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Your ERISA Watch – In Life Insurance Coverage Dispute, a District Court Goes Against the Tide in Favor of Equitable Remedies

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The Eastern District of Pennsylvania’s decision in Staropoli v. Metropolitan Life Insurance Company et al., 2020 WL 3051434 (E.D. Penn. June 8, 2020) demonstrates that even the payment of premiums, full disclosure of facts, and receiving confirmation that benefits are in force is not always enough to survive a motion to dismiss.

Susan Staropoli was employed by JPMorgan Chase Bank. Through JPMorgan’s employee welfare benefit plan, Plaintiff enrolled her then husband for $300,000 in supplemental dependent life insurance coverage. The plan stated dependent coverage was only available to children and “lawful spouses.” Coverage ended the day the person ceased to be a dependent.

The Prudential Insurance Company of America insured the plan and served as claims administrator until December 31, 2016. The Metropolitan Life Insurance Company became the insurer and administrator on January 1, 2017.

While Prudential was still the claims administrator, Plaintiff informed JPMorgan of her divorce. She provided JPMorgan with a copy of her divorce decree in 2014. Thereafter, her benefits profile was updated by JPMorgan to reflect the divorce. JPMorgan also designated her two children as beneficiaries of her ex-husband under the policy. JPMorgan’s computer network confirmed that Plaintiff’s children were now the beneficiaries of any death benefits in the event of her ex-husband’s death. This conflicted with the plan’s terms, under which her ex-husband was not eligible for coverage and only Plaintiff could be the beneficiary of dependent coverage. Plaintiff’s complaint alleged she received repeated oral and written confirmation the coverage was in force thereafter. Plaintiff continued paying premiums via payroll deductions made by JPMorgan.

Plaintiff’s ex-husband died on July 4, 2018. After Plaintiff made a claim for benefits on behalf of her children, JPMorgan explained to MetLife, who now insured the plan, that there had been a break in coverage from March 11, 2013—the day of the divorce—until January 1, 2016. At that point Plaintiff had re-enrolled in coverage. The Court’s decision does not explain exactly why there was a break in coverage in 2013.

Regardless, JPMorgan claimed that it did not know who was being insured in 2016 as it did not require employees to declare the name of the dependent for whom they were electing supplemental coverage—a highly peculiar way to administer life insurance, where the name of the insured seems critical. JPMorgan also claimed it was incumbent upon the employee to ensure the dependent was eligible for the selected plan. If this was true, the Court did not offer JPMorgan’s explanation for why its computer system identified Plaintiff’s ex-husband by name as the insured.

Because Plaintiff’s ex-husband was not her “lawful spouse” when he died, MetLife denied the claim. After an appeal, Plaintiff and her children filed suit against JPMorgan and MetLife under ERISA § 502(a)(1)(B) for denial of benefits and ERISA § 502(a)(3) for breach of fiduciary duty.

At the outset of the decision, the structure of the pleadings took center stage. JPMorgan claimed it was not a proper defendant because it was not the plan administrator and did not act in a fiduciary capacity. JPMorgan noted the plan documents identified JPMorgan Chase U.S. Benefits Executive, an individual, as the plan administrator. Further, it argued that the complaint failed to allege any facts that JPMorgan held any discretionary authority or performed anything more than ministerial and administrative functions.

The Court agreed with JPMorgan, noting that “Plaintiffs do not allege any non-conclusory facts tending to show that JPMorgan exercised control over the administration of benefits.” In a potential contradiction with last week’s notable decision from the Second Circuit—Sullivan-Mestecky v. Verizon Communications Inc., __F.3d__, 2020 WL 2820334 (2nd Cir. 2020)—the Court cited to 29 C.F.R. § 2509.75-8 that enrolling and terminating benefits and confirming eligibility were simply “ministerial acts” not triggering fiduciary status. “Because the plan documents do not grant JPMorgan discretionary authority and the facts alleged do not demonstrate that JPMorgan exercised discretion, the Court concludes that JPMorgan is not a proper defendant to this action as structured and dismisses all claims against it.”

