UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

BOARD OF TRUSTEES OF THE HEALTH )

AND WELFARE DEPARTMENT OF THE )

CONSTRUCTION AND GENERAL )

LABORERS’ DISTRICT COUNCIL OF )

CHICAGO AND VICINITY, )

)

Plaintiff, ) No. 12-CV-04360

)

v. )

) Judge Edmond E. Chang

DAVID FILICHIA and DANIEL E. )

GOODMAN L.L.C., )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiff Board of Trustees of the Health and Welfare Department of the

Construction and General Laborers’ District Council of Chicago and Vicinity (the Board

of Trustees) filed an action for a declaratory judgment and a preliminary injunction

under § 502(a)(3) of the Employee Retirement Income Security Act of 1974 (ERISA),

29 U.S.C. § 1132(a)(3). It seeks a judgment declaring that the Chicago Laborers and

Welfare Fund (the Fund) has the right to be reimbursed from funds held by Defendants

David Filichia and The Law Offices of Daniel E. Goodman, LLC1 (Goodman), as well

as imposing a constructive trust on those funds. The Board of Trustees alleges that

Filichia received a settlement payment from an automobile accident but failed to

reimburse the Fund for medical payments that it made on his behalf. Goodman

represented Filichia in the lawsuit related to his accident. Goodman moves to dismiss

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The defendant is incorrectly captioned as “Daniel E. Goodman, L.L.C.”
[R. 6] the complaint for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P.

12(b)(1). For the reasons below, Goodman’s motion is denied.

I.

In evaluating a motion to dismiss, the Court must accept as true the complaint’s

factual allegations and draw reasonable inferences in the plaintiff’s favor. Capitol

Leasing Co. v. Fed. Deposit Ins. Corp., 999 F.2d 188, 191 (7th Cir. 1993) (citation

omitted). David Filichia, a participant in the Fund, suffered injuries in an automobile

accident in 2010. R. 1, Compl. ¶¶ 4, 8. Because of Filichia’s injuries, the Fund has paid

$20,713.89 in medical benefits to him or on his behalf. Id. ¶ 9. About eight months after

the accident, Filichia resolved a claim he filed against a third party for his injuries and

recovered $20,000 in a settlement. Id. ¶ 15.

According to the Fund’s plan documents, the Fund has a first-priority lien on

any settlement proceeds and recoveries from litigation on a first-dollar basis. Id. ¶ 12.

Under this lien, any participant in the Fund that receives an injury settlement from

a responsible third party is obligated to reimburse the Fund in full for any benefits

paid by the Fund. See id. ¶¶ 10-13. Pursuant to this language, the Board of Trustees

advised Filichia of his obligations to reimburse the Fund from his settlement proceeds.

Id. ¶ 16. Goodman refused to reimburse the Fund and stated that he would file an

action to adjudicate the Fund’s lien in state court, which he did in 2012. Id. ¶¶ 17, 23.

Here in federal court, in Count One, the Board of Trustees seeks a declaratory

judgment that the Fund is entitled to be reimbursed for the benefits paid to Filichia

from his settlement proceeds. R. 1, Compl. ¶ 25. In Count Two, the Board of Trustees

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seeks a preliminary injunction enjoining Filichia and Goodman from dissipating

Filichia’s settlement proceeds pending final determination by this Court that the

Fund’s reimbursement provisions be enforced. Id. ¶ 33. In Count Three, the Board of

Trustees alleges that Filichia breached his fiduciary duty to the Fund when he used

Fund assets for his own benefit by failing to reimburse the Fund. Id. ¶ 38. In addition

to these remedies, the Complaint’s prayer for relief also asks that this Court impose

a constructive trust over Filichia’s settlement amount. Id. at 12.

II.

Federal Rule of Civil Procedure 12(b)(1) provides the procedural vehicle by which

the defendant may move a federal court to dismiss a claim or suit on the ground that

the court lacks jurisdiction. See Fed. R. Civ. P. 12(b)(1); Apex Digital, Inc. v. Sears,

Roebuck & Co., 572 F.3d 440, 444 (7th Cir. 2009). Federal courts have jurisdiction over

“all civil actions arising under the Constitution, laws, or treaties of the United States.”

28 U.S.C. § 1331. A case arises under the laws of the United States within the meaning

of § 1331 only when the claim for relief depends in some way on federal law as stated

in a well-pleaded complaint, “unaided by anything alleged in anticipation or avoidance

of defenses which it is thought the defendant may interpose.” Taylor v. Anderson, 234

U.S. 74, 75-76 (1914). The plaintiff bears the burden of proving that the jurisdictional

requirements have been met. Kontos v. United States Dep't of Labor, 826 F.2d 573, 576

(7th Cir. 1987).

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III.

At the outset, Filichia and Goodman argue that under Speciale v. Seybold, 147

F.3d 612 (7th Cir. 1998), subrogation liens by ERISA-regulated benefit plans cannot

be adjudicated as an original federal action. See R. 6 at 2-3. This argument lacks merit.

