Vercellino v. Optum Insight, Inc.

• Decision Date: 04 November 2020
• Docket Number: 4:19-CV-3048
• Parties: NATHAN VERCELLINO, Plaintiff, v. OPTUM INSIGHT, INC., UNITED HEALTHCARE SERVICES, INC., BOARD OF TRUSTEES OF AMERITAS HOLDING COMPANY HEALTH PLAN, and AMERITAS HOLDING COMPANY HEALTH PLAN, Defendants.
• Court: U.S. District Court — District of Nebraska

NATHAN VERCELLINO, Plaintiff, v. OPTUM INSIGHT, INC., UNITED HEALTHCARE SERVICES, INC.,

BOARD OF TRUSTEES OF AMERITAS HOLDING COMPANY HEALTH PLAN,

and AMERITAS HOLDING COMPANY HEALTH PLAN, Defendants.

4:19-CV-3048

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA

November 4, 2020

MEMORANDUM AND ORDER

I. INTRODUCTION

This case involves a dispute brought under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. over whether an ERISA plan is entitled to reimbursement for benefits it paid for Plaintiff's medical treatment in the event that Plaintiff, Nathan Vercellino, recovers in tort from a third party for damages related to his injuries. Filing 14 at 6. Vercellino alleges a breach of fiduciary duty and seeks a declaration that Defendants are not entitled to reimbursement from his potential recovery as well as an injunction preventing Defendants from asserting such a lien or claim. Filing 14 at 6-8. Defendants assert counterclaims seeking a declaration that the plan is entitled to reimbursement from any recovery Vercellino receives in his pending tort suit and an order enforcing an equitable lien to that effect. Filing 16 at 13. This matter is before the Court on Vercellino's, Filing 54, and Defendants', Filing 51, cross-motions for summary judgment and Vercellino's motion to strike evidence, Filing 74. The Court denies both of Vercellino's motions and grants Defendants' Motion for Summary Judgment.

II. BACKGROUND

On July 23, 2013, at the age of fifteen, Nathan Vercellino was injured in an all-terrain vehicle ("ATV") accident. Filing 55 at 3. Connor Kenney, who intervenes here in support of Vercellino's claims, was driving the ATV that Vercellino rode on. Filing 26 at 2. Other Kenney family members owned the ATV in question. Filing 55 at 3. Now an adult, Vercellino filed suit against the Kenneys in January 2019 in state court for damages arising from the accident, but not for medical-expense damages. Filing 14 at 4. All parties agree that damages for medical expenses are time-barred by the state statute of limitations in this case. Filing 55 at 2; Filing 64 at 6-7; Filing 65 at 7.

At the time of the accident, Vercellino was a covered dependent on his mother's health insurance plan. Filing 16 at 2; Filing 55 at 3. The plan was a self-funded ERISA plan administered by Defendants, Ameritas Holding Company and United Healthcare. Filing 16 at 7. Defendant Optum is the plan's collection agent. Filing 16 at 2. Defendants allege the plan has paid $595,770.80 in medical expenses stemming from injuries Vercellino sustained in his accident. Filing 16 at 9. Neither Defendants nor Vercellino's parents filed suit against the Kenneys or their insurer to recover for medical expenses incurred in Vercellino's care prior to the January 2019 suit. Filing 55 at 5-6; Filing 65 at 3.

Defendants assert an interest in any recovery Vercellino receives from his suit against the Kenneys. Filing 16 at 11. They argue that under the terms of the plan, they have a right to seek reimbursement of the expenses they incurred for Vercellino's medical treatment from any recovery by a covered person relating to the accident, regardless of how the claimed damages are characterized or whether suit is brought by Vercellino or his parents. Filing 65 at 4-7, 11-13. Vercellino initiated this action for declaratory and injunctive relief, praying the Court findDefendants have no such right to reimbursement. Filing 14 at 8. Defendants counter-claimed, seeking a declaration they are entitled to reimbursement.¹ Filing 16 at 13.

In relevant part, Section 11.9 of the plan provides,

[C]overed person(s), including all dependents, agree to transfer to the plan their rights to make a claim, sue and recover damages when the injury or illness giving rise to the benefits occurs through the act or omission of another person. Alternatively, if a covered person receives any full or partial recovery, by way of judgment, settlement or otherwise, from another person or business entity, the covered person agrees to reimburse the Plan, in first priority, for any medical, disability or any other benefits paid by it (i.e., the Plan shall be first reimbursed fully, to the extent of any and all benefits paid by it, from any monies received, with the balance, if any, retained by the covered person). The obligation to reimburse the Plan, in full, in first priortiy, exists regardless of whether the judgment or settlement, etc. specifically designates the recovery, or a portion thereof, as including medical, disability or other expenses.

