Community Health Plan of Ohio v. Mosser

• Decision Date: 21 October 2003
• Docket Number: No. 01-4095.,01-4095.
• Citation: 347 F.3d 619
• Parties: COMMUNITY HEALTH PLAN OF OHIO, Plaintiff-Appellee, v. Joseph J. MOSSER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

347 F.3d 619

COMMUNITY HEALTH PLAN OF OHIO, Plaintiff-Appellee, v. Joseph J. MOSSER, Defendant-Appellant.

No. 01-4095.

United States Court of Appeals, Sixth Circuit.

Argued: February 6, 2003.

Decided and Filed: October 21, 2003.

Petition for Rehearing and Suggestion for Rehearing Denied En Banc: December 19, 2003. Pursuant to Sixth Circuit Rule 206

ARGUED: J. Gerard Swank, SWANK & ASSOCIATES, Newark, Ohio, for Appellant.

Daran P. Kiefer, KREINER & PETERS, Cleveland, Ohio, for Appellee.

ON BRIEF: J. Gerard Swank, SWANK & ASSOCIATES, Newark, Ohio, William F. Goodrich, GOODRICH, GOODRICH & LAZZARA, Pittsburgh, Pennsylvania, for Appellant.

Daran P. Kiefer, Ted M. Traut, KREINER & PETERS, Cleveland, Christopher R. Meyer, Rodney A. Nelson, Reese, Pyle, Drake & Meyer, Newark, Ohio, for Appellee.

Before: SILER and ROGERS, Circuit Judges; GWIN, District Judge.^*

OPINION

GWIN, District Judge.

With this appeal, we examine whether the district court erred when it granted Plaintiff-Appellee Community Health Plan of Ohio ("CHPO") summary judgment on its claims for specific performance and restitution against Defendant-Appellant Joseph J. Mosser ("Mosser").

In reviewing Mosser's appeal, we first consider whether the federal courts have jurisdiction over this case. Under the recent United States Supreme Court decision in Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002), federal subject matter jurisdiction does not exist in this matter, and therefore, this case is not properly before the federal courts. Finding that the district court did not have jurisdiction over this case, we REVERSE and REMAND this case with directions that the district court dismiss this case for lack of subject matter jurisdiction.

This case arises from efforts by an insurance company, CHPO, to enforce its plan's subrogation provision. The subrogation provision requires those insured by CHPO to cooperate with CHPO in its efforts to recover amounts CHPO paid on the insured's behalf. Although the subrogation provision states no explicit obligation to reimburse the insurer for monies received from tortfeasors, CHPO says such a duty should be found in the subrogation provision.

Appellant Mosser says that under the Supreme Court's recent holding in Great-West Life, the district court, and this court, do not have jurisdiction to entertain this action. Arguing that federal courts are courts of limited jurisdiction, not courts of general jurisdiction, Mosser says that district courts are empowered to hear only those cases that the Constitution and Congress have given them jurisdiction over. Insurance Corp. of Ireland, Ltd. v Compagnie des Bauxites de Guinee, 456 U.S. 694, 701, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982); Sweeton v. Brown, 27 F.3d 1162, 1167 (6th Cir.1994) ("Federal courts are courts of limited jurisdiction and are empowered to hear only such cases as are within the judicial power of the United States as defined in Article III, § 2 of the Constitution.").

While Mosser denies that the district court had jurisdiction over this action, Mosser says that even if the district court had jurisdiction, it incorrectly found the subrogation provision required reimbursement. In addition, Mosser says the district court wrongly found that the subrogation provision gave explicit notice that CHPO claimed a priority right to proceeds recovered from third-party tortfeasors and that CHPO claimed this right even when the injured insured had not been made whole for his damages.

CHPO, an Ohio company, insures the Licking Memorial Hospital through its Employee Health Benefit Plan (the "Plan"). In this case, CHPO sued Mosser, a Plan participant, in the U.S. District Court for the Southern District of Ohio, requesting specific performance and restitution. With its lawsuit, CHPO sought to recover medical benefits that CHPO paid on Mosser's behalf. Mosser incurred the medical expenses as a result of injuries he sustained in an automobile accident.

CHPO claimed that the Plan's provision titled "Subrogation" gave CHPO the right to recover the money paid on Mosser's behalf because Mosser recovered money in a settlement with the alleged tortfeasor. Responding to CHPO's complaint, Mosser asserted a counterclaim for bad faith. Both parties moved for summary judgment. The district court granted CHPO summary judgment on its claim for specific performance and restitution, and denied Mosser summary judgment on his bad faith claim. Mosser appeals the district court's grant of the defendant's motion for summary judgment. He does not appeal the district court's denial of his motion for summary judgment on the bad faith claim.

