PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: J.G. FURNITURE GROUP, 

INCORPORATED, d/b/a J.G./The Apollo

Group, Incorporated, d/b/a Alma

Furniture Group, Incorporated, d/b/a

J.G./Alma,

Debtor.

CHARLES M. IVEY, III, Trustee for

the bankruptcy estate of J.G.

Furniture Group, Incorporated,

Trustee-Appellant,

v.

GREAT-WEST LIFE & ANNUITY

INSURANCE COMPANY,  No. 04-1576

Claimant-Appellee,

and

TRIAD FABRICATIONS AND MACHINE;

PIFER INDUSTRIES, INCORPORATED;

TRIANGLE MACHINE AND ELECTRONIC

COMPANY,

Creditors.

AMERICAN HOME ASSURANCE

COMPANY; THE TRAVELERS INDEMNITY

COMPANY, and its affiliates; ZURICH

AMERICAN INSURANCE COMPANY,

Amici Supporting Appellee. 
Appeal from the United States District Court

for the Middle District of North Carolina, at Durham.

N. Carlton Tilley, Jr., Chief District Judge.

(CA-02-586-1; BK-98-10900)

Argued: February 3, 2005

Decided: April 20, 2005

Before LUTTIG and MOTZ, Circuit Judges,

and Samuel G. WILSON, United States District Judge

for the Western District of Virginia,

sitting by designation.

Affirmed by published opinion. Judge Luttig wrote the opinion, in

which Judge Motz joined. Judge Wilson wrote a concurring opinion.

COUNSEL

ARGUED: Charles M. Ivey, III, IVEY, MCCLELLAN, GATTON &

TALCOTT, L.L.P., Greensboro, North Carolina, for Appellant. David

Marion Warren, POYNER & SPRUILL, Rocky Mount, North Carolina, for Appellee. G. Eric Brunstad, Jr., BINGHAM MCCUTCHEN,

L.L.P., Hartford, Connecticut, for Amici Curiae Supporting Appellee.

ON BRIEF: John M. Blust, IVEY, MCCLELLAN, GATTON &

TALCOTT, L.L.P., Greensboro, North Carolina, for Appellant. Deborah E. Sperati, POYNER & SPRUILL, Rocky Mount, North Carolina,

for Appellee. Margaret M. Anderson, Hugh S. Balsam, LORD, BISSELL & BROOK, L.L.P., Chicago, Illinois, for Amici Curiae Supporting Appellee. 

OPINION

LUTTIG, Circuit Judge: 

Appellant-trustee Charles M. Ivey III appeals the district court’s

determination that claimaint-appellee Great West Life & Annuity

2 In Re: J.G. FURNITURE GROUP
Insurance Company’s claim against debtor J.G. Furniture Group, Inc.

was entitled to priority status under 11 U.S.C. § 507(a)(4). For the

reasons set forth below, we affirm the judgment of the district court.

I.

The facts in this case are undisputed. In 1996, J.G. Furniture

entered into a contract with Great West, whereby Great West agreed

to administer J.G. Furniture’s self-funded employee benefit plan. J.A.

88-89. Under the terms of the agreement, J.G. Furniture’s employees

submitted their medical bills to Great West for payment, Great West

then evaluated and paid the claims, and J.G. Furniture reimbursed

Great West by permitting Great West to withdraw funds from an

account set up by J.G. Furniture. J.A. 9, 89. In exchange for these services, J.G. Furniture paid Great West administrative fees. 

In addition, in order to cap its potential liability, J.G. Furniture purchased "stop-loss" coverage from Great West. Under this coverage,

Great West "could only be reimbursed for claims paid up to [J.G. Furniture’s] maximum liability amount." J.A. 89. J.G. Furniture paid

Great West a monthly premium for the stop-loss coverage. 

