Court Opinion

ID: 153080
Source: CourtListenerOpinion
Date Created: 2010-08-14 03:31:48+00
Date Added: 2024-06-11T12:29:34.670661
License: Public Domain

UNITED STATES COURT OF APPEALS
Filed 2/21/96
                                    FOR THE TENTH CIRCUIT

                                     ________________________

PRUDENTIAL HEALTH CARE PLAN INC., and             )
PRUDENTIAL INSURANCE COMPANY OF                   )
AMERICA,                                          )
                                                  )
     Plaintiffs-Appellants,                       )
                                                  )
v.                                                )       Nos. 95-6255
                                                  ) (D.C. No. CIV-94-0523-W)
RICHARD E. LEWIS and WANDA LEWIS,                 )        (W.D. Okla.)
                                                  )
     Defendant-Appellee.                          )
                            __________________________

                                    ORDER AND JUDGMENT*
                                    _________________________

Before BRORBY, EBEL and HENRY, Circuit Judges.
                         __________________________

        After examining the briefs and appellate record, this panel has determined unanimously that

oral argument would not materially assist the determination of this appeal. See Fed. R. App. P.

34(a); 10th Cir. R. 34.1.9. The cause is therefore ordered submitted without oral argument.

        Richard and Wanda Lewis brought charges in state court alleging The Prudential Health Care

Plan, Inc. and the Prudential Insurance Company of America (collectively "PruCare") were liable

        *
          This order and judgment is not binding precedent, except under the doctrines of law of the case,
res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments;
nevertheless, an order and judgment may be cited under the terms and conditions of the court's General Order
filed November 29, 1993. 10th Cir. R. 36.3.
under a vicarious or ostensible agency theory for the alleged negligence of several physicians who

failed to detect a malignant lesion on Mr. Lewis' rectum. PruCare filed suit in federal court seeking

a declaratory judgment that Mr. and Mrs. Lewis' claims in the state court were preempted and

governed by the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001-1461. The district

court denied PruCare's motion for summary judgment and granted Mr. and Mrs. Lewis' cross motion

for summary judgment holding that their vicarious liability or ostensible agency claim is not

preempted by the Employee Retirement Income Security Act. We exercise jurisdiction pursuant to

28 U.S.C. § 1291 and affirm.

       PruCare appeals claiming: 1) Mr. and Mrs. Lewis' vicarious liability claim is barred under

circuit precedent; 2) the terms of the plan in this case govern Mr. and Mrs. Lewis' vicarious liability

claim; and 3) the Employee Retirement Income Security Act permits PruCare to enforce the terms

of the plan against Mr. and Mrs. Lewis.

       We review de novo the district court's determination whether the Employee Retirement

Income Security Act preempts a state law claim. Airparts Co. v. Custom Benefits Servs. of Austin,

Inc., 28 F.3d 1062, 1064 (10th Cir. 1994).

       All three of PruCare's issues on appeal rely on Straub v. Western Union Telegraph Co., 851

F.2d 1262 (10th Cir. 1988). PruCare attempts to stretch the meaning of Straub and its progeny to

bar Mr. and Mrs. Lewis from bringing their vicarious liability claim in state court. Straub's holding,

however, is inapplicable to the issue in the case at bar. In Straub, a retiree brought a breach of

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contract action against his former employer for pension plan benefits. The court found the breach

of contract claims "related to" the plan and were preempted by the Employee Retirement Income

Security Act. Id. at 1264. PruCare attempts to use language in Straub dealing with the application

of the Employee Retirement Income Security Act to the substance of the retiree's claim to argue that

preemption exists in the case at bar. We are not persuaded by this argument.

          In Straub, the court held "no liability exists under ERISA for purported oral modifications

of the terms of an employee benefit plan." Id. at 1265. Straub's discussion hinges on the court's

earlier determination that the Employee Retirement Income Security Act preempts the retiree's state

law claims and therefore governs the issues before the court. We do not find that to be so in the case

at bar.

          Instead, we find our recent decision in Pacificare of Oklahoma, Inc. v. Burrage, 59 F.3d 151

1555 (10th Cir. 1995), dispositive of this appeal. The facts in Pacificare are analogous to those in

the case at bar. Both cases deal with parties seeking to hold a Health Maintenance Organization

vicariously liable for the medical malpractice of a doctor who was allegedly an agent of the plan.

"Just as ERISA does not preempt the malpractice claim against the doctor, it should not preempt the

vicarious liability claim against the HMO if the HMO has held out the doctor as its agent." Id. at

155. The Pacificare court reached this result after finding that a medical malpractice claim does not

"relate to" the employee benefit plan. The court specifically held that "reference to the plan to

resolve that issue does not implicate the concerns of ERISA preemption." Id. PruCare's factual

arguments that the plan prevents the establishment of an agency relationship between it and the

                                                   3
doctors concerns whether vicarious liability attaches, not whether the state claim is preempted by

federal law.

       The district court's order is AFFIRMED.

                                             Entered for the Court:

                                             ___________________
                                             WADE BRORBY
                                             United States Circuit Judge

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