The opinion of the court was delivered by: Wexler, District Judge.
This is an action that was commenced in the Supreme Court of
the State of New York, County of Suffolk (the "State Court
Action") and later removed to this court. In the State Court
Action, Plaintiff William Thomas Vreeland ("William Vreeland")
sued on behalf of his minor child, William Jeremiah Vreeland,
("Billy Vreeland" or "Billy") for injuries sustained by
Billy at birth. The State Court Action was settled for
approximately $1.9 million.
In March of 1998, William Vreeland moved, in the State Court,
for an order setting the amount, if any, of his medical
insurance company's lien on the proceeds of the settlement.
Thereafter, the insurer (referred to herein as the "Fund"),
citing the Employee Retirement Income Security Act ("ERISA") as
a basis of federal jurisdiction, removed the action to this
court. Presently before the court are the parties' cross-motions
for summary judgment. For the reasons that follow, the motions
A. The Birth of Billy Vreeland
Maureen Vreeland, William Vreeland's wife and Billy Vreeland's
mother, was admitted to the Community Hospital of Western
Suffolk on October 27, 1986. At the time, she was thirty-one
weeks pregnant. Two days later, Maureen Vreeland gave birth,
prematurely, to Billy. Billy was born with immature lungs. After
his birth, Billy was transferred to Stony Brook University
Hospital, where he remained for 121 days. For twelve weeks of
his stay, Billy was attached to a respirator. Since birth, Billy
has been hospitalized on several occasions.
Because there is a dispute between the parties regarding the
precise nature and cause of Billy's injuries, the court will not
comment extensively on these issues — they are not necessary to
the disposition of the instant motions. Suffice it to say,
however, that Billy has suffered serious medical complications
since his birth. He has been diagnosed with cerebral palsy and a
variety of lung ailments.
B. The Payment of Billy's Medical Expenses
At all relevant times, William Vreeland has been an employee
of Waldbaums. As such, he has been a participant in the Road
Carriers Local 707 Welfare Fund (the "Fund"). The Fund
reimburses medical expenses of its participants and their
dependants. As dependants of William Vreeland, Maureen and Billy
Vreeland are eligible for such payment. Since Billy's birth, the
Fund has made various payments for his medical expenses. Those
payments were associated with, inter alia, Billy's cerebral
palsy as well as his lung disease.
C. The State Court Action
William Vreeland commenced the State Court Action in 1990.
Named as defendants were Dr. Louis D. Cardi (Mrs. Vreeland's
obstetrician), the Community Hospital of Western Suffolk (the
hospital where Billy was born — the "Hospital"), Michael
Cuccinello, a Registered Nurse Anesthesiologist and his
employer, Community Anesthesia Services. Dr. Cardi was argued to
be liable for failing to have Mrs. Vreeland transferred to a
tertiary care hospital and failure to have a neonatologist
present at the birth. The anesthesiologist and his employer were
alleged to have improperly resuscitated and intubated the child.
The State Court Action was never tried. Instead, Plaintiff
settled with defendants. First, Plaintiff settled with the
Hospital for $10,000. Next, in 1998, Plaintiff settled with the
nurse-anesthesiologist and his employer for $300,000. Finally,
Plaintiff settled with Dr. Cardi for $1.6 million. Upon settling
with the latter three defendants, the settling parties put a
stipulation on the record stating, in pertinent part, that no
part of the settlement was "intended to be for any part of
medical expenses." Instead, it was stated to be the intention of