_____________ No. 95-3185

_____________ United of Omaha, * * Plaintiff - Appellee, * Appeal from the United States * District Court for the v. * Western District of Missouri. * Business Men's Assurance * Company of America, * * Defendant - Appellant. *

_____________ Submitted: April 8, 1996 Filed: January 14, 1997

_____________ Before RICHARD S. ARNOLD, Chief Judge, WOLLMAN and HANSEN, Circui t Judges.

_____________

HANSEN, Circuit Judge.
Business Men's Assurance Company of America (BMA) appeals from a n order of the district court granting summary judgment to United of Omaha (United) i n a dispute under Missouri state law over which company wa s responsible to pay health insurance benefits. BMA argues that the Employe e Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq., preem pts United's claim and, alternatively, that the district cour t
errone ouslyinterpreted and applied Missouri law, on issues of bot h liability and damages. We affirm in part and reverse in part.

### 2 I. FACTS
The undisputed facts of this case are as follows. BMA issued a group health insurance policy to Western Water Management, Inc. (Western) for th e benefit of Western's employees, effective January 1, 1989. Western's group policy was a welfare plan subject to ERISA. During the time of it s
covera ge, one of Western's employees, Clyde Jones, became totally an d per manentlydisabled, and as a result, Jones experienced a reduction i n hours of employment. This was a "qualifying eve nt" under the Consolidated Omnibus Budget Reconc iliation Act (COBRA), 29 U.S.C. §§ 1161-68 (1988), a 1985 amendment to ERISA that requires plan sponsors like Western to provid e
an opp ortunity for individuals like Jones to obtain continuing coverag e under such circumstances. Jones elected to obtain coverage, which BM A began providing to Jones as a COBRA continuee onOctober 1, 1989. The BMA policy expired on November 30, 1990.

Western replaced the BMA policy with an insurance policy issued b y United, effective December 1, 1990. Jones began paying monthly premiums to United on that date and was thereafter covered as a COBRA continue e under the United policy.
During the period between December 1 , 1990 and December 1, 1991, the 12-monthperiod following BMA's policy's termination, a number of health
care p roviders presented bills to United for Jones's medical expenses

. United paid the bills but later sought reimbursement from BMA, contending that BMA was responsible for the expenses pursuant to Missouri law tha t go verns the discontinuance and replacement of insurance for disable d ind ividuals. See Mo. Rev. Stat. §§ 376.438, 376.441. BMA refused t o reimbur se United, pointing to a provision in BMA's group policy whic h provides that its obl igation to provide extended benefits terminates when an individual becomes fully covered by another insurer.

### 3 United brought this action against BMA, seeking damages unde r Missouri l aw for the hospital and medical expenses United had paid o n beh alf of Jones during the 12-month period following the termination o f BMA's policy. The parties filed a series of mot ions for summary judgment, making arguments on l iability, certain affirmative defenses, and damages. The district court gr anted United's motions for summary judgment, holding that United's state-law claim was not preempted by ERISA and, according to Missour i law, BMA is liable for Jones's medical and hospital expense s incu rred from December 1, 1990, through December 1, 1991. The cour t calcula ted the damages based upon the full amount of medical expense s United had paid, plus prejudgment interest.

BMA appe als, asserting a number of arguments. First, BMA contend s th at the district court erroneously interpreted sections 376.438 an d 376.441 of the Missouri Revised Statutes. Second, BMA claims that ERISA preemp ts the Missouri statutes, as interpreted by the district court , because they are in conflict with the federal statute, as amended by COBRA

. BMA also argues that ERISA preempts United's state-law subrogation claim. Next, BMA maintains t hat even if the district court correctly interpreted the statutes, and even if United's claim is not preempted, the cour t
er roneouslyapplied the Missouri state law of equitable subrogation

. Finally, BMA contends that the district court erred in calculating damages

.

