Unum Life Ins. Co. of America v. Grourke

• Decision Date: 20 December 2005
• Docket Number: No. 3:04 CV 1639.,3:04 CV 1639.
• Citation: 406 F.Supp.2d 524
• Parties: UNUM LIFE INSURANCE COMPANY OF AMERICA, Plaintiff, v. Michael J. GROURKE, Jr., Defendant.
• Court: U.S. District Court — Middle District of Pennsylvania

406 F.Supp.2d 524

UNUM LIFE INSURANCE COMPANY OF AMERICA, Plaintiff, v. Michael J. GROURKE, Jr., Defendant.

No. 3:04 CV 1639.

United States District Court, M.D. Pennsylvania.

December 20, 2005.

Michael J. Glasheen, McCarter & English, LLP, Philadelphia, PA, for Plaintiff.

Bruce K. Anders, Mylotte, David & Fitzpatrick, Wilkes-Barre, PA, for Defendant.

MEMORANDUM

CAPUTO, District Judge.

Presently before the Court is Plaintiff UNUM Life Insurance Company of America's Motion For Summary Judgment (Doc. 13). For the reasons set forth below, the Court will deny UNUM's motion. The Court has jurisdiction over this matter pursuant to 29 U.S.C. § 1132(e) and 28 U.S.C. § 1331.

BACKGROUND

The facts in the present case are relatively undisputed. Michael J. Grourke, Jr. began employment with Honeywell, Inc. on January 29, 1962. On or about January 1, 1995, Mr. Grourke became a participant in a fully-insured employee benefit welfare plan under Group Long-Term Disability Insurance Policy No. 392237 ("Plan") issued to Honeywell, Inc. by UNUM Life Insurance Company of America ("UNUM"). The Plan is subject to the provisions of the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001, et seq. ("ERISA").

On November 14, 1997, Mr. Grourke ceased working due to injuries affecting his knee and back. He submitted a claim for long-term disability benefits to UNUM under the Plan on or about April 14, 1998. Mr. Grourke's claim was approved, and he began receiving monthly disability benefits retroactive to May 14, 1998. Under the Plan, any long-term disability benefits paid out are to be offset by other benefits received by the insured. Specifically, the Plan provides that UNUM will "subtract from [the insured's] gross disability payment ... the amount that [the insured is] entitled to receive as disability payments ... under the United States Social Security Act." (Doc. 13, Ex. A at LTD-BEN-3.) Further, the Plan provides that once it is determined that the insured may qualify for Social Security benefits, UNUM "will estimate [the insured's] entitlement to these benefits ..." unless the insured "... sign[s] ... [a] payment option form ... stating that [the insured] promise[s] to pay any overpayment caused by an award." Id. at LTD-BEN-5. Mr. Grourke does not deny signing the Payment Option Form ("POF"), but states that he did not designate either of the two payment options in the POF. Mr. Grourke asserts that, furthermore, he was not requested to sign the POF until May of 1999, and that he was told his disability benefits from UNUM would immediately cease if he failed to sign the form.

Then, on or about September 19, 2000, UNUM ceased making disability payments to Mr. Grourke on the basis that he was no longer disabled. At that point, Mr. Grourke had received a total of $64,896.20 in benefits from UNUM between May 14, 1998 and September 18, 2000; without a reduction in monthly payments based upon Mr. Grourke's potential Social Security benefits. Thereafter, Mr. Grourke retroactively received $48,700.17 in benefits from Social Security for his period of disability between May 14, 1998 to September 18, 2000. Mr. Grourke admits that he has never paid UNUM any portion of the alleged overpayment of disability benefits.

UNUM filed suit to recover the alleged overpayment of disability benefits on July 26, 2004. (Doc. 1.) On May 25, 2005, UNUM filed the present motion for summary judgment. (Doc. 13.) This motion is fully briefed and ripe for disposition.

LEGAL STANDARD

Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). A fact is material if proof of its existence or nonexistence might affect the outcome of the suit under the applicable substantive law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Where there is no material fact in dispute, the moving party need only establish that it is entitled to judgment as a matter of law. Where, however, there is a disputed issue of material fact, summary judgment is appropriate only if the factual dispute is not a genuine one. See id. at 248, 106 S.Ct. 2505. An issue of material fact is genuine if "a reasonable jury could return a verdict for the nonmoving party." Id.

