The opinion of the court was delivered by: Karen E. Schreier Chief Judge
MEMORANDUM OPINION AND ORDER
Plaintiff, Carolann Roemen, filed suit against defendant, Federated Mutual Insurance Company, in the Circuit Court, Second Judicial Circuit, Minnehaha County, South Dakota, asserting that Federated wrongfully refused to pay her medical bills. Roemen sought compensatory and punitive damages under South Dakota law for her claims of breach of the duty of good faith and fair dealing, breach of fiduciary duty, breach of contract, and unreasonable and vexatious refusal to pay. Federated removed the action to this court pursuant to 28 U.S.C. §§ 1441 and 1446.
Roemen is the wife of an employee who works at Roemen's Auto Supply. She obtained health insurance coverage as a dependent on her husband's group health insurance policy, which was issued by Federated to Roemen's Auto Supply. Roemen underwent surgery in August 2007, and Federated denied her claims relating to this procedure. Roemen then brought suit against Federated. After removing this case to federal court, Federated moved for summary judgment, arguing that ERISA preempted Roemen's state-law claims. The court denied Federated's motion for summary judgment because there was a material issue of fact as to the role Roemen's Auto Supply had in the funding of the group health insurance policy and which documents governed the group health insurance policy. The court scheduled an evidentiary hearing for November 9, 2010, in order to determine whether Roemen's claims are governed by and therefore preempted by ERISA.
During the hearing, Federated introduced into evidence a Group Health Insurance Certificate of Coverage identifying the effective date as February 1, 2008, the employer as Roemen's Auto Supply, the policy number as 5672, and the policyholder as Roemen's Auto Supply. Docket 8-2 at 6. The Group Health Insurance Certificate of Coverage states that the policy was delivered in South Dakota and is governed by South Dakota law. Docket 8-2 at 6. Federated introduced a Summary Plan Description: Company Employee Security Benefits Plan (Summary Plan Description), which stated that Roemen's Auto Supply was the sponsor of the plan and the plan administrator and that the insurer was Federated. Docket 8-2 at 7. The Summary Plan Description also contained information about eligibility for participation in the plan, enrollment, and rights and protections under ERISA. Docket 8-2 at 8-9.
Roemen introduced into evidence a document entitled Group Health Policy, which states that the policy holder was Federated Health Choice Group Insurance Trust, the effective date was October 1, 2003, the policy anniversary was January of each year, the policy number was 5672, and the policy was delivered in Iowa and governed by Iowa laws. Docket 16-1 at 2. Roemen asserts that this document relates to the group health insurance policy in effect at the time she filed her claims.
During the evidentiary hearing on whether the group health policy was an ERISA plan, Federated explained that many of the documents submitted into evidence were essentially re-creations of the group health policy. Docket 34 at 40-41. Some of the re-created documents contain incorrect or false information. Docket 34 at 40-41. Roemen presented expert testimony about ERISA's requirements from Joe Dobbs. Dobbs testified about how the group health insurance policy failed, in several respects, to comply with ERISA's requirements.
After considering the evidence presented at the hearing, the court finds by a preponderance of the evidence the following facts to be true:
The group health insurance policy was an intended benefit by Roemen's Auto Supply for its employees. The employees, and their dependents, were in the class of beneficiaries covered by the group health insurance policy.
Roemen's Auto Supply was a substantial source of financing for the group health insurance policy. The procedures for receiving the benefits were set out in the materials provided to Roemen's Auto Supply by Federated.*fn1
Whether or not an insurance policy is governed by ERISA and therefore subject to ERISA preemption is a mixed question of law and fact. Kulinski v. Medtronic Bio-Medicus, Inc., 21 F.3d 254, 256 (8th Cir. 1994) (citations omitted). "Where federal subject matter jurisdiction is based on ERISA, but the evidence fails to establish the existence of an ERISA plan, the claim must be dismissed for lack of subject matter jurisdiction." Id. at 256 (citations omitted). The removing party bears the burden of demonstrating by a preponderance of the evidence that federal jurisdiction exists. Altimore v. Mount Mercy Coll., 420 F.3d 763, 768 (8th Cir. 2005) ("Because Mount Mercy removed this case to federal court, it bears the burden of establishing jurisdiction by a preponderance of the evidence." (citation omitted)).
Federated asserts that the group health insurance policy at issue in this case is part of an employee welfare benefit plan within the meaning of ERISA and that ERISA preemption applies as a matter of law. Roemen argues that the group health insurance policy is not ...