The Court then turned to the sufficiency of the allegations against MetLife. Taking a novel position, despite the plan precluding coverage for ex’s, Plaintiff argued it could maintain an ERISA § (a)(1)(B) claim against MetLife “because the defendants breached their fiduciary duties.” The Court rejected this argument noting the subsection “does not create a private cause of action for breach of fiduciary duty.”

Plaintiff also claimed that ERISA § (a)(1)(B) provided a remedy because the plan’s incontestability clause precluded MetLife from denying the claim after benefits had been in force for two years. The Court rejected this argument based on the specific wording of the plan’s incontestability clause: “We will not use Your statements which relate to insurability to contest insurance after it has been in force for 2 years during Your life.” It noted that MetLife denied the claim based on the death certificate identifying the marital status as “divorced,” not a statement from Plaintiff.

The Court dismissed the claim for benefits under § 502(a)(1)(B) and turned to the (a)(3) claims against MetLife. In a sign of pleading problems to come, the Court noted Plaintiff had “group[ed] the defendants together” when claiming they had breached their fiduciary duties by: (1) misleading Plaintiffs by informing Ms. Staropoli that Mr. Staropoli was covered under the policy and accepting premiums for that coverage; (2) failing to notify Plaintiffs that they no longer qualified for life insurance upon the divorce, despite the defendants knowing or having constructive knowledge of the divorce; (3) failing to carefully review or investigate enrollment applications to determine that all intended beneficiaries were eligible for coverage; (4) failing to anticipate that plan participants would be confused by the ability to enroll someone ineligible for benefits and failing to have a more proactive procedure in place that would ensure plan participants would only enroll individuals who were eligible for benefits; (5) failing to anticipate that plan participants would assume that benefits enrollment statements and premium deductions constituted approval of eligibility requirements; and (6) failing to notify Plaintiffs of their right to convert Mr. Staropoli’s policy upon the divorce to an individual life insurance policy.

But before addressing these six claims, the Court took a detour to discuss agency under the heading for ERISA § 502(a)(3) claims.

While Plaintiff argued that JPMorgan was an agent of MetLife, and therefore JPMorgan’s knowledge of the divorce can be imputed to MetLife, Plaintiff “failed to explain how the facts alleged demonstrate a relationship between JPMorgan and MetLife that satisfies the elements of federal common law agency.” Plaintiff had also alleged an agency relationship on “information and belief” that the Court viewed as “only a bare legal conclusion” that it need not accept as true. Thus, “[u]nder the facts alleged, the Court finds that Plaintiffs have failed to plead agency.”

Finally, the Court addressed the six claimed breaches of fiduciary duty. Regarding misrepresentation, the dispute turned on whether MetLife had made any representations to Plaintiff prior to the claim being made. In all of Plaintiff’s allegations, it lumped together JPMorgan and MetLife. The problem, as pointed out by MetLife was that “such tactics blatantly disregard the fact that JP Morgan and MetLife acted in different roles and at different times vis-à-vis the Plan” and it asked the Court to “disregard this deliberate obfuscation.”

The Court tended to agree, as this “represents a systemic pleading style throughout the amended complaint. Plaintiffs’ allegations jump from alleging conduct of one defendant to allegations that both defendants are liable to allegations that each defendant is liable for the actions of the other. This, in turn, prevents necessary deconstruction to discern which allegations, particularly those related to communications with Plaintiffs, Plaintiffs attribute to MetLife by its direct actions or to JPMorgan and then to MetLife through principles of agency. Indeed, it is unclear if Plaintiffs allege that MetLife directly communicated with Plaintiffs at all, or if MetLife only accepted premiums.”

The “tangled nature” of the allegations rendered an “accurate analysis of the misrepresentation claims against MetLife unachievable.” The Court deemed this claim to fail and that the allegations violated Rule 8(a).

Similarly, Plaintiff’s argument that MetLife had failed to notify them of the ineligibility failed because “Plaintiffs do not allege that they ever informed MetLife of the divorce prior to filing their claim for benefits in 2018 and, as analyzed above, they cannot rely on constructive knowledge through agency principals or principles.”

