Opinion ID: 795595
Heading Depth: 2
Heading Rank: 1

Heading: Popowski v. Parrott

Text: 2 Parrott, an employee of United Distributors, Inc., was injured in an accident in May 2003. The United Distributors Plan paid $ 152,889.65 in medical expenses on her behalf in connection with the accident. PR1-3 at 1. Prior to the United Distributors Plan making any payment, however, Parrott signed a reimbursement agreement stating that she understood that the plan 3 has a claim or lien against, and the first right to receive reimbursement from the Participant for, any recovery, settlement, or judgment obtained by Participant from or against any party at fault in the [accident at issue] or from any other source for the amount paid by the Plan as medical claims. 4 PR1-1, Exh. B at 1. 1 This agreement echoed the Plan's own subrogation and reimbursement provision, which stated that 5 in any event, the Plan has a lien on any amount recovered by the Covered Person whether or not designated as payment for medical expenses. This lien shall remain in effect until the Plan is repaid in full. 6 The Covered Person . . . must repay to the Plan the benefits paid on his or her behalf out of the recovery made from the third party or insurer. 7 Id., Exhs. A, G at 63. The Plan further explains that [t]hese rights provide the Plan with a priority over any funds paid by a third party to a Covered Person relative to the Injury or Sickness, including a priority over any claim for non-medical or dental charges, attorney's fees, or other costs and expenses. Id. 8 In October 2003, Parrott obtained a settlement through her attorney for a total of $525,000. PR1-6, Exh. at 3. Of the portion paid under her uninsured motorist policy, $175,000 went to her attorney, $125,000 was placed in a structured annuity to her benefit, and the remainder, $225,000, was paid directly to Parrott and deposited into a joint checking account that she held with her husband. Id. Of the $25,000 paid by the tortfeasor's insurer, some went to cover medical expenses, some to cover attorney's fees and costs, and the remaining $2,374.64 went into the Parrotts' account. Id. 9 After discovering that Parrott had received this settlement, Popowski and the Commerce Group attempted to collect under the policy's reimbursement provision and reinforcing reimbursement agreement. When they were unable to do so, they filed this suit along with a motion for a temporary restraining order and preliminary injunction to protect the settlement proceeds. Popowski and the Commerce Group also filed a motion to have Parrott's husband joined as a party-defendant because of his interest in the bank account in which the recovery funds had been deposited. In response, Parrott filed motions to dismiss, first alleging failure to state a claim, then alleging lack of subject matter jurisdiction. Faced with a split among the circuits regarding the scope of equitable relief under ERISA, the district court, following the lead of the Sixth and Ninth Circuits in interpreting Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002), concluded that it lacked jurisdiction over appellants' claims because Popowski and the Commerce Group actually sought legal rather than equitable restitution in that they based their claim on the breach of a contract obligation to reimburse the plan rather than on a property right in a specifically identifiable fund. PR1-24 at 11-12. Therefore, the court granted the motion to dismiss and, accordingly, denied all other requested relief.