by 'the employer and the plan administrator in failing to give plaintiff former employee notice of his right to continued health insurance coverage under COBRA after his termination, but the trial court erred by failing to find the employer and plan administrator liable to the insurer for additional expenses incurred in defending plaintiffs\u2019 lawsuit to recover the medical expenses and in paying costs taxed against it by the trial court.\nAm Jur 2d, Insurance \u00a7\u00a7 1849, 1851.\nLiability of insurance agent for exposure of insurer to liability because of issuance of policy beyond authority or contrary to instructions. 35 ALR3d 907.\n6. Insurance \u00a7 351 (NCI4th)\u2014 right to continued health insurance \u2014 failure to give COBRA notice \u2014 payment of premiums \u2014 instructions\nIn a former employee\u2019s action to recover medical expenses incurred after the termination of his employment on the ground that the employer and its benefits plan administrator failed To give him notice of his right to continue group health insurance coverage under COBRA, the trial court properly instructed the jury on defendant\u2019s defense of plaintiff\u2019s failure to pay premiums as well as on plaintiff\u2019s alternative contentions that the employer had agreed to pay all of his health insurance premiums as a part of his employment agreement or that the employer had agreed to deduct his portion of the premiums from his pay.\nAm Jur 2d, Employment Relationship \u00a7\u00a7 207, 210.\nConstruction and application of ERISA provisions governing continuation coverage under group health plans (29 USCS \u00a7\u00a7 1161 et seq.). 126 AJLR Fed. 97.\n7. Evidence and Witnesses \u00a7 82 (NCI4th)\u2014 background evidence \u2014 relevancy\nPlaintiff former employee\u2019s testimony that his son called him and told him that a wall had fallen on his wife and that his wife was in intensive care for an extended period and near death for several weeks was relevant to provide a backdrop and complete picture of what occurred in this action to recover the wife\u2019s medical expenses based on failure of the employer and its benefits plan administrator to give plaintiff COBRA notice of his right to continue group health insurance coverage after the termination of his employment.\nAm Jur 2d, Evidence \u00a7\u00a7 308, 328.\nPropriety under Federal Rules of Evidence 403, permitting exclusion of relevant evidence on grounds of prejudice, confusion, or waste of time. 48 ALR Fed. 390.\n8. Evidence and Witnesses \u00a7 2908 (NCI4th)\u2014 redirect testimony \u2014 door opened by cross-examination\nWhen counsel for defendants asked a hospital employee on cross-examination whether she had made a notation that plaintiffs \u201cwere very wealthy,\u201d defendant opened the door to testimony by the male plaintiff that plaintiffs had lost everything because they had given everything they had to the hospital on a note against their home and property for the female plaintiffs medical expenses.\nAm Jur 2d, Evidence \u00a7 491.\nPrejudicial effect of admission, in personal injury action, of evidence as to financial or domestic circumstances of plaintiff. 59 ALR2d 371.\n9. Retirement \u00a7 22 (NCI4th)\u2014 ERISA action \u2014 health insurance benefits \u2014 allocation of risks among defendants \u2014 no joint and several liability\nIn a former employee\u2019s ERISA action to recover health insurance benefits, the trial court had no basis to impose joint and several liability on the employer, plan administrator, and insurer for the full amount of unpaid medical claims where these defendants had contractually allocated the insurance risk for such claims among themselves.\nAm Jur 2d, Contribution \u00a7\u00a7 10, 62.\n10.Retirement \u00a7 22 (NCI4th)\u2014 ERISA action \u2014 health insurance benefits \u2014 employee-hospital settlement \u2014 no reduction of judgment\nThe trial court did not err by failing to reduce the judgment in an ERISA action to recover health insurance benefits to an amount less than plaintiffs\u2019 actual medical expenses because of a settlement agreement between plaintiffs and the hospital where the hospital agreed to make certain adjustments only if the net proceeds paid to plaintiffs in this lawsuit are insufficient to satisfy the entire amount owed, and plaintiffs thus will not receive payment in excess of the amount necessary to pay their medical expenses.\nAm Jur 2d, Insurance \u00a7\u00a7 1393, 1402, 1810.\nInsured\u2019s settlement of third person\u2019s claim without suit, following liability insurer\u2019s denial of liability on ground that claim is not within policy coverage, as affecting insurer\u2019s liability. 67 ALR2d 1086.\n11. Judgments \u00a7 655 (NCI4th); Retirement \u00a7 22 (NCI4th)\u2014 ERISA action \u2014 prejudgment interest \u2014 state rate\nThe trial court did not err by applying the 8% state prejudgment interest rate rather than the 3.45% federal rate on plaintiffs\u2019 ERISA claim for unpaid health insurance benefits.\nAm Jur 2d, Interest and Usury \u00a7\u00a7 59, 75.\nLiability of insurer for prejudgment interest in excess of policy limits for covered loss. 23 ALR5th 75.\n12. Retirement \u00a7 22 (NCI4th)\u2014 health insurance coverage\u2014 breach of contract \u2014 constructive fraud \u2014 claims preempted by ERISA\nClaims by a former employee and his wife against the employer and its benefits plan administrator for breach of contract and constructive fraud were preempted by ERISA where those claims were premised on allegations of wrongfully denied health insurance coverage.\nAm Jur 2d, Pensions and Retirement Funds \u00a7\u00a7 115-119.\nWhen is state or local law pre-empted by Employee Retirement Income Security Act of 1974, as amended (ERISA) (29 USCS \u00a7\u00a7 1001 et seq.) \u2014 Supreme Court cases. 121 L. Ed. 2d 783.\n13. Retirement \u00a7 22 (NCI4th)\u2014 unfair and deceptive practice \u2014 claim against health insurer \u2014 not exception to ERISA preemption\nPlaintiff former employee\u2019s claim for unfair and deceptive practices by defendant health insurer based upon improper claim processing or administration was not saved from ERISA preemption by exceptions for state law claims which regulate insurance.\nAm Jur 2d, Pensions and Retirement Funds \u00a7\u00a7 115-119.\nWhen is state or local law pre-empted by Employee Retirement Income Security Act of 1974, as amended (ERISA) (29 USCS \u00a7\u00a7 1001 et seq.) \u2014 Supreme Court cases. 121 L. Ed. 2d 783.\n14. Negligence \u00a7 9 (NCI4th)\u2014 negligent representation\u2014 damages\nRecovery on a claim by a former employee and his wife against the employer and its plan administrator for negligent misrepresentation of health insurance coverage was limited to amounts due under the insurance policy and did not include punitive damages and damages for emotional distress.\nAm Jur 2d, Damages \u00a7 951; Insurance \u00a7 141.\nWhat constitutes bad faith on part of insurer rendering it libel for statutory penalty imposed for bad faith in failure to pay, or delay in paying, insured\u2019s claim. 33 ALR4th 579.\nAppeal by parties from judgment entered 1 September 1995 by Judge Catherine C. Eagles in Guilford County Superior Court. Heard in the Court of Appeals 4 December 1996.\nSmith, Foll\u00edn & James, L.L.P., by J. David James, for plaintiffs.\nFloyd Allen and Jacobs, L.L.P., by Jack W. Floyd and Constance Floyd Jacobs, for defendants The Russell Group, Ltd. and Brooke Licensing.\nFrazier, Frazier & Mahler, L.L.P., by Harold C. Mahler, Cynthia R. Jarrell, and Torin L. Fury, for defendant Life Insurance Company of Georgia. '" }, "file_name": "0001-01", "first_page_order": 39, "last_page_order": 68 }