Returning to the theme that MetLife could not be held responsible for actions that took place before it insured the plan, the Court rejected Plaintiff’s claim to hold MetLife liable for a failure to review or investigate the application/enrollment for benefits that took place in 2016. “Here, under the facts alleged, any changes made to the enrollment procedures after MetLife became claims administrator in 2017 would have had no impact on Plaintiffs’ alleged injury. Therefore, they cannot state a claim for breach of fiduciary duty.” The Court cited the lack of alleged involvement by MetLife in the 2016 enrollment as the basis for rejecting the argument that it should have taken proactive steps to ensure the enrollment process was not confusing.

The last two claims failed for similar reasons. The Court did not find any support for the notion that a breach of fiduciary duty can be supported by a “mere failure to anticipate that a plan participant might disregard the plain language of the plan and rely only on the issuance of enrollment statement and the acceptance of premiums as eligibility approval can constitute a breach of fiduciary duty, particularly where a plan participant’s reliance under such circumstances would not be reasonable.” It also did not fault MetLife for failing to provide conversion notice because “MetLife did not know the material fact that the Staropolis had divorced….”

These are not novel conclusions, alleging breaches of fiduciary duty against an entity for acts that took place prior to it becoming a fiduciary are likely going to fail. To the extent it would have mattered, Plaintiff did not sue Prudential or the plan administrator.

The lack of an agency relationship and the lack of sufficient pleading of a misrepresentation by MetLife also doomed Plaintiff’s arguments under equitable estoppel and waiver.

The confusing nature of the pleadings aside, the Court’s decision seems at odds with the recent trend in ERISA cases. All the relevant information was in the hands of the plan sponsor. Premiums were paid. Coverage was confirmed. Yet no liability was found. If the case goes to the Third Circuit, it will be interesting to see the outcome.

This week’s notable decision was summarized by Brent Dorian Brehm, a partner at Kantor & Kantor LLP. Brent views it as incumbent upon plan sponsors and plan administrators to ensure that if an employee pays for or is told they have a benefit, they should get it. He looks forward to continuing to fight for that right on behalf of his clients.

Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.

Disability Benefit Claims

Fifth Circuit

Ingerson v. Principal Life Ins. Co., No. 2:18-CV-227-Z-BR, 2020 WL 3118693 (N.D. Tex. June 12, 2020) (District Judge Matthew Kacsmaryk). Plaintiff filed suit to recover disability benefits from Principal Life. The Magistrate Judge entered findings and conclusions on the record recommending judgement, including an award of attorneys’ fees, be entered for Defendant. Plaintiff objected on three grounds: (1) Reliance on the peer review report obtained by Principal was misplaced because his conclusions were not based on an in-person examination; (2) Reliance on a separate examination was improper because this physician was not a sleep specialist, and thus not qualified to opine on Plaintiff’s sleep-related disability; and (3) An award of attorneys’ fees for Defendant is improper in light of the Bowen factors. The court upheld the magistrate’s conclusion, overruling all three objects. The court found: (1) There is no legal authority supporting the position that reliance on a “paper” review is improper; (2) Reliance on this physician was not improper, as while his specialty was not sleep disorders, it was relevant to the reason Plaintiff was examined—to discern the extent of his cognitive impairment; and (3) While Plaintiff argues two factors weigh in his favor, Plaintiff has not shown an inability to satisfy an award of attorneys’ fees. Even if he had, the Magistrate properly utilized her discretion to award fees without considering the Bowen factors.


Eighth Circuit

Scheff v. Blue Cross Blue Shield of N. Dakota, No. 4:15-CV-173, 2020 WL 3086874 (D.N.D. June 10, 2020) (Magistrate Judge Clare R. Hochhalter). Plaintiff, a participant in an ERISA-governed medical benefit plan, sued the claims administrator for the plan, BCBS, for benefits based on an out-of-network air ambulance bill. Plaintiff filed a “motion for leave to serve discovery requests,” which BCBS opposed. The court stated that in ERISA cases “discovery is the exception, not the rule,” and that discovery was only permissible upon a showing of good cause and in the court’s discretion. The court found that BCBS had a conflict of interest as the plan’s backup insurer, but this fact alone was insufficient to warrant discovery. The court also disregarded as grounds for discovery alleged “contentious litigation” between BCBS and the air ambulance service, and Plaintiff’s allegation that attorneys had written the denial letter in his case. Finally, the court found that BCBS only needed to provide its Ambulance Fee Schedule to Plaintiff and was not required to provide further documentation regarding how it had calculated that schedule. Thus, the court found that this was not one of the “rare” cases where discovery should be permitted.

