IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

WILLIAM SPARKS : CIVIL ACTION

:

v. :

:

DUCKREY ENTERPRISES, INC., :

et al. : NO. 05-2178

MEMORANDUM

McLaughlin, J. August 6, 2012

The plaintiff sued Duckrey Enterprises, Inc.

(“Duckrey”), Health Administrators, Inc. (“HAI”) and Safeco Life

Insurance Co. (“Safeco”) under the Employee Retirement and Income

Security Act of 1974 (“ERISA”) to recover medical benefits that

were allegedly due under the plaintiff’s employee benefits plan. 

Those medical benefits were incurred at Crozier-Chester Medical

Center (“CCMC”) after the plaintiff was repeatedly stabbed during

a home invasion in 2002. CCMC moved to intervene in the instant

case but that motion was denied; CCMC settled the costs of the

hospital bills in state court. In this case, HAI and Safeco

moved to dismiss and for summary judgment on the claims against

them and the Court granted those motions in a Memorandum and

Order of January 30, 2007. 

On February 1, 2007, default was entered against

Duckrey for failure to appear, plead or otherwise defend. The

plaintiff requested entry of default judgment against Duckrey on

Febrary 1, 2007. The Court held two hearings on damages on March

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13, 2007 and August 2, 2011, during which the plaintiff testified

as to the nature and extent of his injuries. The Court will

enter judgment in favor of Sparks and against Duckrey but not as

to all of the damages the plaintiff seeks.

A defaulting defendant admits the factual allegations

against it except those with respect to damages. See, e.g.,

Fehlhaber v. Indian Trails, Inc., 425 F.2d 715, 717 (3d Cir.

1970). The plaintiff’s allegations establish that Duckrey was a

plan administrator and exerted discretionary control over the

funds in the plaintiff’s benefits plan, rendering it a fiduciary

within the meaning of ERISA; the allegations further establish

that Duckrey’s actions render it liable for breaches of that

duty. An individual plaintiff may recover directly for breaches

of ERISA fiduciary duty under ERISA § 502(a)(3), under which the

Court may award “appropriate equitable relief.” Bixler v. Cent.

Pa. Teamsters Health & Welfare Fund, 12 F.3d 1292, 1298-99 (3d

Cir. 1993). Restitution is a permissible form of relief under

that section. In re Unisys Corp. Retiree Ben. ERISA Litig., 57

F.3d 1255, 1269 (3d Cir. 1995). 

Attorney’s fees may also be awarded in the Court’s

discretion based upon five factors, including the defendant’s

culpability, its ability to satisfy a fee award, the deterrent

effect of such an award, the benefit conferred on members of the

plan as a whole, and the relative merits of the parties’

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position. McPherson v. Employees’ Pension Plan of Am. ReInsurance Co., Inc., 33 F.3d 253, 253 (3d Cir. 1994) (citing

Ursic v. Bethlehem Mines, 719 F.2d 670, 673 (3d Cir. 1983)). 

Here, the allegations of the complaint and the testimony of Mr.

Sparks establish that Duckrey’s failure to provide Sparks with

plan information and properly process his claims resulted in the

looming threat of collections by Crozer-Chester Medical Center of

nearly $500,000; rendered him unable to seek follow-up medical

care including surgical repair of a hernia he sustained and

physical therapy following the attack on him. Am. Compl. ¶ 33,

35. Duckrey is thus substantially culpable. The plaintiff

testified that Duckrey also operates several Burger King

franchises and thus likely is able to satisfy an award of fees. 

Tr. Hr’g 8/2/11 at 7. Awarding fees would deter plan

administrators from failing to provide the material necessary to

submit claims. There would be no benefit conferred on the plan

members as a whole here, except to deter malfeasance. Finally,

the plaintiff’s claim is strong and Duckrey has presented no

defense to the allegations against it. The Ursic factors thus

favor an award of fees.

Counsel for the plaintiff submitted detailed billing

records as to her fees and costs on February 28, 2012. The

summary of those billing records seeks fees of $93,983.55. The

Court’s review of the records as a whole reveals, however, that

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only a portion of those fees was associated with pursuing

judgment against Duckrey, and a majority of those costs was

connected to litigating against HAI and Safeco. Where the

purpose of a charge listed on the attorney fee worksheets is

arguably associated with the pursuit of the plaintiff’s case

against Duckrey, the Court assumes that it was in fact incurred

in that pursuit. For example, all discovery costs associated

with CCMC were considered to be associated with the plaintiff’s

pursuit of his claim for damages. Accordingly, the Court awards

$39,118.55 in attorneys’ fees and costs.

The plaintiff also requests that the Court award

restitutionary relief as to the costs of hernia surgery and

physical therapy to which he would have been entitled under the

plan but that he did not receive because the hospital refused

treatment given unpaid bills. At the hearings in 2007 and 2011

Sparks’s counsel made assertions as to the costs of these

treatments. At one point Sparks testified that the costs of the

surgery would be between $10,000 and $15,000. Tr. Hr’g 3/13/07

at 19. At another time, he testified that it would cost between

$15,000 and $30,000. Tr. Hr’g 8/2/11 at 24. Alternatively,

counsel argued that an evaluation would be necessary to determine

the costs of those treatments, stating that it would cost between

$1000 and $5000. Silva also argued that physical therapy would

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cost between $5000 and $7000; she stated that she obtained an

estimate of those costs, but none was presented. Id. at 11.

The Court will not enter judgment as to these costs

because they are either speculative or not supported by the

record. No documentary or testimonial evidence of these costs

was presented at either damages hearing.

In addition, the plaintiff seeks restitutionary relief

for eight visits to his treating physician, Dr. Prime, and for

psychological counseling that he received. Again, Silva argued

that these costs were $500 and $2500, respectively, but no

records were submitted in connection with these costs, and Sparks

did not testify to these costs at either hearing. The Court will

not award restitution for those costs either.

The Court will, however, award $3200 in restitutionary

relief for plan premiums paid by the plaintiff that was

ostensibly for the purpose of insuring him under Duckrey’s

employee benefits plan. When Duckrey failed to pay in connection

with the CCMC treatment bills the plaintiff incurred, Sparks did

not receive the benefits for which he had paid. Equity requires

that the value of the premiums he paid be awarded to him in

restitution. An amount of $3200 is adequately supported by the

record. Tr. Hr’g 3/13/07 at 15; Tr. Hr’g 8/2/11 at 25.

The plaintiff also seeks statutory damages for

Duckrey’s failure to provide plan documents to the plaintiff. 

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The Court may, in its discretion, award up to $100 per day for

that failure, 29 U.S.C. § 1132(c)(1). The Court will not do so

because the CCMC medical bills have been settled and the failure

to provide plan documents appears only to have prejudiced the

plaintiff in connection with those bills.

An appropriate order will issue separately.

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