II. Standard of Review

We re view the district court's grant of summary judgment de novo , applying the same standards as did the district court. Kerns v. Benefit Trust Life Ins. Co. , 992 F.2d 214, 217 (8th Cir. 1993). Summary judgment is appropriate when the evidence, viewed in the light most favorable to th e nonmoving party, show s there is no genuine issue of material fact and the moving party is entit led to judgment as a matter of law. Fed. R. Civ. P. 56(c). In this case,

### 4

because t he parties do not dispute the facts, our inquiry is limited t o whether United was entitled to judgment as a mat ter of law. We review the district court's determination of Missouri state law de novo. Salva Regin a College v. Russell , 499 U.S. 225, 231 (1991); United States v. Green Acre s Enters., Inc. , 86 F.3d 130, 133 (8th Cir. 1996).
III. Statutory Interpretation

To determ ine whether United has a cause of action that is preempted by ERISA, we must interpret the state statute onwhich the cause of action is based. The district court interpreted the state statute to require BMA , as a pri or carrier of group health insurance, to provide Jones a n
ex tension-of-benefits for 12 months following the termination of th e policy, regardless of whether Western had secured replacement coverage

. The c ourt then looked at BMA's policy, which provided an extension fo r medical expenses, without payment of a premium, "1) for up to 3 month s after coverage terminates for any sickness or injury; and 2) for up to 9 more months for the s ickness or injury causing the total disability," but whichalso stated that the extension of benefits would be terminated o n "[t]he date the [c]overed [p]erson is covered un der any other group policy
or emplo yer-funded plan." (J.A. at 76.) Finding this terminatio n provision of the policy to be incompatible with Missouri law, the district court held that it was void. BMA argues that the extension-of-benefit s coverage provided in its policy does not violate the state statute because it is reas onable, within the meaning of section 376.438.1, for BMA t o refuse to extend benefits after the disabled person is covered by a replacement policy.

Our primary objective in interpreting the Missouri statute is t o ascert ain the legislative intent from the statutory language and, i f possible, to give effect to that intent. Rothschild v. State Tax Comm'n of Mo. , 762 S.W.2d 35, 37 (Mo. 1988) (en banc).

### 5

"[W]e con sider the words employed in the statute in their plain an d ordinary meaning, we presume the legislature didnot intend an absurd law, and we favor a construction that avoids unjust or unreasonable results." Id. (internal citati on omitted). When the plain and ordinary meaning of the language is unambiguous, "we are afforded no room for construction." Brownstein v. Rhomber g-Hagling & Assoc. , 824 S.W.2d 13, 15 (Mo. 1992) (en banc).
Section 376.438.1 of the Missouri Revised Statutes provides:

Every group policy or other contract subject to sections 376.431 to 376.442, or under which the level of benefits i s her eafter altered, modified or amended, must provide a reasonable provision for extension of benefits in the event of tota l disability at the date of any termination o r discontinuance of the group policy or contract, regardless of the reason for the termination or discontinuance, as required by the following subdivisions of this subsection[.]

This provision has three subdivisions. Subdivision (3) states, in relevan t part:
In the case of hospital or medical expense coverages . .

., a reasonable extension of benefits or accrued liabilit y pro vision is required. Such a provision will be considere d rea sonable if it provides an extension of at least twelv e months under major medical and comprehensive medical typ e coverages . . . .

Mo. Rev. Stat. § 376.438.1(3).

To inte rpret the language of section 376.438, we must also look a t section 376.441, which explains the coverage requirements of replacement carrie rs and the allocation of liabilities between prior and succeedin g carriers. Section 376.441 begins by stating:

Wh en one carrier's contract replaces a plan of simila r benefits of another carrier, the prior carrier remains liable only to the extent of its accrued

### 6 lia bilities and extensions of benefits. The position of th e prior carrier shall be t he same whether the group policyholder or other entity secures replacement coverage from a ne w carrier, self-insurer, or foregoes the provision of coverage.

