National Ben. Administrators v. MMHRC, Civ. A. No. J89-0532(L).

• Decision Date: 26 July 1990
• Docket Number: Civ. A. No. J89-0532(L).
• Citation: 748 F. Supp. 459
• Parties: NATIONAL BENEFIT ADMINISTRATORS, INC., on Behalf of NATIONAL BUSINESS ASSOCIATION TRUST, Plaintiff, v. MISSISSIPPI METHODIST HOSPITAL AND REHABILITATION CENTER, INC., Defendant, v. LAUREL COCA-COLA BOTTLING COMPANY, Samuel Johnson and Derron Johnson, Third-Party Defendants.
• Court: U.S. District Court — Southern District of Mississippi

748 F. Supp. 459

NATIONAL BENEFIT ADMINISTRATORS, INC., on Behalf of NATIONAL BUSINESS ASSOCIATION TRUST, Plaintiff, v. MISSISSIPPI METHODIST HOSPITAL AND REHABILITATION CENTER, INC., Defendant, v. LAUREL COCA-COLA BOTTLING COMPANY, Samuel Johnson and Derron Johnson, Third-Party Defendants.

Civ. A. No. J89-0532(L).

United States District Court, S.D. Mississippi, Jackson Division.

July 26, 1990.

Neville H. Boschert, Watkins Ludlam & Stennis, Jackson, Miss., for plaintiff.

Luther M. Thompson, Otis Johnson Jr., John B. MacNeill, Heidelberg, Woodliff & Franks, Jackson, Miss., David M. Ratcliff, Pack, Ratcliff & Ratcliff, Laurel, Miss., for Laurel Coca-Cola.

MEMORANDUM OPINION AND ORDER

TOM S. LEE, District Judge.

This is an action brought by National Benefit Administrators, Inc., on behalf of National Business Association Trust (NBAT), the administrator of an employee health benefits plan, seeking recovery of payments made to defendant, Mississippi Methodist Hospital and Rehabilitation Center (MMHRC), for the account of third-party defendant Derron Johnson. Jurisdiction is based upon both federal question and diversity. Defendant has asserted a counterclaim for the recovery of remaining amounts due on the account. Presently before the court are plaintiff's motion for summary judgment and defendant's motion for partial summary judgment. Each party has responded to the motion of the opposing party, and the court has considered the memoranda with attachments submitted by the parties in ruling on the motions.

Parties and Facts

The facts in this case, for purposes of the present motions, are essentially undisputed. On May 21, 1988, Derron Johnson was injured in an accident. He was hospitalized at the Mississippi Baptist Medical Center (not a party to this suit) for approximately one month. At the time of the accident, Derron Johnson's father, Samuel Johnson, was covered under an employee health benefit plan with his employer, Laurel Coca-Cola Bottling Company. This plan provided that coverage would include dependents of Samuel Johnson who were eighteen years of age or younger, and those dependents over the age of eighteen but less than twenty-five years of age who were full-time students. In July of 1988 Samuel Johnson submitted to plaintiff a claim for Derron's hospitalization expenses at Mississippi Baptist Medical Center. On this form, he stated that Derron's date of birth was June 26, 1969 and that Derron was a student. He made this same representation approximately two weeks later when he signed a new enrollment card for the plan. This date of birth indicated that Derron qualified for health benefits under the terms of the plan. Subsequently, Derron was hospitalized at MMHRC for additional treatment. Before defendant admitted Derron, one of its employees contacted the plan coordinator at Laurel Coca-Cola, who verified that Derron was a qualified dependent. During and after Derron's treatment at MMHRC, several claims were filed with NBAT for his treatment there. Based upon Samuel Johnson's representation on the initial claim form, which indicated that Derron was a qualified dependent, NBAT paid approximately $65,000 in claims to MMHRC, the assignee of benefits due Derron Johnson. Subsequently, plaintiff learned that Derron's correct date of birth was June 26, 1968 and that he had not been a student at the time of the accident. Thus, he was not a qualified dependent under the terms of the policy. After attempting unsuccessfully to obtain repayment from MMHRC of the amounts paid to Derron's account, plaintiff brought the present action for recovery of the payments. Defendant has asserted a counterclaim for recovery of remaining amounts due on Derron Johnson's account.

In its complaint, NBAT seeks a declaratory judgment that, pursuant to the terms of the plan and under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001 et seq. (1985 & Supp.1990), MMHRC is not entitled to retain payments and judgment for the amount of the payments (count I). NBAT also seeks recovery based on the state common law causes of action for money had and received (count II) and conversion (count III). Defendant's counterclaim is for recovery of additional amounts from plaintiff; although the counterclaim does not specify a theory of recovery, defendant's memoranda suggest that this is a state law claim for breach of an implied contract. By its motion, plaintiff seeks summary judgment on counts I and II of its complaint and on defendant's counterclaim. The relief sought by defendant in its motion for partial summary judgment is not entirely clear; when considered along with statements and arguments contained in defendant's memoranda, it appears to be a request for summary judgment on plaintiff's ERISA claim (count I) and the state law conversion claim (count III), and the court will consider it as such.¹

Does a Cause of Action Exist under ERISA?

