Source: https://www.lifeanddisabilitylaw.com/erisa-watch-court-rules-that-medical-plan-improperly-asserted-subrogation-lien-to-deny-benefits/
Timestamp: 2019-04-18 10:51:21+00:00

Document:
This week’s notable decision is Sadowski v. Tuckpointers Local 52 Health & Welfare Trust, No. 16 C 11014, __F.Supp.3d__, 2017 WL 6549759 (N.D. Ill. Dec. 20, 2017), a case in which the plaintiff was represented by Michelle Roberts of Kantor & Kantor LLP and Adam Garner of The Garner Firm, Ltd. In its opinion, the Court held that a union health plan abused its discretion by refusing to pay medical claims that it contended were related to a settled motor vehicle accident (“MVA”) case more than two years earlier.
The Court rejected the Plan’s interpretation. First, it noted that the subrogation provision cited above was clear and unambiguous that the charges, to be denied, had to result from the “same injury.” The Court correctly found that Sadowski’s fall down the stairs at home in 2015 was a different injury than the exacerbation of her CRPS symptoms following her car accident in 2013. The Plan’s attempt to construe the Plan’s language to tie the two incidents together as one was unreasonable as a matter of law as it controverted the plain language of the Plan. The Court also found correctly that there was no rational factual basis in the record for determining that the infection in the area of the spinal cord stimulator’s battery pack was proximately caused by the 2013 MVA and the stimulator’s initial implantation other than an overly attenuated reliance on simple but for causation (i.e., but for the stimulator being implanted in the first place, the implantation site would not have developed an infection more than two years later). Thus, judgment was entered in favor of the plaintiff and the Plan was ordered to pay the medical claims in question.
*The above summary was contributed to ERISA Watch by Adam Garner of The Garner Firm, Ltd.
Flaaen v. Principal Life Insurance Company, No. C15-5899 BHS, 2017 WL 6527144 (W.D. Wash. Dec. 21, 2017) (Judge Benjamin H. Settle). In this long-term disability dispute where the court previously found in favor of Plaintiff, the court awarded attorneys’ fees in the total amount of $137,294. The court determined that the hourly rates of $500 and $450 for Plaintiff’s attorneys are reasonable. The court awarded fees for 2/3 of the time requested for a total of 200 hours.
Board of Trustees of the Pacific Coast Roofers Pension Plan, et al., v. Fryer Roofing Co., Inc., No. 16-CV-02798-LHK, 2017 WL 6539868 (N.D. Cal. Dec. 21, 2017) (Judge Lucy H. Koh). In this matter seeking default judgment on Defendant’s withdrawal liability, the court concluded that Plaintiffs have failed to justify the $30,784.00 in attorney’s fees that they seek. “Specifically, a very substantial portion of the billed time for which Plaintiffs seek attorney’s fees appears to have been performed solely in connection with dismissed defendant Rosie—including billed time related to mediation and settlement with Rosie. Although Plaintiffs allege that Rosie is Defendant’s successor, Plaintiffs do not provide any authority to support awarding the fees incurred solely in connection with Rosie against Defendant where Plaintiffs ultimately dismissed Rosie.” The court denied the fees without prejudice.
Nicolas v. The Trustees of Princeton University, No. CV 17-3695, 2017 WL 6514662 (D.N.J. Dec. 20, 2017) (Judge Anne E. Thompson). In this putative class action alleging breaches of fiduciary duties related to excessive administrative and recordkeeping fees, the court previously granted in part and denied in part Defendant’s motion for summary judgment. Defendant filed a motion for reconsideration and motion to stay in light of the docketed appeal to the Third Circuit in the matter of Sweda v. University of Pennsylvania, 2017 WL 4179752 (E.D. Pa. Sept. 21, 2017). The court concluded that a stay is appropriate, and in light of Sweda, it denied the motion for reconsideration.
