Kolbe & Kolbe Health & Welfare Benefit Plan v. Medical College of Wisconsin, Inc.
657 F.3d 496
| 7th Cir. | 2011Background
- Kolbe & Kolbe Plan paid over $1.6 million for K.G., who was not admitted as a Covered Person under the Plan.
- Gurzynski submitted an incomplete enrollment form for K.G., withholding key eligibility details required to determine coverage.
- After extensive inquiries, Kolbe & Kolbe denied coverage for 2007; no appeal was filed.
- Payments were made to Medical College and Children’s Hospital under provider agreements that discounted services for Plan members.
- K.G.’s treatment occurred while not enrolled as a Covered Person; Formed financial and contractual arrangements with CHHS entities.
- District court dismissed ERISA § 502(a)(3) and federal unjust enrichment claims, but allowed state law breach claims to proceed and awarded fees to defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| ERISA § 502(a)(3) scope for non-Covered Persons | Gurzynski sought enforcement of an overpayment provision. | No Covered Person means no plan enforcement under § 502(a)(3). | No equitable relief under § 502(a)(3); not enforceable against non-Covered Person. |
| Federal common law unjust enrichment under ERISA | Unjust enrichment claims arise under federal common law. | ERISA forecloses federal common-law remedies when plan terms not violated. | Dismissed; ERISA preemption not implicated because no plan violation. |
| ERISA preemption of state-law breach claims | State claims should proceed as third‑party beneficiaries of provider agreements. | State claims preempted if they require plan interpretation. | Not preempted; claims relate to agreements, not plan terms; remanded. |
| Attorney fees under ERISA § 1132(g)(1) | Fees were substantially justified; award requires reversal. | District court did not abuse discretion in fees. | Reversed; district court abused discretion in awarding fees. |
Key Cases Cited
- Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (U.S. 2002) (ERISA enforcement scheme; limits on non‑statutory remedies)
- Buckley Dement, Inc. v. Travelers Plan Adm’rs. of Ill., Inc., 39 F.3d 784 (7th Cir. 1994) (federal common law in ERISA contexts)
- Collins v. Ralston Purina Co., 147 F.3d 592 (7th Cir. 1998) (ERISA preemption; 'relates to' standard)
- In re Biondi, 303 F.3d 765 (7th Cir. 2002) (ERISA preemption and state-law claims)
- Quinn v. Blue Cross & Blue Shield Ass'n, 161 F.3d 472 (7th Cir. 1998) (five-factor test for attorney’s fees in ERISA cases)
- Fritcher v. Health Care Serv. Corp., 301 F.3d 811 (7th Cir. 2002) (ERISA attorney-fee standards)
- Roth v. North American Coal Corp. Ret. Serv. Plan, 395 F.3d 916 (8th Cir. 2005) (federal common-law unjust enrichment under ERISA)