In Prince v. Sears Holdings Corp., 848 F.3d 173 (4th Cir. 2017), plaintiff applied for life insurance for his spouse through Sears, his employer, in 2010. Sears sent an acknowledgment to plaintiff, and Sears’ online benefits summary confirmed in 2012 that his wife had life insurance. Plaintiff’s wife died in 2014, and the insurer denied benefits, asserting that no evidence of insurability questionnaire had been submitted for her. The insurer asserted that it had sent a notice to that effect in 2011, but plaintiff denied receiving it. Plaintiff sued Sears, alleging constructive fraud, negligent misrepresentation, and intentional infliction of emotional distress. After Sears removed, the district court dismissed the action.
The Fourth Circuit affirmed, ruling that ERISA preempted plaintiff’s claim.
Plaintiff argued that his claims relied only on Sears’ actions before the denial of benefits, such as deducting premiums and reporting that his wife was covered. The court held that the claims nonetheless “challenge the administration of the ERISA plan – a core § 502(a) claim.” The court noted that plaintiff was entitled to life insurance benefits “only if the ERISA plan provided them.” Because plaintiff’s entitlement to coverage would exist only because of the plan, and because Sears had no independent duty to him, ERISA preempted his claims.
The court also found that resolution of plaintiff’s claims would require interpretation of the ERISA plan, including assessment of Sears’ duty as plan administrator.