Title: AFL Hotel & Restaurant Workers Health & Welfare Trust Fund v. Bosque.

State: hawaii

Issuer: Hawaii Supreme Court

Document:

LAW LIOR

*** FOR PUBLICATION ***

IN THE SUPREME COURT OF THE STATE OF HAWAT‘T

=--000-==

APL HOTEL & RESTAURANT WORKERS HEALTH & WELFARE TRUST FUND,
by its Trustees, Cherlyn Logan, Malcolm Sur, Nona Tamanaha,
Eric Gill, Gilbert Farias, and Hernando Tan,

Plaintiffs-Appellants,

ELMER BOSQUE, Defendant-Appellee.

 

No. 26632

 

APPEAL FROM THE FIRST CIRCUIT COURT
(CIV. No. 03-1-0264)

 

o2ms

APRIL 28, 2006

NAKAYAMA, ACOBA, AND DUFFY,

N26 WY 82 vay sing

MOON, C.J-, LEVINSON, og.

OPINION OF THE COURT BY DUFFY, J.

Plaintiff-appellant AFL Hotel 6 Restaurant Workers
(hereinafter, AFL)

 

ith 6 Welfare Trust Fund, by its trust

H
2004 final judgment of the Circuit Court

 

appeals from the June 1,
of the First Circuit! in favor of defendant~appellee Elmer Bosque

dismissing AFL’s complaint against Bosque for breach of a
subrogation agreement. On appeal, AFL argues that the circuit
court erred by: (1) granting Bosque’s motion to dismiss on the
basis that the Employment Retirenent Income Security Act of 1974

(ERISA), as amended, 29 U.S.C. § 1001 et seq. (2002), preempts an

 

the Honorable Dexter Del Rotaric presided over this matter:
*** FOR PUBLICATION ***

 

ERISA plan’s state law claim against a plan beneficiary for
reimbursement, out of proceeds recovered from a third-party
tortfeasor, of medical expenses paid on behalf of the beneficiary
to cover injuries caused by that third party; and (2) dismissing
as moot AFL's motion for summary judgment when there were no
genuine issues of material fact and AFL was entitled to judgment
as a matter of law. AFL thus asks this court to vacate the
judgment below and remand with directions to enter an order
grating summary judgment in its favor and award AFL reasonable
attorney's fees and costs. Bosque responds that: (1) the
circuit court properly dismissed the suit on ERISA preemption
grounds; (2) AFL is judicially estopped to deny Bosque’s
preemption argument based on the inconsistent position taken by
AEL in related cases; (3) this court may not consider AFL's
motion for summary judgment because it was not granted or denied
on the merits; and (4) this court should direct the circuit court
to award Bosque reasonable attorney's fees and costs incurred in
connection with this action.

Based on the following, we vacate the judgment below
and remand for further proceedings.

I. BACKGROUND

facts

 

The following facts are not disputed by the parties.
AFL is an employee benefit plan within the meaning of ERISA, of

2
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which Bosque was a beneficiary. Bosque admitted that on
October 25, 1996, he was injured in a motor vehicle accident.
AFL subsequently agreed to pay Bosque’s medical expenses on the
condition that he sign a subrogation agreement (Agreement). ‘The
Agreement, which Bosque admitted he signed on March 2, 2000,
stated that Bosque would notify AFL of any third-party recovery
arising out of his motor vehicle accident and reimburse AFL out
of that recovery. Specifically, the Agreement provided in
relevant part as follows:

E understand that [medical] bills shall be paid (by AFL) on
2 “loan basis only, subject to the recovery rights of (AFL) and I
gree to promptly Fepay (AFL) if and when I... receive
payment(s) from or on Behalf of (a) responsible thira party.

 

I hereby authorize and direct ay attorney to notify [AFL] of
any claim, action or lowest filed on my behalf... as a result
Of the accident.” {or my aetorney, will notify (AL| immediately
pen ‘receiving any settienest or payment resulting from such a
Glein(-]. I hereby further give an irrevocable Lien on any such
Elaim, “action or lawsuit to [AFL] against the proceeds of any
Fettlenent, judgement. [sic] or verdict which may be paid to me
Sas the result of injuries or illness for which I’. = have been
treated by reason of the accident

 

   

 

    

I agree that I will not rescind this Agreement, and that any
attonpted rescission will fot be honored by my attorney. T hereby
instruct that, in the event snother attorney is substituted in
this matter, the new attorney shall honor this lien. In the event
of any Litigation concerning the enforcenent or interpretation of
this lien, the prevailing party shall be entitled to an avard of
ite attorney's fees and cost [sie].

