{ "id": 9006408, "name": "RICHARD JARVIS, Plaintiff v. NATHANIEL M. STEWART & STEWART FINANCIAL GROUP, INC., Defendants", "name_abbreviation": "Jarvis v. Nathaniel M. Stewart & Stewart Financial Group, Inc.", "decision_date": "2005-06-07", "docket_number": "No. COA04-713", "first_page": "638", "last_page": "643", "citations": [ { "type": "official", "cite": "170 N.C. App. 638" } ], "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": "1998 U.S. App. LEXIS 38509", "category": "reporters:specialty_lexis", "reporter": "U.S. App. LEXIS", "opinion_index": 0 }, { "cite": "151 F.3d 908", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 11713545 ], "year": 1998, "pin_cites": [ { "parenthetical": "amended opinion reported at 1998 U.S. App. LEXIS 38509" } ], "opinion_index": 0, "case_paths": [ "/f3d/151/0908-01" ] }, { "cite": "516 U.S. 489", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 324851 ], "weight": 3, "year": 1996, "opinion_index": 0, "case_paths": [ "/us/516/0489-01" ] }, { "cite": "884 F.2d 116", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 11337363 ], "weight": 2, "year": 1989, "pin_cites": [ { "page": "120" }, { "page": "120-21" } ], "opinion_index": 0, "case_paths": [ "/f2d/884/0116-01" ] }, { "cite": "482 U.S. 1", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6208630 ], "weight": 2, "year": 1987, "pin_cites": [ { "page": "11" } ], "opinion_index": 0, "case_paths": [ "/us/482/0001-01" ] }, { "cite": "498 U.S. 133", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6220346 ], "weight": 2, "year": 1990, "pin_cites": [ { "page": "142" }, { "page": "486" } ], "opinion_index": 0, "case_paths": [ "/us/498/0133-01" ] }, { "cite": "354 S.E.2d 746", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "pin_cites": [ { "parenthetical": "holding that a claim, that was not against the ERISA plan, seeking amounts in addition to benefits under the plan based on an agreement to provide additional benefits did not concern the substance or regulation of the plan and was therefore not preempted" } ], "opinion_index": 0 }, { "cite": "85 N.C. App. 281", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12169838 ], "year": 1987, "pin_cites": [ { "parenthetical": "holding that a claim, that was not against the ERISA plan, seeking amounts in addition to benefits under the plan based on an agreement to provide additional benefits did not concern the substance or regulation of the plan and was therefore not preempted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/85/0281-01" ] }, { "cite": "551 S.E.2d 122", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2001, "opinion_index": 0 }, { "cite": "144 N.C. App. 534", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11435553 ], "year": 2001, "opinion_index": 0, "case_paths": [ "/nc-app/144/0534-01" ] }, { "cite": "237 F.3d 371", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 11160956 ], "year": 2001, "pin_cites": [ { "page": "378" } ], "opinion_index": 0, "case_paths": [ "/f3d/237/0371-01" ] }, { "cite": "126 F.3d 61", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 943667 ], "year": 1997, "pin_cites": [ { "page": "67", "parenthetical": "citing De Buono, 520 U.S. 806, 138 L. Ed. 2d 21" } ], "opinion_index": 0, "case_paths": [ "/f3d/126/0061-01" ] }, { "cite": "28 F.3d 1062", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 10527589 ], "weight": 2, "year": 1994, "pin_cites": [ { "page": "1064-65" }, { "page": "1066" } ], "opinion_index": 0, "case_paths": [ "/f3d/28/1062-01" ] }, { "cite": "58 F.3d 1361", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 7413807 ], "year": 1995, "pin_cites": [ { "page": "1365" } ], "opinion_index": 0, "case_paths": [ "/f3d/58/1361-01" ] }, { "cite": "519 U.S. 316", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11595471 ], "weight": 3, "year": 1997, "pin_cites": [ { "page": "325" }, { "page": "800" }, { "page": "325" } ], "opinion_index": 0, "case_paths": [ "/us/519/0316-01" ] }, { "cite": "520 U.S. 806", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11653014 ], "weight": 4, "year": 1997, "pin_cites": [ { "page": "29" } ], "opinion_index": 0, "case_paths": [ "/us/520/0806-01" ] }, { "cite": "514 U.S. 645", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1339053 ], "weight": 6, "year": 1995, "pin_cites": [ { "page": "654" }, { "page": "704" }, { "page": "656" }, { "page": "658" }, { "page": "707" }, { "page": "658" } ], "opinion_index": 0, "case_paths": [ "/us/514/0645-01" ] }, { "cite": "463 U.S. 85", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6191473 ], "weight": 2, "year": 1983, "pin_cites": [ { "page": "96-97", "parenthetical": "deciding, based on a definition from Black's Law Dictionary, that a state law \"relates to\" an employee benefit plan if it has a connection or reference to the plan" }, { "page": "501", "parenthetical": "deciding, based on a definition from Black's Law Dictionary, that a state law \"relates to\" an employee benefit plan if it has a connection or reference to the plan" } ], "opinion_index": 0, "case_paths": [ "/us/463/0085-01" ] }, { "cite": "29 U.S.C. \u00a7 1132", "category": "laws:leg_statute", "reporter": "U.S.C.", "pin_cites": [ { "page": "(e)" } ], "opinion_index": 0 }, { "cite": "29 U.S.C. \u00a7 1144", "category": "laws:leg_statute", "reporter": "U.S.C.", "weight": 3, "pin_cites": [ { "page": "(a)" }, { "page": "(c)(1)" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 707, "char_count": 14093, "ocr_confidence": 0.739, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.21332170331166025 }, "sha256": "d03720908560698904016a995997df55f7acc1538c0e3f4aa26c473cc2e11ace", "simhash": "1:f18f2308854e09f7", "word_count": 2257 }, "last_updated": "2023-07-14T16:44:47.676310+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges HUNTER and CALABRIA concur." ], "parties": [ "RICHARD JARVIS, Plaintiff v. NATHANIEL M. STEWART & STEWART FINANCIAL GROUP, INC., Defendants" ], "opinions": [ { "text": "JACKSON, Judge.\nRichard Jarvis, (\u201cplaintiff\u201d) appeals an order entered 19 March 2004 in Cabarrus County Superior Court dismissing, with prejudice as to further state proceedings, his complaint alleging breach of contract; detrimental reliance; negligence; negligent misrepresentation; and unfair or deceptive trade practices.\nPlaintiff filed his initial complaint on 11 June 2003 and his first amended complaint and motion to amend complaint on 20 January 2004. The motion to amend complaint was heard and granted on 16 February 2004. Defendant-appellees, Nathaniel M. Stewart (\u201cStewart\u201d) and Stewart Financial Group, Inc. (\u201cStewart Financial\u201d) (collectively \u201cdefendants\u201d) responded to plaintiff\u2019s First Amended Complaint with a Motion to Dismiss pursuant to Rules 12(b)(1) and 12(b)(6) of the North Carolina Rules of Civil Procedure. In their Motion to Dismiss, defendants argued that plaintiff\u2019s claims were preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. \u00a7 1144, (ERISA) and therefore the state courts did not have jurisdiction over the claims. In opposition to defendants\u2019 Motion to Dismiss, plaintiff argued that his claims were traditional state law claims and should not be preempted. Plaintiff contended that since the terms of the disability policy itself were not disputed and neither the plan nor any of the plan administrators were named as parties to the action the claims should not be preempted.\nThe trial court issued an order granting defendants\u2019 Motion to Dismiss with prejudice as to further state court proceedings on the claims on 19 March 2004. In its order the trial court held plaintiff\u2019s claims were \u201crelate [d] to\u201d an \u201cemployee welfare benefit plan\u201d and were therefore preempted by ERISA. The trial court also held concurrent jurisdiction under 29 U.S.C. \u00a7 1132(e) was not proper as that section allows concurrent state court jurisdiction in the \u201climited circumstance of a participant or beneficiary seeking \u2018to recover benefits due him under the terms of his plan, to enforce his rights under the terms of the plan, or to . clarify his rights to future benefits under the terms of the plan.\u2019 \u201d (emphasis in original omitted) The trial court also noted in its order that plaintiff did not seek to recover under the terms of the plan and had not sued the plan, the plan\u2019s administrator, the plan\u2019s trustee, or the employer.