ERISA Preemption

Ninth Circuit

Redmond v. Standard Life Ins. Co., et al., Case No. 19-cv-02061-BR, 2020 WL 3051344 (D. Or. Jun. 8, 2020) (Senior Judge Anna J. Brown). Redmond, the former Senior Director of Procurement, filed a complaint against Standard for (1) common-law breach-of-contract,  (2) wrongful denial of benefits under ERISA, (3) wrongful termination in violation of ERISA § 510 arising out of what appeared to be a soap opera worthy series of events involving his management of certain employees in his department. On Defendants’ motion to dismiss, the court denied Defendants’ entire motion to dismiss holding that (1) Redmond’s claim for breach of contract was not preempted by ERISA because the claim related to provisions of a separate Release and Severance Agreement signed by Redmond (and not the Severance Play Plan itself) and, moreover, Redmond’s claim implicates a legal relationship and alleged motivation to interfere with Redmond’s employment outside of the scope of the ERISA plan, (2) Redmond is seeking severance damages (not primarily ERISA-governed benefits) in his breach of contract claim against Standard and therefore Redmond’s claims are not preempted by ERISA § 510.

Exhaustion of Administrative Remedies

Seventh Circuit

Westray v. Amazon & Subsidiaries Short Term Disability Plan, No. 1:19-CV-3290-TWP-DLP, 2020 WL 3035968 (S.D. Ind. June 5, 2020) (Judge Tanya Walton Pratt). Plaintiff filed a claim for Short Term Disability benefits under a Plan which required two administrative appeals prior to filing suit. Plaintiff’s claim was denied and upheld after one appeal. Plaintiff then filed suit, as the statute of limitations to file a complaint under the terms of the Plan would have run prior to the completion of the second administrative appeal. Defendants filed a motion to dismiss, or in the alternative a motion to stay pending exhaustion of administrative proceedings. Plaintiff stipulated to staying the action, but opposed the motion to dismiss, arguing that she had no choice but to file prior to completion of the second appeal, and it is within the court’s discretion to stay the action pending the proceedings. As such, the court accepted the parties’ agreement to stay the proceedings pending exhaustion of administrative remedies.

Life Insurance Claims

Third Circuit

Staropoli v. Metropolitan Life Insurance Company et al., 2020 WL 3051434 (E.D. Penn. June 8, 2020) (Judge Gene E. K. Pratter). See Notable Decision summary above.

Medical Benefit Claims

First Circuit

N.R. by & through S.R. v. Raytheon Co., No. CV 20-10153-RGS, 2020 WL 3065415 (D. Mass. June 9, 2020) (Judge Richard G. Stearns). Plaintiffs brought a putative class actions against Defendants ERISA plans predicated upon the allegation that Defendants’ exclusion of coverage for non-restorative speech therapy as an autism spectrum disorder treatment violates the Federal Parity Act. Regarding the breach of fiduciary duties action, Plaintiffs do not allege facts suggesting that the plan suffered losses but rather that Defendants’ refusal to cover speech therapy benefits resulted in the plan’s unjust retention of funds. The court dismissed the count one with prejudice. Regarding the benefit claim, the court found that the complaint does not allege any right to benefits under the plan and therefore the court dismissed count two with prejudice. Regarding the equitable relief action, the court cannot make out the nature of Plaintiffs’ as-applied Parity Act claim. The court found that the plan does not support Plaintiffs’ allegation that the plan facially excludes benefits for non-restorative speech therapy only for mental health conditions. The court dismissed count three seeking equitable relief without prejudice. Regarding statutory penalties, Plaintiffs did not plead facts sufficient to suggest that his documents request were directed to the true Plan Administrator and therefore the court declined to address the merits of the penalties argument and dismisses count four without prejudice.

