FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

OCTOBER 18, 2011

JOHN LEY

 CLERK

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

 FOR THE ELEVENTH CIRCUIT

 ________________________

 No. 10-13968 

 ________________________

 D.C. Docket No. 2:07-cv-00666-JES-DNF

EHLEN FLOOR COVERING, INC.,

a Florida corporation,

EDWARD EHLEN,

an individual,

THOMAS EHLEN,

an individual,

FRANCIS EHLEN,

an individual,

EHLEN FLOOR COVERINGS RETIREMENT PLAN,

llllllllllllllllllllllllllllllllllllllll Plaintiffs - Counter Defendants

llllllllllllllllllllllllllllllllllllllll Appellees,

DOLORES EHLEN,

llllllllllllllllllllllllllllllllllllllll Plaintiff - Counter Defendant,

 versus

JEFFREY LAMB,

individually, et al., 

llllllllllllllllllllllllllllllllllllllll Defendants,

INNOVATIVE PENSION STRATEGIES, INC., 

a California corporation, 

llllllllllllllllllllllllllllllllllllllll Defendant - Counter Claimant

llllllllllllllllllllllllllllllllllllllll Appellant.
________________________

 Appeal from the United States District Court

 for the Middle District of Florida

 ________________________

(October 18, 2011)

Before MARCUS, WILSON and HILL, Circuit Judges.

WILSON, Circuit Judge:

Innovative Pension Strategies, Inc. (“IPS”) appeals the district court’s denial

of its motion to compel arbitration and stay plaintiffs’ claims against it. Plaintiffs

cross-appeal, disputing the preemption of their claims under the Employment

Retirement Income Security Act (“ERISA”) and alleging a lack of federal

jurisdiction. We find that jurisdiction is proper and affirm the district court’s

denial of IPS’s motion to compel arbitration.

I. BACKGROUND

Thomas, Francis, Edward, and Dolores Ehlen (“the Ehlens”) are employees 1

of Ehlen Floor Covering, Inc. (“Ehlen Floor”). In 2002, Ehlen Floor created a

412(I) employee benefit pension plan, the Ehlen Floor Coverings Retirement Plan

(“the Plan”), with the help of advisors and administrators. IPS, a corporation

 Dolores Ehlen was dismissed without prejudice as a plaintiff on March 15, 2010. 1

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specializing in pension plan design and administration for small businesses, took

over as the Plan administrator at the start of 2003. As part of the commencement

of IPS’s services, Edward Ehlen, in his capacity as president of Ehlen Floor,

signed an Arbitration Addendum (“AA”) attached to an Administrative Services

Agreement (“the Agreement”) between IPS and Ehlen Floor. The AA called for

arbitration of “any claim arising out of the rendition or lack of rendition of

services under [the] [A]greement.” The Agreement provided a list of available

services that IPS could provide, such as performing annual reviews of the Plan,

making amendments, and preparing annual report forms. The Agreement also

stated that Ehlen Floor would indicate in Section VI of the Agreement which of

the available services it desired for IPS to actually perform. There is no Section

VI in the Agreement, nor is there any testimony or evidence that plaintiffs ever

viewed a Section VI of the Agreement. 

Shortly after IPS stepped in as administrator of the Plan, it became aware

that the Plan was not in compliance with several Internal Revenue Service (“IRS”)

rules and regulations. IPS contends that it drafted an amendment to correct these

flaws, but the amendment was never officially adopted. In 2004, the IRS

promulgated new rules explaining that it would consider 412(i) plans with

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beneficiary payout limitations to be listed transactions , possibly subject to serious

2

penalties. The rule required any plans that could be considered listed transactions

to file Form 8886 to avoid potential penalties. IPS drafted another amendment to

the Plan after determining that the Plan would likely be classified as a listed

transaction under the new rules. Ehlen Floor was not informed about the pre-rule

tax problems, the existence of the new rule, the additional filing requirements that

the new rule imposed, or the drafting of the new amendment. The IRS instigated

an audit on March 6, 2006, found the Plan to be non-compliant, and ultimately

assessed significant penalties against Ehlen Floor.