Alexander Acosta v. Lopez, et al., No. 117CV330LMBIDD, 2017 WL 6541463 (E.D. Va. Dec. 21, 2017) (Judge Leonie M. Brinkema). The Secretary of Labor filed a partial objection to the R&R to the extent that it did not award the full relief sought in the motion for default. “Specifically, plaintiff objected to the Report’s recommendation that plaintiff not be awarded $5,808.03 in missing employee contributions to the 401(k) Plan; $3,799.52 in missing loan repayments to the 401(k) Plan; $1,295.50 in interest to the 401(k) Plan; $7,002.13 in interest to the Contractors Plan; and up to $7,550.00 to the Contractors Plan, $2,100.00 to the 401(k) Plan, and $3,900.00 to the Health Plan to cover the costs associated with appointing an independent fiduciary.” The court sustained Plaintiff’s objections and granted his motion for default judgment.
In re: UnitedHealth Grp. PBM Litig. THIS ORDER RELATES TO: Nos. 16-CV-3352, 16-CV-3496, 16-CV-3914, 16-CV-3996, 16-CV-4119, 16-CV-4129, 16-CV-4130, & 16-CV-4136, No. 16-CV-3352, 2017 WL 6512222 (D. Minn. Dec. 19, 2017) (Judge Joan N. Ericksen). In this lawsuit alleging ERISA and other violations related to deceptive trade practices for Defendants’ conduct in administrating pharmacy benefits that allegedly caused Plaintiffs to overpay for prescription drugs purchased at retail network pharmacies, the court granted Defendants’ motion to dismiss the Consolidated Class Action Complaint.
Stoddard v. First Unum Life Insurance Company, No. 16-2065, __F.App’x__, 2017 WL 6492641 (4th Cir. Dec. 19, 2017) (Before WILKINSON, KING, and FLOYD, Circuit Judges). The court affirmed the judgment entered by the district court in favor of First Unum on its determination to terminate Plaintiff’s long-term disability benefits after paying them for a decade.
Jackson v. Aetna Life Insurance Company, No. CV 16-15837, 2017 WL 6501599 (E.D. La. Dec. 19, 2017) (Judge Martin L.C. Feldman). The Texas Insurance Code permits Aetna to only offer Accelerated Debt Benefit coverage to terminally ill claimants. The plan language of the policy permits Aetna’s denial of Plaintiff’s application for Accelerated Debt Benefit coverage and reduction of long-term disability benefits due to Plaintiff’s receipt of SSDI benefits and his son’s receipt of family SSDI benefits.
Sand-Smith v. Liberty Life Assurance Company of Boston, No. CV 17-0004-BLG-SPW, 2017 WL 6501862 (D. Mont. Dec. 19, 2017) (Judge Susan P. Watters). In this case where the court previously determined that Liberty Life’s mental illness provision is void because it conflicted with Montana’s mental health parity law, the court denied Plaintiff’s motion for contempt. The court granted Liberty Life’s motion to stay the judgment with respect to the attorneys’ fees and costs portion upon Liberty Life posting bond in the amount of $28,633.47, plus interest. The court denied Liberty Life’s motion to stay the judgment with respect to the summary judgment portion.
Cluck v. Metrocare Svcs-Austin, L.P., et al., No. A-16-CV-1216-RP, 2017 WL 6459809 (W.D. Tex. Dec. 15, 2017) (Magistrate Judge Andrew W. Austin). Plaintiff alleges that MetroCare and its alleged conspirators concealed from her one or more insurance policies that might have provided MetroCare coverage for her claims related to a slip and fall at work. The court held that the claims for negligent misrepresentation, breach of contract, civil conspiracy, and fraudulent concealment “relate to” the ERISA plan and are therefore preempted.
Low-Iacovino v. The Benefit Plan Committee of The Nonbargained Program of the AT&T Pension Benefit Plan, No. CV 16-6614-AB (GJSX), 2017 WL 6541772 (C.D. Cal. Dec. 20, 2017) (Judge Honorable Andre Birotte Jr.). The Plan abused its discretion when it denied Plaintiff’s claim for survivor benefits and the waiver of benefits allegedly executed by Plaintiff and her husband. The court also found that Defendant is not entitled to offset the $47,064.21 it overpaid the deceased participant during his lifetime, but is entitled to recover the $5,082.14 it overpaid him based on the failure to terminate his 10% increase after he reached age 62.
Dresel v. Pension Plan of The Pacific Northwest Laboratories, No. 15-35643, __F.App’x__, 2017 WL 6420974 (9th Cir. Dec. 18, 2017) (Before: HAWKINS, McKEOWN, and CHRISTEN, Circuit Judges). The court determined that the district court properly held that the Plan abused its discretion in denying Plaintiff Early Retirement Benefits since he met the requirements: He was a fifty-seven-year-old former employee with over seventeen years of credited service when he elected to receive ERB. The Plan abused its discretion by requiring Plaintiff to be an “active employee” when he elected the commencement of benefits.