 

 

3 acknowledge that I have carefully read and fully
understand sll of the provisions of this Subrogation Agreement and
the effect of the lien on my entitlement to the proceeds of any
payment. from a third party.

 

Bosque admitted that AFL then paid $60,948.83 in
medical expenses on his behalf. Bosque also admitted that on

June 6, 2002, he obtained a $106,000.00 judgment, after a jury
*** FOR PUBLICATION ***

 

trial, against a third party for his injuries in the accident.
Following entry of judgment, Bosque entered into a confidential,
“general damages only” settlement with the third party. While
the amount of the settlement is not revealed in the record before
us, Bosque adnitted that the amount exceeded the amount paid by
AFL on his behalf in medical expenses. Bosque denied actually
receiving any settlement proceeds himself, however, claiming that
the proceeds were applied to attorney's fees and costs incurred
in pursuing the third-party tort case. Ultimately, Bosque
refused to reimburse AFL for any of the money paid on his behalf
by APL.
B. Procedural History

on February 5, 2003, AFL filed a three-count complaint
in the first circuit court against Bosque alleging breach of
contract, unjust enrichment, and unlawful rescission, and seeking
$60,948.83 in damages plus attorney's fees and costs.
Specifically, AFL alleged that “Sosque’s repeated and unequivocal
refusal to comply with the terms of the Subrogation Agreement and
reimburse [AFL] the full amount of $60,948.83 is a breach of the
Subrogation Agreement.” On April 22, 2003, Bosque filed a motion
to dismiss, arguing that ERISA preempted AFL's state-law claims
for reimbursement.

On June 19, 2003, AFL filed a motion for summary
judgment, arguing that there were no genuine issues of material

‘
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fact because Bosque admitted to both signing the Agreement and
obtaining a third-party recovery. In addition to arguing ERISA
preemption, Bosque opposed the summary judgment motion on the

grounds that: (1) AFL w

 

collaterally and judicially estopped
to deny preemption on the basis of adverse circuit court rulings
and inconsistent positions taken in other cases; and (2) even if
AFL's claim were not preempted, Hawai'i Revised Statutes (HRS)
$ 663-10 (Supp. 2002) Limits lienholder and subrogee recovery of
tort proceeds to a share of special damages, allows a deduction
for reasonable fees and costs, and requires that the lienholder
timely intervene in the tort action.

on duly 9, 2003, both Sosque’s motion to dismiss and
AEL's motion for summary judgment came on for hearing. on
August 6, 2003, the circuit court entered 2 written order
granting Bosque’s motion to dismiss, which stated in relevant
part as follows:

Agguning the allegations of (AFL's) complaint to be true, au
webu, €3 aw. 216, 224, 626 P.2d 173, 177° (1981), the Coure finds
Ghat’ [AFL] is an employee benefit plan organized under federal
Laws as an employee welfare benefit plan within the meaning of
ERISA, 29 U.S-C, $§ 1002(1); Defendant Bosque is a beneficiary of
the plan «ho wae provided medical benefits under the [AFL] plan to
pay for injuries suffered in an automobile accident on or about
Detober 25, 1996; [AFL] in this action seeks reimbursement of
those benefits paid to [Bosque].

‘The United states Supreme Court has held that actions by
ERISA plan trustees seeking Feimburaenent from plan beneficlar
for benefits received are barred by the ERISA statute. Great-West
fe Annuity Ine. Co. vs Kuudaon, $34 0.8. 204 (2002);
Hestartiusal Inc. ¥ Arce, 298 F.3d 1164 (9th Cir. 2002). (AFL)
[n this action haw hve failed to state a claim upon which reliet
Gan be granted, Blair v. ing, 98 Haw[at't) 247(,] 21 Pad 452
(2001); [Bawas't Rules of Civil Procedure (HRCP} Rule) 121b) (6)

 

 

5
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on September 15, 2003, the circuit court entered an order
declaring AFL's motion for summary judgment moot inasmuch as
Bosque’s motion to dismiss had already been granted,

on February 4, 2004, AFL filed a motion for
reconsideration of the circuit court’s August 6, 2003 and
September 15, 2003 orders based on: (1) subsequently entered
state circuit court rulings in other cases on the sane ERTSA~
preemption issue; and (2) a new Ninth Circuit Court of Appeals
opinion directly addressing the issue, Providence Health Plan vw.
McDowell (hereinafter, Providence], 361 F.3d 1243, reh’a en banc
denied, 385 F.3d 1168 (9th Cir. 2004), cart, denied, 125 s.ct.
1726 and 1735 (2005). After a March 31, 2004 hearing, the motion
was denied pursuant to a written order entered on May 6, 2004.

on June 1, 2004, the circuit court entered final
judgment in favor of Bosque dismissing the complaint. | on
June 18, 2004, AFL filed a timely notice of appeal in this court.

