Pricewaterhousecoopers LLP Health v. Mayer

          RULING ON MOTION TO DISMISS

          VICTOR A. BOLDEN UNITED STATES DISTRICT JUDGE.

         PricewaterhouseCoopers LLP Health and Welfare Benefits Plan (“PWC”) brings this action against Arthur Mayer and his personal injury attorney, James O. Gaston, under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §§ 1001, et seq. (“ERISA”) for health insurance reimbursement. Mr. Gaston moves to dismiss because PWC failed to state a claim upon which relief can be granted. Motion to Dismiss, ECF No. 19 (“ECF No. 19”).

         For the following reasons, the Court DENIES Mr. Gaston's motion to dismiss.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         A. Factual Allegations

         PWC is a self-funded employee welfare benefit plan under 29 U.S.C. § 1001. Am. Compl., ECF No. 14. PWC covered Mr. Mayer. Id. at ¶ 5. The PWC Summary Plan Description gives full rights to PWC to recover from employees or dependents for the cost of health benefits paid on their behalf under the PWC health plan. Id. at ¶ 8. The plan description states in pertinent part:

         RIGHT TO SUBROGATION/THIRD PARTY RECOVERY

You shall cooperate with PWC and its agents in a timely manner to protect its legal and equitable rights to subrogation and reimbursement.

If a third party may be liable for a covered medical expense that you or your Dependent have incurred, the Plan has a right of subrogation to any claim that you or your Dependent have against the third party. The Plan will then be entitled to be paid back from any amount that you or your Dependent recover against the third party for any expenses that the Plan has had, and the recipient of any such recovered amounts shall hold the funds in constructive trust for the Plan. The Plan has a right of reimbursement against any recovery by you or your Dependents from a third party. No. court costs or attorneys' fees may be deducted from the Plan's recovery without the Plan's express written consent and the Plan is not required to participate in or pay court costs or attorneys' fees to the attorney hired by you or your Dependents to pursue damages or personal injury claims. No. so-called "fund doctrine" or "common fund doctrine" right shall defeat the Plan's rights. Regardless of whether you or your Dependents have been fully compensated or made whole, the Plan may collect from you or your Dependents the proceeds of any full or partial recovery that you or your Dependents or legal representative obtain, whether in the form of a settlement (either before or after any determination of liability) or judgment. The proceeds available for collection by PWC shall include, but not be limited to, any and all amounts whether designated in any settlement or judgment as economic damages, noneconomic damage, punitive damages, attorneys' fees or otherwise. You shall not, without PWC's written consent, settle any claim for an amount less than the amount that PWC has paid or advanced on your behalf.

Id.

         On May 11, 2015, Mr. Mayer suffered injuries in a motor vehicle accident. Id. at ¶ 9. PWC spent $44, 167.59 for Mr. Mayer's health care in connection with those injuries. Id.

         Mr. Gaston represented Mr. Mayer in the civil action arising from Mr. Mayer's accident in Connecticut Superior Court (“Mayer Litigation”). Id. at ¶ 6. Before the Mayer litigation settled, PWC allegedly gave notice to Mr. Mayer, through Mr. Gaston, of PWC's right of subrogation and reimbursement from all proceeds of payment, settlement, or judgment in the Mayer Litigation. Id. at ¶ 12. PWC alleges that Mr. Gaston settled the Mayer Litigation for at least $250, 000. Id. at ¶ 11. The Amended Complaint also alleges that Mr. Gaston holds or has disbursed part of the proceeds of the Mayer Litigation to himself while no payment has been to PWC. Id. at ¶ 13-14.

         B. ...