Where there is a material fact in dispute, the moving party has the initial burden of proving that: (1) there is no genuine issue of material fact; and (2) the moving party is entitled to judgment as a matter of law. See 10A CHARLES ALAN WRIGHT, ARTHUR R. MILLER, & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D § 2727 (2d ed.1983). The moving party may present its own evidence or, where the nonmoving party has the burden of proof, simply point out to the Court that "the nonmoving party has failed to make a sufficient showing of an essential element of her case." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

All doubts as to the existence of a genuine issue of material fact must be resolved against the moving party, and the entire record must be examined in the light most favorable to the nonmoving party. See White v. Westinghouse Elec. Co., 862 F.2d 56, 59 (3d Cir.1988). Once the moving party has satisfied its initial burden, the burden shifts to the nonmoving party to either present affirmative evidence supporting its version of the material facts or to refute the moving party's contention that the facts entitle it to judgment as a matter of law. See Anderson, 477 U.S. at 256-257, 106 S.Ct. 2505.

The Court need not accept mere conclusory allegations, whether they are made in the complaint or a sworn statement. Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). In deciding a motion for summary judgment, "the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249, 106 S.Ct. 2505.

DISCUSSION

1. "Equitable Relief" Under 29 U.S.C. § 1132(a)(3)(B)

UNUM first claims that it is entitled to equitable restitution under ERISA's civil enforcement mechanism, 29 U.S.C. § 1132(a)(3), which is available to plan fiduciaries. Section 1132(a) provides:

A civil action may be brought ... (3) 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.

29 U.S.C. § 1132(a) (2005) (emphasis added). The Supreme Court has made it clear that the term "equitable relief" in § 1132(a)(3)(B) refers only to "those categories of relief that were typically available in equity." Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002) (quoting Mertens v. Hewitt Assocs., 508 U.S. 248, 256, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993)) (emphasis in original). Furthermore, determining that "not all relief falling under the rubric of restitution is available in equity," the Supreme Court distinguished between legal and equitable restitution in Knudson. Id. at 212-13, 122 S.Ct. 708. The Supreme Court stated:

In cases in which the plaintiff "could not assert title or right to possession of particular property, but in which nevertheless he might be able to show just grounds for recovering money to pay for some benefit the defendant had received from him," the plaintiff had a right to restitution at law through an action derived from the common-law writ of assumpsit. In such cases, the plaintiff's claim was considered legal because he sought "to obtain a judgment imposing a merely personal liability upon the defendant to pay a sum of money." Such claims were viewed essentially as actions at law for breach of contract (whether the contract was actual or implied).

Id. at 213, 122 S.Ct. 708 (citations omitted). The Supreme Court went on to explain:

In contrast, a plaintiff could seek restitution in equity, ordinarily in the form of a constructive trust or an equitable lien, where money or property identified as belonging in good conscience to the plaintiff could clearly be traced to particular funds or property in the defendant's possession. A court of equity could then order a defendant to transfer title (in the case of the constructive trust) or to give a security interest (in the case of the equitable lien) to a plaintiff who was, in the eyes of equity, the true owner. But where "the property [sought to be recovered] or its proceeds have been dissipated so that no product remains, [the plaintiff's] claim is only that of a general creditor," and the plaintiff "cannot enforce a constructive trust of or an equitable lien upon other property of the [defendant]." Thus, for restitution to lie in equity, the action generally must seek not to impose personal liability on the defendant, but to restore to the plaintiff particular funds or property in the defendant's possession.

Id. at 213-14, 122 S.Ct. 708 (citations omitted) (alterations in original).

Following the Supreme Court's decision in Knudson, a split among the circuits has developed over how to determine the true nature of restitution sought in an ERISA action. In the minority view, the United States Courts of Appeals for the Sixth and Ninth Circuits have read Knudson to establish a broad prohibition under § 1132(a)(3)(B) on claims for restitution derived from the provisions of ERISA plans. See, e.g., Qualchoice, Inc. v. Rowland, 367 F.3d 638, 650 (6th Cir.2004), cert. denied, ___ U.S. ___, 125 S.Ct. 1639, 161 L.Ed.2d 510 (Mar. 21, 2005). For the Sixth and Ninth Circuits, "the fact that the ... claim...