Heartland Health & Wellness Fund v. Billeter

333 F.Supp.3d 761

HEARTLAND HEALTH & WELLNESS FUND, Plaintiff,

v.Janet L. BILLETER, et al., Defendants.

Case No. 2:17-cv-214

United States District Court, S.D. Ohio, Eastern Division.

Signed September 11, 2018

Filed September 12, 2018

Rena G. Sauer, Jennie Gayle Arnold, Ledbetter Parisi LLC, Miamisburg, OH, for Plaintiff.

John Zachary Zatezalo, Bordas & Bordas, PLLC, Wheeling, WV, for Defendants.

OPINION AND ORDER

EDMUND A. SARGUS, JR., CHIEF UNITED STATES DISTRICT JUDGE

This matter is before the Court on Defendants' Motion for Summary Judgment (ECF No. 21 ), to which Plaintiff has filed a memorandum in opposition (ECF No. 23 ). Plaintiff has also filed a Motion for Summary Judgment (ECF No. 22 ), to which Defendants have filed a memorandum in opposition (ECF No. 25 ). Plaintiffs have also filed a Motion for Leave to file a Sur-reply (ECF No. 27 ) and a Motion to Strike (ECF No. 28 ). The motions are ripe for consideration. For the reasons that follow, Defendants' Motion for Summary Judgment is DENIED as MOOT, Plaintiff's Motion for Summary Judgment is GRANTED, and Plaintiff's motions for leave to file a sur-reply and to strike are DENIED as MOOT.

I. BACKGROUND

Plaintiff in this lawsuit, Heartland Health & Wellness Fund ("Plaintiff" or the "Fund") is a self-funded multiemployer fund "established and maintained pursuant to the Labor-Management Relations Act of 1947, § 302(c)(5), 29 U.S.C. § 186(c)(5) ("LMRA")." (Compl . ¶ 4, ECF No. 1.) This suit is brought on the Fund's behalf by Henry B. Taylor and Joe Chorpenning, in their capacity as trustees. (Id. , at p. 1.) The Fund is governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et. seq. (Id. , ¶ 1.)

The Defendants in this lawsuit are Janet L. Billeter and her attorneys, Bordas & Bordas, PLLC (collectively "Defendants"). Ms. Billeter was an enrollee in the Fund at the time that she sustained serious injuries in an accident on January 9, 2015, when she was struck as a pedestrian by a tractor trailer. ( Compl. , ¶¶ 7-9, ECF No. 1.) "These injuries included fractures of the neck, back, pelvis, ribs and left arm, a collapsed lung, a lacerated liver, and a severed right arm from the shoulder and numerous surgeries." (Def.'s Mot. S.J. , ECF No. 21, p. 1.) The Fund alleges that, since the time of the accident, it "has paid $712,761.51 in medical treatment benefits for Defendant Billeter." (Compl. , ¶ 9, ECF No. 1.)

Ms. Billeter subsequently sued the driver of the tractor trailer and several entities to recover for the injuries that she suffered. (Pl.'s Mot. S.J. , Ex. B., ECF No. 22-2.) She was represented by Bordas & Bordas, PLLC, co-defendant in this action. ( Compl. , ECF No. 1, ¶ 10.) The Fund alleges that "sometime between January and March 2017 Defendants settled the personal injury claim for approximately $10,000,000." (Id. , ¶ 11.)

The Fund brings this suit "for equitable relief to enforce the terms and preserve the assets of an employee welfare benefit Fund's subrogation and reimbursement rights under the terms of the governing Fund documents through imposition of an equitable lien by agreement or a constructive trust on funds received or to be received by Defendant from a third party, pursuant to ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3)." ( Compl. , ¶ 1, ECF No. 1.) The Fund asserts that it is entitled to receive "the remaining reimbursement of the $712,761.51 that the Fund paid out of a self-funded trust as medical benefits for Defendant Billeter from the funds received or to be received in the personal injury settlement." (Id. , ¶ 25.) The funds at issue, $712,761.51, are maintained in a trust account by counsel Bordas & Bordas, PLLC. (See Compl. , ¶ 15, ECF No. 1 ; Amended Answers of Janet L. Billeter (ECF No. 11, ¶ 15 ) and Bordas & Bordas, PLLC (ECF No. 10, ¶ 15 ) ).

The Fund asserts that the Supreme Court's decision in U.S. Airways, Inc. v. McCutchen , 569 U.S. 88, 133 S.Ct. 1537, 185 L.Ed.2d 654 (2013), is on point and governs the case at bar. (Pl.'s Mot. S.J. , p. 8, ECF No. 22.) The Fund's assertion is well taken. This case is similar to McCutchen in all material respects except one. In this case, the plain language of the Plan disavowing the common-fund doctrine Defendants seek to impose is unambiguous, and leaves no room for equitable defenses to operate.