TT, STANDARD OF REVIEW

A trial court’s ruling on a motion to dismiss is
reviewed de novo. Bremner v. City ¢ County of Honolulu, 96
Hawai'i 134, 138, 28 P.3d 350, 354 (App. 2001). The court must
accept plaintiffs allegations as true and view them in the light
most favorable to the plaintiff; dismissal is proper only if it

appears beyond doubt that the plaintiff “can prove no set of
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facts in support of his or her claim that would entitle him or

her to relief.” Dunlea v. Dappen, 83 Hawai'i 28, 32, 924 P.2d
196, 200 (1996), overruled on other grounds by Hac v. Univ. of

Hawai'i, 102 Hawai'i 92, 105-06, 73 P.34 46, 59-60 (2003)
(citations omitted).
II, DISCUSSION

The principal issue in the instant suit -- ive. the
ability of an ERISA plan to enforce reimbursement agreements such
as the Agreenent here -- has been the focus of frequent
Litigation in federal and state courts in recent years. the
disputed point here is whether and to what extent federal law
expressly or impliedly preempts actions brought by the plan under
state law to force plan beneficiaries to reimburse them for
medical expenses paid by the plen where those expenses were
caused by a third party and the beneficiary has obtained a
recovery from that third party. For the reasons set forth below,
we hold that AFL's state law claim in the instant case is not
expressly or impliedly preempted by ERISA. Accordingly, the
circuit court erred in dismissing AFL's complaint.
A. ERISA Jurisdiction and Preemption

‘The dispute in this case stems from confusion regarding

the scope and interplay of two different sections of ERISA: (1)
 

FOR PUBLICATION ***

 

the jurisdictional provisions of section 502(a) (3),? codified at

29 U.S.C. § 1132(a) (3) (2002); and (2) the preemption clause of

 

section $14(a), codified as 29 U.S.C. § 1144 (a) (2002). In full,
section $02(a) (3) provides that a civil action may be brought:

by 4 participant, beneficiary, or fiduciary (A) to enjoin any act
of practice unich violates any provision of this title or the
Rerma of the plan, oF (b} to cbtein other appropriate

Helles (1) to edtess such violations or [ii] to entores any
provisions of this title or the terme of the plan(-]

 

    

(Emphasis added.) Section 502(e) (1) of BRISA, codified at 29
0.8.C. § 1132(e) (1) (2002), in turn provides that federal courts
“shall have exclusive jurisdiction of civil actions” brought
under section 502 (a) (3).

The question thus inmediately arises as to whether an
ERISA plan's reimbursement or subrogation interest in a third

party tort recovery should be considered equitable or Lega

 

it
the former, then a reimbursement action should be brought in
federal courts under section 502(a) (3). The United state:
Supreme Court addressed this issue in Great-West, one of the
cases cited by the circuit court here. In that case, an ERISA
plan brought an action under section 502(a) (3) for declaratory
and injunctive relief in federal court seeking to enforce a plan
provision requiring a beneficiary to reimburse the plan, out of

any subsequent recovery by the beneficiary from a third-party

 

! the parties do not dispute that AFL's trust
plan and that section $02{a) (3) would be the only
Bring this aute in federal court,

  

are fiduclaries of the
fans, if any, for AFL to

 

 
**©* FOR PUBLICATION *** .

tortfeasor, for payment of the beneficiary's medical expense:
resulting from injuries caused by the third party. 534 U.S. at
208. The Ninth Circuit held that the relief sought was not
equitable and thus the suit was not authorized under section
502(a) (3). Id, at 209. The United states Supreme Court
affirmed, holding that “[blecause (the plan is) seeking legal
relief -~ the imposition of personal Liability on (the plan

beneficiary] for a contractual obligation to pay money

 

§ S02(a) (3) does not authorize this action.” Id. at 221.
Significantly, however, the Great-West Court expressly reserved
Sts opinion on whether a plan could seek reimbursement outside of
ERISA, stating:

lhe note, though it is not necessary to our decision, that there
May have been other means for petitioners to obtain the
azentisily legal relief that they s

 

 

  

Risach of contract would have been ore-eapted by ERISA.
Id, at 220 (emphasis added). Here, because AFL has brought a
state law breach of contract claim against a plan beneficiary, we

are faced with the question left open by Great-West.”

