GC Am. v. Hood

• Decision Date: 29 March 2022
• Docket Number: 20-cv-03045
• Parties: GC AMERICA INC., Plaintiff, v. KEVIN HOOD, et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

GC AMERICA INC., Plaintiff,
v.
KEVIN HOOD, et al., Defendants.

No. 20-cv-03045

United States District Court, N.D. Illinois, Eastern Division

March 29, 2022

MEMORANDUM OPINION AND ORDER

Andrea R. Wood United States District Judge

Plaintiff GC America Inc. (“GC America”) is the sponsor and fiduciary of the GC America Inc. Group Benefit Plan (“Plan”). Defendant Kevin Hood was a Plan participant and beneficiary. When Hood was injured in a car accident, the Plan paid more than $1.7 million to cover his medical bills. With the assistance of attorneys at Defendant Law Offices Goldberg & Goldberg (“Goldberg”), however, Hood later obtained a settlement or judgment of more than $7 million from a lawsuit against the parties responsible for negligent medical treatment he received for his injuries. GC America has now filed suit against Hood and Goldberg under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a)(3), as well as Illinois state law, to recover the amounts it paid for his medical bills. Before the Court is Goldberg's motion to dismiss GC America's claims against it pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. No. 19.) For the reasons stated below, the motion is granted.

BACKGROUND

For purposes of Goldberg's motion to dismiss, the Court accepts all well-pleaded facts in GC America's complaint as true and views those facts in the light most favorable to GC America

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as the nonmoving party. See Santiago v. Walls, 599 F.3d 749, 756 (7th Cir. 2010). The complaint alleges as follows.

GC America sponsors and serves as a fiduciary of the Plan, which provides health benefits to GC America employees and their eligible family members. (Compl. ¶¶ 4, 6, Dkt. No. 1.) Hood was a Plan participant and beneficiary at all times relevant to the complaint. (Id. ¶ 5.) In 2009, Hood was injured in an automobile collision. (Id. ¶ 10.) Over the course of his post-accident medical treatment, Hood was the victim of medical negligence. (Id.) As a result, the Plan paid $1, 732, 846.51 in medical expenses on Hood's behalf. (Id. ¶ 11.) GC America alleges that under the terms of the Plan, Hood was required to reimburse it for those medical expenses in the event he won any judgments or settlements from third parties compensating him for his deficient medical care. (Id. ¶¶ 9, 12.)

Goldberg represented Hood in a medical negligence case against the third parties responsible for his post-collision treatment. (Id. ¶ 13.) According to GC America, as a result of that litigation, Hood obtained a settlement or judgment of more than $7 million (“Award”) in 2017. (Id.) When GC America requested that Hood and Goldberg use a portion of the Award to reimburse it for the amount of Hood's medical expenses covered by the Fund, they refused. (Id. ¶ 15.) Instead, Goldberg advised Hood not to honor the Plan terms. The Award funds were initially deposited in an account controlled by Goldberg and then distributed to Hood; GC America also alleges that Goldberg may be in possession of some of the funds (Id. ¶ 16, 27-28.) Either way, GC America was not repaid. Following Goldberg's advice, Hood has not reimbursed GC America. (Id. ¶ 29.)

In Count I of its complaint in this lawsuit, GC America seeks an injunction pursuant to ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), requiring Defendants to reimburse GC America for

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$1, 732, 846.51 in medical bills that it paid on Hood's behalf. In Counts II and III, GC America asserts state-law claims against Goldberg for tortious interference with contract and conversion, respectively. Goldberg seeks dismissal of all claims against it.

DISCUSSION

“A complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint does not necessarily need to contain detailed factual allegations to survive a motion to dismiss. Twombly, 550 U.S. at 555. Rather, “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014) (quoting Iqbal, 556 U.S. at 678). Although the Court accepts the plaintiff's well-pleaded factual allegations as true for purposes of a Rule 12(b)(6) motion, conclusory allegations will not be sufficient to stave off dismissal. Id.; see also Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”).

Here, in support of its motion to dismiss, Goldberg first argues that GC America's ERISA claim fails because it has not pleaded facts sufficient to allege entitlement to equitable relief from Goldberg. Next, Goldberg contends that both state-law claims are barred by the applicable statute of limitations as well as Illinois's litigation privilege, which protects attorneys from liability for communications they make in the course of litigation. Lastly, Goldberg asserts that the complaint fails to state a valid claim for the tort of conversion because it does not adequately allege that GC America has an identifiable property right to any particular funds.

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I.Equitable Relief Under ERISA (Count I)

Section 502(a)(3) of ERISA allows fiduciaries of an employee welfare benefit plan to bring a civil suit to enjoin acts or practices that violate ERISA or the terms of the relevant plan or to obtain other appropriate equitable relief. See 29 U.S.C. § 1132(a)(3). The Supreme Court has held that § 502(a)(3) provides only equitable relief, not legal relief. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 209 (2002) (citing Mertens v. Hewitt Assocs., 508 U.S. 248, 256, 258 n.8 (1993)). Therefore, “whether a remedy is available under [§] 502(a)(3) ‘depends on (1) the basis for the plaintiff's claim and (2) the nature of the underlying remedies sought'; both must be equitable to proceed under [§] 502(a)(3).” Cent. States, Se. & Sw. Areas Health & Welfare Fund by Bunte v. Am. Int'l Grp., Inc., 840 F.3d 448, 453 (7th Cir. 2016) (quoting Montanile v. Bd. of Trs. of Nat'l Elevator Indus. Health Benefit Plan, 577 U.S. 136, 142 (2016)).

GC America's § 502(a)(3) claim seeks relief in several forms, including a constructive trust and an equitable lien in its favor with respect to Hood's Award proceeds. In other words, GC America requests an injunctive order directing Defendants to turn over money. Although the claim is stated in equitable terms, “[a]lmost invariably suits seeking (whether by judgment, injunction, or declaration) to compel the defendant to pay a sum of money to the plaintiff are suits for money damages” because “they seek no more than compensation for loss resulting from the defendant's breach of legal duty.” Great-West, 534 U.S. at 210 (internal quotation marks and alterations omitted). “[M]oney damages are, of course, the classic form of legal relief.” Id. (internal quotation marks omitted); see also Cent. States, 840 F.3d at 453 (“[S]imply phrasing the request for relief in equitable terms-e.g., restitution, unjust enrichment, an equitable lien-is not dispositive.”). Thus, a claim that seeks injunctive relief...