In July of 1997, J.G. Furniture closed its Pennsylvania operations,

moving all of its production activities to North Carolina. The Pennsylvania employees lost their jobs, but many of them "completed

COBRA forms and sent payments to the Debtor in order to continue

coverage" under J.G. Furniture’s medical benefits plan administered

by Great West. J.A. 89. On April 7, 1998, J.G. Furniture filed a voluntary petition under Chapter 7 of the United States Bankruptcy

Code. Great West filed a claim for a combination of unpaid administrative fees, unpaid premiums, and unpaid medical claims, totaling

$27,773.51. Notably, in the 180 days preceding J.G. Furniture’s bankruptcy, only J.G. Furniture’s former employees were insured through

Great West. Great West successfully sought priority status for its

claim pursuant to 11 U.S.C. § 507(a)(4) in the bankruptcy court. The

district court affirmed and the instant appeal followed. 

II.

Section 507(a)(4) affords "priority" to "unsecured claims for contributions to an employee benefit plan . . . arising from services renIn Re: J.G. FURNITURE GROUP 3
dered within 180 days before the date of the filing of the petition or

the date of the cessation of the debtor’s business, whichever occurs

first." 11 U.S.C. § 507(a)(4)&(A) (emphasis added) (internal divisions omitted). When the trustee brought this appeal, we had not

addressed whether an insurance company could obtain priority under

section 507(a)(4) for claims for unpaid premiums and fees, pertaining

to an employee benefit plan, owed by a debtor-employer. In the

interim, however, we decided Howard Delivery Service, Inc. v.

Zurich American Ins. Co., ___ F.3d ___, 2005 WL 674869 (4th Cir.

2005), where we held that an insurer was entitled to section 507(a)(4)

priority status for unpaid worker’s compensation insurance premiums

owed by a debtor-employer. Howard Delivery held that worker’s

compensation plans fall within the meaning of "employee benefit

plan," and that an employer’s payment of insurance premiums constitutes a "contribution." While the instant case is for unpaid health

insurance premiums and fees, "worker’s compensation insurance is

indistinguishable, under the Statute, from [health, disability, and life]

insurance." Id. at *8 (King, J., concurring). Accordingly, under Howard Delivery, Great West is entitled to priority status for its claim

against J.G. Furniture. 

Appellant, however, raises a contention that was not addressed in

Howard Delivery, namely that section 507(a)(4) is inapplicable here

because the individuals insured through Great West were not

employed by J.G. Furniture in the 180-day period preceding the bankruptcy filing, and thus, appellant claims, J.G. Furniture’s obligation

did not arise from "services rendered" in that time frame. We disagree

with appellant’s contention that the relevant services were those rendered (or not) by J.G. Furniture’s employees. Under section

507(a)(4), priority is afforded "claims . . . arising from services rendered within 180 days before the date of the filing of the petition." At

a minimum, this language contemplates that such a claim can — and

perhaps must — arise from services rendered by the claimant, namely

the creditor seeking priority status. Here, the creditor, Great West,

provided health insurance coverage and administered J.G. Furniture’s

plan during the statutory time period. As the district court determined,

the performance of these services entitled Great West to priority

under the statute. See J.A. at 100 ("Insurers providing health coverage

are rendering services, and the claims for contributions arise from

these services."). 

4 In Re: J.G. FURNITURE GROUP
CONCLUSION

For the foregoing reasons, the judgment of the district court is

affirmed.

AFFIRMED

WILSON, District Judge, concurring: 

I concur in the court’s judgment, and I concur in the court’s opinion that under Howard Delivery, Great West is entitled to priority status for its claim against J.G. Furniture. However, while I reject

appellant’s argument that J.G. Furniture’s obligation did not arise

from "services rendered" within 180 days of the bankruptcy filing

because J.G. Furniture had no employees during that time period, I do

not reject this argument on its underlying merits. Rather, I reject the

argument because I believe that Howard Delivery’s reasoning that the

"services rendered" language of § 507(a)(4) contemplates services

rendered either by an employee or by an insurance company precludes it.

In Re: J.G. FURNITURE GROUP 5