Bielenberg v. Ods Health Plan Inc.

• Decision Date: 12 October 2010
• Docket Number: No. CV–09–1188–ST.,CV–09–1188–ST.
• Citation: 744 F.Supp.2d 1130
• Parties: Richard BIELENBERG, Plaintiff,v.ODS HEALTH PLAN, INC., and Metro West Ambulance Services, Inc., Defendants.ODS Health Plan, Inc., administrator of the Metro West Ambulance Services, Inc. PPO High Deductible Plan, Counterclaimant,v.The Law Offices of Brandon B. Mayfield, as Trustee of the Richard Bielenberg, Beneficiary, Client Lawyer Trust Account, Counterclaim Defendant.
• Court: U.S. District Court — District of Oregon

744 F.Supp.2d 1130

Richard BIELENBERG, Plaintiff,

v.ODS HEALTH PLAN, INC., and Metro West Ambulance Services, Inc., Defendants.ODS Health Plan, Inc., administrator of the Metro West Ambulance Services, Inc. PPO High Deductible Plan, Counterclaimant,

v.The Law Offices of Brandon B. Mayfield, as Trustee of the Richard Bielenberg, Beneficiary, Client Lawyer Trust Account, Counterclaim Defendant.

No. CV–09–1188–ST.

United States District Court, D. Oregon.

Oct. 12, 2010.

Brandon B. Mayfield, Law Office of Brandon Mayfield, Portland, OR, for Plaintiff.Frank V. Langfitt, Ater Wynne, LLP, Portland, OR, William H. Stockton, Brisbee & Stockton, Hillsboro, OR, for Defendants.

REDACTED OPINION AND ORDER

STEWART, United States Magistrate Judge:

INTRODUCTION

Plaintiff, Richard Bielenberg (“Bielenberg”), originally filed this action in Multnomah County Circuit Court on August 28, 2009. Bielenberg seeks declaratory relief against his employer, Metro West Ambulance Services, Inc. (“Metro West”), and ODS Health Plan, Inc. (“ODS”) with respect to the existence of certain subrogation and reimbursement rights under the terms of a health insurance policy (“Benefit Plan”) sponsored and funded by Metro West.

ODS removed this case to this court on October 7, 2009, based on 28 USC §§ 1331, 1441(a), and the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 USC §§ 1132(a)(3), (e)(1). ODS and Metro West later filed two alternative counterclaims against Bielenberg and a Counterclaim against defendant Law Offices of Brandon Mayfield (“Mayfield Law Office”), as trustee of two accounts entitled “Richard Bielenberg, beneficiary, Client Trust Account” (“Bielenberg Trust Account”). ODS's Amended Answer, Affirmative Defenses, and Counterclaims (“ODS's Amended Answer”) (docket # 20); ¹ Metro West's Answer, Affirmative Defenses, and Counterclaims (“Metro West's Amended Answer”) (docket # 28). In their First Counterclaims, ODS and Metro West seek declaratory relief against Bielenberg and (Counterclaim Defendant) Bielenberg Trust Account, and a constructive trust against the Bielenberg Trust Account, in order to recover $158,434.52 in settlement funds that ODS and Metro West contend belong to the Benefit Plan. ODS's Amended Answer, ¶¶ 18–33; Metro West's Amended Answer, ¶¶ 18–33. In the alternative, ODS and Metro West allege a Second Counterclaim for breach of contract, asserting that Bielenberg breached the Benefit Plan, causing damages of the same amount ($158,434.52) to the Benefit Plan. ODS's Amended Answer, ¶¶ 34–39; Metro West's Amended Answer, ¶¶ 34–39. All parties have consented to allow a Magistrate Judge to enter final orders and judgment in this case in accordance with FRCP 73 and 28 USC § 636(c).

Bielenberg has now filed a Motion for Leave to File an Amended Complaint (docket # 80), seeking to add a claim for penalties under 29 USC § 1132(c)(1). Additionally, the parties have filed cross-motions for summary judgment, including ODS's Motion for Partial Summary Judgment (docket # 44), Metro West's Motion for Partial Summary Judgment (docket # 49) (joining in ODS's motion), Plaintiff's Motion for Summary Judgment (docket # 61), and Counterclaim Defendant's Motion for Summary Judgment (docket # 71) (joining Bielenberg's motion in part). In addition, in response to Bielenberg's motion for summary judgment, ODS seeks to strike certain portions of the declarations of Bielenberg and his attorneys, Brandon Mayfield (“Mayfield”) and Gary Linkous (“Linkous”). See ODS's Memorandum in Opposition to Plaintiff's and Counterclaim Defendant's Motions for Summary Judgment (docket # 90), p. 4 and Ex. 1.

For the reasons that follow, ODS's Motion for Partial Summary Judgment (docket # 44), Metro West's Motion for Partial Summary Judgment (docket # 49), Plaintiff's Motion for Summary Judgment (docket # 61), and Counterclaim Defendant's Motion for Summary Judgment (docket # 71) are GRANTED IN PART AND DENIED IN PART, and Bielenberg's Motion for Leave to File an Amended Complaint (docket # 80) is DENIED.

