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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA


MIDDLE DIVISION
STEVEN HUNTER, CHRISTY HUNTER, )
STEVEN TANNER HUNTER, JR., )
)
Plaintiffs, )
)
vs. ) CASE NO. 4:14-CV-114-VEH
)
W. HAL SHEPHERD; ED THOMASON; )
THE KENNION GROUP, INC.; ACADEMIC )
BENEFIT TRUST CORPORATION; )
PREFERRED HEALTH ALLIANCE )
CORPORATION; PLANNED BENEFIT )
SERVICES, INC.; ALABAMA HIGH )
SCHOOL ATHLETIC ASSOCIATION, )
)
Defendants. )
MOTION TO DISMISS PLAINTIFFS STATE LAW CLAIMS,
CLAIMS FOR PUNITIVE AND EXTRA-CONTRACTUAL DAMAGES,
AND TO STRIKE DEMAND FOR JURY TRIAL PURSUANT TO ERISA
COME NOW W. Hal Shepherd (Shepherd); Ed Thomason (Thomason); The Kennion
Group, Inc. (Kennion Group); Academic Benefit Trust Corporation (Academic Benefit);
Preferred Health Alliance Corporation (Preferred Health); Planned Benefit Services, Inc. (Planned
Benefit); and Alabama High School Athletic Association (AHSAA) (collectively referred to as
Defendants) and pursuant to Rule 12(b)(6), F. R. CIV. P. , hereby move this Honorable Court to
dismiss Plaintiffs state law claims, including related claims for extra-contractual and punitive
damages, and to strike Plaintiffs demand for a jury trial on the ground such claims are preempted
by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001, et seq. In
support of this Motion, the Defendants set forth and state the following:
1. On December 21, 2013, Plaintiffs filed their Complaint in the Circuit Court of
St. Clair County, Alabama.
FILED
2014 Jan-24 PM 01:36
U.S. DISTRICT COURT
N.D. OF ALABAMA
Case 4:14-cv-00114-VEH Document 10 Filed 01/24/14 Page 1 of 8
2. In their Complaint, Plaintiffs allege that on December 21, 2011, Tanner Hunter, while
a student at the Leeds Alabama public High School, received a permanent spinal cord injury while
participating in a wrestling tournament at St. Clair High School in Odenville, St. Clair County,
Alabama. (Complaint 11). Plaintiffs further allege that upon information and belief Leeds High
School pays AHSAA a premium each year to purchase insurance for all student athletes in their
school, and such insurance was purchased from Kennion Group and/or Academic Benefit and/or
Preferred Health and/or Planned Benefit and/or Shepherd and/or Thomason. (Complaint 13 & 14).
3. The Plaintiffs claim that after Tanner Hunters initial course of treatment, they were
visited by a representative of AHSAA and were assured that insurance was in place to handle a
multitude of expenses arising from Tanners injuries. (Complaint 15). The Plaintiffs further claim
that they were contacted and met with Shepherd and Thomason and were told that their expenses
would be covered by insurance. (Complaint 18 & 19). The Plaintiffs maintain that they gathered
and submitted information to Thomason and Shepherd, but were later told that Tanners injury was
not considered to be permanent and catastrophic and that only $50,000 of coverage was available.
(Complaint 20). In short, the Plaintiffs allege the coverage is not what AHSAA or Thomason and
Shepherd represented it would be and does not confer the benefits bargained for. (Complaint
21-24).
4. Plaintiffs Complaint contains six counts as follows: Contract and Fiduciary Duty
Breach (Complaint 29-32); Fraud (Complaint 33-39); Negligence/Wantonness (Complaint
40-42); Outrage (Complaint 43-45); Bad Faith (Complaint 46-50); and Illusory Contract
(Complaint 51-53). Within each count, Plaintiffs claim the following damages:
a. Have incurred and will continue to incur costs associated to the health education
and welfare due to the injury that is the basis of this proceeding;
b. Suffered and will continue to suffer mental anguish and physical suffering;
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Case 4:14-cv-00114-VEH Document 10 Filed 01/24/14 Page 2 of 8
c. Failed to receive the basis of their contract;
d. Lost wages, lost future wages, educational expenses;
e. Caused to incur incidental damages;
f. Any and all other damages as allowed by law including attorney fees, expenses
lost interest.
5. On January 17, 2014, the Defendants removed this case from the Circuit Court of
St. Clair County to the United States District Court for the Northern District of Alabama pursuant
to 28 U.S.C. 1331.
6. As set forth in the Notice of Removal, AHSAA is a private agency founded in 1921
and organized by its member schools to regulate, coordinate, and promote the interscholastic athletic
programs among its member schools. AHSAA contracted with Planned Benefit to provide accident
coverage through a plan named The Academic Benefit Trust (hereinafter referred to as The
Plan). A true and correct copy of The Plan entered into between AHSAA and Planned Benefit is
attached to the Notice of Removal as Exhibit C. As stated in The Plan, the Managing General Agent
(MGA) is Planned Benefit, the Managing General Underwriter (MGU) is Kennion Group, and the
Third Party Administrator (TPA) is Preferred Health.