Filing 53-2 at 60. Defendants claim this language gives them the right to seek reimbursement if Vercellino recovers against the Kenneys. Filing 65. Vercellino argues the language limits reimbursement rights to recovery compensating for medical expenses, which are not attainable in his suit against the Kenneys because the statute of limitations has run on any claim for medical expenses incurred because of the accident. Filing 55 at 12. He also argues Defendants waived any claim for reimbursement or subrogation by not exercising their right to sue on Vercellino's parents' behalf before the statute of limitations for medical expenses had run. Filing 55 at 12. In the alternative, Vercellino argues Defendants breached their fidicuary duty to him by failing to notify his parents that their decision not to sue could negatively impact a future action brought by Vercellino. Filing 55 at 14-15. Vercellino also moves to strike the document Defendants offer, contending it is not a true and accurate copy of the plan, or that it is invalid. Filing 74.

III. DISCUSSION

Before the Court are cross-motions for summary judgment, Filing 51, Filing 54, each seeking declaratory relief, and Vercellino's motion to strike plan documents offered by Defendants as the controlling written instruments at issue under ERISA. Filing 74.

A. Standard of Review

"Summary judgment is appropriate when the evidence, viewed in the light most favorable to the nonmoving party, presents no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Garrison v. ConAgra Foods Packaged Foods, LLC, 833 F.3d 881, 884 (8th Cir. 2016) (citing Fed. R. Civ. P. 56(c). "[S]ummary judgment is not disfavored and is designed for every action." Briscoe v. Cty. of St. Louis, Missouri, 690 F.3d 1004, 1011 n.2 (8th Cir. 2012) (internal quotation marks omitted) (quoting Torgerson v. City of Rochester, 643 F.3d 1031, 1043 (8th Cir. 2011) (en banc)). In reviewing a motion for summary judgment, the Court will view "the record in the light most favorable to the nonmoving party . . . drawing all reasonable inferences in that party's favor." Whitney v. Guys, Inc., 826 F.3d 1074, 1076 (8th Cir. 2016) (citing Hitt v. Harsco Corp., 356 F.3d 920, 923-24 (8th Cir. 2004)). Where the nonmoving party will bear the burden of proof at trial on a dispositive issue, "Rule 56(e) permits a proper summary judgment motion to be opposed by any of the kinds of evidentiary materials listed in Rule 56(c), except the mere pleadings themselves." Se. Missouri Hosp. v. C.R. Bard, Inc., 642 F.3d 608, 618 (8th Cir. 2011) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)). The moving party need not produce evidence showing "an absence of a genuine issue of material fact." Johnson v. Wheeling Mach. Prod., 779 F.3d 514, 517 (8th Cir. 2015) (quoting Celotex, 477 U.S. at 325). Instead, "the burden on the moving party may be discharged by 'showing' . . . that there is anabsence of evidence to support the nonmoving party's case." St. Jude Med., Inc. v. Lifecare Int'l, Inc., 250 F.3d 587, 596 (8th Cir. 2001) (quoting Celotex, 477 U.S. at 325).

In response to the moving party's showing, the nonmoving party's burden is to produce "specific facts sufficient to raise a genuine issue for trial." Haggenmiller v. ABM Parking Servs., Inc., 837 F.3d 879, 884 (8th Cir. 2016) (quoting Gibson v. Am. Greetings Corp., 670 F.3d 844, 853 (8th Cir. 2012)). The nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts and must come forward with specific facts showing that there is a genuine issue for trial." Wagner v. Gallup, Inc., 788 F.3d 877, 882 (8th Cir. 2015) (quoting Torgerson, 643 F.3d at 1042). "[T]here must be more than 'the mere existence of some alleged factual dispute'" between the parties in order to overcome summary judgment. Dick v. Dickinson State Univ., 826 F.3d 1054, 1061 (8th Cir. 2016) (quoting Vacca v. Viacom Broad. of Mo., Inc., 875 F.2d 1337, 1339 (8th Cir. 1989)).

B. Vercellino's Motion to Strike Snowden's Declaration and Exhibits

Vercellino moves to strike Defendants' Exhibit 1 (Filing 53-2 at 7-65) ("Exhibit 1"), the supposed copy of the plan document governing the ERISA plan at issue, because it is unsigned or otherwise inadmissible. Filing 74 at 1. Because there is no requirement the document be signed and because the Court determines there is adequate foundation to support admitting the plan document, it denies the motion to strike.

Exhibit 1 is a document entitled "Ameritas Benefits Advantage Flexible Benefits Program." Filing 53-2 at 7. Exhibit 1 is attached to the declaration of Andrea Snowden, a vice president and assistant general counsel at Ameritas. Filing 53-2 at 2. In her declaration, Snowden asserts she has knowledge of the Ameritas Holding Company Health Plan through her professional duties, which include managing litigation and disputes over company benefit plans. Filing 53-2 at2. She presents Exhibit 1 as "a true and accurate copy of the plan document governing the ERISA plan at issue in this case. Filing 53-2 at 3. Vercellino argues that because Exhibit 1 is unsigned, either the original is also unsigned and therefore invalid, or Exhibit 1 is not a true copy. Filing 74 at 1. Vercellino also moves to strike most of Snowden's declaration because it relies on the allegedly inadmissible Exhibit 1, or...