In August 2007, plaintiffs filed a complaint in state court against a number

of parties involved with the creation and initial administration of the Plan,

asserting claims of negligence, fraudulent and negligent misrepresentation,

negligent supervision, breaches of fiduciary duties, and unfair and deceptive trade

practices. The case was removed to federal court on the basis of preemption under

ERISA. In May 2009, as requested by the court, plaintiffs recast their complaints

as federal matters in their Second Amended Complaint, but plaintiffs contested the

 A listed transaction is a transaction that is the same as, or substantially similar to, one 2

that the IRS has determined to be a tax avoidance transaction. The IRS identifies types of listed

transactions and usually promulgates additional reporting requirements for persons engaged in

such transactions. 

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removal and argued against federal jurisdiction. IPS was added as a defendant in

the Second Amended Complaint. IPS then moved to compel arbitration of the

dispute, claiming that the terms of the AA govern the matter. The district court

denied the motion. IPS appeals; plaintiffs cross-appeal to challenge the existence

of federal jurisdiction. 

II. STANDARD OF REVIEW

We review questions of jurisdiction de novo. See McKusick v. City of

Melbourne, 96 F.3d 478, 482 (11th Cir. 1996). The denial of a motion to compel

arbitration is reviewed de novo. See Paladino v. Avnet Computer Techs., Inc., 134

F.3d 1054, 1056–57 (11th Cir. 1998). 

III. DISCUSSION

A. Complete preemption under ERISA grants federal jurisdiction

Questions of jurisdiction can be raised at any point in the litigation, see

Cochran v. U.S. Health Care Fin. Admin., 291 F.3d 775, 778 n.3 (11th Cir. 2002),

and must be addressed first to ensure that we have the authority to hear the case. 

The existence of federal jurisdiction is tested as of the time of removal. Adventure

Outdoors, Inc. v. Bloomberg, 552 F.3d 1290, 1294–95 (11th Cir. 2008). 

Jurisdiction is determined by looking to the face of the plaintiffs’ well-pleaded

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complaint, so we examine the plaintiffs’ original complaints entered at the time of

removal. See Kemp v. Int’l Bus. Mach. Corp., 109 F.3d 708, 712 (11th Cir. 1997). 

A federal district court has original jurisdiction over cases arising under

federal law. 28 U.S.C. § 1331. Federal question jurisdiction generally exists only

when the plaintiffs’ well-pleaded complaint presents issues of federal law, but the

complete preemption doctrine of ERISA creates an exception to that rule. Conn.

State Dental Ass’n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1344 (11th Cir.

2009). Regardless of its characterization as a state law matter, a claim will be recharacterized as federal in nature if it seeks relief under ERISA. Kemp, 109 F.3d

at 712. 

This court acknowledged in Conn. State Dental that the test articulated by

the Supreme Court in Aetna Health Inc. v. Davila, 542 U.S. 200, 210, 124 S. Ct.

2488, 2496 (2004), should govern our inquiry into whether complete preemption

under ERISA exists. 591 F.3d at 1345. The Davila test asks (1) whether the

plaintiffs could have ever brought their claim under ERISA § 502(a) and (2)

whether no other legal duty supports the plaintiffs’ claim. Id. 

Step one of Davila entails two inquiries: first, whether the plaintiffs’ claims

fall within the scope of ERISA § 502(a), and second, whether ERISA grants the

plaintiffs standing to bring suit. Conn. State Dental, 591 F.3d at 1350. ERISA §

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502(a)(2) allows a civil action to be brought by “a participant, beneficiary[,] or

fiduciary for appropriate relief under [29 U.S.C. § 1109].” 29 U.S.C. § 1132(a)(2). 

Section 1109 allows recovery against, “[a]ny person who is a fiduciary with

respect to a plan who breaches any of the responsibilities, obligations, or duties

imposed upon fiduciaries by this subchapter.” 29 U.S.C. § 1109(a). Fiduciary

duties imposed by ERISA include “proper management, administration, and

investment of fund assets, the maintenance of proper records, the disclosure of

specified information, and the avoidance of conflicts of interest.” Mass Mut. Life

Ins. Co. v. Russell, 473 U.S. 134, 142–3, 105 S. Ct. 3085, 3090 (1985). 