The initial question to be resolved is whether ERISA provides a basis for recovery. Both parties have moved for summary judgment on this claim. It is helpful, initially, to clarify the manner in which a claim may arise under the Act. Both plaintiff and defendant refer in their briefs to ERISA causes of action which arise under "federal common law," apparently being under the impression that there exist two kinds of ERISA causes of action: those which arise under its express civil enforcement provisions, 29 U.S.C. § 1132, and those which arise under the general federal common law of ERISA. In the court's opinion, this view is incorrect. While Congress did intend that the courts develop federal common law to be applied in ERISA cases when issues not specifically addressed in the Act arise, Degan v. Ford Motor Co., 869 F.2d 889, 895 (5th Cir.1989); Hayden v. Texas-U.S. Chemical Co., 681 F.2d 1053, 1058 (5th Cir.1982), Congress did not authorize the courts to develop or allow causes of action or remedies not expressly provided for in section 1132, Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54, 107 S.Ct. 1549, 1556, 95 L.Ed.2d 39 ("The six carefully integrated civil enforcement provisions found in section 1132(a) ... provide strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly.") Either plaintiff's ERISA claim arises under the express provisions of the Act, or it does not exist. Cf. Amos v. Blue Cross-Blue Shield of Alabama, 868 F.2d 430, 432 (11th Cir.) (indicating that effect of ERISA preemption is to leave remaining only those causes of action expressly provided for in section 1132), cert. denied, ___ U.S. ___, 110 S.Ct. 158, 107 L.Ed.2d 116 (1989).

The only portion of section 1132 which addresses the type of claim which may be brought by an administrator of a plan is section 1132(a)(3), which provides that a civil action may be brought by a fiduciary to obtain appropriate equitable relief to redress violations of the statute or terms of the plan or to enforce any of their provisions.² The question of whether a plan administrator may bring an action under section 1132(a)(3) to recover payments made in error has been addressed in only a few cases. In Northern California Food Employers & Retail Clerks Unions Benefit Fund v. Dianda's Italian-American Pastry Co., 645 F.Supp. 160 (N.D.Cal.1986), a benefit fund sued a beneficiary's employer to recoup benefits improperly paid because of the misreporting by the employer of the beneficiary's work hours. The court held that the action could be maintained under section 1132(a)(3) because it was an action to compensate the plan for money lost due to violations of the terms of the plan. On the other hand, in NYSA-ILA GAI Fund v. Poggi, 617 F.Supp. 847 (S.D. N.Y.), amended and reaff'd, 624 F.Supp. 443 (1985), a case in which a pension plan sued a beneficiary of the plan whom it claimed had wrongfully accepted benefits, the court dismissed the claim for lack of federal jurisdiction, summarily concluding that nothing in section 1132 grants jurisdiction over an action by a plan to recover benefits wrongfully paid. Finally, in Provident Life & Accident Insurance Co. v. Waller, 906 F.2d 985 (4th Cir.1990), the court noted that a plan administrator attempting to sue a plan participant under section 1132(a)(1)(B) to recover advances could probably have brought the claim under section 1132(a)(3). Id. at 988 n. 5.³

Unlike the present case, in none of these cited cases was the court confronted with an attempt to recover from a third-party health care provider. MMHRC's status casts a different light on the question of recovery under ERISA and causes this court to conclude that plaintiff's action cannot be maintained under ERISA. First, defendant is not a party to the plan and, by its mere receipt of mistaken payments, has not violated or threatened to violate its terms. Cf. Northeast Dep't ILGWU Health and Welfare Fund v. Teamsters Local Union No. 229 Welfare Fund, 764 F.2d 147, 153 (3d Cir.1985) (where ILGWU fund paid benefits to one who was entitled to benefits under either ILGWU plan or Teamsters plan, and then sued Teamsters plan for declaration of rights, it could not be said that terms of ILGWU plan were being enforced against Teamsters plan, the Teamsters plan not being a party to the ILGWU plan and not having violated or threatened to violate its terms).

Furthermore, a recent Fifth Circuit case suggests that the underlying question raised by plaintiff's suit — which of the parties should bear the risk of loss due to the insured's misrepresentation — is not one for which Congress intended section 1132, or ERISA in general, to provide the answer. In Memorial Hospital System v. Northbrook Life Insurance Co., 904 F.2d 236 (5th Cir.1990), a health care provider, relying on the assurance of coverage by an ERISA plan, and pursuant to an assignment of benefits, admitted and treated a patient whose coverage was not yet effective. After the insurance company refused to pay...