\nThe basis of plaintiff\u2019s claim was a letter he received from Stewart on behalf of Stewart Financial informing him that his employer had made changes to his benefits package. These changes included adding a company paid long term disability policy. The letter also informed plaintiff that the new disability policy would pay him sixty-six and two thirds percent (66 2/3%) of his income in the event he became disabled. This information was confirmed to plaintiff verbally by defendants on several occasions.\nPlaintiff subsequently was disabled. His actual benefits paid under the long term disability policy were only sixty percent (60%) of his income. The difference in benefits between the amount stated by defendants in the letter and the amount actually paid under the policy during plaintiff\u2019s disability was $48,572.48.\nPlaintiff only filed suit against Stewart, who had acted as a financial advisor, and Stewart Financial and not against plaintiff\u2019s employer; the plan administrator; the plan trustee; nor the plan itself. His initial complaint was based on the grounds that: (1) the letter and subsequent conversations with defendants were sufficient to constitute a contract between the parties and defendants breached that contract; (2) that defendants were negligent in sending the misleading letter to plaintiff and in failing to correct their misstatements; and (3) that plaintiff relied on the statements in the letter to his detriment. Plaintiff\u2019s amended complaint added claims for breach of contract based on defendants contract with plaintiffs employer, negligent misrepresentation and unfair or deceptive trade practices.\nOn defendants\u2019 motion, the trial court dismissed plaintiff\u2019s claims on the ground that they were preempted by ERISA. Plaintiff timely appealed. Plaintiff assigns as error: (1) the trial court\u2019s granting of defendants\u2019 motion to dismiss plaintiff\u2019s claims on the basis that they were related to a welfare benefits policy and therefore preempted by Federal Law and (2) the trial court\u2019s conclusion that state courts do not have concurrent jurisdiction over plaintiff\u2019s claims.\nERISA contains an express preemption clause which provides that ERISA supercedes \u201cany and all State laws insofar as they may now or hereafter relate to any employee benefit plan\u201d covered by ERISA. 29 U.S.C. \u00a7 1144(a). In its early attempts to interpret this preemption clause, the United States Supreme Court relied heavily on a textual analysis and dictionary definition of \u201crelate to\u201d. See Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97, 77 L. Ed. 2d 490, 501 (1983) (deciding, based on a definition from Black\u2019s Law Dictionary, that a state law \u201crelates to\u201d an employee benefit plan if it has a connection or reference to the plan). More recently, however, the Supreme Court has determined that ERISA\u2019s preemption clause analysis must begin with the \u201cpresumption that Congress does not intend to supplant state law.\u201d New York State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654, 131 L. Ed. 2d 695, 704 (1995). The Supreme Court has instructed that, in applying ERISA\u2019s preemption clause, courts should \u201clook ... to the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive.\u201d Id. at 656. Accordingly, the party asserting preemption must convince the court that the statute sought to be preempted is the type of law that Congress specifically intended ERISA to preempt. De Buono v. NYSA-ILA Med. and Clinical Servs. Fund, 520 U.S. 806, 814 138 L. Ed. 2d 21, 29 (1997).\nThe anti-preemption presumption can be overcome, according to the Supreme Court, in several ways. If the state law in question \u201cacts immediately and exclusively upon ERISA plans\u201d or if \u201cthe existence of ERISA plans is essential to the law\u2019s operation\u201d then the law \u201crefers to\u201d .ERISA plans and is preempted. Cal. Div. Of Labor Stds. Enforcement v. Dillingham Constr., NA, 519 U.S. 316, 325, 136 L. Ed. 2d 791, 800 (1997). ERISA also preempts state laws that do not refer to ERISA or ERISA plans if there is a clear \u201cconnection with\u201d a plan in that the law \u201cmandated employee benefits structures or their administration\u201d or \u201cprovides alternative enforcement mechanisms.