Sheet Metal Workers' Local 73 Welfare v. Degryse
| Decision Date | 17 April 2008 |
| Docket Number | No. 06 C 6340.,06 C 6340. |
| Citation | 579 F.Supp.2d 1063 |
| Parties | SHEET METAL WORKERS' LOCAL 73 WELFARE FUND BOARD OF TRUSTEES, and Joseph Ohm, Fund Administrator, Plaintiffs, v. Charles W. DeGRYSE, III, a/k/a Charles W. DeGryse, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Richard A. Toth, Dennis J. Aukstik, Jill Patricia Conroy, Kathleen A. Duncan, Robert T. Oleszkiewicz, Daley and George, Ltd., Chicago, IL, for Plaintiffs.
Donald Brian Leventhal, Donald B. Leventhal, Ltd., Chicago, IL, for Defendant.
Plaintiffs, the trustees and administrator of the Sheet Metal Workers' Local 73 Welfare Fund (the "Fund"), have moved for summary judgment against defendant Charles W. DeGryse, a Fund participant. The Complaint states that the Fund paid disability benefits and medical expenses for injuries to defendant arising out of an accident, and that defendant later obtained a workers' compensation settlement related to the same injuries. The Fund has brought suit pursuant to § 502(a)(3) of the Employee and Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(3). Count I contains this federal ERISA claim. Plaintiffs assert the right to a refund of all the benefits the Fund paid to defendant. One form of relief that is sought is in the form of an equitable lien on the portion of the workers' compensation settlement equal to the amount of benefits paid. To the extent plaintiffs seek to enforce a lien on the settlement funds, they pursue equitable relief that may be pursued under ERISA. See Sereboff v. Mid Att. Med. Serv., Inc., 547 U.S. 356, 126 S.Ct. 1869, 1873-76, 164 L.Ed.2d 612 (2006). To the extent, regardless of any lien on the workers' compensation settlement funds, plaintiffs seek to enforce a right to reimbursement of benefits paid out that were contrary to the terms of the Fund's Plan (the "Plan"), that is a legal claim based on contract, restitution, or unjust enrichment, not an equitable claim for which § 1132(a) would provide federal jurisdiction. See id. at 1874; Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210-13, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002). However, although ERISA does not provide for federal court jurisdiction over a claim for reimbursement based on the benefit terms of the Plan not providing coverage, such a claim is still a federal claim, not a state law claim. It is not preempted by § 514 of ERISA, 29 U.S.C. § 1144, and supplemental jurisdiction over such a claim may be exercised in appropriate circumstances. See Leipzig v. AIG Life Ins. Co., 362 F.3d 406, 409-10 (7th Cir.2004); Smith v. Accenture U.S. Group Long-Term Disability Ins. Plan, 2006 WL 2644957 *2-3 (N.D.Ill. Sept.13, 2006); Providence Health System-Washington v. Bush, 461 F.Supp.2d 1226, 1237 (W.D.Wash.2006). Here, this legal claim theory, which is incorporated in Count I, is part of the same case or controversy as the equitable claim and it is appropriate to exercise supplemental jurisdiction over it. See 28 U.S.C. § 1367. Count II contains a contract claim based on a written reimbursement agreement between the parties. That is a separate state law contract claim not preempted by ERISA, cf. Plumbers & Steamfitters Local 298 Jurisdiction Pension Plan v. Triton Plumbing & Sewer Contractors, Inc., 2007 WL 2570374 (E.D.Wis. Sept.4, 2007), and also properly before the court based on supplemental jurisdiction. The Fund paid a total of $24,037.61 to or on behalf of defendant. Plaintiffs have moved for summary judgment on all aspects of Count I of their Complaint.
