Filed: Apr. 17, 2000
Latest Update: Mar. 02, 2020
Summary: UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT _ No. 99-40346 _ RICARDO N. ADOBBATI, Plaintiff-Appellant, versus GUARDIAN LIFE INSURANCE COMPANY OF AMERICA; MORELAND, BLACK & MANNING, INC.; DONALD BLACK, Defendants-Appellees. _ Appeal from the United States District Court for the Southern District of Texas (B-97-CV-178) _ April 14, 2000 Before POLITZ, JOLLY, and BARKSDALE, Circuit Judges. PER CURIAM:* Primarily at issue is whether the district court, having dismissed with prejudice Ricardo
Summary: UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT _ No. 99-40346 _ RICARDO N. ADOBBATI, Plaintiff-Appellant, versus GUARDIAN LIFE INSURANCE COMPANY OF AMERICA; MORELAND, BLACK & MANNING, INC.; DONALD BLACK, Defendants-Appellees. _ Appeal from the United States District Court for the Southern District of Texas (B-97-CV-178) _ April 14, 2000 Before POLITZ, JOLLY, and BARKSDALE, Circuit Judges. PER CURIAM:* Primarily at issue is whether the district court, having dismissed with prejudice Ricardo ..
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UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
____________________
No. 99-40346
____________________
RICARDO N. ADOBBATI,
Plaintiff-Appellant,
versus
GUARDIAN LIFE INSURANCE COMPANY OF AMERICA;
MORELAND, BLACK & MANNING, INC.; DONALD BLACK,
Defendants-Appellees.
_________________________________________________________________
Appeal from the United States District Court
for the Southern District of Texas
(B-97-CV-178)
_________________________________________________________________
April 14, 2000
Before POLITZ, JOLLY, and BARKSDALE, Circuit Judges.
PER CURIAM:*
Primarily at issue is whether the district court, having
dismissed with prejudice Ricardo N. Adobbati’s state law claims as
preempted under the Employee Retirement Income Security Act
(ERISA), 29 U.S.C. §§ 1132(a), 1144(a), should have granted him
leave to amend his complaint to assert an ERISA claim. We AFFIRM
in PART; REVERSE in PART; and REMAND.
I.
In January 1997, Adobbati filed suit in Texas state court
against Guardian Life Insurance, Moreland, Black & Manning, Inc.,
and Donald R. Black (Appellees), claiming breach of contract,
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
fraud, and other state law violations in connection with a
“vanishing premiums” life insurance policy. Adobbati had purchased
the policy, on Black’s recommendation, in 1988, on behalf of an
ERISA plan in which he and his medical office employees were
participants (ownership of the policy was converted to him when the
plan was terminated). But, the complaint made no reference to the
plan.
In interrogatory responses, served on Appellees on 7 August
1997, Adobbati stated for the first time that the policy was
obtained through the plan. On 18 August, Appellees filed notice of
removal, asserting a federal question under ERISA. Adobbati moved
to remand, claiming removal was untimely and ERISA inapplicable.
In his April 1998 report and recommendation, the magistrate
judge concluded: the removal was timely, because Adobbati’s
discovery responses were the first “other paper” he submitted
indicating his claims were removable; and ERISA preempted his state
law claims. That July, the district court adopted the
recommendation and denied remand.
Pursuant to FED. R. CIV. P. 12(b)(6), Appellees moved, based on
ERISA preemption, to dismiss Adobbati’s claims. In opposition, he
continued to assert ERISA was inapplicable, but, alternatively,
requested leave to replead under ERISA if the court found
preemption:
... [Adobbati] should be given the
opportunity to replead pursuant to the federal
rules within the doctrine of ERISA as it is
clear a claim exists against [Appellees] under
same. The dispute to date has not been
whether the suit filed presents the
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availability of a claim but rather what is the
applicable law. Although [Adobbati] believes
a state cause of action would be proper for
his claims, clearly another avenue available
to him would be to pursue this claim under
ERISA and the applicable statutes.