 

> since Geeat-Hest, ERISA plans have struggled to distinguish the
court's ruling based on dictum suggesting that the legal-equitable distinction
night turn on whether the beneficiary hes possession of the third-party
Fecovery in an identifiable fund. See Great-West, 53¢ 0.5. at 214 ("The basis
for [the plan's] claim is not that (the Deneficzaries) hold particular funds
that, in good conscience, belong to (the plan], but that (the plan is]
contractually entitled to gone funda for benefits that they cohferred.”). The
Ninth ciresit (later joined by the Sixth Circuit), ina case cited by the
Cireuse court here, has taken the view that the claim is legal regardless of
who possesses the Boney. Wastatf USA Inc. v. Ares, 298 F.3d Lies, 1167 (9eh
(continved. «1

  

 
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To answer the question framed by the Great West Court,
this court must decide whether ERISA preempts a state law clain
such as the one brought here by AFL. We recently set forth the
framework of ERISA preemption analysis in Hawaii Mamt, Alliance
Assoc. vy. Ing, Comm, (hereinafter, HMAA], 106 Havai‘i 21, 100
P.3d 952 (2004). In HMAR, we observed that a state law “will be
deemed [impliedly] preempted if it conflicts with § 1132(a)
(Yeonflict’ preemption) or if Congress intended ERISA to occupy
the entire field . . . (*field’ preemption).” Id. at 30, 100
P.3d at 961 (citation omitted). In addition, ERISA’s express

preemption clause, section 1144(a), provides that ERISA “shall

cont inved)
cir. 2007)7 Cagpenters Health ¢ Welfare Trust for Southern California vw.
Nondeshars, Sea Fe3d 667, c12-73 (sth cir: 200¢)+ gee

367 F134 638; 649-50 (6th Cir. 2008) (same). On the other hand,
The Fourth, Fifth, Seventh, and Tenth Circuits hold that when an ERISA plan
Seeks to recover specifically identifiable tort-recovery proceeds that belong
in good conscience to the plan and are within the possession and control of
the plan participant or beneficiary, the action is equitable, Wid Atlantic

407 F.34 212, 21719 (ath Csr. 2008);

 

WalMart a 393 38
Gils; ize (loth cir. 2000); Bombay r7

Plan's, Ferrer, Bolter 4 Mabsbrouan, 354 Food 348, s56-38 (5th cir. 2003)7
ania. Coane a ee, ine. Assoss, Healcn

Marco, 338 fod 600, 6¢7-88 (7th Cir, 2003). On Novenber 78, 2005, the United
States Suprene Court granted certiorari in dereboft to resolve th

split Ste 0.8.
3s (doo8i< Regardless cf how the leget-equitable question i ultimately
answered, however, the salient point it that neither Great-dest nor Hest
Sdaress the preemption question before this court. As Bosque concedes, AFL
Goes not specifically identity any tort-recovery proceeds in Bosque’ s
Possession belonging in good conscience to it. ‘Therefore, this court need not
"ake sides in the dispute snong the federal circuits over the characterization
Of certain reinbursenent actions as legal or equitable because AFL's claim
Cannot be construed as equitable even under the standard of the Fourth, Fifth,
Seventh, and tenth Circuits. Accordingly, for present purposes we need only
note that reliance on Great-Hest and Westatt would be misplaced with respect
fo the proposition that AFL'E claim for reimbursement under state commen’ law
is preenpted.

 

   

 

 

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supersede any and all State laws insofar as they may now or
hereafter relate to any employee benefit plan” covered by ERISA.
Id, at 27, 100 P.3d at 958 (emphasis deleted). In other words, a
state-law claim may be expressly preempted by section 1144(a) or
impliedly preenpted under section 1132 (a). For the reasons set

forth below, we hold that neither situation obtains here.

   

ERISA Does Not Impliedly Preempt AFL’s State Law Clain
for Reimbursement Pursuant to a Subrogation Agreement.

Neither the doctrine of implied field preemption nor
the doctrine of implied conflict preemption preclude an ERISA
plan from bringing a state connon-law action for reimbursement.
First, with respect to field preemption, this court has
previously held that it does not apply in the ERISA context
because the existence of an express preemption clause in ERISA
and the fact that health care is a subject of traditional state
regulation demonstrate no clear and manifest intent to supersede
state law. MAA, 106 Hawai‘ at 30-31, 100 P.3d at 961-62.