The st atute requires succeeding carriers to provide coverage fo r individuals who are not eligible under the succeeding carrier's policy, bu t who were validly covered under a benefit extension on the date of the prio r carrier's discontinua nce and who are in the class of persons eligible for
covera ge under the succeeding carrier's policy. Under this require d coverage, the succeed ing carrier's obligation to pay benefits is measured by the applicable ben efits under the prior carrier's plan, reduced by the benefits payable by the prior carrier. Id. § 376.441(1); see also id

. § 376.441(3) (measuring the succeeding carrier's obligation to pay expense s related to preexisting conditions by the lesser of (1) the benefits of the
succee ding carrier's policy without regard to any limitation fo r preexisting conditions or (2) the benefits of th e prior carrier's policy). The succeeding carrier must provide this coverage until the earliest o f several dates, one of which is when the period of extension or accrue d liability by the prior carrier has terminated. Id. § 376.441(2)(c). When the si tuation arises requiring a determination of the prior carrier' s ben efits, those benefits are to be determined under the prior carrier' s plan, "as if coverage had not been replaced by the succeeding carrier. " Id. § 376.441(5).

Sec tion 376.441 reveals that BMA's policy of providing extende d benefi ts only until replacement coverage is secured is not "reasonable " within the meaning of section 376.438. The firs t two sentences of section 376.441 clearly indicate that a prior carrier remains liable "to the exten t of its accrued liabil ities and extensions of benefits," even if the group policy holder has secured coverage from a succeeding carrier. Further, th e statute states that for individuals like Jones who were covered by a

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benefit extension on the date of discontinuance, the amount of benefits a succeeding carrier mu st pay depends upon the benefits available under the prior c arrier's plan. See Mo. Rev. Stat. § 376.441(1), (5). The plai n langua ge of section 376.441 contemplates that the coverage of th e succeeding replacement carrier is secondary to t he benefits payable by the prio r carrier under its extension-of-benefits provision. We therefor e reject BMA's interpretation of section 376.438.1(3).

We also note that BMA's interpretation of what is reasonabl e misconstrues the natu re of the section 376.438 requirements. The statute mandates that BMA provide, for a reasonable time, an extension of benefits , not full coverage. S ection 376.441 makes this clear, because it requires the succeeding carrie r to provide replacement coverage until the earliest of severa l dates, one of which is when the prior carrier's extension o f bene fits terminates. Id. § § 376.441(2)(c). This obligation on th e succeeding carrier would be unnecessary if an extension of benefits were the same as extended coverage. See also id. § 376.441(1) (defining th e succeeding carrier's required replacement coverage by the total coverage provided under the pr ior carrier's plan before it was discontinued, minus the bene fits payable by the prior carrier). Thus, BMA's statutor y obligati on to provide an extension of benefits is not a "coverage " requ irement and should not be confused with any obligation United o r Western had to Jones.

We therefore hold that BMA was primarily obligated to provid e extended benefits to Jones for a reasonable period of time. We furthe r hold that BMA cannot avoid this requirement mere ly because Western secured replacement coverage for Jones. Because of our disposition of this case under the preemption analysis below, we need not consider the issues o f whether the language in section 376.438(3) regarding a 12-month period is definit e or indefinite and exactly what types of benefits the statut e requires BMA to pay.

### "An employee welfare-benefit plan or welfare plan is 1 

### defined as one which provides to employees `medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident disability [or] death,' whether these benefits are provided `through the purchase of insurance or otherwise.'" Metropolitan Life Ins. Co. v. Massachusetts , 471 U.S. 724, 732 (1985) (quoting 29 U.S.C. § 1002(1)). The parties agree that Western provided its employees with a welfare plan as defined by ERISA. 8 IV. ERISA Preemption

BMA argu es that United's claim is preempted by ERISA, both becaus e the Missouri statutes are in conflict with COBRA and because United styles its claim as a common-law subrogation claim. ERISA regulates employe e pensio n and welfare plans. While ERISA imposes various procedura l standards on welfare plans, it does not regulate the substantive content 1 of such plans. Metropolitan Life , 471 U.S. at 738.