Tenth Circuit

Amy G., et al. v. United Behavioral Health, et al., Case No. 17-cv-00413-DN-EJF, 2020 WL 3065414 (D. Utah June 9, 2020) (Judge David Nuffer). The court denied a motion to certify a class alleging UnitedHealthcare improperly refused to pay for programs that use outdoor activities to treat young people’s mental health issues. The proposed class alleged that UnitedHealthcare uniformly excluded coverage for wilderness therapy based on it being experimental. The court held that “[t]he circumstances demonstrate that the alleged uniform policy of exclusion cannot be the ‘glue’ that allows examination of all the class members’ claims for relief,” referring to the class certification standard laid out in Wal-Mart Stores Inc. v. Dukes. The court also observed that “[t]he alleged uniform policy of exclusion does not produce a common answer to the crucial question of why the proposed class members’ claims for wilderness therapy coverage were denied.” Apparently, discovery obtained revealed the insurer denied coverage for nearly one-third of wilderness therapy claims based on reasons unrelated to an alleged uniform policy exclusion and the court indicated that those individuals could not be ignored just because they are not part of the proposed class. “The existence of these individuals, particularly the one whose claims were paid in full, undercuts the premise that defendants have a uniform policy of exclusion based on wilderness therapy being experimental,” the court wrote. The Court finally concluded that the proposed class members’ medical conditions, the wilderness therapy they participated in, and the terms of their benefits plans are too varied to satisfy commonality.

Pension Benefit Claims

Fifth Circuit

BBVA USA Bancshares, Inc. v. Bandy, No. 2:19-CV-01548-SGC, 2020 WL 3104594 (N.D. Ala. June 11, 2020) (Magistrate Judge Staci G. Cornelius). Plaintiff, the administrator of an ERISA-governed 401(k) employee benefit plan, filed this interpleader action to determine the rightful beneficiary of an employee’s retirement account. (One of the potential beneficiaries was a person who alleged he was married to the employee, but had also been arrested for her murder, thereby implicating Alabama’s “slayer statute.”) The plan filed a motion requesting that the account funds be interpled, and that it be dismissed from the action, or in the alternative, requesting injunctive relief that no claims could be asserted against it. The court granted the plan’s motion to interplead the funds due to the competing claims for benefits, and to be dismissed from the action. However, it denied the plan’s request for injunctive relief without prejudice because the action was a “rule interpleader” action, not a “statute interpleader” action, and injunctive relief is typically not available in rule interpleader actions. The court also entered default judgment against one of the defendants who had not filed a response to the interpleader action—the one accused of the beneficiary’s murder. As for the remaining defendants, they agreed as to who the proper beneficiary was, and thus the court ordered that the funds be paid to that person.

Plan Status

First Circuit

Keefe v. LendUs, LLC, No. 20-CV-195-JD, 2020 WL 3051779 (D.N.H. June 8, 2020) (Judge Joseph A. DiClerico, Jr.). Plaintiff brought ERISA and breach of contract claims against Defendant, his former employer, seeking to enforce the terms of the Executive Incentive Bonus Program. Defendant moved to dismiss the ERISA claims. It argued that the Program is not a “top hat” plan subject to ERISA. Rather, it is a bonus plan designed to keep Plaintiff as an employee. The court determined that with respect to Article II of the Program which provides for annual bonuses, the fact that the bonuses were not paid immediately does not make them deferred compensation for purposes of providing an employee pension benefits. The court dismissed the ERISA claim seeking the annual bonus from the Program. However, the court found that Article III of the Program, which determines a settlement amount to be received at termination of employment, appears to extend beyond a simple one-time severance payment. On a motion to dismiss, the court cannot determine as a matter of law that this part of the program is not an ERISA top hat plan. The court denied dismissal of the ERISA claims for the bonus settlement amount and attorneys’ fees.