As to conflict preemption, we have held that “any
state-law cause of action that duplicates, supplements, or
supplants the ERISA civil enforcement remedy conflicts with the
clear congressional intent to make the ERISA remedy exclusive and

is therefore pre-empted.” Id. at 31, 100 P.3d at 962 (quoting

 

Astna Health, Inc. v. Davila, 542 U.S. 200, 209 (2004)).

However, the United States Supreme Court has expressly held that

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section 502 (a) (3) of ERISA provides no legal remedy for
reimbursement of expenses paid on behalf of plan beneficiaries
for injuries caused by third parties. Great-West, 534 U.S. at
221, It is thus patent that a state law claim for relief for
breach of contract such as the one brought here by AFL does not
duplicate or supplant any federal cause of action under ERISA.

That being said, there is still a question regarding
the word “supplement” as used in Aetna. The Aetna Court
emphasized:

[2}t (would pot) be consistent with our precedent to conclude that
Shy steietiy duplicative state causes of action are pre-empted. =

Gonorese’ intent co make the ERISA civil enforcenent
hecheniam sxelusive Would be undermined if state causes of action
That supplement the ERISA § S0Z(a) remedies were permitted, even
[f'tne elements of the state cause of action dig hot precisely
duplicate the elenents of an ERISA claim

Aetna, 542 U.S. at 216. Fortunately, however, the Aetna Court
identified the key to distinguishing between supplementary and
independent causes of action, holding that the distinction turns
on whether liability would exist only because of the ERISA plan;
that is, whether the beneficiary's potential liability “derives
entirely from the particular rights and obligations established
by the benefit plan{].” Id. at 213. See also Ingersoll-Rand Co.
Ms McClendon, 498 U.S. 133, 140 (1990) (holding that a state-law
wrongful discharge claim was preempted because it was premised on
the existence of the ERISA plan). Here, however, Bosque’s

Liability is not entirely derived from the terms of the AFL plans

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rather, liability is dependent on the Agreement, which is
independent of the rights and obligations established by the
plan.‘ Therefore, a state law breach of contract action, in
which liability rests at least in part on the Agreement, does not
“supplement” a federal claim for relief as that term is used in
Aetna, and there 1s no conflict preemption.

2. ERISA Does Not Expressly Preempt State-Law Claims for
Reimbursement Pursuant to a Subrogation Agreement.

In addition to creating federal claims for relief under
ERISA, Congress also provided for the express preemption of all
state-law actions “related to” ERISA. 29 U.S.C. § 1144(a). We

previously considered the scope of ERISA’s expre:

 

Preemption
clause in Garcia v, Kaiser Foundation Hospitals, 90 Hawai'i 425,
978 P.2d 863 (1999). In Garcia, we recognized the United States
Supreme Court’s view that a state law “relates to” an ERISA plan
“if St has a connection with or reference to euch a plan.” Id.
at 432, 978 P.2d at 870 (citation omitted). This court, again

citing United States Supreme Court precedent, also remarked on

the “conspicuous breadth” of ERISA preemption implied by the

‘ sosque argues that the terms of the plan are necessarily implicated
because the Agreement containg no terms that vary from those in the plan?
Bosque war given ne benefits in addition to these owed hin under the plans and
therefore he received no consideration for elgning the Agreement (Lage, AFL
had a pre-existing duty to pay his expenses). However, even assuming this
characterization is accurate, Gosque’s argument fails because, as set forth
Below in Section III.A.2, the mere fact that the existence of an ERISA plan
anda violation of one of its ters may be implicated in a state law claim is
Rot sufficient to invoke ERISA preeaption,

 

 

 

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phrase “relate to,” and noted that ERISA could preempt state law
claims even where the law is not specifically designed to affect
ERISA plans or the effect is indirect. Id, at 431-32, 978 P.24
at 869-70.