As with all preemption analysis, our task is to ascertai n congressional intent in enacting the federal law

. Id. In enacting ERISA, Congress set out:

"to ensure that plans and plan sponsors would be subject to a unif ormbody of benefits law; the goal was to minimize th e adm inistrative and financial burden of complying wit h conflicting directives among States or between States and the Federal Government . . ., [and to prevent] the potential fo r conflict in substantive law . . . requiring the tailoring o f plans and employer conduct to the peculiarities of the law of each jurisdiction."

New York Conference of Blue Cross v. Travelers I ns. , 115 S. Ct. 1671, 1677 (1995) (quoting Ingersoll-Rand Co. v. McClendon , 498 U.S. 133, 142 (1990))

. To this end, ERISA contains a preemption provision declaring that th e statute "shall supersede any and all State laws insofar as they may now or hereafter relate to employee benefit plans." 29 U.S.C. § 1144(a). W e construe this language broadly, Pilot Life Ins. Co. v. Dedeaux , 481 U.S. 41, 47 (1987),

### 9

finding that a state law relates to employee benefit plans if it "refers to or has a connection with covered benefit plans . . . `even if the law is not specifically designed to affect such plans, or the effect is only indirect,' and even if the law is `consistent with ERISA's substantiv e requirements.'" District of Columbia v. Greater Wash. Bd. of Trade , 506 U.S. 125, 129-30 (1992) (quoting, and citing internally, Ingersoll-Rand , 498 U.S. at 139, and Metropolitan Life , 471 U.S. at 739).

The "r elates to" language of the preemption clause is meant t o prov ide some boundaries to the scope of preemption, however, and th e question of whether state law is connected with ERISA is not to be carried to its infinite, logical limits. New York Conference of Blue Cross , 115 S. Ct. at 1677. To fall within the parameters of ERISA's preemptio n clause, the state law must be related to ERISA in an aspect that affects ERISA's objectives. Id. ; see Arkansas Blue Cross & Blue Shield v. St

. Mary's Hospital , 947 F.2d 1341, 1344-45 (8th Cir 1991) (discussing th e factors courts have used to determine whether a state law relates to ERISA plans). In essence, "[s]ome state actions may affect employee benefit plan s in too tenuous, remote, or peripheral a manner to warrant a finding that the law `relates to' the plan." Shaw v. Delta Air Lines, Inc. , 463 U.S. 85, 100 n.21 (1983). See, e.g., Mackey v. Lanier Collection Agency & Serv ., Inc. , 486 U.S. 825, 831-34 (1988) (holding no preemption of a state' s general garnishment statute, even though it might burden th e administration of an ERISA plan when applied to collect judgments against plan participants); McCallum v. Rosen's Diversified, Inc. , 41 F.3d 1239, 1241-42 (8th Cir. 1994) (holding no preemption of state statute authorizin g court-ordered valuati on and buyout, even though such a buyout may require valuation of shares in employee stock ownership plan).

If a state law does in fact fall within the scope of ERISA' s pre emption clause, it may nonetheless be excepted under what has becom e known as the "savings clause." 29 U.S.C. § 1144(b)(2)(A).

### The savings clause is limited, in turn, by the "deemer 2 

### clause," FMC Corp. v. Holliday , 498 U.S. 52, 56 (1990), which states that no employee-benefit plan "shall be deemed to be an insurance company or other insurer, . . . or to be engaged in the business of insurance or banking for purposes of any law of any State purporting to regulate insurance companies . . . ." 29 U.S.C. § 1144(b)(2)(B). This limitation is not in issue in the case before us today.
10 The savings clause excepts from preemption certain categories of state law , incl uding state law that regulates insurance. The Supreme Court ha s expla ined that a state law "regulates insurance" if (1) it is directe d spec ificallytoward the insurance industry and (2) it applies to th e "business of insurance" within the meaning of the McCarran-Ferguson Act, which giv es to the states the authority to regulate the business o f insurance , see 15 U.S.C. §§ 1011-1015. Pilot Life , 481 U.S. at 48 ; Metropolitan Life , 471 U.S. at 742-43; Baxter v. Lynn , 886 F.2d 182, 185 (8th Cir . 1989). A law applies to the business of insurance under th e McCarran-Ferguson Act if it (1) has the effect of transferring or spreadin g the policyholder's risk; (2) is an integral part of the policy relationshi p between the insurer and the insured; and (3) is limited to entities within the insurance industry. Metropolitan Life , 471 U.S. at 743. 2
Regulatio n of the insurance industry may exist both in ERISA and in state law. In such circumstances, "ERISA leaves room for complementary or dual federal and state regulation." John Hancock Mut. v. Harris Trust & Sav. Bank , 114 S. Ct. 517, 525 (1993); see also McCallum , 41 F.3d at 1240. However, "in the case of a direct conflict, federal supremacy principles require that state law yield." Id. at 526. Mor eover, "`where [state] law stan ds as an obstacle to the accomplishment of the full purposes an d objectives of Congress,' federal preeemption occ urs." Id. at 526 (quoting Silkwood v. Kerr-McGee Corp. , 464 U.S. 238, 248 (1984)); see also Pilo t Life , 481 U.S. at 57 (finding state cause of action for improper processin g of a claim for ERISA benefits conflicts with

