Bluecross Blueshield of South Carolina v. Carillo, CIV.A.4:05 CV 0044 H.

• Decision Date: 25 May 2005
• Docket Number: No. CIV.A.4:05 CV 0044 H.,CIV.A.4:05 CV 0044 H.
• Citation: 372 F.Supp.2d 628
• Parties: BLUECROSS BLUESHIELD OF SOUTH CAROLINA, Plaintiff, v. Josue CARILLO and Vincente Carillo, Defendants.
• Court: U.S. District Court — Northern District of Georgia

372 F.Supp.2d 628

BLUECROSS BLUESHIELD OF SOUTH CAROLINA, Plaintiff, v. Josue CARILLO and Vincente Carillo, Defendants.

No. CIV.A.4:05 CV 0044 H.

United States District Court, N.D. Georgia, Rome Division.

May 25, 2005.

COPYRIGHT MATERIAL OMITTED

Ansel Franklin Beacham, III, Brinson Askew Berry Siegler Richardson & Davis, Rome, GA, Charles M. Cork, III, Gambrell & Stolz, LLC, Macon, GA, for Josue Carillo.

Polly M. Haley, Thomas H. Lawrence, Lawrence & Russell, Memphis, TN, Susan D. Taylor, Magruder & Sumner, Rome, GA, for BlueCross BlueShield of South Carolina.

ORDER

DAVID L. MURPHY, District Judge.

This is a case filed under the Employee Retirement Income Security Act ("ERISA"). The case is before the Court on Plaintiff's Motion for a Preliminary Injunction [4], Defendants' Motion to Dismiss [16], and Plaintiff's Motion for Summary Judgment [17].

I. Procedural Background

On February 23, 2005, Plaintiff filed this lawsuit. Plaintiff asserts claims under 29 U.S.C.A. § 1132(a)(3) of ERISA. Plaintiff seeks to require Defendants to reimburse Plaintiff from funds that Defendants received in a settlement for medical costs that Plaintiff paid on behalf of Defendants under the terms of an ERISA employee benefit plan. Plaintiff requested that the Court enter a temporary restraining order and a preliminary injunction preventing Defendants and their counsel, Richard Yancey, from dissipating the settlement funds.

On February 25, 2005, the Court held a hearing with respect to Plaintiff's Motion for Temporary Restraining Order. On that same day, the Court approved an ex parte Temporary Restraining Order presented by Plaintiff preventing Defendants and Attorney Yancey from dissipating the settlement funds. (Order of Feb. 25, 2005.)

The Court scheduled a hearing on Plaintiff's Motion for Preliminary Injunction for March 7, 2005. Attorney Yancey and Defendants, however, were unable to attend the March 7, 2005, hearing. The Court consequently entered an Order extending the Temporary Restraining Order for ten days or until the Court could hold a hearing on the Motion for Preliminary Injunction, whichever was earlier. (Order of Mar. 7, 2005.)

On March 14, 2005, the Court held a hearing on Plaintiff's Motion for Preliminary Injunction. During the March 14, 2005, hearing, the Court heard evidence and counsel for the parties presented oral argument. On that same day, the Court entered an Order deferring ruling on the Motion for Preliminary Injunction to allow counsel time to file additional briefs. (Order of Mar. 14, 2005.) The Court also extended the Temporary Restraining Order as to the following: (1) $61,120.17 of settlement proceeds deposited in Defendant Josue Carillo's account at Dalton Whitfield Bank, located at 401 South Thornton Avenue in Dalton, Georgia; (2) $32,000 of settlement proceeds remaining in Defendant Vincente Carillo's account at Dalton Whitfield Bank, located at 401 South Thornton Avenue in Dalton, Georgia; and (3) a 2000 F-150 Ford truck purchased by Defendant Vincente Carillo with a portion of the settlement proceeds. (Id.) The March 14, 2005, Order provided that the Temporary Restraining Order would remain in place until the Court issued a decision on Plaintiff's Motion for Preliminary Injunction. (Id.) The Court's March 14, 2005, Order also appointed a guardian ad litem for Defendant Josue Carillo. (Id.)

On March 21, 2005, Defendants responded to Plaintiff's Motion for Preliminary Injunction with a Motion to Dismiss. On April 4, 2005, Plaintiff responded to Defendant's Motion to Dismiss by filing a Motion for Summary Judgment. The briefing process for Plaintiff's Motion for Preliminary Injunction, Defendants' Motion to Dismiss, and Plaintiff's Motion for Summary Judgment is complete, and the matters are ripe for resolution by the Court.

II. Defendant's Motion to Dismiss

A. Allegations of Plaintiff's Verified Complaint

Plaintiff's Verified Complaint states, in relevant part: "This action is to enforce the terms of the Mohawk Carpet Corporation Health and Welfare Benefits Plan (the `Plan') ... and for equitable relief arising under" ERISA. (Verified Compl. ¶ 1.) Plaintiff is a fiduciary of the Plan. (Id. ¶ 2.)

Defendant Josue Carillo and Defendant Vincente Carillo reside in Chatsworth, Georgia. (Verified Compl. ¶¶ 3-4.) Defendants were covered persons under the terms of the Plan, which is self-funded. (Id. ¶¶ 1, 7.) The Plan is covered by ERISA. (Id. ¶ 1.)