7. The Plan provides it is covered under the Employee Retirement Income Security Act
of 1974, as amended (ERISA), 29 U.S.C. 1001, et. seq. Specifically, The Plan states in pertinent
part:
Plan Administrator - means the licensed Third Party Administrator
that administers the plan and is responsible for its routine
administration within the meaning of section 3(16) of ERISA. This
Plan has elected to be covered under ERISA.
Plan Sponsor - means the group that sponsors the plan and is
responsible for its overall administration within the meaning of
Section 3(16) of ERISA. This Plan has elected to be covered under
ERISA.
(Exhibit C to the Notice of Removal, p. 2)(Emphasis added).
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Case 4:14-cv-00114-VEH Document 10 Filed 01/24/14 Page 3 of 8
Conformity with State and Federal Statutes. This Plan has
elected to be covered under ERISA. Any provision of this Plan of
Benefits which, on its effective date, is in conflict with the statutes of
any state or federal regulation is hereby amended to conform to the
minimum requirements of those statutes.
(Id., p. 6)(Emphasis added).
The Plan Sponsor is ABT. Participating Members in the Plan are the
participating School, School District, System, Association or other
School established and organized body recognized by the State in
which it is located. The Plan Administrator is Preferred Health
Alliance Corporation. Both the Plan Sponsor AND the Plan
Administrator are responsible for discharging all obligations that
ERISA and its regulations impose upon plan sponsors and plan
administrators, such as delivering summary plan descriptions, annual
reports, and other notices when required by law.
(Id., p. 9)(Emphasis added).
8. The Plaintiffs claims for benefits under The Plan arise under ERISA Section
502(a)(1)(B) (29 U.S.C. 1132(a)(1)(B)); and, therefore, all of the Plaintiffs claims are preempted
by ERISA and due to be dismissed.
9. In addition, Plaintiffs claims for punitive and extra-contractual damages are due to
be dismissed or stricken from the Complaint because such damages are not allowed under ERISA.
I. ERISA PREEMPTS STATE LAW CLAIMS.
10. In Connecticut State Dental Association v. Anthem Health Plans, Inc., 591 F.3d 1337
(11
th
Cir. 2009), the Eleventh Circuit adopted the test for ERISA preemption as set forth in the
United States Supreme Court case Aetna Health, Inc. v. Davila, 542 U.S. 200, 124 S. Ct. 2488
(2004) as follows:
that if an individual brings suit complaining of a denial of coverage
for medical care, where the individual is entitled to such coverage
only because of the terms of an ERISA-regulated employee benefit
plan, and where no legal duty (state or federal) independent of ERISA
or the plan terms is violated, then the suit falls within the scope of
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Case 4:14-cv-00114-VEH Document 10 Filed 01/24/14 Page 4 of 8
ERISA 502(a)(1)(B). Metropolitan Life [v. Taylor], supra, [481
U.S. 58] at 66, 107 S. Ct. 1542. In other words, if an individual, at
some point in time, could have brought his claim under ERISA
502(a)(1)(B), and where there is no other independent legal duty that
is implicated by a defendant's actions, then the individual's cause of
action is completely pre-empted by ERISA 502(a)(1)(B).
542 U.S. at 210, 124 S. Ct. at 2496. Thus, the Davila test requires two inquiries, (1) whether the
plaintiff[s] could have brought [their] claim under 502(a); and (2) whether no other legal duty
supports the plaintiffs claim. Connecticut State Dental Assn, 591 F.3d at 1345.
11. Both elements are satisfied in this case. Plaintiffs claims are within the scope of
502(a)(1)(B) as they are seeking benefits under The Plan. In addition, there is no separate legal duty
supporting Plaintiffs claims. Plaintiffs claims for benefits arise under an ERISA plan as all of the
claims relate to the alleged improper denial of benefits, and the Plaintiffs have specifically pled
within each count that they seek the basis of their contract. Accordingly, both elements of the
Davila test for ERISA preemption are met in this case.
12. Further, 514(a) (29 U.S.C. 1144(a)) sets forth that ERISA preempts any and all
State laws insofar as they may now or hereafter relate to any employee benefit plan. Section 514(a)
is ERISAs express preemption provision that defeats claims that seek relief under state-law
causes of action that relate to an ERISA plan. Butero v. Royal Maccabees Life Ins. Co., 174 F.3d
1207, 1212 & 1215 (11
th
Cir. 1999). Claims relate to an ERISA plan if they have a connection
with or reference to an employee benefit plan. Howard v. Parisian, 807 F.2d 1560, 1563-1564 (11
th
Cir. 1987).
