                 IN THE UNITED STATES COURT OF APPEALS

                           FOR THE FIFTH CIRCUIT
                              _______________

                                 No. 95-50539
                               _______________



                             DEE MARCUS BREWER,

                                                 Plaintiff-Appellant,

                                    VERSUS


           UNUM LIFE INSURANCE COMPANY OF AMERICA, et al.,

                                                 Defendants-Appellees.

                        _________________________

             Appeal from the United States District Court
                   for the Western District of Texas
                             (A-94-CV-488)
                       _________________________

                                July 12, 1996

Before JONES, SMITH, and STEWART, Circuit Judges.

JERRY E. SMITH, Circuit Judge:*



      In this coverage dispute between Dee Marcus Brewer (“Brewer”)

and UNUM Life Insurance Company of America (“UNUM”), Brewer claims

that he is entitled to recover over $72,000 in benefits under a

group life insurance policy issued by UNUM.               The district court

granted summary judgment for UNUM on Brewer’s 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should not be published and is not precedent except under the limited circum-
stances set forth in 5TH CIR. R. 47.5.4.
breach of duty of good faith and fair dealing, and fraud claims and

granted UNUM’s motion for judgment as a matter of law (“j.m.l.”) on

Brewer’s misrepresentation claims.     We reverse in part for want of

jurisdiction, vacate in part, and remand.



                                  I.

     In July 1993, UNUM submitted a proposal to the Eanes Independ-

ent School District (“EISD”) for group life, accidental death and

dismemberment (“AD&D”), and disability insurance coverage.      EISD

requested basic term life insurance of $5,000 for each of its

employees, with supplemental term life coverage of one times the

employee’s salary, to be paid for by the employee.   UNUM’s proposal

provided basic coverage of $10,000 and supplemental coverage of two

times the employee’s salary.     The EISD board of trustees selected

UNUM as its group life, AD&D and disability insurance carrier on

September 8, 1993.   The policy was to be effective November 1,

1993.

     June Brewer (“June”) worked in the tax department of EISD and

was a full-time employee, eligible for teacher retirement at the

time of her death from cancer.   Starting on July 31, 1993, she took

advantage of her accumulated sick leave.     On October 4, 1993, she

signed enrollment forms and elected to purchase supplemental life

insurance coverage from UNUM. A premium for supplemental coverage

was deducted from her paycheck on October 22, 1993.      On November



                                   2
15, 1993, she died of cancer.

     UNUM denied both basic and supplemental coverage to June’s

beneficiaries because she was not an active employee under the

terms of the insurance policy.        UNUM relied on the “Effective Date”

provision of the policy, which states,

     The effective date of any initial . . . or additional
     insurance will be delayed for a person if he is not in
     active employment because of an injury, a sickness, a
     temporary layoff or a leave of absence on the date that
     insurance would otherwise be effective.      The initial
     . . . or additional insurance will start on the date that
     person returns to active employment.

The policy defines “active employment” to require that the employee

be working “for the employer on a permanent full-time basis and

paid regular earnings” and working at least thirty hours per week

at the employer’s place of business or location to which the

employer’s business requires the employee to travel.

     On June 8, 1994, Brewer sued UNUM and two of its employees,

Kori Ann Peel and Stephanie A. Caraway, in state court.                The

petition1 alleged breach of contract, violations of the Texas

Deceptive Trade Practice Act and TEX. INS. CODE art. 21.21, breach

of the duty of good faith and fair dealing, and fraud.

     UNUM removed the case to federal court, on July 13, 1994,

based upon the existence of a federal question and diversity. UNUM

alleged the existence of federal question jurisdiction based upon

the fact that at least one of Brewer’s state law claims depended


     1
         In federal court, a petition is referred to as a complaint.

                                       3
upon the correct application of the Employee Retirement Income

Security   Act   of   1974   (“ERISA”).   Diversity   jurisdiction   was

premised on the theory that the resident defendants (Peel and

Caraway) were fraudulently joined.

     On September 8, 1994, the district court entered an order

finding no federal question jurisdiction.         Finding fraudulent

joinder, the court dismissed the resident defendants and retained

jurisdiction under 28 U.S.C. § 1332.

     The district court granted UNUM’s motion for summary judgment

with respect to Brewer’s breach of contract, breach of duty of good

faith and fair dealing, and fraud claims.      Following presentation

of the plaintiff’s case in chief, the court granted UNUM’s motion

for j.m.l. on Brewer’s misrepresentation claims. The court entered

a take nothing judgment in favor of UNUM and the resident defen-

dants.



