Sollars v. Healthcare Recoveries
| Decision Date | 09 June 2006 |
| Docket Number | Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 3.,No. 102,013.,102,013. |
| Citation | 2006 OK CIV APP 140,147 P.3d 289 |
| Parties | Theresa SOLLARS, Plaintiff/Appellee, v. HEALTHCARE RECOVERIES, Shelly Russell and Blue Advantage Administrators of Arkansas, Defendants/Appellants, and Integris Southwest Medical Center, Defendant. |
| Court | United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma |
Appeal from the District Court of Oklahoma County, Oklahoma; Honorable Vicki L. Robertson, Trial Judge.
AFFIRMED IN PART, REVERSED IN PART AND REMANDED.
Michael W. Phillips, Ryan Bisher Ryan, Oklahoma City, OK, for Plaintiff/Appellee.
William Bergner, Nash, Cohenour & Kelley, P.C., Oklahoma City, OK, and Thomas H. Lawrence, John M. Russell, for Healthcare Recoveries Memphis, Tennessee, and Blue Advantage of Arkansas.
¶ 1 Healthcare Recoveries and Blue Advantage Administrators of Arkansas (collectively, Plan) appeal a trial court order holding that its recovery from funds received by Theresa Sollars should be reduced under the common fund doctrine to compensate her attorney and that her uninsured motorists insurance proceeds were not available as a source for reimbursement. Plan argues that the state law relied upon by Sollars is preempted and is inapplicable under the terms of her employee benefit plan. We agree. Insofar as the order allows reimbursement to Plan as an equitable remedy from funds interpled, the order is affirmed. However, by accepting benefits Sollars agreed to be bound by the terms of the employee benefit plan which made inapplicable certain state law relied upon in calculating Plan's reimbursement. The order applying the common fund doctrine, reducing reimbursement, and finding her uninsured motorist benefits unavailable as a source for reimbursement to Plan must be reversed, and the matter remanded for further proceedings.
¶ 2 Plan is a self-funded, employee welfare benefit plan covered by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (ERISA). Sollars had medical coverage with Plan as set forth in a 2004 Associate Guide Summary Plan Description (the Summary).
¶ 3 Sollars filed a Petition in Interpleader pursuant to 12 O.S.2001 § 2022, stating that she was injured in an automobile accident, had an offer to settle her claim against Shelly Russell for Russell's $10,000 policy limits, had an offer of $10,000 from her own uninsured motorist insurance carrier, had incurred medical bills in excess of $28,100, that Plan had a subrogation interest for $11,863.53 for benefits it had paid, and that she was still receiving treatment for her accident injuries. Sollars' petition states she is "ready and willing to distribute the balance of $10,000.00 after attorney fees and costs" but that she was "in doubt as to the amounts to be allocated amongst the various providers." She asked that the trial court "determine who is entitled to what amount of the $20,000.00."1
¶ 4 Subsequently, Sollars moved to extinguish liens, determine subrogation, and apportion settlement proceeds. She stated that her counsel was entitled to $8,000 under a forty percent attorney fee contract and that costs incurred in litigating her petition against Russell totaled $246.82. She argued that after subtracting attorney fees and costs from the settlement proceeds, the remaining sum was not sufficient to fairly compensate or make her whole, and that she knew of potential remaining medical expenses and bills in addition to Plan's request for subrogation for the $11,863.53 benefits it had paid. She states "[i]t is undisputed [Plan] policy of health insurance falls under ERISA." (Emphasis in original.)
¶ 5 Plan responded to Sollars' motion, arguing by accepting benefits Sollars agreed to "abide by" the provisions of the Summary. Under those provisions, it claimed, it was entitled to reimbursement, the "make whole" rule did not apply because the Summary expressly provided for priority of payment, the common fund doctrine did not apply, and that Sollars was required "to reimburse the Plan out of uninsured motorist proceeds." Plan moved for summary judgment in its favor.
¶ 6 The trial court granted summary judgment to Sollars and extinguished all liens overruling Integris' objections to lien extinguishment. The order determined that Sollars' uninsured motorist benefits were not subject to subrogation, and apportioned her third-party liability limits between Plan for its subrogation interest and her counsel for attorney fees and costs. This appeal followed.