13. Further, ERISAs expansive preemption clause is broadly interpreted by the Eleventh
Circuit. Swerhun v Guardian Life Ins. Co. Of Am., 979 F.2d 195, 197 (11
th
Cir. 1992) (stating The
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Case 4:14-cv-00114-VEH Document 10 Filed 01/24/14 Page 5 of 8
Supreme Court has noted that the preemption clause is conspicuous for its breadth . . . and has
instructed that the clause should be expansively applied (citations omitted)).
14. Importantly, the Eleventh Circuit has repeatedly held that state law causes of action,
including claims for breach of contract and bad faith failure to pay, as are alleged in the case here,
are preempted by ERISA. See, Gilbert v. Alta Health & Life Ins. Co., 276 F.3d 1292, (11
th
Cir.
2000).
15. As set forth above, all six counts of the Plaintiffs Complaint relate to The Plan, yet
set forth causes of action pursuant to common law or statutory law of the State of Alabama.
Accordingly, each claim is preempted and barred by ERISA.
II. PUNITIVE AND EXTRA-CONTRACTUAL DAMAGES.
16. In their Complaint, Plaintiffs request an unspecified amount of punitive damages.
(Complaint, 32, 39, 42, 45).
17. However, Plaintiffs claims for punitive damages are due to be dismissed or stricken
from the Complaint because such damages are not recoverable under ERISA. Godfrey v. BellSouth
Telecomm., Inc., 89 F.3d 755, 761 (11
th
Cir. 1996). To be clear, ERISA contemplates and authorizes
beneficiaries to bring actions to enforce rights under a plan, but does not provide for any extra-
contractual relief such as punitive damages. Bishop v. Osborn Transp., Inc., 838 F.2d 1173, 1174
(11
th
Cir. 1988).
III. JURY TRIAL.
18. Plaintiffs Complaint includes a jury demand. (Complaint, 53). However, the
Eleventh Circuit has held that Plaintiffs are not entitled to a jury trial under ERISAs provisions.
Blake v. Unionmutual Stock Life Ins. Co. Of America, 906 F.2d 1525 (11
th
Cir. 1990).
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Case 4:14-cv-00114-VEH Document 10 Filed 01/24/14 Page 6 of 8
WHEREFORE, PREMISES CONSIDERED, Defendants respectfully request that this
Honorable Court (1) dismiss Plaintiffs state law claims as set forth in all six counts and require
Plaintiffs to amend their Complaint to assert an ERISA cause of action; (2) dismiss or strike
Plaintiffs request for punitive damages; and (3) strike Plaintiffs demand for jury trial.
Respectfully submitted this 24
th
day of January, 2014.
OF COUNSEL: /s/ James E. Williams
JAMES E. WILLIAMS (ASB-9283-W84J)
MELTON, ESPY & WILLIAMS, P.C.
P. O. Drawer 5130 /s/ C. Mark Bain
Montgomery, AL 36103-5130 C. MARK BAIN (ASB-8555-N58C)
PH: (334) 263-6621 Attorneys for Defendant Alabama High
FAX: (334) 269-9515 School Athletic Association
EMAIL: jwilliams@mewlegal.com
mbain@mewlegal.com
/s/Richard A. Bearden
MASSEY STOTSER & NCHOLS, P.C. RICHARD A. BEARDEN (ASB-0873-E41R)
1780 Gadsden Highway Attorney for Defendants, Ed Thomason;
Birmingham, AL 35235-3106 The Kennion Group, Inc.; Academic
PH: (205) 838-9004 Benefit Trust Corporation; Preferred Health
FAX: (205) 838-9024 Alliance Corporation
EMAIL: rbearden@msnattorneys.com
/s/ James R. Seale
HILL HILL CARTER FRANCO COLE & BLACK JAMES R. SEALE (ASB-3617-E68J)
P. O. Box 116 Attorney for Defendant Planned Benefit
Montgomery, AL 36101-0116 Services, Inc.
PH: (334) 834-7600
FAX: (334) 263-5969
EMAIL: jrs@hillhillcarter.com
/s/ John W. Clark IV
BAINBRIDGE MIMS ROGERS & SMITH, LLP JOHN WILLIAM CLARK IV (ASB-5187-077C)
P. O. Box 530886 Attorney for Defendant Hal Shepherd
Birmingham, AL 35253-0886
PH: (205) 879-1100
FAX: (205) 879-4300
EMAIL: jclark@bainbridgemims.com
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Case 4:14-cv-00114-VEH Document 10 Filed 01/24/14 Page 7 of 8
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing has been electronically filed on the 24
th

day of January , 2014, with the Clerk of the Court using the CM/ECF system which will send
notification of such filing to the following and a hard copy has been served by first-class mail:
Attorneys for Plaintiffs:
Alexander M. Weisskopf, Esq.
MOORE, WEISSKOPF & HILL, PC
P. O. Box 310
Moody, AL 35004
alex@stclairlawgroup.com
kryals@stclairlawgroup.com
/s/ C. Mark Bain
OF COUNSEL
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