Plaintiffs argue that their claims against IPS concern the design and repair

of the Plan, not IPS’s ERISA-regulated duties such as management and

administration of the Plan. It is true that some of plaintiffs’ assertions do not fall

under the umbrella of ERISA, but their allegations of breach of fiduciary duties

and failure to make required disclosures are clearly potential claims under 29

U.S.C. § 1109(a), thus fulfilling prong one. The second inquiry is satisfied

because Ehlen Floor and the Ehlens have standing under ERISA § 502(a)(2) as

fiduciary and Plan participants, respectively.

Step two of Davila looks to whether the plaintiffs’ claims implicate a duty

independent of ERISA. In Davila, the Supreme Court found that although

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respondents’ claim asserted a breach of duty under the Texas Health Care Liability

Act (THCLA), the “interpretation of the terms” of the benefit plan “form[ed] an

essential part of their THCLA claim,” such that there was no independent claim to

defeat preemption. 542 U.S. at 213, 124 S. Ct. at 2498. Similarly, in Borrero v.

United HealthCare of N.Y., Inc., appellants argued that their contractual duties

were defined by state law, but this court found that even though the appellants’

assertion was “true in the abstract,” “the content of the claims necessarily

require[d] the court to inquire into aspects of the ERISA plans because of the

invocation of terms defined under the plans.” 610 F.3d 1296, 1304 (11th Cir.

2010). This court held that if some of a party’s claims “implicate legal duties

dependent on the interpretation of an ERISA plan,” the claims are completely

preempted. Id. at 1304–5. 

 Plaintiffs here assert that IPS failed to disclose information related to the

Plan— an ERISA violation— and abrogated its fiduciary obligations, which arise

from the relationship established by the Plan and IPS’s duties under ERISA. Like

the claims in Borrero, the “legal duty implicated is dependent upon an ERISA

plan.” Id. at 1304. Because there is federal question jurisdiction over these

claims, supplemental jurisdiction provides us with subject matter jurisdiction over

the remaining claims. See id. at 1304–05. 

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B. The Arbitration Agreement does not govern this dispute

Plaintiffs and IPS agree on the following: Ehlen Floor signed the AA

attached to the Administrative Services Agreement; the AA requires arbitration of

disputes arising out of the provision of services under the Agreement; the

Agreement lists available services that IPS is capable of providing; the Agreement

states that the “particular services to be performed are indicated in Section VI,

‘Election of Services,’” within the Agreement; and Section VI does not exist. IPS

argues that the AA should still govern Ehlen Floor’s claims and that the Ehlens,

non-signatories to the AA, should be equitably estopped from avoiding arbitration. 

We disagree. 

Although there is a liberal federal policy favoring arbitration agreements,

see Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.

Ct. 927, 941 (1983), this policy does not override the wishes of parties who have

restricted the circumstances under which they agree to arbitrate disputes, see

Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 57, 115 S. Ct. 1212,

1216 (1995). Here, Ehlen Floor and IPS intentionally limited the scope of

arbitrable matters by specifying that not all disputes would be sent to arbitration,

only those directly linked to the provision of services under the contract. As we

examine their contract to determine what those services are, the absence of the

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mysterious Section VI creates a problem. We see a laundry list of available

services but, ultimately, no selection of services to be provided. It is impossible

for us to say that a dispute “arose out of services under the Agreement” when the

Agreement does not stipulate any services. 

IPS argues that an arbitrator should decide whether the AA applies, but this

ignores the parties’ intent to have a threshold limitation on the types of claims that

will be sent to arbitration. Furthermore, even if we accepted IPS’s argument that

all disputes arising from available services, rather than selected services, should be

arbitrated, it is not clear that plaintiffs’ claims concern the available services. IPS

relies heavily on Agreement language that one service offered was to draft

amendments “[a]s requested by [Ehlen Floor], or required by minor changes in tax

law, or as needed to conform to testing of discrimination requirements.” The

change in tax law in this case was hardly minor, and the amendment was not

disclosed to plaintiffs, much less requested. 

IPS also asserts that principles of equitable estoppel bar the claims of the

Ehlens, non-signatories to the AA. IPS contends that the Ehlens cannot assert

claims arising dependent upon the Agreement while escaping other clauses of the

Agreement. The Ehlens do not seek to enforce the Agreement, though, and as we

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explained above, the claims cannot be said to arise from services under the

Agreement because the document specified no services.

We therefore affirm the district court’s denial of IPS’s motion to compel

arbitration and to stay plaintiffs’ claims against it. 

AFFIRMED.

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