II. STANDARD OF REVIEW

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The movant has the burden of establishing that there are no genuine issues of material fact, which may be accomplished by demonstrating that the nonmoving party lacks evidence to support an essential element of its case. Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Barnhart v. Pickrel, Schaeffer & Ebeling Co. , 12 F.3d 1382, 1388–89 (6th Cir. 1993). To avoid summary judgment, the nonmovant "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ; accord Moore v. Philip Morris Cos. , 8 F.3d 335, 340 (6th Cir. 1993). "[S]ummary judgment will not lie if the dispute about a material fact is ‘genuine,’ that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In evaluating a motion for summary judgment, the evidence must be viewed in the light most favorable to the nonmoving party. Adickes v. S.H. Kress & Co. , 398 U.S. 144, 158–59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) ; see Reeves v. Sanderson Plumbing Prods., Inc. , 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000) (stating that the court must draw all reasonable inferences in favor of the nonmoving party and must refrain from making credibility determinations or weighing evidence). Furthermore, the existence of a mere scintilla of evidence in support of the nonmoving party's position will not be sufficient; there must be evidence on which the jury reasonably could find for the nonmoving party. Anderson , 477 U.S. at 251, 106 S.Ct. 2505 ; see Copeland v. Machulis , 57 F.3d 476, 479 (6th Cir. 1995) ; see also Matsushita , 475 U.S. at 587–88, 106 S.Ct. 1348 (finding reliance upon mere allegations, conjecture, or implausible inferences to be insufficient to survive summary judgment).

III. SUMMARY JUDGMENT

Although there are cross motions for summary judgment, the Court addresses the Plan's motion first. In view of this approach, the Court treats Defendants as the non-movants with respect to the evidence in the record. As discussed in more detail below, the Court grants the Fund's motion for summary judgment because the terms of the plan are clear and they foreclose the application of the equitable defenses asserted by Defendants, and because Defendants' remaining arguments are not sufficiently supported by evidence in the record. The Court also denies as moot Defendants' motion for summary judgment, which raises largely the same arguments as Defendants' opposition brief and which introduces no additional evidence that would support a different decision.¹ Likewise, the Fund's motion for leave to file a sur-reply and motion to strike are denied as moot.

The Fund's complaint asserts one count, seeking to enforce the terms of the Fund documents pursuant to ERISA § 502(a)(3). (Compl. , ¶¶ 27-32, ECF No. 1.) ERISA § 502(a)(3)(B)(ii) provides that a "civil action may be brought by a plan fiduciary ... to obtain other appropriate equitable relief ... to enforce ... the terms of the plan." 29 U.S.C. § 1132(a)(3). The Fund asserts that it relies "on the equitable relief provided by ERISA § 502(a)(3), along with the Subrogation and Reimbursement Agreement and the Subrogation and Reimbursement provision in the Fund's governing document for their demand for equitable relief." (Pl.'s Mot. S.J. at p. 5, ECF No. 22.) Additionally, the Fund asserts that "[t]he Subrogation and Reimbursement provision in the Fund's governing document satisfies the requirements of an equitable lien by agreement." (Id. )

A. The Plan Sets Forth an Equitable Lien by Agreement

The Fund's Rules and Regulations (the "Plan") "were originally adopted effective January 1, 1984 by the Trustees of the UFCW [United Food and Commercial Workers] Local Unions and Employers Benefit Plan of the Southwestern Ohio Area under the Plan's Trust Agreement to establish the Rules and Regulations determining the eligibility of Employees for the health and welfare benefits to be provided by the Plan and to prescribe the amount, extent, conditions and method of payment of such benefits." (Pl.'s Mot. S.J. , Ex. H, Heartland Health & Wellness Fund Rules and Regulations, p. 1, ECF No. 22-8.)

The Plan sets forth the duties and authorities of the Plan's Trustees. These duties include carrying out the obligation "to maintain, within the limits of the funds available to them, a sound and economical program dedicated to providing the maximum benefits for eligible Employees and Dependents ...." (Id. ) The Fund contends that it has a right to recover benefits paid by a third party that is legally responsible for medical payments. The Plan sets forth its rights to subrogation and reimbursement in Section 7.6(c):

(i) Plan's Rights to Subrogation and Reimbursement. The Plan shall be entitled to subrogation or reimbursement with regard to all rights of recovery of a Person, or representatives, guardians, beneficiaries, fiduciaries, trustees, estate representatives, heirs, executors, administrators of any special needs trust, and any other agents, persons or entities that may receive a benefit on behalf of the Person (collectively for purposes of this section 7.6(c), "Person"), to the extent of any amounts which the Plan has paid or may become obligated to pay

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