Primax Recoveries, Inc. v. Lee

• Decision Date: 15 April 2003
• Docket Number: No. CIV.A. 99-2020(PLF).,CIV.A. 99-2020(PLF).
• Citation: 260 F.Supp.2d 43
• Parties: PRIMAX RECOVERIES, INC., Plaintiff, v. Annabell LEE, Defendant.
• Court: U.S. District Court — District of Columbia

260 F.Supp.2d 43

PRIMAX RECOVERIES, INC., Plaintiff, v. Annabell LEE, Defendant.

No. CIV.A. 99-2020(PLF).

United States District Court, District of Columbia.

April 15, 2003.

COPYRIGHT MATERIAL OMITTED

Brooks R. Amiot, Piper Rudnick, Baltimore, MD, for Plaintiff.

Joel S. Aronson, Ridberg Press & Sherbill, Bethesda, MD, for Defendant.

OPINION

PAUL L. FRIEDMAN, District Judge.

The Court has before it defendant Annabell Lee's motion to dismiss the complaint against her, plaintiffs opposition and defendant's reply, as well as supplemental briefs concerning the impact of the recent opinion of the Supreme Court in Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002). After considering the complaint in the light most favorable to plaintiff, the Court concludes that defendant's motion to dismiss for lack of subject matter jurisdiction, failure to state a claim, failure to join an indispensable party, and failure to sue the real party in interest must be denied.

I. FACTUAL BACKGROUND

Defendant Annabell Lee suffered personal injuries in an automobile accident on January 17, 1992. See Complaint ¶ 11; Motion to Dismiss at 1. Her injuries required hospitalization, with medical treatment continuing for two and a half years at a total cost of $89,843.17 to defendant's health insurer, The George Washington University Health Plan ("the Plan"). See Complaint ¶ 12. Following her accident, defendant filed a civil action against a third-party tortfeasor, who she alleged was responsible for the accident and her injuries. A settlement was reached between defendant and the third party, and defendant received what she characterizes as a non-differentiated, lump sum settlement of $450,000. See Motion to Dismiss at 2. It is from this recovery that plaintiff seeks reimbursement.

Plaintiff brought this action pursuant to Section 1132(a)(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"), claiming that as an assignee for purposes of collection and as a fiduciary of the George Washington University Health Plan, it is entitled to reimbursement from defendant for medical expenses based on the reimbursement clause contained in defendant's health plan. In relevant part, that provision states: "If a Member is injured or suffers illness as a result of an act caused by or involving a third party, the Health Plan shall be reimbursed for Covered Services it provides or pays that are recovered or may be recoverable from the third party. ..." Complaint, Exhibit 1, The George Washington University Health Plan, Inc., District of Columbia Standard Option Plan at 22, Art. 10(A). Plaintiff contends that the benefits defendant received from the Plan were subject to and conditioned upon the Plan's right of reimbursement, and that defendant's refusal to reimburse the Plan out of the settlement proceeds violated her contractual obligation under the policy. See Complaint ¶¶ 15, 21.

The Plan is a health care plan sponsored by The George Washington University. See Complaint ¶ 2.¹ The University established and maintains the Plan for the purpose of providing its employees and their eligible dependents with medical, surgical and/or hospital care. See id. Plaintiff asserts, and defendant does not contest, that the Plan therefore is an "employee welfare benefit plan" within the meaning of ERISA. See id.; 29 U.S.C. § 1002(1).

Seeking to assert its rights under the Plan and to obtain equitable and "restitutionary relief under ERISA in an amount equivalent to the benefits it has paid for medical expenses incurred by defendant, plaintiff filed suit against defendant on July 28, 1999. See Complaint ¶ 5, 19, 22. Plaintiff asserts that it has standing to bring this suit as the assignee and fiduciary of the Plan pursuant to 29 U.S.C. § 1132(a)(3), which provides that a civil action may be brought under ERISA

by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.

According to plaintiff, the Plan duly appointed and authorized plaintiff to administer and prosecute all of the Plan's rights and claims to reimbursement and subrogation, making plaintiff an assignee for purposes of collection and a fiduciary under ERISA. Id. ¶¶ 3, 6.² Plaintiff bases its claim of fiduciary status on its assertion that it has discretionary authority in the settlement and prosecution of claims for reimbursement and subrogation, as well as in the collection, management, investment and disbursement of Plan assets. Id. ¶ 6.

II. DISCUSSION

Defendant moves to dismiss plaintiffs complaint on the grounds that: (1) this Court lacks subject matter jurisdiction; (2) plaintiff has failed to state a claim upon which relief can be granted; (3) plaintiff has failed to join an indispensable party, namely the Plan; and (4) plaintiff must sue the real party in interest, the Plan, rather than defendant. The Court will address each of these arguments in turn.

