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Kilfoyle v. Hill

United States District Court, N.D. Ohio, Eastern Division

January 10, 2020

MARTIN KILFOYLE, Plaintiff,
v.
TASHA J. HILL, et al., Defendants.

          MEMORANDUM OF OPINION AND ORDER

          PAMELA A. BARKER U.S. DISTRICT JUDGE

         This matter comes before the Court upon the Motion for Orders of Remand (“Motion to Remand”) of Plaintiff Martin Kilfoyle (“Kilfoyle”). (Doc. No. 8.) Defendants Tasha J. Hill, Matthew W. Roddy, Roddy Group, Inc., Sanford M. Aderson (“Aderson”), Earl J. Luttner, Lifetime Financial Growth of Central Ohio, LLC (“LFGCO”), and Lifetime Financial Growth of Northern Ohio, LLC (“LFGNO”) (collectively, “Defendants”) filed a brief in opposition to Kilfoyle's Motion to Remand on September 3, 2019, to which Kilfoyle replied on September 9, 2019. (Doc. Nos. 14, 15.)

         Also, currently pending is Defendants' Rule 21 Motion to Sever Plaintiff's Claim and Transfer Pursuant to 28 U.S.C. § 1404(a) (“Motion to Transfer”). (Doc. No. 6.) Kilfoyle filed a brief in opposition to Defendants' Motion to Transfer on August 23, 2019, to which Defendants replied on August 30, 2019. (Doc. Nos. 11, 12.)

         For the following reasons, Kilfoyle's Motion to Remand (Doc. No. 8) is GRANTED IN PART and DENIED IN PART, and Defendants' Motion to Transfer (Doc. No. 6) is DENIED AS MOOT.

         I. Background

         On July 24, 2019, Kilfoyle commenced this civil action against Defendants in the Court of Common Pleas of Cuyahoga County, Ohio. (Doc. No. 1-1.) In his Complaint, Kilfoyle alleges that he was a registered representative and statutory employee of the Guardian Life Insurance Company of America (“GLICA”). (Id. at ¶ 2.) In that capacity, his job was to sell GLICA's disability and life insurance policies. (Id.) GLICA's general agent in Cuyahoga County, Ohio is LFGCO. (Id. at ¶ 3.) LFGCO does business using the fictitious tradenames Lifetime Financial Growth, LLC and Capital Planners, which are registered tradenames of LFGNO. (Id.) The Complaint contains nine counts alleging Defendants engaged in a variety of misconduct, mainly related to Defendants' alleged interference with the terms of Kilfoyle's service while with GLICA. (Id. at ¶¶ 11-58.) In Count IX, Kilfoyle also alleges that Aderson, LFGCO, and LFGNO have denied Kilfoyle his right to fully participate in the retirement program that GLICA provides for its field representative statutory employees. (Id. at ¶¶ 54-58.)

         On August 12, 2019, Defendants removed the case to this Court. (Doc. No. 1.) Defendants' sole basis for removal is that there is federal jurisdiction over Count IX of Kilfoyle's Complaint because Kilfoyle's claim that Aderson, LFGCO, and LFGNO have denied him his right to fully participate in GLICA's retirement benefit program is subject to complete preemption by the Employee Retirement Income Security Act of 1974 (“ERISA”). (Id. at ¶ 9.) Defendants contend the Court has supplemental jurisdiction over the remaining non-federal claims in the Complaint. (Id. at ¶¶ 11-17.)

         Subsequently, on August 19, 2019, Defendants filed their Motion to Transfer. (Doc. No. 6.) Defendants argue that Count VII of Kilfoyle's Complaint relates to a promissory note that contains a forum selection clause providing for exclusive jurisdiction in Allegheny County, Pennsylvania. (Id. at ¶¶ 4-6.) As such, Defendants assert that Count VII should be severed and transferred to the United States District Court for the Western District of Pennsylvania. (Id. at ¶¶ 7-8.) Kilfoyle opposes Defendants' Motion to Transfer for a variety of reasons and has asserted that he never signed the promissory note at issue. (See Doc. No. 11.)

