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New York State Teamsters Council Health & Hospital Fund v. Williams

August 11, 2009

NEW YORK STATE TEAMSTERS COUNCIL HEALTH & HOSPITAL FUND, BY ITS TRUSTEES, JOHN BULGARO, RONALD G. LUCAS, DANIEL W. SCHMIDT, MICHAEL S. SCALZO, SR., FREDRICK J. CARTER AND TOM J. VENTURA, PLAINTIFF,
v.
DANIEL WILLIAMS AND NICOLE FERREN, DEFENDANTS.



The opinion of the court was delivered by: Neal P. McCURN, Senior U.S. District Court Judge

MEMORANDUM - DECISION AND ORDER

This is an action brought by plaintiff New York State Teamsters Council Health & Hospital Fund ("Health Fund") by its trustees John Bulgaro, Ronald G. Lucas, Daniel W. Schmidt, Michael S. Scalzo, Sr., Fredrick J. Carter and Tom J. Ventura, (collectively, "plaintiff") against defendants Daniel Williams ("Williams") and Nicole Ferren ("Ferren"), pursuant to the Employment Retirement Income Security Act of 1974, codified at 29 U.S.C. § 1001 et. seq. ("ERISA"), and the Labor Management Relations Act ("LMRA"), codified at 29 U.S.C. § 141 et. seq.*fn1 Plaintiff seeks $13,287.43, compensation for the amount it states it erroneously paid in prescription and medical benefits which Ferren allegedly submitted to the Health Fund after she was no longer eligible for benefits under the plan. Plaintiff also asserts state law claims of breach of contract, fraud, and unjust enrichment. Currently before the court is a motion to dismiss by defendant Williams for lack of subject matter jurisdiction (Doc. No. 8). For the reasons set forth below, Williams' motion will be granted. Defendant Ferren has filed a motion for summary judgment (Doc. No. 12). Ferren's motion will be denied as moot.

I. Facts

The following facts are taken from the complaint and are construed in favor of the non-moving party for purposes of the motions before the court. At all times relevant to this action, Williams was an eligible participant in plaintiff's health care plan. In April 2002, Williams formally enrolled Ferren in the plan as his legal spouse. In December of 2005, Williams and Ferren were divorced. The plaintiff did not receive notice of the divorce until Williams telephoned the Health Fund Office on June 29, 2006. During the period of December 2005 to July 2006, Ferren continued to use her Health Fund identification to secure medical and prescription benefits under the plan for which she was no longer eligible. The plaintiff requested proof of the marriage dissolution in June 2006, which Williams provided in July 2006. At that time, plaintiff put its vendors on notice that Ferren was ineligible for plan coverage.

During the period of Ferren's ineligibility, the Health Fund paid medical claims for Ferren in the amount of $3,061.20 and prescription claims in the amount of $10,226.23. The Health Fund notified Williams and Ferren of these overpayments and requested reimbursement. When attempts at voluntary reimbursement failed, plaintiff initiated suit in federal court seeking reimbursement for the monies improperly and erroneously paid on behalf of Ferren. Plaintiff asserts jurisdiction is conferred upon this court pursuant to 29 U.S.C. § 1132(a)(3) (ERISA § 502(a)(3)) and 29 U.S.C. § 185.

II. Discussion

A. Standard of Review for Rule 12(b)(1) Motion to Dismiss In a motion to dismiss for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1), "the plaintiff bears the burden of showing that the court has jurisdiction over the defendant." Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 240 (2d Cir.1999).

"A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir.2000). In deciding a Rule 12(b)(1) motion, the Court may properly refer to evidence outside the pleadings. Id. (citing Kamen v. American Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d Cir.1986)). When deciding a motion to dismiss, the court must accept as true the well pleaded allegations of the complaint. Albright v. Oliver, 510 U.S. 266, 268, 114 S.Ct. 807 (1994). In addition, the allegations of the complaint should be construed favorably to the pleader. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct 1683 (1973). See also Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir.2005) ("It is well established that, in passing on a motion to dismiss, whether on the ground of lack of jurisdiction over the subject matter or for failure to state a cause of action, the allegations of the complaint should be construed favorably to the pleader"). A plaintiff asserting subject matter jurisdiction "has the burden of proving by a preponderance of the evidence that it exists." Makarova, 201 F.3d at 113.

B. Equitable relief pursuant to 29 U.S.C. § 1132(a)(3)

Plaintiff argues that this matter is governed by 29 U.S.C. § 1132 (a)(3), which states in pertinent part that "[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.... (West 2009) (emphasis added).

"In determining the propriety of a remedy, we must look to the real nature of the relief sought, not its label." Gerosa v. Savasta & Company, Inc., 329 F.3d 317, 321(2d Cir. 2003) (internal citations omitted). "Section 1132(a)(3) permits money awards only in very limited circumstances." Id.

In the case at bar, the parties submit case law from various jurisdictions, but make little attempt to analyze law from our own circuit. Plaintiff cites extensively from a Western District of Washington case that gives plaintiff the result it seeks in the instant case. However, in a case decided in this circuit, Vacca v. Trinitas Hospital, 2006 WL 3314637 (E.D.N.Y. 2006), the district court held that ERISA did not provide a remedy for plaintiffs who sought to recover an alleged overpayment to the defendant hospital for medical benefits provided to a plan beneficiary. Consequently, the court did not have subject matter jurisdiction, and declined to exercise supplemental jurisdiction over state claims of unjust enrichment and breach of contract. Id. at * 5. In Frommert v. Conkright, 433 F.3d 254 (2d Cir. 2006), the court reiterated that "the Supreme Court ... has consistently disfavored the expansion of the availability of equitable relief where remedies at law are sufficient." Id. at 270.

In Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002), the Court, in denying the availability of relief under § 502(a)(3), sounded a note of caution concerning suits purporting to seek equitable relief while also seeking monetary damages: 'Almost invariably ... suits seeking (whether by judgment, injunction, or declaration) to compel the defendant to pay a sum of money to the plaintiff are suits for 'money damages,' as that phrase has traditionally been applied, since they seek no more than compensation for loss resulting from the defendant's breach of legal duty.' Bowen v. Massachusetts, 487 U.S. 879, 918-919, 108 S.Ct. 2722 ... (1988) (SCALIA, ...


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