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the civil enforcement scheme of ERISA-plan participants and beneficiaries to recover benefits owed under an ERISA plan).

With this legal framework in mind, we turn now to BMA's argument s that Missouri's extension-of-benefits statute an d this cause of action are preempted.
A. Preemption and Missouri Revised Statute 376.438
Applying the same preemption analysis as set forth above, th e district court conclu ded that ERISA does not preempt sections 376.438 and 376.441 of the Missouri Revised Statutes. The court determined tha t although the Missouri statutes "relate to" the ERISA plan, they are rescue d from p reemption by the savings clause because they "mandate certai n benefits and govern liability among insurance ca rriers for providing those benefits." (Appella nt's Adden. at A-4.). The district court determined that the statutes regulate the business of insur ance within the meaning of the McCarran-Ferguson Act. In reaching its conclusions, the district cour t relied primarily on Metropolitan Life , 471 U.S. at 741-43, which held that
a mandated-benefits statute was not preempted because it was governed by the savings clause.

BMA conte nds that the district court's conclusion is flawed because the court failed to consider adequately the limitations on the saving s clause an nounced in Pilot Life , 481 U.S. at 56-57, a case decided afte r Me tropolitan Life . In Pilot Life , the Supreme Court held that a beneficiary may not bring a state-law cause of action disputing th e all ocation of benefits, for such an action conflicts with ERISA's civi l enforcement scheme. Id. BMA maintains that the Missouri statutes conflic t with COBRA and thus are preempted pursuant to Pilot Life

.

The prec ise requirement at issue in this case is the extension-of

benefits requirement of Missouri Revised Statute,

### We note that Missouri has a continuing coverage statute 3 

### that is in fact analogous to COBRA, Mo. Rev. Stat. § 376.428. The Missouri legislature avoided any conflict with COBRA by amending the statute in 1987 to apply "only to those persons who are not subject to the continuation and conversion provisions set forth in [COBRA]." Id. § 376.428.4.
12 section 376.438. We conclude that although this statute relates t o employe e benefit plans, it is excepted from preemption by the saving s clause. As already d iscussed, the extension of benefits statute works to
ensure that a discontinued carrier remains primarily liable for a reasonable extension of benefits to a disabled i ndividual. The statute is directed specifically toward insurance companies and regulates the busines s of insurance within the meaning of the McCarran Ferguson Act. Accordingly , we agree with the district court's conclusion that section 376.438 is save d from ERISA preemption.