A. Subject Matter Jurisdiction

Defendant contends that the Court does not have subject matter jurisdiction over this matter because plaintiff's cause of action is not a genuine ERISA claim. Defendant bases this claim on two separate theories: (1) that plaintiff is not a fiduciary, and (2) that plaintiff's claim is legal, rather than equitable in nature.

1. Plaintiffs Status as "Fiduciary"

First, defendant argues that plaintiff is not a fiduciary within the meaning of ERISA and thus is not empowered to bring suit under 29 U.S.C. § 1132(a)(3). Defendant alleges that plaintiffs assertion of fiduciary status was made only to enable it to bring this action in federal court and that plaintiff has provided no evidence of an assignment of rights or of its status as a fiduciary. Defendant notes that a federal court may dismiss an asserted ERISA claim for lack of subject matter jurisdiction if the claim is made solely for the purpose of obtaining jurisdiction or is wholly insubstantial and frivolous. See Blue Cross & Blue Shield v. Sanders, 138 F.3d 1347, 1352 (11th Cir.1998) (citing Bell v. Hood, 327 U.S. 678, 682-83, 66 S.Ct. 773, 90 L.Ed. 939 (1946)).

On a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, the Court must accept as true all factual allegations set forth in the complaint and must draw all reasonable inferences from those allegations in favor of the non-moving party. See Artis v. Greenspan, 158 F.3d 1301, 1305-06 (D.C.Cir.1998); Pitney Bowes Inc. v. United States Postal Service, 27 F.Supp.2d 15, 19 (D.D.C.1998). While the complaint is to be construed liberally, the Court need not accept factual inferences drawn by plaintiff if those inferences are not supported by facts alleged in the complaint, nor must the Court accept plaintiffs legal conclusions. See National Treasury Employees Union v. United States, 101 F.3d 1423, 1430 (D.C.Cir.1996). Under this standard, a plaintiff is required only to assert, not to prove, fiduciary status in its complaint, and plaintiff has done so here. See Complaint ¶¶ 5, 7. Nothing more is required at this stage. Cf. Blue Cross & Blue Shield v. Sanders, 138 F.3d at 1352 (federal subject matter jurisdiction exists so long as plaintiff "plausibly is a `fiduciary'"). See 29 U.S.C. § 1132(e)(1).³ Therefore, the Court will deny defendant's motion to dismiss on this ground.

2. Nature of Relief Sought

Defendant also asserts that the relief sought by plaintiff—recovery from defendant of the amount of unreimbursed benefits that the Plan paid for defendant's medical expenses incurred as a result of the accident—is not equitable in nature but legal, and thus cannot be sought under ERISA. Because plaintiffs action is legal, defendant argues, ERISA does not confer subject matter jurisdiction on this Court. Defendant relies for her argument on the Supreme Court's recent decision in Great-West Life Ins. & Annuity Co. v. Knudson, 534 U.S. 204, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002) ( hereinafter "Great-West" or "Great-West v. Knudson").

Defendant argues that plaintiffs request for reimbursement is essentially an action at law to impose personal liability on defendant for a sum of money, a claim that is directly precluded under ERISA as interpreted in Great-West. Plaintiff responds that the Great-West decision actually supports jurisdiction in this case by making clear that the requested relief—"restoration of an identifiable portion of the funds Defendant obtained in settlement against a third party and now held in trust by her former counsel"—is equitable in nature and thus properly sought under ERISA. See Letter to the Court from Brooks Amiot, May 13, 2002 at 2. Plaintiff argues that the relief it seeks is "money or property belonging in good conscience to the plaintiff [that can] clearly be traced to particular funds or property in the defendant's possession," Great-West v. Knudson, 534 U.S. at 213, 122 S.Ct. 708 (internal quotations omitted), that plaintiff is proceeding in equity, and that this Court therefore has subject matter jurisdiction under ERISA.

The complaint expressly states that plaintiff seeks restitution and characterizes the relief sought as equitable. See Complaint ¶¶ 5, 22. As the Supreme Court pointed out in Great-West, however, restitution may be either an equitable remedy or a legal one; it depends on both the basis for the claim and the nature of the remedies sought. Greats-West v. Knudson, 534 U.S. at 213,122 S.Ct. 708. Where the property or money sought has been "dissipated so that no product remains" and plaintiff's claim is "only that of a general creditor," the plaintiff necessarily is seeking to impose personal liability on the defendant and his action is a legal one. Great-West v. Knudson, 534 U.S. at 213-14, 122 S.Ct. 708 (internal quotations omitted)....