Premera Blue Cross v. Winz, No. 2:17-CV-695-BAT, 2017 WL 6451802 (W.D. Wash. Dec. 18, 2017) (Magistrate Judge Brian A. Tsuchida). The court granted Premera’s interpleader action concerning distribution of benefits under its 401(k) Savings Plan and the Premera Pension Equity Plan. The court enjoined Defendants from instituting further proceedings against Premera or its agents with regard to the benefits.
Bradshaw v. Principal Financial Group, No. 2:17-CV-02174-SHM, 2017 WL 6520921 (W.D. Tenn. Dec. 20, 2017) (Judge Samuel H. Mays, Jr.). In this dispute over long-term disability benefits, the court granted Principal’s motion to dismiss. Plaintiff’s breach of contract claim is preempted by ERISA and Plaintiff is not entitled to a jury trial on her ERISA claim.
Brand Tarzana Surgical Institute, Inc. v. International Longshore And Warehouse Union-Pacific Maritime Association Welfare Plan, No. 16-55503, 2017 WL 6420447 (9th Cir. Dec. 18, 2017) (Before: D.W. NELSON and REINHARDT, Circuit Judges, and STEEH, District Judge). The court affirmed the district court’s decision partially dismissing the case on the basis of an anti-assignment clause. The court determined that the Plan’s clauses regarding the direction to pay benefits directly to the provider do not contradict the anti-assignment of benefits clause; the Plan is not estopped from asserting the anti-assignment provision; and the Plan did not waive the anti-assignment provision.
Hayes v. Brink’s Incorporated, No. 1:16CV314-LG-RHW, 2017 WL 6407877 (S.D. Miss. Dec. 15, 2017) (Judge Louis Guirola, Jr.). The court determined that the employer has shown there are no facts surrounding the pro se plaintiff’s termination that show more than an incidental loss of benefits, which is insufficient to establish a prima facie Section 510 case.
Prince v. Sears Holdings Corporation, et al., No. 1:17CV142, 2017 WL 6540493 (N.D.W. Va. Dec. 21, 2017) (Judge Irene M. Keeley). In this life insurance dispute alleging breach of fiduciary duty for the failure to provide accurate information concerning life insurance coverage, the court determined that Plaintiff had actual knowledge of the alleged breach on September 26, 2013, when Sears sent him a notice informing him that his wife’s coverage had been reduced, but he did not file suit before the end of the three-year statute of limitations. The court declined to find that the statute of limitations was tolled pending his exhaustion of administrative remedies, nor by the removal of his initial lawsuit to the Northern District. The court held that his complaint is time barred by ERISA’s statute of limitations for breach of fiduciary duty claims.
Askew v. R.L. Reppert Inc., et al., No. 16-3924, __F.App’x__, 2017 WL 6523345 (3d Cir. Dec. 21, 2017) (Before: CHAGARES, GREENAWAY JR., and VANASKIE, Circuit Judges). On the claim regarding the level of penalties to be assessed for the failure to provide 401(k) Plan documents on a timely basis, the Third Circuit affirmed the district court’s trial verdict that assessed penalties of $50 per day for the period of December 6, 2008 to October 2, 2009, for nonproduction of documents relating to Reppert’s 401(k) Plan documents, and $1 per day for the period of May 17, 2012 to January 1, 2015, for the nonproduction of the Nationwide agreement that Askew had obtained through subpoena, totaling $15,959.00.
Alexander Acosta v. Wilmington Trust, N.A., et al., No. 1:17-CV-1755, 2017 WL 6505812 (N.D. Ohio Dec. 20, 2017) (Judge James S. Gwin). In this matter where the U.S. Department of Labor alleges that Defendant violated ERISA by improperly approving the Graphite Sales, Inc. Employee Stock Ownership Plan’s purchase of the outstanding stock of Graphite Sales, Inc., the court denied Defendant’s motion to transfer venue to the District of Delaware because Defendant has not shown that either convenience or the interests of justice strongly favor transfer.

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