Silver v. International Longshore and Warehouse Union – Pacific Maritime Association Welfare Plan (Aug. 22, 2016, B267941) __ Cal.App.4th ___ [2016 WL 4434735]
Dr. Morris Silver sued an ERISA Plan to recover payments for health care services that he provided to the Plan’s policyholders. Dr. Silver’s complaint alleged that, before he rendered the services, the Plan made representations to him regarding amounts it would pay for services to its policyholders. He further alleged that the Plan initially made the promised payments, but then stopped. Dr. Silver’s asserted causes of action for breach of oral contract, quantum meruit, promissory estoppel, and interference with contractual relations. The trial court dismissed Dr. Silver’s complaint, ruling that it was preempted by ERISA because he essentially alleged denial of coverage under an ERISA plan.
The Court of Appeal affirmed in part and reversed in part. The court explained that the case concerned conflict preemption, an affirmative defense that bars state law claims interfering with the uniform administration of ERISA plans. The court further explained that ERISA does not preempt “ ‘run-of-the-mill state law claims such as claims for unpaid rent, failure to pay creditors, or even torts committed by an ERISA plan,’ ” and case law articulates “a valid distinction between claims by a plan participant for additional benefits [which are preempted] and claims by third-party medical providers [which are not preempted].” Applying that distinction, the court held that the trial court erred when it ruled that Dr. Silver’s “three contract/quasi-contract causes of action” were preempted because those claims do not seek “compensation for the Plan’s decisions to deny coverage under the terms of an ERISA plan,” but instead “are predicated on a garden-variety failure to make payment as promised for services rendered.” However, the trial court correctly ruled that Dr. Silver’s claim for interference with contractual relations was preempted because “the Plan’s allegedly tortious conduct cannot be separated from the Plan’s discharge of its obligations to notify participants of an adverse determination under ERISA.”
Thomas Watson
htwatson@horvitzlevy.com
Horvitz & Levy LLP
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