In his appeal, Mosser claims that Pennsylvania law applies to this matter and prohibits CHPO from obtaining subrogation or reimbursement from Mosser. Mosser also claims that the Plan precludes CHPO from recovering the funds it paid Mosser because the Plan's "Subrogation Provision" is both ambiguous and not a reimbursement provision. CHPO claims it is entitled to recover the funds because Ohio law applies to this matter and the applicable Ohio law is preempted by ERISA. CHPO further argues that the plan's subrogation provision is not ambiguous and is, in fact, also a reimbursement provision.

History

On October 1, 1995, Joseph J. Mosser, an Ohio resident, was involved in an automobile accident in Murrysville, Westmoreland County, Pennsylvania. A negligent Murrysville police officer caused the accident when he ran a red light. As a result of the accident, Mosser sustained severe personal injury.

At the time of the accident, CHPO insured Mosser as a Licking Memorial Employee Health Benefit Plan covered participant. As a covered participant, CHPO paid most of Mosser's hospital and medical expenses. CHPO says it paid $261,267.27 in medical expenses on Mosser's behalf.

Mosser later settled his claims against the City of Murrysville (the "Murrysville Settlement"). After the Murrysville Settlement, Mosser did not reimburse CHPO for the monies that CHPO had paid on his behalf. In September 1999, CHPO filed a breach of contract claim against Mosser requesting specific performance and restitution for medical payments made by CHPO on Mosser's behalf.

CHPO based its specific performance and restitution claims on a provision within the CHPO Plan which states:

SUBROGATION

CHPO has a right of recovery against any person, firm or organization for medical, hospital or other health services provided by the Plan to you or your Dependents. This applies to any money recovered by suit, settlement or otherwise. You must cooperate with the plan in all actions necessary to do this. If legal collection costs are incurred on a contingency fee basis, these costs will be deducted before the remaining sum is distributed to the Plan and the Enrollees.

On August 30, 2001, the district court awarded CHPO summary judgment on its claims against Mosser. Mosser filed a timely notice of appeal.

Standard of Review

We review the district court's summary judgment decision de novo. Flint v. Kentucky Dep't of Corr., 270 F.3d 340, 346 (6th Cir.2001). Summary judgment is proper where no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In considering such a motion, the court must view the evidence and draw all reasonable inferences in favor of the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The central issue is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Analysis

Defendant-Appellant Mosser raised the issue of subject matter jurisdiction for the first time in his reply brief. We generally will not hear issues raised for the first time in a reply brief. United States v. Crozier, 259 F.3d 503, 517 (6th Cir.2001). "Court decisions have made it clear that the appellant cannot raise new issues in a reply brief, he can only respond to arguments raised for the first time in appellee's brief." Id. (quoting United States v. Jerkins, 871 F.2d 598, 602 n. 3 (6th Cir.1989)).

Despite the general rule that we will not hear issues raised for the first time in a reply brief, "[t]he existence of subject matter jurisdiction, moreover, is an issue that may be raised at any time, by any party or even sua sponte by the court itself." Ford v. Hamilton Inv., Inc., 29 F.3d 255, 257 (6th Cir.1994). Any court may address the issue of subject matter jurisdiction at any time, with or without the issue being raised by a party to the action. In re Millers Cove Energy Co., Inc., 128 F.3d 449, 450 (6th Cir.1997). Therefore, we will hear Mosser's subject matter jurisdiction issue despite the fact that he raised it for the first time in his reply brief.

The Employee Retirement Income Security Act ("ERISA") does not authorize actions brought by ERISA plan fiduciaries against plan beneficiaries to enforce plan reimbursement provisions through money damages. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002). In Knudson, an ERISA plan fiduciary brought an action against a plan beneficiary to enforce a reimbursement provision in the plan and to compel that beneficiary to make restitution to the plan from a recovery that she obtained from a third-party tortfeasor. Id. The Supreme Court held that when a fiduciary seeks to impose personal liability on a plan beneficiary for a contractual obligation to pay money, the action is an action at law, not an action in equity. Id. at 209-10, 122 S.Ct. 708. Since 29 U.S.C. § 1132(a)(3) only authorizes actions seeking equitable relief, ERISA does not provide jurisdiction for fiduciaries seeking to enforce a contract's...