Speciale and the related cases that Defendants cite are cases where the plaintiffs

attempted to remove state actions to adjudicate liens on state tort settlement funds to

federal court. See, e.g., Speciale, 147 F.3d at 614. Those cases held that removal under

ERISA preemption was improper because “neither the original tort action[s] nor the

petition[s] to adjudicate adverse claims to the settlement fund[s] sought a payment

from the [ERISA-regulated] plan[s], [so] Section 502 [was] irrelevant.” Id. at 616

(quoting Blackburn v. Sundstrand Corp., 115 F.3d 493, 495 (7th Cir.1997)) (internal

quotation marks omitted). That is plainly not this case.

Instead, the Board of Trustees brings an original federal action seeking

reimbursement to the Fund pursuant to ERISA § 502(a)(3). That provision authorizes

a civil action “by a . . . fiduciary (A) to enjoin any act or practice which violates . . . 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 . . . the terms of the plan.” 29 U.S.C.

§ 1132(a)(3). So, a federal court has subject matter jurisdiction over a § 502(a)(3) case

if the plaintiff pleads (1) that it is a fiduciary,2

 and (2) that it seeks equitable relief

2

The Board of Trustees has plausibly pled that it is a fiduciary of the Fund. See R. 1,

Compl. ¶ 3. 

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regarding an ERISA-regulated plan. See id.; Sereboff v. Mid Atlantic Med. Servs., Inc.,

547 U.S. 356, 361 (2006).

1.

The Board of Trustees has plausibly pled that it seeks equitable relief against

Filichia. Under Sereboff, a fiduciary of an ERISA-regulated plan that seeks

reimbursement for medical expenses paid to the defendant from tort settlement

proceeds must identify a particular fund distinct from the defendant’s general assets

and a particular share of that fund to which the plan is entitled. See 547 U.S. at 364.

Once identified, equity would allow the plan to “follow” a portion of the tort recovery

into the defendant’s hands and impose on that portion an equitable lien established by

the defendant’s agreement to the plan documents. See id. Similarly, Administrative

Committee of the Wal-Mart Stores, Inc. Associates’ Health and Welfare Plan v. Varco

requires that an ERISA administrator plead that the funds are identifiable, in the

control of a defendant, and that the administrator is rightfully entitled to the funds

under the terms of its plan. 338 F.3d 680, 688 (7th Cir. 2003). Here, the Board of

Trustees has identified the $20,000 settlement, alleged that Filichia has recovered the

settlement, and alleged that the Fund’s plan documents require a 100% reimbursement

of that amount. See R. 1, Compl. ¶¶ 13, 15. Accordingly, the Board of Trustees has

satisfied the requirements of § 502(a)(3) as to defendant Filichia.

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2.

Plaintiff has also plausibly pled that it seeks equitable relief against Goodman.

Although Goodman is not a party to the Fund’s plan, the text of § 502(a)(3) does not

limit the universe of possible defendants. See 29 U.S.C. § 1132(a)(3); Harris Trust &

Sav. Bank v. Salomon Smith Barney, Inc., 530 U.S. 238, 246 (2000). Instead,

§ 502(a)(3) focuses on redressing the act or practice that violates ERISA. Harris, 530

U.S. at 246. Although the Seventh Circuit has not yet specifically addressed whether

a plan beneficiary’s lawyer is a proper defendant in § 502(a)(3) actions, other circuits

have held that Harris instructs that they are. See Longaberger Co. v. Kolt, 586 F.3d

459, 469 (6th Cir. 2009); Admin. Comm. for the Wal-Mart Stores, Inc. Assocs.’ Health

& Welfare Plan v. Horton, 513 F.3d 1223, 1228-29 (11th Cir. 2008); Bombardier

Aerospace Emp. Welfare Benefits Plan v. Ferrer, Poirot & Wansbrough, 354 F.3d 348,

357-58 (5th Cir. 2003). Their reasoning is persuasive, as is the reasoning of Central

States, Southeast and Southwest Areas Health and Welfare Fund ex rel. McDougall v.

Lewis, 871 F. Supp. 2d 771, 778 (N.D. Ill. 2012). In particular, Lewis reasoned that an

attorney can be a proper defendant if the attorney exercises control over the particular

funds identified in the complaint, such as by choosing to pay attorney’s fees from those

funds instead of reimbursing the ERISA-regulated plan. See id.

Here, the Board of Trustees has pled that Goodman was Filichia’s attorney

during his personal injury suit, helped Filichia recover the $20,000 settlement, and

knew about Filichia’s reimbursement obligations to the Fund yet rejected the Fund’s

right to reimbursement. See R. 1, Compl. ¶¶ 5, 15-17. This plausibly pleads that

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Goodman exercised sufficient control over the settlement funds to be a proper

defendant, especially because the Court presumes that Goodman took its attorney’s

fees from that settlement.3 See Lewis, 871 F. Supp. 2d at 774 (presuming that

defendant’s attorney paid himself before disbursing a settlement fund to his client).

Accordingly, the Board of Trustees has satisfied the requirements of § 502(a)(3) as to

defendant Goodman.

IV. 

For the reasons discussed above, the Court denies Defendant’s motion to dismiss

[R. 6].

ENTERED:

___________________________

Honorable Edmond E. Chang

United States District Judge

Date: January 29, 2013

3

In any event, Defendants have not briefed this argument in their Motion to Dismiss

[R. 6] or in their Reply [R. 10].

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