Provider Claims

Eleventh Circuit

GVB MD d/b/a Miami Back and Neck Specialists v. Aetna Health Inc., No. 19-22357-CIV, 2020 WL 3078520 (S.D. Fla. June 10, 2020) (Judge Federico A. Moreno). In this case, Miami Back seeks reimbursement for medical procedures and treatments rendered to Defendant Aetna Health Inc.’s insured members and health insurance plan subscribers. The intake and admission process at Miami Back requires that Members execute a written assignment of benefits, which assigns to Miami Back the Members’ rights to receive benefits under applicable Aetna insurance plans. Here, the court found that Plaintiff’s third attempt at stating a claim for declaratory relief fares no better than the previous two attempts. First, Miami Back’s requests are not substantively different than those dismissed in the initial complaint. Second, as in the initial complaint, the declaratory relief claim here requests nothing more than a general declaration of rights. For instance, Miami Back asks the court to issue a declaratory judgment clarifying the parties’ rights and obligations under certain Aetna insurance plans because Miami Back has provided and continues to provide pre-authorized medically necessary spine surgery and related procedures to Aetna’s insured members and believes it has a right to receive compensation from Aetna. However, Miami Back provides no guideposts for the relief that it seeks: the requested declarations are not limited by a particular procedure or treatment, by a particular diagnosis, or by a determination that a particular procedure or treatment was medically necessary for a particular diagnosis; nor is the requested declaration limited by the reasonableness of pricing. A general, sweeping request for declaratory relief, such as this, fails to state a claim.

Seventh Circuit

Morris v. Aurora Network Plan, No. 19-CV-1210, 2020 WL 3051456 (E.D. Wis. June 8, 2020) (Judge Lynn Adelman). Defendant Anthem Blue Cross and Blue Shield (“Anthem”) is claims administrator for the Defendant Aurora Health Care’s (“Aurora’s”) self-insured medical employee benefit plan. Plaintiff Morris is a beneficiary of Aurora’s medical plan and received medical care from Plaintiff NEA. NEA submitted claims to Anthem for the services rendered, and it was reimbursed a fraction of the total amount billed. NEA requested, but Anthem did not provide, information on how Anthem calculated the amount allowed and the amount paid to NEA for services. Defendants filed a motion to dismiss the complaint. The court found that Count I of the Complaint adequately stated a claim for breach of the terms of the plan. Anthem’s method of calculation is unknown because Anthem has refused to provide it to Plaintiffs. From this, the court inferred Defendants did not properly calculate the amount paid to NEA under the terms of the plan. Plaintiffs’ Count II is for breach of the ERISA disclosure requirements pursuant to §1132(a)(3). Anthem and the Plan argued this claim should be dismissed with respect to them because they are not plan administrators and therefore not subject to the disclosure requirements. The court disagreed, finding that Anthem and the Plan both benefited from Aurora’s breach and equitable relief would require a transfer of funds from Anthem or the Plan to Plaintiffs. The court stated that just because they are not responsible does not mean they are not liable for the breach. The court dismissed Count III for breach of fiduciary duty, determining it was duplicative of Count II. Count IV for failure to provide plan documents was dismissed with respect to Anthem and the Plan because they are not plan administrators, but dismissal was denied with respect to the plan administrator, Aurora.

Meucci v. Aurora Network Plan, No. 19-CV-1188, 2020 WL 3051535 (E.D. Wis. June 8, 2020) (Judge Lynn Adelman). See, Morris v. Aurora Network Plan, No. 19-CV-1210, 2020 WL 3051456 (E.D. Wis. June 8, 2020). Same facts, same issues, same Defendants.

Statutory Penalties

Ninth Circuit

Penwell v. Providence Health & Servs., No. 2:19-CV-01786-RAJ, 2020 WL 3035566 (W.D. Wash. June 5, 2020) (Judge Richard A. Jones). In early 2019, after observing an increase in their premiums, Plaintiffs began requesting network pricing information from Providence. Plaintiffs sued Providence under ERISA section 502(c), seeking specific performance and civil penalties based on Providence’s alleged failure to provide the requested documents and information under 29 U.S.C. § 1024(b). Plaintiffs’ complaint asserts a single claim under ERISA section 502(c)(1), which provides that a plan administrator is subject to fines if they violate ERISA section 104(b). Under section 104(b), a plan administrator must “upon written request of any participant or beneficiary, furnish a copy of the latest updated summary plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated. Providence moved to dismiss Plaintiffs’ complaint for failure to state a claim under Fed. R. Civ. P. 12(b)(6), which the court granted. Plaintiffs’ complaint contains no factual allegations showing how the requested information will inform “plan participants and beneficiaries about their rights under the plan.” Indeed, Plaintiffs make no effort to connect their incredibly broad information requests to their rights and duties under the Plan. Instead, Plaintiffs recite the statutory elements in conclusory fashion, labeling each category of requested documents or data as “instruments under which the Plans are established or operated.” This is insufficient. Additionally, it appears that some of the information requested by Plaintiffs does not constitute formal documents governing the Plans. The court dismissed Plaintiffs’ complaint without prejudice and gave them fourteen days to file an amended complaint.