However, despite the acknowledged breadth of ERISA’s
express preemption clause, the United States Supreme Court has
also stated that there are limits to its scope, such that
“infinite relations cannot be the measure of pre-emption” in
construing “relate to” because “[i]f ‘relate to’ were taken to
extend to the furthest stretch of its indeterminacy, then for all
practical purposes pre-emption would never run its course, for
really, universally, relations stop nowhere.” New York State
conf. of Blue Cros: ve Travs Ins. co.
Ihereinafter, Tkavelers], 514 U.S. 645, 655-86 (1995) (internal
quotation marks, brackets, and citation omitted). See also Dist.
of Columbia v, Greater Wash, Bd. of Trade, 506 U.S. 125, 130 n.1
(1992) (stating that there is no preemption “if the state law has
only a tenuous, remote, or peripheral connection with covered
plans, as is the case with many laws of general applicability”)
(internal quotation marks and citation omitted). Recognizing
that “relate to” cannot be infinite in scope, this court in
Garcia adopted the approach of the United States Court of Appeals
for the Bighth Circuit, holding that state law claims are
expressly preempted where they rely on a person’s “status as a

u
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beneficiary under the [ERISA] plan and arlilse from the
administration of benefits under the plan.” Garcia, 90 Hawai'i
at 433, 978 P.2d at 872 (citing Kubl v. Lincoln National Health
Plan of Kansas City, Inc, 999 F.2d 298, 303-04 (8th Cir. 1993))
(emphasis added). See also Egelhotf v, Egelhoff, 532 U.S. 141,
147-48 (2001) (holding that a state statute providing that a

beneficiary designation is automatically revoked on divorce was
preempted because it bound “plan administrators to a particular
choice of rules for determining beneficiary status” and thus

“govern(ed) the payment of benefits, a central matter of plan

administration"); Calif. Div, of Labor stndrds. Ent. ve
Dillingham Constr, NA. Inc., 519 U.S. 316, 334 (1997) (holding

that a state wage law was not preempted because it did not
“dictate the choices{] facing ERISA plans”): Tzavelers, 514 U.S.
at 658 (observing that 2 state lew is preempted when it
“mandate[s] employee benefit structures or their
administration”); Shaw v. Delta Airlines, Inc., 463 U.S. 85, 108
(1983) (concluding that state law was preempted where it required
the provision of benefits in a manner not required by federal
law); estos) 1 451 U.S. $04, 524-25
(1981) (holding that a state statute was preenpted because it
prohibited a method for calculating plan benefits that was

allowed under federal law).

as
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Applying the rule in Kuhl to determine whether the

state common law clains asserted in Garcia for breach of

 

contract, fraud, infliction of emotional distress, and unfair and
deceptive trade practices, inter alia, were preempted, we noted
that each claim was based on the “underlying contention that (the
plan] failed to provide [the beneficiary) with reasonable and
necessary medical services to which he believed he was entitled
under his health plan.” Garcia, 90 Hawai'i at 433, 978 P.2d at
871. Consequently, we held as follows:

Essentially, a2 in Kuhl, (the plan beneficiaries] assere{] that
(the ERISA plan] inproperly withheld benefits under the health
plan agreenent. In order to have prevailed at trial, (the
Beneficiaries) would have had to show that (the ERISA plan)
the (recormended surgical procedure} .
the acjudiestion of (the

 

   

arity
(2). (the) sasiniseration of the health

were provided by the health
Plany and (3) the sedical services that were proviaed by (ehe plan
bperator) a8 an HM. Therefore, (the beneficiaries’ state common
Yiu elaine] undoubtedly “related tov an employes health plan
agreenent.  Aecordingly, we hold that the [beneficiaries’ claims)
Were preempted by ERISA.

   

 

 

Id, Here, however, there is no claim that AFL improperly
withheld benefits, no need to inquire into the medical services
provided, and no need to inquire into the administration of the
plan or its benefit structures. Because the sole issue is

whether AFL is entitled to money damages based on the breach of a

 

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contractual agreement, we find that the instant case is

 

distinguishable from Garcia.
This view is consistent with the Ninth Circuit's
conclusion in Providence that an ERISA plan’s state law claims
for reimbursement of medical expenses paid on behalf of a plan
beneficiary out of a third-party tort recovery is not preempted
by ERISA. In that case, an ERISA plan brought a state law breach
of contract action against plan beneficiaries seeking
reimbursement, out of proceeds from a third-party tort recovery,

of benefits paid to cover the beneficiaries’ injuries caused by

 