In December 1998, the magistrate judge recommended dismissal,
but did so without addressing the request to replead under ERISA.
Adobbati’s objections to this recommendation included the
following:
AMENDMENT OF COMPLAINT
16. As previously indicated in
[Adobbati’s] Response to [Appellees’] Motion
to Dismiss, by admission of [Appellees], there
exist ERISA claims in this matter and as such
it would be incorrect to dismiss the claims
brought by [Adobbati], but rather [Adobbati]
should be allowed the opportunity to replead
and amend the Complaint to state a cause of
action under ERISA.
....
... [Adobbati] hereby requests that this
court make a final determination ERISA is not
applicable to the case at bar, and that this
case be remanded to State Court .... In the
alternative, and without waiving the above,
that [Adobbati] be provided with the
opportunity to amend the complaint pursuant to
the case law stated in order to assert those
causes of action available to [Adobbati] under
ERISA.
In January 1999, the district court granted the motion to
dismiss, summarily adopting the magistrate judge’s recommendation.
It did not address Adobbati’s request/objection concerning
amendment. The action was dismissed with prejudice.
II.
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Adobbati contends: removal was not timely; ERISA does not
preempt his claims; and he should have been allowed to amend.
A.
The removal issue is based on the contention Appellees had
knowledge of the policy’s relationship to the ERISA plan prior to
the complaint being filed. Having reviewed the remand-denial de
novo, Leffall v. Dallas Ind. Sch. Dist., 28 F.3d 521, 524 (5th Cir.
1994), removal was timely under the “other paper” rule. E.g.,
Chapman v. Powermatic, Inc.,
969 F.2d 160, 163-64 (5th Cir. 1992),
cert. denied,
507 U.S. 967 (1993).
B.
The ERISA issue is based on Adobbati’s not seeking to recover
ERISA benefits or enforce ERISA rights. He acknowledges, however,
that the ERISA plan was the original purchaser and beneficiary of
the policy at issue. Based upon our de novo review of the ERISA-
preemption determination, McClelland v. Gronwaldt, 155 F.3d 507,
511 (5th Cir. 1998), and Rule 12(b)(6) dismissal, Beanal v.
Freeport-McMoran, Inc.,
197 F.3d 161, 164 (5th Cir. 1999), ERISA
completely preempted Adobbati’s state law claims. See
McClelland,
155 F.3d at 512-13.
C.
As noted, in summarily adopting the report and recommendation,
the district court did not address allowing Adobbati to replead
under ERISA, rather than dismissing with prejudice. Denial of a
motion to amend the complaint is reviewed for abuse of discretion.
E.g., Jacobsen v. Osborne, 133 F.3d 315, 318 (5th Cir. 1998).
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Leave to amend should be freely granted “when justice so requires”.
FED. R. CIV. P. 15(a); Jacobsen, 133 F.3d at 318.
Appellees respond that such dismissal was proper, because
Adobbati failed to move to amend or submit a proposed amended
complaint. They assert also that amendment would be futile,
claiming the ERISA limitations period has run.
Despite the lack of a formal motion, the court should have
allowed Adobbati to amend, in the light of his making that request
in his response to Appellees’ motion to dismiss, and repeating it
in his objections to the report and recommendation regarding that
motion. In short, “justice so requires”.
Because Appellees raised the limitations issue for the first
time in response to Adobbati’s objections to the report, and it was
not considered by the district court, the issue is not before us.
Cf. United States v. Armstrong, 951 F.2d 626, 630 (5th Cir. 1992).
On remand, Adobbati’s amendments will “relate back” to the date of
his original complaint, pursuant to Rule 15(c)(2). See Peña v.
United States,
157 F.3d 984, 987 (5th Cir. 1998). Nevertheless,
Appellees are not precluded from thereafter raising their
limitations defense. Of course, we express no opinion concerning
its merits.
III.
For the foregoing reasons, we AFFIRM in PART; REVERSE in PART;
and REMAND for further proceedings consistent with this opinion.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED
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