Subrogation/Reimbursement Claims

Ninth Circuit

Colorescience, Inc. v. Bouche, No. 20CV595-GPC(AGS), 2020 WL 3078503 (S.D. Cal. June 10, 2020) (Judge Gonzalo P. Curiel). The plaintiff plan administrator brought action against the plan participant to seek a subrogation lien to recover benefits paid for treatment of Bouche’s injuries sustained in an accident. Defendant moved to dismiss the complaint arguing that Bouche was never a plan participant. The court denied Defendants’ request to convert the motion to dismiss into a motion for summary judgment because Defendant did not make the request until their reply. The court found that Plaintiff plausibly alleged a claim for equitable subrogation and constructive trust because the complaint alleges that Bouche is a plan participant and the plan provides for automatic equitable lien to any benefits the plan participant may receive against a third party for injuries suffered and include a right of reimbursement. The court also found that the plan may sue a third party regardless of the funds being deposited into the court’s registry. The court also found that Defendants do not appear to dispute that the court has personal jurisdiction and venue. The court denied Defendants’ motion to dismiss.

Withdrawal Liability & Unpaid Contributions

First Circuit

Alongi v. BR Steel, LLC, No. 18-CV-12648-ADB, 2020 WL 3086071 (D. Mass. June 10, 2020) (Judge Allison D. Burroughs). The court granted Plaintiffs’ motion for Defendant to be held in civil contempt for failing to follow the Court’s previous order on Plaintiffs’ motion for a preliminary injunction to obtain an audit.

Fourth Circuit

Constellium Rolled Prod. Ravenswood, LLC v. United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int’l Union, AFL-CIO/CLC, No. 2:18-CV-01404, 2020 WL 3104912 (S.D.W. Va. June 11, 2020) (Judge Thomas E. Johnston). The court denied Plaintiff’s Motion to Vacate Arbitration Award, finding that the Arbitrator did not manifestly disregard the principles of res judicata and collateral estoppel, and did not issue an award inconsistent with the parties’ CBA.

Seventh Circuit

Chicago Reg’l Council of Carpenters Pension Fund v. United Carpet, Inc., No. 18 C 4785, 2020 WL 3077541 (N.D. Ill. June 10, 2020) (Magistrate Judge Sheila Finnegan). In this action to recover fringe benefit contributions, the court denied the parties’ cross-motions for summary judgment. There are factual questions surrounding Defendants’ motive and intent in forming Great Northern Flooring, Inc.—which the Trust Funds alleged is a sham non-union flooring company employing United Capet’s union workers without paying them union wages and fringe benefits—precluding an award of summary judgment.

Knowles, et al. v. Dodds Masonry Construction Company, Inc., et al., No. 119CV00443SEBMPB, 2020 WL 3060383 (S.D. Ind. June 8, 2020) (Judge Sarah Evans Barker). Plaintiffs alleged that Dodds Masonry violated its obligations under its CBA and that Defendants are successive alter egos of Dodds Masonry who share responsibility for its obligations under the CBA. The court denied Defendants’ motion for summary judgment because whether the CBA was terminated in compliance with the CBA is a core dispute between the parties, the resolution of which requires credibility determinations that must be made by a jury.

Your ERISA Watch is made possible by the collaboration of the following Kantor & Kantor attorneys:  Brent Dorian Brehm, Sarah DemersElizabeth GreenAndrew Kantor, Susan Meter, Michelle RobertsTim Rozelle, Peter Sessions, and Zoya Yarnykh.


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