* In addition to Garcia, AFL siso refers us to our decision sn Hawaid
rere! Te (hereinafter, ALTE], @1 Havas
487, 916 P.2a 1143 (1984). Ih Hue, an ERISA plan brought = state law action
to foreclose Liens on properties in order to collect unpaid default judgments

for delinquent ERISA contributions. Jd, at 490-91, $16 F.2d at 1146-47
Aitnoogh this court held that the state iien lew at issue eid not “relace to”
ERISA and thus was not preempted, ELIE does not guide the present inguiry
because there, the ERISA plan was suing asa Judgment creditor, not as 2
subrogee. The appropriate analogy would be if AFL had Brought suit against
Bosque for breach of the Agreenent, received a default judgment or entered
into a settlement of that sult, and then, after Bosque falled to pay the
settlenent or Judgnent, brought second suit on the judgment or settlonent.
‘This was in face what Happened in
Galit. v MeCrachen, 83 Cal. App. deh 1365, 100 Cal- Rper. 2d 473" (2000)
(Gilowing = suit wnere an ERISA plan sued a beneficiary for breach of
agreenent pursuant to which the parties had agreed to settle a prior suit by
the plan for breach of a reinbursenent agreement), 3 case also cited as
Support by AFL. The McCracken Court expressly noted that, under such
cizcunstances, it need not addrass the thorny preemption iesue, stating:
Fortunately, we need not resolve (the preemption issue] in the
instant case.” Here, we are concerned not mith (the plan's)
original reimbursement claim against the (beneficiaries], which
vas the subject of an earlier federal court lawsuit between the
jent_ action for breach of an
Roreanent settling the earlier lawsuit. Regardless of whether the
original action related to an employee benefit plan for the
Purpose of ERISA preemption, the subsequent action for breach of
the porties’ settlenent agreement almost certainly does not

Ad, at 1372, 200 Cal, Aptr. 2d at 476. Accordingly, HLTE, like MoCracken, is
Sndpposite here.

      

     

 

 

     

  

 

 

 

 

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the third party. 385 F.3d at 1171. After the beneficiaries
removed the case to federal court, the trisl judge dismissed on
the basis of ERISA preemption. Id, On appeal, the Ninth Circuit
reversed, noting that the Great-West Court had explicitly left
the issue open, ida at 1273, and holding:

‘The disteict court erred in (diani
[the ERISA plan's] action for brea:
Fequisite “connection with” or “reference to” an ERISA plan. (7
Bien} is simply attempting, through contract law, to enforce the
Felmbursenant provision [of the plan]. Adjudication of its claim
Goes not require interpreting the plan or dictate any sort of
SSteibueion of benefice. [The plan] has already pald ERISA
benefits on behalf of the beneficiaries, and they are not
Gleputing the correctness of the benefits paid. Rather, (the
plan) claims that the [beneficiaries] nave breached two promises
(a) the reimbursenent provision incorporated into their ERISA
plan, as it applies te monies paio to them Sy 2 nonvERISA third
party, and (by thelr agreement to direct their lawyer to reimburse
{the pian! in the event of a settlement. Because this is nerely ©
Claim for reimbursement based upon the third-party settlenent, it
Goes not “relate to” the plan.

Id. at 1172 (citation omitted). Cf. Hamrick’s, Inc. vs Rov, 115

S.W.3d 468, 474-76 (Tenn. Ct. App. 2003) (holding that a state

ing the complaint) because
of contract does not have the

 

  

 
   

 

 

 

 

law action for breach of @ reimbursement agreement by an ERISA
plan against a beneficiary was not jurisdictionally barred under
29 U.S.C. § 1132(e))+ Behavioral Sci, Inst. v. Great-Hest Life,
930 P.24 933, $39 (Nash. Ct. App. 1997) (concluding that a state
law action by an ERISA plan against a reinsurer for breach of
reinsurance contract was not preempted by ERISA, even though the
dispute referenced the ERISA plan, because the case did not
involve 2 beneficiary coverage dispute or a complex plan
interpretation substantively affecting ERISA law). The reasoning

in Providence is consistent with Garcia and equally applicable
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here: first, AFL does not dispute the correctness of the

benefits alr

 

dy paid, nor would this court's decision affect the
distribution of benefits or administration of the plan, Second,
also as in Providence, AFL claims that the beneficiary has
breached hie contractual promise to reimburse the plan out of the
proceeds of any third-party recovery.

At first glance, the Garcia-Providence tandem would

appear to be dispositive. However, as the Ninth Circuit panel in

 

Providence noted, a finding of no preemption is directly in
conflict with the decisions of some state courts. The Providence
Court rejected the opposing view on the basis that those courts’
construction of “relate to” is not supported by Great-West.

