PricewaterhouseCoopers LLP v. Mayer

          RULING AND ORDER ON THE CROSS-MOTIONS FOR SUMMARY JUDGMENT AND PLAINTIFFS' MOTION FOR A MORE DEFINITE STATEMENT

          VICTOR A. BOLDEN, UNITED STATES DISTRICT JUDGE.

         PricewaterhouseCoopers LLP Health and Welfare Benefits Plan and PricewaterhouseCoopers LLP (collectively “PricewaterhouseCoopers” or “PWC”) brings this action against Arthur Mayer and James O. Gaston (collectively “Defendants”) under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §§ 1001, et seq. (“ERISA”) for medical payment reimbursement.

         PricewaterhouseCoopers moves for summary judgment on its health insurance reimbursement and against Defendants' counterclaims. Motion for Summary Judgment by PricewaterhouseCoopers LLP, ECF No. 51; Motion for Summary judgment on Defendants' Counterclaim, ECF No. 68.

         Defendants also move for summary judgment. Motion for Summary Judgment, ECF No. 58.

         For the following reasons, the Court GRANTS PricewaterhouseCoopers's motions for summary judgment and DENIES Defendants' motion for summary judgment.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         A. Factual Allegations

         PricewaterhouseCoopers is a self-funded employee welfare benefit plan under 29 U.S.C. § 1001. Amended Complaint, ECF No. 14 (“Am. Compl.”). PricewaterhouseCoopers covered Mr. Mayer. Id. at ¶ 5; Pamela Copeland Affidavit, ECF No. 52-4 (“Copeland Aff”). The PricewaterhouseCoopers Summary Plan Description gives full rights to PricewaterhouseCoopers to recover from employees or dependents for the cost of health benefits paid on their behalf under the PricewaterhouseCoopers health plan. Am. Compl. 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.; Summary Plan Description, ECF No. 52-3, at 109.

         On May 11, 2015, Mr. Mayer suffered injuries in an automobile accident. Am. Compl. at ¶ 9; Mayer v. Kong Litigation Complaint. ECF No. 52-6 (“Mayer Litigation Compl.”). PricewaterhouseCoopers spent $44, 167.59 for Mr. Mayer's health care in connection with those injuries. Am. Compl. at ¶ 9; Copeland Aff. at ¶ 11; Medical Payment Summary, ECF No. 52-5, at 4.

         Mr. Gaston represented Mr. Mayer in the civil action arising from Mr. Mayer's accident in Connecticut Superior Court (“Mayer Litigation”). Am. Compl. at ¶ 6; Mayer Litigation Compl. at 4. Before the Mayer litigation settled, PricewaterhouseCoopers allegedly gave notice to Mr. Mayer, through Mr. Gaston, of PricewaterhouseCoopers's right of subrogation and reimbursement from all proceeds of payment, settlement, or judgment in the Mayer Litigation. Am. Compl. at ¶ 12; Copeland Aff. at ¶ 7.

         PricewaterhouseCoopers alleges that Mr. Gaston settled the Mayer Litigation for at least $250, 000. Am. Compl. at ¶ 11; Amended Answer to Amended Complaint with Special Defenses, Counterclaim against Plaintiff, ECF No. 64 (“Amended Answer”), at ¶ 11 (“Admitted that Mayer v. Long case settled for $250, 000”). 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 PricewaterhouseCoopers. Am. Compl. at ¶ 13-14; see also Gaston Memorandum of Law in Support of Motion to Dismiss, ECF No. 20, at 5.

         Defendants contend that the settlement did not fully compensate Mr. Mayer for his non-economic damages. James Gaston Affidavit, ECF No. 59-1 (“Gaston Aff.”), at ¶ 5. Instead, Defendants contend that PricewaterhouseCoopers paid for medical expenses related to a preexisting cervical condition, which was unrelated to the May 11, 2015 automobile collision. Id. at ¶ 7.

         B. Procedural History

         On March 28, 2018, PricewaterhouseCoopers filed its Complaint for equitable relief for medical bill payments under ERISA. Complaint, ECF No. 1.

         On May 5, 2018, Mr. Mayer and Mr. Gaston moved for a more definite statement because PricewaterhouseCoopers did not specify which counts applied to Mr. Mayer and which applied to Mr. Gaston. Motion for a More Definite Statement, ECF No. 12. On November 1, 2018, the Court found this motion moot. Order, ECF No. 36.

         On May 14, 2018, PricewaterhouseCoopers amended its Complaint, separating the allegations against Mr. Mayer and Mr. Gaston into separate counts. Am. Compliant, ECF No. 14.

         On June 21, 2018, Mr. Gaston moved for nonsuit. Motion for Nonsuit, ECF No. 15. On November 1, 2018, the Court found this motion moot. Order, ECF No. 36.

         On June 27, 2018, Mr. Mayer moved to dismiss the Complaint under Rule 12(b)(1). Motion to Dismiss, ECF No. 17. On July 13, 2018, Mr. Mayer moved to withdraw his motion to dismiss in its entirety. Motion to Withdraw, ECF No. 21. On August 2, 2018, the Court granted Mr. Mayer's motion to withdraw motion to dismiss. Order, ECF No. 27.

         On June 27, 2018, Mr. Gaston moved to dismiss the claim brought against him under Rules 12(b)(1) and 12(b)(6). Motion to Dismiss, ECF No. 19. On July 13, 2018, Mr. Gaston moved to withdraw his motion to dismiss, as to the diversity of jurisdiction, while still preserving the claim that he is an inappropriate party to this action. Motion to Withdraw, ECF No. 22. On August 2, 2018, the Court granted Mr. Gaston's motion to withdraw his 12(b)(1) claim. Order, ECF No. 27.

         On August 17, 2018, PricewaterhouseCoopers opposed the remaining portions of Mr. Gaston's motion to dismiss claim, arguing that Mr. Gaston is a proper party to this action. Memorandum in Opposition to Defendant Gaston's Motion to Dismiss, ECF No. 28.

         On December 10, 2018, the Court held a hearing on Mr. Gaston's motion to dismiss. Minute Entry, ECF No. 46.

         On December 13, 2018, the Court denied Mr. Gaston's motion to dismiss. Order Denying Motion to Dismiss, ECF No. 47.

         On January 31, 2019, PricewaterhouseCoopers moved for summary judgment, claiming a legal entitlement to reimbursement from the proceeds of the Mayer litigation settlement. Plaintiffs' Motion for Summary Judgment, ECF No. 51.

         On February 20, 2019, Defendants filed their memorandum in opposition to Plaintiffs' motion for summary judgment. Memorandum in Opposition, ECF No. 57 (“Mem. in Opp. to Pl.'s MSJ”).

         On February 20, 2019, Defendants responded to the Amended Complaint with special defenses and counterclaims against PricewaterhouseCoopers. Answer with Special Defenses, Counterclaim against Plaintiffs, ECF No. 56. On March 4, 2019, PricewaterhouseCoopers moved for a more definite statement as to the Answer. Motion for a More Definite Statement as to Defendants' Answer, ECF No. 63. On March 12, 2019, Defendants amended their Answer to provide more clarity. Amended Answer to Amended Complaint with Special Defenses, Counterclaim against Plaintiffs, ECF No. 64 (“Am. Answer”). Defendants also objected to the motion for a more ...