\u201d Travelers, 514 U.S. at 658, 131 L. Ed. 2d at 707. Consistent with these opinions, the Ninth and Tenth Circuits have held that ERISA preempts\n(1) laws that regulate the type of benefits or terms of ERISA plans, (2) laws that create reporting, disclosure, funding, or vesting requirements, (3) laws that provide rules for calculation of the amount of benefits to be paid under ERISA plans, and (4) laws that provide remedies for misconduct growing out of the administration of ERISA plans.\nFarr v. U.S. West Inc., 58 F.3d 1361, 1365 (9th Cir. 1995), Airparts v. Custom Benefit Servs, 28 F.3d 1062, 1064-65 (10th Cir. 1994). Otherwise, the presumption against preemption is very strong and state laws of general application that simply impose some burdens on ERISA plans should not be preempted. Plumbing Indus. Bd. v. E. W. Howell Co., 126 F.3d 61, 67 (2d Cir., 1997) (citing De Buono, 520 U.S. 806, 138 L. Ed. 2d 21).\n\u201cThe term \u2018State law\u2019 includes all laws, decisions, rules, regulations, or other State action having the effect of law, of any State. 29 U.S.C. \u00a7 1144(c)(1). \u201c[I]n appropriate circumstances, state common law claims fall within the category of state laws subject to ERISA preemption.\u201d Griggs v. E.I. Dupont De Nemours & Co., 237 F.3d 371, 378 (4th Cir. 2001). Common law tort and breach of contract claims are preempted by ERISA if they involve \u201cefforts by [plan] beneficiaries to undo some allegedly improper act of plan administration.\u201d Airparts, 28 F.3d at 1066.\nConsistent with the above federal cases, is the opinion of this Court in Vaughn v. CVS Revco D.S., Inc., 144 N.C. App. 534, 551 S.E.2d 122 (2001). In Vaughn, the plaintiff filed a common law claim of anticipatory breach of contract and a statutory claim of unfair and deceptive trade practices against the plaintiffs employer in its individual corporate capacity. The plaintiff did not seek relief from the plan administrator, did not attempt to regulate the plan itself, nor seek to recover benefits from the plan itself. Id. at 539. There, this Court held that the claims were traditional state-based claims of general application and not, therefore, preempted by ERISA. Id. at 540. See also Welsh v. Northern Telecom, Inc., 85 N.C. App. 281, 354 S.E.2d 746 (1987) (holding that a claim, that was not against the ERISA plan, seeking amounts in addition to benefits under the plan based on an agreement to provide additional benefits did not concern the substance or regulation of the plan and was therefore not preempted).\nAs instructed by the Supreme Court in Travelers and De Buono, we begin by looking at the objectives of ERISA to determine if the state laws in question here are of the type that Congress intended ERISA to preempt. The ERISA preemption provision has two primary purposes: to protect employees and their beneficiaries in employee benefit plans and to ensure that there is a uniform body of benefit law among the states by minimizing \u201cthe administrative and financial burden of complying with conflicting directives among States or between States and the Federal Government.\u201d Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 142, 112 L. Ed. 2d 474, 486 (1990). \u201cPre-emption ensures that the administrative practices of a benefit plan will be governed by only a single set of regulations.\u201d Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 11, 96 L. Ed. 2d 1 (1987).