Providence, 385 F.3d at 1173 (citing with disapproval Liberty

NuW. Ins. Corp. v. Kemp, 85 P.3¢ 871 (Or. Ct. App. 2004), and
Jefferson-Pilot Life Ins. Co. v. Krafka, 50 Cal. App. 4th 190, 57

Cal. Rptr. 24 723 (1996)}. Bosque relies heavily on the Oregon
Court of Appeals’ decision in Kemp. In that case, on essentially

the same facts as presented here, the court held:

 

[t)n this case ERISA has preemptive force. [The ERISA plan's
state Lan) complaint derives from and is based on an employee
Benefit plan. Tt elleges that “(the beneficiary] was covered
‘under {an ERISA plan},” that “(t]he [plan] provides... that
When (the plan] has paid besefits on behalf of (the beneficiary),
{the plan] sil be subrogated to all righte of recovery that (the
beneficiary] has against the person who 1s at fault,

“pursuant to the terms of the [plan], . . . (the bereficiary]
completed and signed a Reinbursenent Agroenent,” and that "(the
beneficiary's] failure and refusal to reimburse plaintiff out of
the proceeds of his recovery for the accident isin violation of
the femme of the policy.” Zo prevail, (the plan! had to prove th

 

  

 

 

3
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Kemp, 85 P.3d at 877 (emphasis added; first ellipsis added,
second ellipsis in original). See also MEBA Med. & Benefits Plan
vs Lago, 867 $0.24 1184, 1188-80 (Fla. Dist. ct. App. 2004)
(holding that ERISA preempted 2 plan’s state law reimbursement
claim because the claim would require the existence of a plan and
violation of one the plan's terms). Kemp is unpersuasive because
it is overbroad: in requiring only the existence of a plan, Kemp
takes “relates to” to the “furthest stretch of its
indeterminacy,” a construction rejected by the United states
Suprene Court in Txavelers and by this court in Garcia. In order
for the state law claim to be “related to,” and thus preenpted
by, ERISA, Garcia, like Providence and unlike Kemp, requires not
just the existence of an ERISA plan, but questions involving the
plan's adninistration and the benefits provided. As set forth
above, such involvement is not implicated here, and thus there is
no express preemption. Accordingly, the circuit court erred in
dismissing AFL's complaint.

5. AFL's Motion for Summary Judament Ia Not Ripe for Appellate
Review.

AFL argues that the circuit court's order “nooting” its
motion for sunmary judgment effectively amounted to a denial of
the motion, which this court may review and reverse because there
are no genuine issues of material fact in dispute, Bosque
counters that this court lacks appellate jurisdiction because

20
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there is no order granting or denying the motion that can be
reviewed. We agree with Bosque and hold that where the trial
court neither grants nor denies a motion for summary judgment,
the issues presented therein are unripe for appellate review.
‘This court has long held to the general rule that
questions “not . . . ruled upon by the trial judge will not be
considered and passed upon for the first time on appeal.” State
vs Cummings, 49 Haw. $22, 527, 423 P.2d 438, 442 (1967)
(citations omitted). Here, the trial court did not rule upon
AFL's motion for summary judgment; therefore, this court may not
pass upon AFL's assignments of error because to do so in the
first instance would be premature. See Atlanta Journal-
Constitution v. Jewell, $55 S.B.2d 175, 187 (Ga. Ct. App. 2001)
(“Enunerations of error relating to a motion for summary judgment
which have not yet been ruled upon are not ripe for appellate

review because there has been no ruling below, and this Court may

not address these issues in the first instance." (Footnote
omitted.)); see also Czaplicki v. Gooding Joint School Dist. No.

231, 778 P.2d 640, 646-47 (Idaho 1989) (holding that where the
trial court did not rule on a motion because a prior order had
rendered the motion moot, the unruled-upon motion was unripe for

appellate review). Accordingly, we decline to review both AFL's

a
 

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motion for summary judgment and Bosque’s estoppel and collateral
source objections raised with respect thereto.
IV. CONCLUSION
Based on the foregoing, we vacate the circuit court's
June 1, 2004 final judgment and remand for further proceedings

consistent with this opinion.*

on the briefs: Uf
Ashley K. Theda and .
Lori K. Aquino (of BE
tieinberg, ‘Roger t Rosenfeld)

for plaintiffs-appellants
AFL Hotel & Restaurant Workers Passe Caney

Health & Welfare Trust Fund,

by its Trustees, Cherlyn Logan,
Malcolm Sur, Nona Tamanaha,
Eric Gill, Gilbert Farias, and

Hernando Tan €, Dally:

Janice P. Kim
for defendant-appellee
Elmer Bosque

* tn Light of the foregoing disposition, AFL's and Sosque's requests for
fees and costs are also pronature, and thus not addressed herein

2