Thus, we turn to the question of whether section 376.438 is i n conflict with ERISA. John Hancock Mut. , 114 S. Ct. at 526; see also Pilot Life , 481 U.S. at 57. We see no conflict betwee n Missouri's extension-ofbenefits statute and COBRA. COBRA requires plan sponsors of group health insurance policies to provide the opportunity for continuing coverage to beneficiaries who would lose coverage as a result of a qualifying event. 29 U.S.C. § 1161(a). COBRA is directed at the plan sponsor (here , Wester n), whereas section 376.438 is directed at prior carriers (here , BMA). COBRA mandates an opportunity for Jones to obtain coverage, fo r which he pays premiums, see id. § 1162(2)(C) (coverage ceases whe n beneficiary fails to make timely payment of premium), while section 376.43 8 requires BMA to provide reasonable extended benefits for certain claims, without the payment of any additional premiums a nd regardless of any other
cover age Jones may have. Thus, section 376.438 does not conflict wit h COBRA, bec ause it governs a different situation and is directed at a n entirely different entity. 3

### 13 BM A's assertion that United subjected itself to COBRA requirement s byissuing a group policy to Western misses the mark. Western, the plan sponso r, fulfilled its COBRA obligations by securing an opportunity fo r Jones t o obtain continued coverage through United. BMA's claims tha t United became a fiduciary under COBRA and that United has continuing dutie s under COBRA (such as giving Jones notice) simply do not affect BMA's duty to provide an extension of benefits under Missouri state insurance law.

BMAalso submits a conflict-preemption argument based on COBRA' s requirement that the continuing coverage provided to disabled individuals be identical to the c overage provided to similarly situated beneficiaries to whom a qualifying event has not occurred. See 29 U.S.C. § 1162(1). BMA contrasts this requir ement with the language in section 376.441(3) of the Missouri statutes, which provides that a succeeding carrier's obligation to pay be nefits is determined by the terms in the prior carrier's plan

. BMA contends that because the terms in the prior plan may not be identical to the coverage similarly situated beneficiaries have under the succeeding carrier's plan, the Missouri statutes governing discontinuance an d replac ement coverage for disabled individuals must be preempted. Onc e again, we note that COBRA is directed at the plan sponsor, whereas section s 376.438 and 376.441 are directed at the insurance companies. Mor e imp ortantly, however, we conclude that we need not decide today whethe r section 376.441 is preempted by virtue of this alleged conflict, for it ha s nothing t o do with the precise question before us; the narrow issu e pre sented in this case is whether ERISA preempts section 376.438, whic h requires BMA to provide extended benefits for a reasonable period of time. We leave the preemption question regarding section 376.441 for another day , and specifically hold that ERISA does not preempt section 376.438 of the Missouri Revised Statutes.

We recogn ize that our holding negates the provision in BMA's policy providing for a termination of extended benefits when the

### Because United is not a "participant" or "beneficiary," 4 

### United has no standing to bring an ERISA claim. 29 U.S.C. § 1132(a)(1)(B).
14 recipi ent obtains other coverage, but this provision conflicts with th e substance of state insurance law. Having already concluded that the state extension-of-benefits statute is an insurance regulation saved fro m preemption and fully compatible with the language and spirit of ERISA, we wil l not now find that a conflicting provision in BMA's ERISA pla n
ov errides the state statute. To do so would be to open the door fo r insurance companies to avoid any state insurance law simply by including
a contrary provision in their group ERISA welfare plans. Arkansas Blu e Cross & Blue Shield , 947 F.2d at 1345. We do not believe Congress intende d
suc ha result. Cf. FMC Corp. v. Holliday , 498 U.S. 52, 61, 64 (1990 ) (finding that a subrogation provision in a self-funded ERISA plan preempte d
a state antisubrogation statute because of the deemer clause, but noting that if the plan had been insured, it would be bound by state insuranc e regulations).

In summar y so far, we conclude that section 376.438 of the Missouri Revised Statutes, which requires insurance companies to provide a n extension of benefits to disabled individuals upon discontinuance of the poli cy, relates to employee benefits plans but is rescued from ERIS A preemption because it comes within ERISA's savings clause. Additionally,
we conclude that the statute is not preempted by ERISA under a conflictpreemption analysis.
B. Preemption and the Common Law of Subrogation

Whether United's cause of action is preempted presents yet anothe r question. United brought this cause of action under state common law as
a sub rogee. United's theory is that it became subrogated to the right s 4 of Jones when it paid claims for which BMA was primarily liable. Relyin g
on Baxter , 886 F.2d at 186, BMA

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argues that ERISA preempts United's state-law subrogation claim. We agree

.