                                    II.

     Brewer argues that the district court erred in determining

that Peel and Caraway were fraudulently joined.           In order to

establish that a resident defendant has been fraudulently joined,

“the removing party must show . . . that there is no possibility

that the plaintiff would be able to establish a cause of action

against the in-state defendant in state court.”        East Texas Mack

Sales, Inc. v. Northwest Acceptance Corp., 819 F.2d 116, 119 (5th


                                     4
Cir. 1987) (citation omitted).     The district court must evaluate

all factual allegations and uncertainties as to the current state

of controlling law in favor of the plaintiff.      Id.   “[I]f there is

even a possibility that a state court would find a cause of action

stated against any one of the named in-state defendants on the

facts alleged by the plaintiff, then the federal court must find

that the in-state defendant(s) have been properly joined, that

there is incomplete diversity, and that the case must be remanded

to the state courts.”   B., Inc. v. Miller Brewing Co., 663 F.2d

545, 550 (5th Cir. Unit A Dec. 1981).

     In removal cases, jurisdiction is determined by examining the

petition at the time of removal.   Cavallini v. State Farm Mut. Auto

Ins. Co., 44 F.3d 256, 259-60 (5th Cir. 1995).           “While we have

frequently cautioned the district courts against pretrying a case

to determine removal jurisdiction, we have also endorsed a summary

judgment-like   procedure   for   disposing   of   fraudulent   joinder

claims.”   Carriere v. Sears, Roebuck & Co., 893 F.2d 98, 100 (5th

Cir.), cert. denied, 498 U.S. 817 (1990).

     The defendants concede that the district court did not pierce

the pleadings and consider summary judgment-type evidence, thereby

limiting this court’s inquiry to the pleadings.      In order to find

fraudulent joinder, we must determine, assuming all the facts set

forth by the plaintiff are true, that there can be no recovery as

a matter of law.   B., Inc., 663 F.2d at 551.


                                   5
     The   first   step       in    determining     whether     a   party    has    been

fraudulently joined is determining the relevant state law.                     Brewer

believes he has two viable claims against Peel and Caraway.                         The

first cause of action is based on Peel and Caraway’s alleged

misrepresentations to EISD and June Brewer; the second is premised

on alleged omissions by Peel and Caraway.

     There was, at the time of removal, at least a possibility

under Texas law that a state court would find a cause of action

against an agent of an insurance company for misrepresentations

made in the course of his agency.                       A number of courts have

recognized   a   cause    of       action    against     an   insurance     agent   for

misrepresentations, implicitly overruling Hodges v. Casey, 646

S.W.2d 175 (Tex. 1983).            See Light v. Wilson, 663 S.W.2d 813, 815

(Tex. 1983) (Spears, J., concurring); State Farm Fire & Casualty

Co. v. Gros, 818 S.W.2d 908, 913 (Tex. App.SSAustin 1991, no writ);

East Texas Mack, 819 F.2d at 119.                 Even if Hodges is still good

law, the uncertainty in the law created by Light and subsequent

cases should be resolved in favor of the plaintiff for purposes of

determining fraudulent joinder.              East Texas Mack, 819 F.2d at 119.

     Taking the factual allegations of the petition to be true,

Brewer has stated a cause of action for misrepresentation.                     Brewer

consistently alleges that UNUM, Peel, and Caraway made material

misrepresentations       to    EISD    and      June.     The   petition     contains

allegations that UNUM, Peel, and Caraway affirmatively represented


                                            6
that “all employees who were eligible to participate in EISD’s

previous life insurance plan could participate in the UNUM plan,”

“that persons who had previously participated in EISD’s employee

benefit plans would not be subject to a ‘waiting period’ before

becoming eligible to participate in the plan,” and “that UNUM would

provide EISD with ‘readable’ certificates of insurance which would

clearly communicate to EISD’s employees the most important terms

and conditions of UNUM’s life insurance plan.”       Each of these

allegations, when taken as true, could provide inferences that Peel

and Caraway misrepresented the policy coverage to EISD and June.

See Burton v. State Farm Mut. Auto. Ins. Co., 869 F. Supp. 480, 486

(S.D. Tex. 1994) (opining that misrepresenting policy coverage

states a cause of action under Texas law), aff’d, 66 F.3d 319 (5th

Cir. 1995).