¶ 7 The parties do not argue that ERISA is inapplicable but rather differ in how they construe its provisions. Summary plan descriptions are part of the ERISA plan documents and must be considered when interpreting a benefit plan. 29 U.S.C. § 1022(a)(1); Chiles v. Ceridian Corporation, 95 F.3d 1505 (10th Cir.1996); Kemmerer v. ICI Americas Inc., 70 F.3d 281, (3rd Cir. 1995), cert. denied, 517 U.S. 1209, 116 S.Ct. 1826, 134 L.Ed.2d 931 (1996). A plan's summary "best reflects the expectations of the parties" and controls the terms of the plan itself. Chiles, 95 F.3d at 1515.
¶ 8 Sollars argues that Plan may not maintain an interest in the settlement proceeds because it is limited to "appropriate equitable relief" under ERISA. 29 U.S.C. § 1132(a)(3). Citing Great West Life & Annuity Insurance Company v. Knudson, 534 U.S. 204, 210, 122 S.Ct. 708, 713, 151 L.Ed.2d 635 (2002), she argues that Plan is seeking relief not available to it under ERISA, because it seeks contractual reimbursement, a legal remedy, and that its claim for reimbursement is nothing more than an effort to enforce "a contractual provision to pay money — relief that was not typically available in equity." In Knudson, the Court noted that this is so because a claim for money under a contract was "quintessentially an action at law." 534 U.S. at 210, 122 S.Ct. at 713 (citing Wal-Mart Stores, Incorporated Associates' Health and Welfare Plan v. Wells, 213 F.3d 398, 401 (7th Cir.2000), cert. denied, 531 U.S. 985, 121 S.Ct. 441, 148 L.Ed.2d 447(2000)). Sollars argues that an enforcement of a contractual obligation to pay money is a legal remedy not available under ERISA.
¶ 9 It is not enough to argue that Plan's claim for reimbursement is a claim for money. The quoted language from Knudson is part of a more thorough analysis, and a benefit plan is not foreclosed from enforcing its terms merely because the remedy will result in the receipt of money. Determining the nature of the relief requires a more precise analysis. Further, the relationship of these parties arises from the substantive provisions of the Summary, an agreement controlled by ERISA, and analysis of this matter requires both consideration of the underlying basis for relief and of the terms of that agreement.
¶ 10 We must, therefore, determine if the relief Plan seeks is equitable in nature. Like in Administrative Committee of the Wal-Mart Associates Health and Welfare Plan v. Willard, 302 F.Supp.2d 1267 (D.Kan. 2004) (Willard I), aff'd, 393 F.3d 1119 (10th Cir.2004) (Willard II),2 funds have been paid into the court and a claim against them may be asserted without imposing a personal liability on Sollars. "The Plan seeks in rem relief against the proceeds in the Court's possession, not a legal remedy of general liability." Willard I, 302 F.Supp.2d at 1276. As recognized in Knudson, restitution in equity in the form of a constructive trust or an equitable lien may be recovered from an identifiable or traceable fund when money or property in the possession of one party is "identified as belonging in good conscience" to another. 534 U.S. at 213, 122 S.Ct. at 714. In such circumstances, the remedy sought by the Plan is equitable in nature.3
¶ 11 Here, Sollars received funds and sought, via interpleader, to determine the proper respective rights of various competing claimants to those funds. Welch v. Montgomery, 1949 OK 80, ¶ 11, 205 P.2d 288, 290.
¶ 12 The relief sought by Plan is appropriate equitable relief under § 1132(a)(3) because it does not seek to impose personal liability upon Sollars but to reach identifiable funds under her control. Sollars herself also seeks equitable relief via interpleader. The relief requested by Plan is available to it under ERISA and is available in Sollars' interpleader proceeding, and to the extent the order allows an equitable remedy against the interpled funds, the order is affirmed.
¶ 13 A court will examine ERISA plan documents as a whole and, if unambiguous, construe them as a matter of law. Chiles v. Ceridian Corporation, 95 F.3d 1505, 1511 (10th Cir.1996). This approach is consistent with Oklahoma statutory law which provides that "[t]he whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the others." 15 O.S.2001 § 157. Ambiguity exists if a provision is reasonably susceptible of more than one meaning or its meaning is uncertain. Willard I, 302 F.Supp.2d at 1279. The language of a plan must be given its common and ordinary meaning, Willard II, 393 F.3d at 1123, because it "best reflects the expectations of the parties." Ceridian, 95 F.3d at 1515.
¶ 14 Plan argues that "ERISA preempts any state law relied upon by Sollars to reduce the Plan's reimbursement interest where such state law conflicts with [the Summary] terms." Sollars argues that Plan should not receive reimbursement because she has not been made whole by the funds she received, citing Equity Fire and Casualty Company v. Youngblood, 1996 OK 123, 927 P.2d 572. Youngblood recognized that the...
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