         On August 20, 2019, Kilfoyle filed his Motion to Remand. (Doc. No. 8.) Kilfoyle asserts that federal subject matter jurisdiction does not exist because he was a statutory employee (i.e., independent contractor) of GLICA-not a common law employee-and ERISA is therefore inapplicable to his claim in Count IX. (Id. at 1-3.) In support of his Motion, Kilfoyle submitted a copy of his Field Representative Agreement with GLICA, which provides: “Nothing herein contained shall be construed to create the relation of employer and employee between the Field Representative and the Principal or the Company.” (Doc. No. 8-1 at 1.) In addition, Kilfoyle submitted an email from Sarah Chen, GLICA's counsel, in which she wrote that “as an FR Mr. Kilfoyle has been and is an independent contractor/statutory employee of Guardian.” (Doc. No. 15-1.) Kilfoyle also argues that none of the payments to which he claims he is entitled in Count IX are part of an ERISA plan. (Doc. No. 8 at 5.) Accordingly, Kilfoyle asserts the case should be remanded to state court. (Id. at 9.) Kilfoyle also requests that Defendants be required to pay the attorneys' fees he incurred to address Defendants' Notice of Removal because Defendants had no objectively reasonable basis for removal. (Id. at 8-9.)

         In response, Defendants do not dispute the fact that Kilfoyle was not a GLICA employee. Defendants admit that “GLICA treats field representatives as ‘statutory employees' as that term is defined by treasury regulations.” (Doc. No. 14-1 at ¶ 8.) Instead, Defendants argue that common-law employee status is not a precondition to suit under ERISA and that independent contractors have standing to sue under ERISA if they are identified as beneficiaries under an ERISA-regulated employee benefit plan. (Doc. No. 14 at 4-6.)

         In addition, Defendants assert that GLICA's retirement income program qualifies as an employee benefit plan under ERISA. (Id. at 6-10.) According to a declaration by Aderson, LFGNO's general counsel, “GLICA offers its field representatives a full range of statutory employee benefits, including group health coverage, group insurance coverage, pension and retirement income benefits.” (Doc. No. 14-1 at ¶¶ 6, 9.) These benefits are summarized in GLICA's Field Representative Plan Handbook (the “Plan Handbook”). (Doc. No. 14-1, Ex. A.) Defendants identify the retirement income benefits provided to field representatives by the Plan Handbook as part of GLICA's retirement income program. (Doc. No. 14 at 8-9.) They further clarify that the beneficiaries under this retirement income program are field representatives eligible to retire under the Field Representative Defined Benefit Plan. (Id.) Defendants assert that this retirement income program, which is at issue in Count IX, qualifies as an ERISA employee benefit plan. (Id. at 7-10.) As a result, Defendants argue that Kilfoyle's claim is subject to complete preemption by ERISA, federal subject matter jurisdiction exists, and Kilfoyle's Motion to Remand should be denied. (Id. at 10.) Alternatively, Defendants contend that they had objectively reasonable grounds for removal, and in the event that the Court finds that the case should be remanded, an award of fees or costs is not warranted. (Id. at 10-12.)

         II. Motion to Remand

         a. Standard of Review

         Pursuant to 28 U.S.C. § 1447(c), “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” In addition, “[a]s a court of limited jurisdiction, a federal district court must proceed cautiously in determining that it has subject matter jurisdiction.” Petrofski v. Chrysler LLC, No. 5:07CV3619, 2008 WL 5725581, at *2 (N.D. Ohio Jan. 17, 2008). Accordingly, “[a]ll doubts as to the propriety of removal are resolved in favor of remand.” Coyne v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999). The party seeking removal also bears the burden of showing that federal jurisdiction exists. See Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 871 (6th Cir. 2000). A court ...


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