On a motion for summary judgment, the entire record is considered with all reasonable inferences drawn in favor of the nonmovant and all factual disputes resolved in favor of the nonmovant. Scott v. Harris, 550 U.S. 372, 127 S.Ct. 1769, 1774, 1776, 167 L.Ed.2d 686 (2007); Fischer v. Avanade, Inc., 519 F.3d 393, 401 (7th Cir. 2008); Scaife v. Cook County, 446 F.3d 735, 738-39 (7th Cir.2006). The burden of establishing a lack of any genuine issue of material fact rests on the movant. Hicks v. Midwest Transit, Inc., 500 F.3d 647, 651 (7th Cir.2007); Creditor's Comm. of Jumer's Castle Lodge, Inc. v. Jumer, 472 F.3d 943, 946 (7th Cir.2007); Outlaw v. Newkirk, 259 F.3d 833, 837 (7th Cir.2001). The nonmovant, however, must make a showing sufficient to establish any essential element for which he will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Hicks, 500 F.3d at 651; Jumer, 472 F.3d at 946. The movant need not provide affidavits or deposition testimony showing the nonexistence of such essential elements. Celotex, 477 U.S. at 324, 106 S.Ct. 2548. Also, it is not sufficient to show evidence of purportedly disputed facts if those facts are not plausible in light of the entire record. See Lorillard Tobacco Co. v. A & E Oil, Inc., 503 F.3d 588, 594-95 (7th Cir.2007); Yasak v. Retirement Bd. of Policemen's Annuity & Benefit Fund of Chicago, 357 F.3d 677, 679 (7th Cir.2004); NLFC, Inc. v. Devcom Mid-America, Inc., 45 F.3d 231, 236 (7th Cir.1995); Covalt v. Carey Canada, Inc., 950 F.2d 481, 485 (7th Cir.1991); Collins v. Associated Pathologists, Ltd., 844 F.2d 473, 476-77 (7th Cir.1988); Freundt v. Allied Tube & Conduit Corp., 2007 WL 4219417 *2 (N.D.Ill. Nov.29, 2007). As the Seventh Circuit has summarized:
The party moving for summary judgment carries the initial burden of production to identify "those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Logan v. Commercial Union Ins. Co., 96 F.3d 971, 978 (7th Cir.1996) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (citation and internal quotation omitted)). The moving party may discharge this burden by "`showing'—that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 325, 106 S.Ct, 2548, 91 L.Ed.2d 265.
Once the moving party satisfies this burden, the nonmovant must "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). "The nonmovant must do more, however, than demonstrate some factual disagreement between the parties; the issue must be `material.'" Logan, 96 F.3d at 978. "Irrelevant or unnecessary facts do not preclude summary judgment even when they are in dispute." Id. (citation omitted). In determining whether the nonmovant has identified a "material" issue of fact for trial, we are guided by the applicable substantive law; "[o]nly disputes that could affect the outcome of the suit under governing law will properly preclude the entry of summary judgment." McGinn v. Burlington Northern R.R. Co., 102 F.3d 295, 298 (7th Cir.1996) (citation omitted). Furthermore, a factual dispute is "genuine" for summary judgment purposes only when there is "sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Hence, a "metaphysical doubt" regarding the existence of a genuine fact issue is not enough to stave off summary judgment, and "the nonmovant fails to demonstrate a genuine issue for trial `where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party....'" Logan, 96 F.3d at 978 (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)).
The parties have filed Local Rule 56.1 statements from which it appears that the undisputed facts are as follows.
As an employee of McCauley Mechanical Construction, defendant is a participant in the Fund's programs and benefits. The Fund's Plan provides disability and medical benefits to its participants, but specifically excludes benefits from "any accidental bodily injury or sickness arising out of or in the course of employment, or which is compensable under any Workers' Compensation or Occupational Disease Act or law."
On November 3, 2000, defendant injured his right arm, shoulder, and rotator cuff. On this motion for summary judgment, there is no genuine factual dispute that this injury occurred during the course of defendant's employment. However, defendant's claim for disability and medical expenses initially was denied by his employer's workers' compensation carrier as not having arisen out of his employment. Defendant then made a claim for benefits from the Fund and also filed a claim with the Illinois Industrial Commission.
In instances in which workers' compensation is denied or in dispute, the Fund will provide benefits to a participant subject to a right of subrogation. The Plan provides in part:1
If the Welfare Fund pays benefits to or for you, your dependent, your estate or your dependent's estate as a result of an Accident, injury, or illness for which any third party is or may be liable, the Fund has a right of reimbursement from any settlement, judgment, insurance proceeds, no-fault automobile insurance payments, or other recovery, for any and all benefits paid in connection with such injury and illness up to the amount of recovery.
In addition, the Fund will have a lien upon any such recovery in the amount of all benefits paid up to the amount of recovery.
* * *
In the event that you, your dependent or estate fails to timely inform the Fund of any recovery, the Fund shall have a right of reimbursement from you, your dependent, or estate for any and all benefits paid and for costs of suit including payment of reasonable attorney fees, regardless of the amount of actual recovery.
The Plan also contains the following provisions titled "Workers' Compensation Claims Procedures."
In cases where a member also has a ...
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...because workers' compensation is available, and has been awarded to, Sanchez. See Sheet Metal Workers' Local 73 Welfare Fund Board of Trustees v. DeGryse, III, 579 F. Supp. 2d 1063, 1069-70 (N.D. Ill. 2008) (interpreting similar provision that excluded benefits where workers' compensation w......