United States District Court, D. Connecticut
RULING AND ORDER
Robert
N. Chatigny, United States District Judge
Plaintiff
Employee Benefit Plan of Compass Group USA, Inc., is the
fiduciary of an employee welfare benefit plan (“the
Plan”) administered pursuant to the Employee Retirement
Income Security Act of 1974 (“ERISA”). William
Marino, a participant in the Plan, suffered injuries caused
by a third party and Plaintiff paid for his medical
treatment. Defendant Miller, Rosnick, D'Amico, August
& Butler, P.C. (“Miller Rosnick”) brought
suit against the third party on behalf of Marino, obtained a
lump sum settlement, took its attorney's fees and costs
from the settlement proceeds, and disbursed the remainder to
Marino. A consent judgment has been entered in favor of
Plaintiff against Marino in the amount of the medical
expenses Plaintiff paid on his behalf, but Plaintiff seeks to
recover this amount from Miller Rosnick. The question
addressed here is whether the relief Plaintiff seeks against
the law firm falls within the scope of § 502(a)(3)(B) of
ERISA, which authorizes a fiduciary to bring an action
“to obtain appropriate equitable relief” for
conduct that violates ERISA or the terms of a plan. Plaintiff
contends the answer is yes; Defendant responds the answer is
no. I conclude that Defendant is correct and therefore grant
Defendant's motion for summary judgment and deny
Plaintiff's cross-motion.
I.
Factual Background
The
Plan contains a provision entitled “Subrogation and
Reimbursement, ” which provides as follows:
[I]f a Participant incurs charges or expenses for any
illness, injury or other condition as a result of the act of
a third party or parties . . . and such Participant has or
may have a legal right to seek restitution from such third
party, his insurance company or other responsible party for
such act, then any payment of benefits made under this Plan
based on such illness, injury or other condition
automatically shall be subject to the provisions of this
Section. The Participant shall advise the Plan of any claim
or potential claim he might have against any [such] third
party or his insurance company as of the date the person
becomes a Participant under this Plan, or, if later, within
sixty (60) days of the act which gives rise to such claim if
such act also results in payment of benefits being made under
the Plan. . . .
If a Participant receives any judgment, settlement or other
payment from any person or persons considered responsible for
the condition which gives rise to the expenses which the Plan
pays, . . . the Participant shall reimburse the Plan from the
first of such payments received to the extent of the expenses
paid under the Plan regardless of whether the judgment,
settlement or other payment allocates any specified amount to
medical expenses paid under the Plan. The Plan's right to
recovery shall be enforceable, even if the Participant has
not been made whole. If the Participant fails to timely and
fully reimburse the Plan for such expenses, any future claims
the Participant makes under the Plan shall be offset by any
amounts owed by the Participant to the Plan.
The
Plan reserves Plaintiff's right to “request a court
to establish a constructive trust or equitable lien” on
assets “held by a third party” and to “sue
the Participant or a third party in state court for
reimbursement of funds held by such party.” Beginning
in early 2011, Kerris Brown, an employee of Rawlings Company,
LLC, Plaintiff's subrogation agent, communicated with
Attorney James Butler at Miller Rosnick regarding
Plaintiff's payment of Marino's medical expenses. In
a series of communications, Brown provided documentation of
medical expenses paid on Marino's behalf, requested
information about Marino's lawsuit, and asserted a lien
on funds recovered from the lawsuit.
With
regard to these communications, the record shows the
following. Brown first contacted Butler on February 22. Her
letter provided notice of plaintiff's payment of medical
expenses on behalf of Marino and requested information
regarding his lawsuit against the responsible party. On March
2, Brown sent Butler the first of several summaries of
medical expenses paid on behalf of Marino. On April 5, she
followed up with Butler regarding her first communication.
This letter again requested information about the lawsuit and
noted that “to date, [Butler] ha[d] not provided that
information nor acknowledged representation of
[Marino].” On May 17, Brown followed up again, seeking
the same information. She noted that “[f]ailure to
provide such information may result in a finding of
non-cooperation. The member may be held accountable for any
prejudice to [Plaintiff's] right of recovery as a result
of the failure to comply.” On June 7, and again on June
13, Brown sent Butler updated lists of medical expenses.
On June
20, Butler sent a letter to Brown, his first communication to
her contained in the record. In the letter, he commented on
the medical expenses claimed by plaintiff but wrote that his
“letter [was], in no way, meant to convey that (he]
accept[ed] the legitimacy and validity of [Plaintiff's]
claimed lien.” On November 11, he wrote to Brown
stating that he had requested “documentation”
related to plaintiff's claim “[o]n numerous
occasions” and been provided no “documentation
whatsoever.” Butler threatened legal action if the
information was not provided.
On
December 5, Ben White, associate general counsel at Rawlings,
wrote to Butler. White's letter suggests that Brown had
inquired about the employment status of Marino (salaried or
hourly) to ensure she provided Miller Rosnick with the right
documentation supporting Plaintiff's claim but Miller
Rosnick had failed to provide the requested information.
Enclosed with the letter were pertinent pages from both the
salaried and hourly plans.
On May
3, 2012, Brown sent a letter to Butler notifying him that
Rawlings was aware that Marino had reached a settlement in
the civil case. In fact, the case been settled for a lump sum
payment of $160, 000. The letter requested that Butler
contact Brown to arrange for satisfaction of Plaintiff's
claim.
On May
8, 2012, Butler responded to Brown. He acknowledged the
settlement but argued that Rawlings was attempting to collect
on a claimed lien without providing proof of the lien's
legitimacy. Butler added that he was “awaiting the
Schedule A's that you must file along with the Form 5500
to be in compliance with the reporting requirements under the
applicable ERISA statutes.” Butler offered to advise
Marino to pay $5, 000 to settle the matter but stated that
“this offer, in no way, acknowledges the validity or
legality of [plaintiff's] claim.”
About
two months later, Butler disbursed the settlement proceeds.
Of the total amount of $160, 000, Butler disbursed $55,
872.68 to his law firm to cover costs, plus another $50, 000
for attorney's fees. The remaining $54, 127, 32 was
disbursed to Marino and several of his creditors.
Subsequently,
on September 6, 2012, White responded to Butler's letter
of May 8. White wrote that IRS Form 5500 is not an
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