     UNUM asserts an alternative ground for affirming the district

court: that federal question jurisdiction exists because the state

law claim turns on a construction of ERISA.   A determination that

federal question jurisdiction exists depends upon the allegations

of the well-pleaded complaint. Louisville & N.R.R. v. Mottley, 211

U.S. 149 (1908).   Under § 1331, a suit arises under federal law if

there appears on the face of the complaint some substantial,

disputed question of federal law.    Franchise Tax Bd. v. Construc-

tion Laborers Vacation Trust, 463 U.S. 1, 12 (1983); Carpenter v.

Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 366 (5th Cir. 1995).


                                 7
     UNUM has failed to demonstrate federal question jurisdiction.

When UNUM pressed its claim, it did not argue that ERISA preempts

the cause of action but expressly disavowed preemption as a basis

for jurisdiction. UNUM’s argument was that federal law constituted

a substantial portion of the claim because the misrepresentation

claim relies on the assertion that UNUM’s policy and certificate

did not conform, as promised, to the requirements of ERISA.

     UNUM’s case for jurisdiction is analogous to the one rejected

in Willy v. Coastal Corp., 855 F.2d 1160 (5th Cir. 1988), aff’d,

503 U.S. 131 (1992).    The plaintiff in Willy filed a state law

wrongful discharge claim alleging that he was fired for refusing to

violate federal and state law on behalf of his employer.          The

federal statute provided a private cause of action but did not

preempt the state law claim.         The defendant removed, and the

district court found that a federal question was presented on the

face of the petition.

     The Willy court reversed.   The court identified three cases

where federal question jurisdiction could exist.      The first    is

where federal law creates the cause of action.     Id. at 1167.   The

second is where the state law claim is completely preempted by

federal law.   Id. at 1165.   The third is where a feature of the

plaintiff’s claim raises a substantial issue of federal law.      Id.

at 1168. The court noted that this ground for federal jurisdiction

is limited by the requirement that the federal law provide a


                                 8
private remedy before it can be a basis for federal jurisdiction.

Id. at 1168 (citing Merrell Dow Pharmaceuticals, Inc. v. Thompson,

478 U.S. 804 (1986)).

     Turning to the complaint, the Willy court noted that despite

the fact that the state law claim depended on the application of a

federal   statute,   federal   question   jurisdiction    was   lacking.

Assuming arguendo that the existence of a federal remedy in the

statute met the requirements of Merrell Dow, the court found that

the federal element was not substantial enough to confer federal

question jurisdiction.    Willy, 855 F.2d at 1169.   The court based

its decision on the fact that the state law claim was based on more

than one theory, and the federal statute was implicated in only one

of the theories.     Id. at 1170-71 (citing Christianson v. Cold

Indus. Operating Corp., 486 U.S. 800 (1988)).

     The petition in this case suffers from the same defect as did

the complaint in Wiley.    The causes of action in the petition are

not based upon a cause of action created by federal law, and the

defendant has disavowed any preemption argument.         With regard to

the third ground for federal jurisdiction, the federal element of

Brewer’s cause of action is not substantial. The misrepresentation

claim is based upon a number of theories, only one of which

implicates ERISA.    Willy, 855 F.2d at 1170-71.         Even the ERISA

issues are not at the forefront of that one theory; the claim is in

essence one under state law.     Id. at 1171.


                                   9
                                     III.

     Brewer asks, in the event of a remand, that we award costs and

attorneys’ fees under 28 U.S.C. § 1447(c) (1995).2                   We leave

consideration of the issue to the district court.             See Carpenter,

44 F.3d at 372 n.14 (“The decision whether to allow the recovery of

costs is committed to the discretion of the district court upon its

order to remand the case to state court.              Because the district

court has evidently not yet addressed this issue, we prefer to

leave it for consideration by the district court in the first

instance on remand.”) (citation omitted). The district court is in

a better position to determine whether fees and costs should be

awarded.    Id.; Miranti v. Lee, 3 F.3d 925, 928-29 (5th Cir. 1993)

(discussing the standards to be applied in determining whether to

award costs and fees).         An important factor is the defendants’

decision to remove.      Id. at 928.    Here, Brewer has not developed a

theory as to why it was improper for the defendants to remove.

Absent such arguments, this court is not in a position to determine

whether fees should be awarded.

     For the foregoing reasons, the judgment is REVERSED in part,

VACATED in part, and REMANDED for consideration of attorneys’ fees



     2
         28 U.S.C. § 1447(c) provides in pertinent part:

            If at any time before final judgment it appears that the district
            court lacks subject matter jurisdiction, the case shall be remanded.
            An order remanding the case may require payment of just costs and
            any actual expenses, including attorney fees, incurred as a result
            of the removal.

                                      10
and costs under 28 U.S.C. § 1447(c).




                               11
