Coontz v. GORDON JEWELRY CORPORATION

439 N.W.2d 223, 1989 Iowa App. LEXIS 37, 1989 WL 43510
CourtCourt of Appeals of Iowa
DecidedFebruary 23, 1989
Docket87-1808
StatusPublished
Cited by2 cases

This text of 439 N.W.2d 223 (Coontz v. GORDON JEWELRY CORPORATION) is published on Counsel Stack Legal Research, covering Court of Appeals of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Coontz v. GORDON JEWELRY CORPORATION, 439 N.W.2d 223, 1989 Iowa App. LEXIS 37, 1989 WL 43510 (iowactapp 1989).

Opinions

HAYDEN, Presiding Judge.

Plaintiff Louis Coontz appeals the decision of the district court which granted defendants’ motion for summary judgment on his claims of wrongful discharge and intentional infliction of emotional distress. The district court found the federal court had jurisdiction over plaintiff’s claims because his state claim was preempted by the Employee Retirement Income Security Act (ERISA). The court also found there was no outrageous conduct to support a claim for intentional infliction of emotional distress. Plaintiff claims the district court erred in granting the motion for summary judgment on both of his claims. We reverse.

Plaintiff Louis Coontz was employed by the Gordon Jewelry Company as an assistant manager. Jeff Berman was his supervisor. Plaintiff’s employment contract provided that he was to be discharged for [225]*225reasonable cause only. Coontz was discharged on August 30, 1985, for failure to comply with a company rule regarding discounts for cash payments by employees. The company claims Coontz was fired because the store was cutting back on employees. Coontz was sixty-two years old and had worked for the company for six and one-half years. After he was fired he was afraid to tell his wife and friends. He would cry and was unable to sleep. Coontz filed an application for unemployment benefits and was allowed to collect benefits.

Plaintiff filed a petition in district court claiming wrongful discharge and intentional infliction of emotional distress. Plaintiff also filed a suit in federal court alleging age discrimination under the Age Discrimination in Employment Act (ADEA) and under ERISA. The federal court stayed discovery in that case until the state court case was resolved. Defendants filed a motion for summary judgment. The district court dismissed the claim for intentional infliction of emotional distress because the defendants’ actions did not constitute outrageous conduct. The court also dismissed the claim for wrongful discharge, despite a prima facie showing of wrongdoing by the defendants, because the State tort claim was preempted by ERISA. Coontz now appeals from the action of the district court sustaining the motion for summary judgment.

I.

Coontz contends his lawsuit does not fall within the exclusive jurisdiction of the federal courts. He also argues his cause of action is not related to a benefit plan and therefore, is not preempted by ERISA. We agree.

Congress has set forth the purpose of ERISA:

It is hereby declared to be the policy of this Act to protect interstate commerce and the interests of participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts.

29 U.S.C. § 1001(b).

In enacting ERISA, Congress “saw the need to set minimum, uniform, national standards for employee benefit plans and to provide for uniform remedies in the enforcement of the plans.” Dependahl v. Falstaff Brewing Corp., 653 F.2d 1208, 1215 (8th Cir.1981) (cert. denied 454 U.S. 968, 102 S.Ct. 512, 70 L.Ed.2d 384 (1981)). In doing so, Congress preempted all state laws which relate to employee benefit plans, not only state laws which directly attempt to regulate an area expressly covered by ERISA. Id. However, courts have held ERISA does not preempt the entire state law of employment relationships. E.g. Contreras v. Blue Cross of California, 199 Cal.App.3d 945, 950, 245 Cal.Rptr. 258, 261 (Cal.App.2 Dist.1988).

Under ERISA’s “virtually unique preemption provision,” Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 24, n. 26, 103 S.Ct. 2841, 2854, n. 26, 77 L.Ed.2d 420, 440, n. 26 (1983), with limited exceptions, ERISA “shall supersede any and all state laws insofar as they may now or hereafter relate to any employer benefit plan described in [section 4(a) of ERISA] and not exempt under [section 4(b) of ERISA].” Sorosky v. Burroughs Corp., 826 F.2d 794, 799 (9th Cir.1987), ERISA § 514(a), 29 U.S.C. 1144(a). Congress intended the words “relate to” be interpreted broadly. Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 48, 107 S.Ct. 1549, 1553, 95 L.Ed.2d 39, 47 (1987). State law causes of action are said to relate to an employee benefit plan if they have “a connection with or reference to such a plan.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97, 103 S.Ct. 2890, 2900, 77 L.Ed.2d 490, 501 (1983).

In determining whether ERISA preemption exists here, we must decide whether the cause of action asserted in Coontz’s lawsuit “relate to” Gordon Jewelry’s em[226]*226ployee benefit plan. See § 514(a), as set forth in 29 U.S.C. § 1144(a).

Coontz pleaded two causes of action in this case, only Division I of his petition alleging wrongful discharge is relevant in this portion of the opinion. Through discovery it became clear Coontz relied on a number of theories to support his wrongful discharge claim. In determining ERISA preempted the present action, the trial court relied on an exchange during a deposition where Coontz indicated a belief he could have been fired to prevent him from receiving pension benefits. However, a review of the record indicates Coontz also alleges breach of contract or wrongful discharge on theories that have no relationship to the benefit plan — for example discharge without good cause. Thus, we determine to the extent this claim refers to the employee benefit plan it is preempted, however, the claim is not preempted on theories independent of the benefit plan. See Sorosky v. Burroughs Corp., 826 F.2d 794 (9th Cir.1987); Barnick v. Long’s Drug Stores, Inc., 203 Cal.App.3d 377, 250 Cal.Rptr. 10 (Cal.App. 4 Dist.1988).

The district court also would conclude ERISA preempts Coontz’s claims not directly related to the benefit plan, reasoning damages for the additional claims may include “loss of retirement benefits, vacation pay, health insurance, sick leave benefits, as well as lost wages.” We determine this interpretation is too broad and elect to follow the rationale of a recent Michigan Supreme Court decision.

In Teper v. Park West Galleries, Inc., 431 Mich. 202, 427 N.W.2d 535 (1988), the Michigan court held a jury award of future pension benefits was not preempted by ERISA, stating:

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Coontz v. GORDON JEWELRY CORPORATION
439 N.W.2d 223 (Court of Appeals of Iowa, 1989)

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439 N.W.2d 223, 1989 Iowa App. LEXIS 37, 1989 WL 43510, Counsel Stack Legal Research, https://law.counselstack.com/opinion/coontz-v-gordon-jewelry-corporation-iowactapp-1989.