In Baxter , the beneficiary had been awarded damages from a tort feaser in addition to the medical benefits he had received under an ERISA plan. When the plan's insurer attempted to enforce a plan provision creating a right of subrogation in favor of the insurer against the beneficiary, the ben eficiarypointed to state law precluding such subrogation. We foun d that the state antisubrogation law prevented the plan administrator from exercis ing its rights under the plan to obtain reimbursement from th e beneficiary for the medical expenses paid. Beca use the state law directly impacted the structure of the ERISA plan, we con cluded that it was related to the plan. See Arkansas BCBS , 947 F.2d at 134 5 (explaining Baxter ). We further f ound that the law was not saved from preemption by the saving s clause, and consequently, ERISA preempted the state antisubrogation law.

The district court in this case distinguished Baxter and rejecte d BMA's preemption argument on the basis that United's subrogation claim is not related to the plan. The court stated:

Althou ghthe terminology is the same, the subrogatio n involved in Baxter and that involved here are entirel y different. The subrogation at issue in Baxter related to the righ ts and obligations running between the insurer and th e insured. It thus "relat e[d] to an employee benefit plan," and required analysis under the McCarran-Ferguson Act. By contrast the subrogation involved here is unrelated to the substantive provisions of the insurance policy; it is simply an equitable princip le for recovering a claim from one who ought to hav e paid it.

(Appellant's Adden. at A-5.)

We agree that in some respects, this case is quite different fro m Baxter . Here, the dispute is between two insurance companies

### 16

over which company is responsible to pay for certain benefits. Thi s particular state-law claim does not affect either the amount of benefits due to Jones or any r eimbursement from him to the plan. This subrogation claim implicates the allocation of liability between prior and succeeding insurance carriers under state insurance law.
Despite these distinctions from Baxt er , we nonetheless conclude that ERISA p reempts United's claim. Under Missouri law, "[i]t is . . . wel l established that in [a subrogation] action a party makes a claim through
a derivative right acquiring no greater rights in law or equity than the partyfor whom it was substituted and therefore, cannot make a claim its subrogor could not make." Stoverink v. Morgan , 660 S.W.2d 743, 745 (Mo. Ct. App. 1983). Thus , as a subrogee, United stands in the shoes of Jones and has no greater ri ghts than Jones has. Under settled law, Jones could not bring a state-law claim seeking benefits owed him under sectio n 376.4 38, because ERISA would preempt that claim and require him to us e ERISA's re medies. See Pilot Life , 481 U.S. 54-56 (holding that ERIS A preemp ts a beneficiary's state-law causes of action based on imprope r processing of claims for benefits because the ci vil enforcement provisions of ERISA are meant to be the exclusive vehicle for such actions)

. Consequently, United' s state-law subrogation claim is likewise preempted.

To be sure, subrogation is an equitable doctrine founded o n principles of justice, and BMA was obligated und er Missouri law to provide a reasonable extensio n of benefits. See American Nursing Resources, Inc.

v. Forrest T. Jones & Co. , 812 S.W.2d 790, 796 (Mo. Ct. App. 1991); Qualit y Wood Chip s, Inc. v. Adolphsen , 636 S.W.2d 94, 96-97 (Mo. Ct. App. 1982 ) (explicating the nature of subrogation claims). The equitable nature of the doctrine, however , is that we theoretically place the subrogee in the shoes of the subrogor. We cannot change the color or size of those

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shoes. We therefore hold that United's state-law cause of action, based on its right of subrogation, is preempted by ERISA.

V. Conclusion

For the above reasons, we affirm the district court in its conc lusion that ERISA does not preempt section 376.438 of the Missouri Revise d statutes, but we reverse the district court's conclusion that ERISA does not preempt United's subrogation cause of action. We do not consider the partie s' remaining arguments, because our reversal on the basis o f pree mption renders them moot. The judgment of the district court i s vacated, and the case is ordered dismissed with prejudice.
RICHARD S. ARNOLD, Chief Judge, concurs in the judgment.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.