BACKGROUND

I. Benefit Plan and Medical Care

Effective January 1, 2007, Bielenberg was covered under the Metro West Ambulance Services, Inc. PPO High Deductible Plan (the Benefit Plan), which was funded by Metro West and administered by ODS.² Born in 1979, Bielenberg lost one of his kidneys as an infant, placing him at an increased level of risk of injury or disease to the remaining kidney. On or about November 22, 2004, Bielenberg became a patient of Dr. Richard Larson, a family physician in Silverton, Oregon. At the time he began treatment with Dr. Larson, Bielenberg had already been suffering for years from chronic kidney disease of his remaining kidney.

Dr. Larson administered a blood test in September 2005 and failed to follow up on laboratory results which showed elevated creatinine levels (evidence that Bielenberg was already suffering from advancing and chronic renal insufficiency).

On April 19, 2006, Bielenberg was admitted to the emergency room at the Santiam North Lincoln Hospital in Lincoln City, Oregon. The following day, he was transferred to Good Samaritan Regional Medical Center, in Corvallis, Oregon, where he underwent kidney dialysis. Bielenberg continued to undergo kidney dialysis over the course of the ensuing months into March 2007. Laidler Decl., Ex. 4, pp. 3, 10–11; Bielenberg Decl., ¶ 8.

On March 13, 2007, Bielenberg was admitted to Oregon Health Sciences University where he underwent a kidney transplant surgery and received attendant care. The Benefit Plan paid his medical bills between January 1, 2007, and December 12, 2008. Laidler Decl., pp. 3–16. ODS and Metro West contend that they paid a total of $272,123.20 relating to Bielenberg's renal failure, hypertensive kidney disease, end stage renal disease, and chronic renal failure. The bulk of payments related to Bielenberg's March 13, 2007 kidney transplant. Amounts allowed for medical charges prior to the transplant were approximately $10,500.00.³ Pursuant to a stop loss provision in the agreement between ODS and Metro West, Metro West paid the first $150,000.00 in claims relating to Bielenberg's medical care for 2007. Mayfield Decl., Ex. 10. ODS paid the remaining claims, totaling over $100,000.00. Id.

II. Third Party Liability Provisions of the Benefit Plan

ODS is the Benefit Plan's named Claims Administrator. Laidler Decl., Ex. 1, p. 9.⁴ The Benefit Plan's Summary Plan Description lists Metro West as the plan sponsor, plan administrator, and named fiduciary. Id., p. 10. The Benefit Plan contains a section on “Benefits Available from Other Sources,” with subsections on Coordination of Benefits and Third–Party Liability. Id., pp. 11–14. The Third–Party Liability subsection provides as follows:

An individual covered by the Plan may have a legal right to recover benefit or healthcare costs from another person, organization or entity, or an insurer, as a result of an illness or injury of which benefits or healthcare costs were paid by the Plan.... Should the Plan make an advance payment of Benefits, as described below, it is entitled to be reimbursed for any benefits paid by the Plan that are associated with any illness or injury that are or may be recoverable from a Third Party or other source.

Because recovery from a Third Party may be difficult and take a long time, and payment of benefits where a Third Party may be legally liable is excluded under the terms of this Plan, as a service to you, the Plan will pay a Covered Individuals' expenses based on the understanding and agreement that the Covered Individual is required to honor the Plan's rights of subrogation as discussed below, and, if requested by us, to reimburse the Plan in full from any recovery the Covered Individual may receive, no matter how the recovery is characterized.

Upon claiming or accepting Benefits, or the provision of Benefits, under the terms of this Plan, the member agrees that the Plan shall have the remedies and rights as stated in this Section.... The Covered Individual agrees to do whatever is necessary to fully secure and protect, and to do nothing to prejudice, our right of reimbursement or subrogation as discussed in this Section. We have the sole discretion to interpret and construe these reimbursement and subrogation provisions.

Id., p. 11.

The Benefit Plan defines a “Third Party Claim” and a “Third Party” as follows:

3. “Third Party Claim” means any claim, lawsuit, or settlement, award, verdict, judgment, arbitration decision or other action against a Third Party (or any right to assert the foregoing) by or on behalf of a Covered Individual, regardless of the characterization of the claims or damages of the Covered Individual, and regardless of the characterization of the Recovery Funds. (For example, a Covered Individual who has received payment of medical expenses from the Plan, may file a Third Party claim against the party responsible for the Covered Individual's injuries, but only seek the recovery of non-economic damages. In that case, the Plan is still entitled to recover Benefits as described herein.)

4. “Third Party” means any individual or entity responsible for the injury or illness, or the aggravation of an injury or illness, of the Covered Individual. “Third Party” includes any insurer of such individual or entity, including different forms of liability insurance, or any other form of insurance that may pay money to or on behalf of the Covered Individual including uninsured motorist coverage, under-insured motorist coverage, premises med-pay coverage, PIP, and workers' compensation insurance.

Id., p. 12.

Finally, under the heading “Right of Recovery,” the Benefit Plan provides that:

In addition to the Plan's subrogation rights, we may, at our sole discretion and option, ask that the Covered Individual, and his or her attorney, if any, protect the Plan's reimbursement rights. If we elect to proceed under this sub-section, the following rules apply:

1. The...