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Schaffer v. Mancini

September 13, 2007

JOHN SCHAFFER AS TRUSTEE OF THE LABORERS LOCAL #7 HEALTH FUND, PLAINTIFFS,
v.
PALMA MANCINI AND SILVERIO MANCINI, INDIVIDUALLY, AND RONALD R. BENJAMIN, ESQ., AS TRUSTEE OF A CLIENT TRUST ACCOUNT, DEFENDANTS



The opinion of the court was delivered by: Hon. Norman A. Mordue, Chief U.S. District Judge

MEMORANDUM-DECISION AND ORDER

INTRODUCTION

Plaintiff moves (Dkt. No. 13) for summary judgment in this action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001, et seq. Defendants cross-move (Dkt. No. 16) for relief under Fed. R. Civ. P. 56(f). The Court grants the motion and denies the cross motion.

BACKGROUND

Plaintiff is a fiduciary of the Laborers Local #7 Health Fund ("Fund"), a multiemployer employee welfare benefit plan as defined in ERISA.*fn1 The plan's assets are held in a tax-exempt trust managed by a joint labor-management Board of Trustees for the sole and exclusive benefit of the participants. The Trust Agreement affords to the Trustees full and exclusive authority to determine all questions of coverage and eligibility and full power to construe the provisions of the agreement. It further provides that any determination and construction adopted by the Trustees in good faith is binding on all parties, participants, and beneficiaries.

The complaint explains:

The Plan "self-funds" the medical benefits from its trust fund assets, which are accumulated solely from the fixed hourly employer contributions earned by Participants pursuant to a bargaining agreement, and by the investment earnings on those accumulated contributions.

If benefits are paid on behalf of a beneficiary, those monies are not available to pay benefits to other beneficiaries, and no source of funding is available to replace the monies expended. If the Trust Fund becomes unable to meet its benefit obligations, it must reduce benefits to all participants and beneficiaries. Accordingly, the Fund fiduciaries have a duty to avoid excessive or duplicative benefit payments. (Paragraph numbering omitted.) Defendant Silverio was a participant in the Fund and his spouse, defendant Palma Mancini ("defendant") was a beneficiary of the Fund.*fn2

On January 25, 2002, Palma Mancini fell on ice in a parking lot on property owned by P&J Auto Painting & Body Works, Inc. ("P&J Auto"), allegedly sustaining injuries, including injury to her left knee. Thereafter, she underwent left-knee surgery and other treatment, incurring medical expenses. According to the complaint herein:

In keeping with the Plan document, the Fund paid the Defendant's medical expenses in the amount of $9,107.20. Plaintiff's Fund Manager advised Defendants of the Plan's subrogation/lien provisions, and the Defendants acknowledged those provisions [and signed a subrogation agreement relative to these medical expenses].

Pursuant to the Plan's subrogation provisions, if a Beneficiary recovers from a third-party tortfeasor who is liable for his or her injuries, the Plan has an equitable lien on the proceeds of the recovery to the extent of the benefits paid, and such benefit amounts must be restored to the Plan from such proceeds.

On information and belief, Defendants asserted a claim against a third party [P&J Auto], and pursuant to a decision or settlement, the third party was held liable for Defendant Palma Mancini's injuries in the amount of $18,000.00.

The Defendants have refused to adhere to the terms of the Plan, and have refused to restore to the Plan the amount of the benefits paid on ...


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