\nIn the instant case, plaintiff, in his amended complaint, alleges six causes of action: 1) breach of express agreement and contract (between himself and defendants); 2) negligence; 3) detrimental reliance; 4) breach of contract (between plaintiffs employer and defendants); 5) negligent misrepresentation; and 6) unfair or deceptive trade practices. The Fourth Circuit, which has jurisdiction over North Carolina federal claims, has found that state law claims for breach of contract, promissory estoppel and negligent misrepresentation were not preempted by ERISA where the claims would not submit the employer to conflicting employer obligations, create alternative standards of recovery, determine whether the plaintiff would receive benefits under the plan, or affect the administration of the plan. Pizlo v. Bethlehem Steel Corp., 884 F.2d 116, 120 (4th Cir. 1989). In Pizlo, as here, the damages sought were measured by the benefits the plaintiffs would have received under the plan, yet the claims were held to not be preempted. Id. at 120-21.\nThe common law and state statutory claims in the instant case do not act immediately and exclusively on ERISA plans nor is the existence of ERISA plans essential to the operation of these common law doctrines or state statutes which are instead claims of general application that do not fall within the situations that overcome the anti-preemption presumption set forth in Dillingham. 519 U.S. at 325. The basis of these claims is the actions of defendants who are not plan administrators or fiduciaries. The claims do not seek to recover benefits under the plan nor do they seek to mandate the structure of benefits or the administration of the plan and consequently do not fall within the situations outlined in Travelers that justify preemption. 514 U.S. at 658. Nor do these common law claims subject the plan to regulations that conflict with the uniform body of law regulating ERISA plans. Consequently, as none of plaintiffs claims raise any of the concerns Congress sought to address when the ERISA preemption provision was enacted, we hold that plaintiff\u2019s claims are not preempted by ERISA and reverse the trial court\u2019s order dismissing plaintiff\u2019s claims.\nBecause we have held that plaintiff\u2019s claims are not preempted by ERISA, it is unnecessary to reach plaintiff\u2019s second assignment of error regarding concurrent state jurisdiction.\nReversed.\nJudges HUNTER and CALABRIA concur.\n. On appeal after remand, the 9th Circuit affirmed the trial court\u2019s holding that plaintiff\u2019s claims were preempted by ERISA, contrary to its holding in the original appeal. The Court\u2019s holding after remand was based on the ground that the Supreme Court decision in Varity Corp. v. Howe, 516 U.S. 489, 116 S. Ct. 1065, 134 L. Ed. 2d 130 (1996), handed down subsequent to the Court\u2019s first decision, expanded the scope of plan administration activities and brought the activities upon which plaintiff\u2019s claims were based within ERISA preemption. 151 F.3d 908 (1998) (amended opinion reported at 1998 U.S. App. LEXIS 38509).", "type": "majority", "author": "JACKSON, Judge." } ], "attorneys": [ "Browne, Flebotte, Wilson, Horn & Webb, PLLC, by Martin J. Horn and Adam A. Smith, for plaintiff-appellant.", "Parker, Poe, Adams & Bernstein, L.L.P, by David N. Allen and Jennifer E. Marsh, for defendants-appellees." ], "corrections": "", "head_matter": "RICHARD JARVIS, Plaintiff v. NATHANIEL M. STEWART & STEWART FINANCIAL GROUP, INC., Defendants\nNo. COA04-713\n(Filed 7 June 2005)\nEmployer and Employee\u2014 disability provisions \u2014 state action \u2014 no preemption\nPlaintiffs state action against his employer\u2019s financial advisor should not have been dismissed as preempted by federal ERISA legislation where none of plaintiff\u2019s claims raised any of the concerns Congress sought to address by ERISA. These claims arose from the difference between the disability benefits plaintiff received and representations made to him; among other things, these claims involved defendants who are not plan administrators or fiduciaries.\nAppeal by plaintiff from order entered 19 March 2004 by Judge W. David Lee in Cabarrus County Superior Court. Heard in the Court of Appeals 16 February 2005.\nBrowne, Flebotte, Wilson, Horn & Webb, PLLC, by Martin J. Horn and Adam A. Smith, for plaintiff-appellant.\nParker, Poe, Adams & Bernstein, L.L.P, by David N. Allen and Jennifer E. Marsh, for defendants-appellees." }, "file_name": "0638-01", "first_page_order": 668, "last_page_order": 673 }