On or about June 17, 2002, Defendants sustained injuries in an accident. (Verified Compl. ¶ 8.) The Plan paid medical benefits of $122,393.64 on behalf of Defendant Josue Carillo as a result of the June 17 2002, accident. (Id. ¶ 9.) The Plan paid medical benefits of $3,971.09 on behalf of Defendant Vincente Carillo as a result of the June 17, 2002, accident. (Id. ¶ 10.)

The Plan contains a Subrogation/Right of Reimbursement provision, which states:

ARTICLE XI-SUBROGATION RIGHT OF REIMBURSEMENT

In the event benefits are provided to or on behalf of a Covered Person under the terms of this Plan, the Covered Person agrees, as a condition of receiving benefits under the Plan, to transfer to the Plan all rights to recover damages in full for such benefits when the injury or illness occurs through the act or omission of another person, firm, corporation, or organization.

If, however, the Covered Person receives a settlement, judgment, or other payment relating to the accidental injury or illness from another person, firm, corporation, organization, or business entity paid by, or on behalf of, the person or entity who allegedly caused the injury or illness, the Covered Person agrees to reimburse the Plan in full, and in first priority, for any medical expenses paid by the Plan relating to the injury or illness. The Plan's right of recovery applies regardless of whether such payments are designated as payment for, but not limited to, pain and suffering, medical benefits, lost wages, other specified damages, or whether the Covered Person has been made whole or fully compensated for his/her injuries.

The [Plan's] right of full recovery may be from the third-party, any liability or other insurance covering the third-party, the insured's own uninsured motorist insurance, underinsured motorist insurance, any medical payments (Med-Pay), no fault, personal injury protection (PIP), malpractice, or other insurance coverages which are paid or payable.

In the event benefits are provided to or on behalf of a Covered Person under the terms of this Plan, the Plan shall be subrogated, at its expense, to the rights of recovery of such Covered Person against any person, firm, corporation, organization, and/or any insurance coverages to which the Covered Person may be entitled.

The Plan will not pay attorney's fees, costs, or other expenses associated with a claim or lawsuit without the expressed written authorization of the Plan.

The Covered Person shall not do anything to hinder the Plan's right of subrogation and/or reimbursement. The Covered Person shall cooperate with the Plan and execute all instruments and do all things necessary to protect and secure the Plan's right of subrogation and/or reimbursement, including assert a claim or lawsuit against the third-party or any insurance coverages to which the Covered Person may be entitled. Failure to cooperate with the Plan will entitle the Plan to withhold benefits due the Covered Person under the Plan Document. Failure to reimburse the Plan as required will entitle the Plan to deny future benefit payments for all Covered Persons under this policy until the subrogation/reimbursement amount has been paid in full.

(Verified Compl. ¶ 11.)

Plaintiff alleges that Defendants settled claims relating to the June 17, 2002, accident for $200,000. (Verified Compl. ¶ 12.) Plaintiff claims that although Plaintiff has requested that Defendants reimburse the Plan for $126,364.73 under the terms of the Plan, Defendants have refused to reimburse Plaintiff. (Id. ¶ 13.)

Plaintiff's Verified Complaint further states: "Pursuant to 29 U.S.C. § 1132(a)(3), Plaintiff seeks equitable relief including, but not limited to, restitution, imposition of a constructive trust, and equitable lien to enforce ERISA and the terms of the Plan." (Verified Compl. ¶ 17.) Plaintiff alleges: "By refusing to cooperate with the Plan to protect its rights, and refusing to reimburse the Plan to the extent of benefits paid out of the amount Defendants recovered, Defendants have violated the terms of the Plan." (Id. ¶ 18.) According to Plaintiff, "[s]ince these acts and/or practices violate the Plan's terms, this Court should enter an order in restitution enforcing the terms of the Plan by requiring Defendants to turn over the $126,364.73 to the Plan." (Id. ¶ 19.) Finally, Plaintiff's Prayer for Relief states, in relevant part: "Plaintiff requests that the Court enter an Order granting equitable restitution against Defendants requiring Defendants to reimburse Plaintiff in the amount of $126,364.73, including appropriate pre-judgment and post-judgment interest, and for any other relief to which Plaintiff is entitled, and that reasonable attorney's fees and costs be awarded, pursuant to 29 U.S.C. § 1132(a)."

B. Standard Governing a Motion to Dismiss

The standard for a court to dismiss a claim is whether "it appears beyond doubt that the plaintiff can prove no set of facts to support his claim." GSW, Inc. v. Long County, 999 F.2d 1508, 1510 (11th Cir.1993) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). When considering a motion to dismiss, the Court "must accept the allegations in the complaint as true, construing them in the light most favorable to the plaintiffs." White v. Lemacks, 183 F.3d 1253, 1255 (11th Cir.1999). However, "[a]s a general rule, conclusory allegations and unwarranted deductions of fact are not admitted as true in a motion to dismiss." South Fla. Water Mgmt. Dist. v. Montalvo, 84 F.3d 402,...