Mull v. Motion Picture Industry Health Plan
51 F. Supp. 3d 910
C.D. Cal.2014Background
- Lenai Mull, a plan beneficiary, sustained severe accident-related injuries; the MPI Health Plan paid about $148,000 of ~$190,000 in medical expenses and demanded reimbursement from Lenai’s $100,000 third‑party settlement under a subrogation/reimbursement clause appearing in the Plan’s Summary Plan Description (SPD).
- Plaintiffs Norman, Danielle, and Carson Mull sued under ERISA §§ 502(a)(1)(B) and (a)(3) challenging the Plan’s enforcement of the SPD reimbursement clause; defendants counterclaimed against Lenai only (Lenai is in bankruptcy and subject to an automatic stay).
- Plaintiffs moved for summary judgment; defendants also moved for summary judgment. Central dispute: whether the reimbursement/recoupment provision in the SPD is an enforceable term of the ERISA plan.
- Plaintiffs produced the Plan’s Agreement and Declaration of Trust (ADT) as the formal plan document; the ADT contains no reimbursement provision, while the SPD contains a full reimbursement clause that purports to waive equitable defenses.
- The Court applied Supreme Court and Ninth Circuit precedents distinguishing SPDs from formal plan documents, and held that only terms contained in the formal plan documents (not the SPD) are enforceable as plan terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the SPD reimbursement clause is an enforceable term of the ERISA plan | SPD is not a formal plan document; only the ADT (formal plan) controls; SPD terms are not binding under Amara | SPD expressly states it constitutes both the SPD and the Plan Document and thus is enforceable | Held for plaintiffs: SPD is not a plan document; ADT is the controlling plan document, and the reimbursement clause in the SPD is not enforceable |
| Whether equitable defenses can limit plan reimbursement | Plaintiffs argued equitable defenses may apply (make‑whole, common‑fund) but only if the provision were enforceable or in an equitable action | Defendants argued equitable defenses cannot override clear plan terms; SPD purports to waive equitable defenses | Court did not reach this issue because SPD provision is unenforceable as a plan term; equitable‑defense analysis unnecessary |
| Whether the ADT incorporated the SPD (making SPD terms part of the plan) | Plaintiffs: ADT does not incorporate SPD; defendants previously produced only the ADT as the formal plan document | Defendants: SPD’s language and a self‑serving statement indicate the SPD is the Plan Document for participants | Held for plaintiffs: defendants failed to show SPD satisfies statutory plan‑document features or that ADT incorporated SPD; SPD not part of the plan |
| Standard of review / remedies available under ERISA §502 | Plaintiffs seek declaratory/monetary relief against Plan enforcement of SPD clause | Defendants sought enforcement of SPD reimbursement rights and summary judgment | Court granted plaintiffs’ summary judgment (Norman, Danielle, Carson) and denied defendants’ motion; relief limited to these three plaintiffs (Lenai stayed by bankruptcy) |
Key Cases Cited
- CIGNA Corp. v. Amara, 563 U.S. 421 (2011) (SPD statements communicate plan terms but do not themselves constitute enforceable plan terms)
- US Airways, Inc. v. McCutchen, 569 U.S. 88 (2013) (equitable defenses cannot override clear plan terms; plan documents control; common‑fund doctrine may apply where plan is silent)
- Sereboff v. Mid Atlantic Medical Servs., Inc., 547 U.S. 356 (2006) (ERISA §502(a)(3) permits equitable remedies to enforce plan terms)
- Oldoerp v. Wells Fargo & Co. Long Term Disability Plan, [citation="500 F. App'x 575"] (9th Cir. 2012) (SPD language cannot create plan terms such as discretionary‑authority clauses when not present in formal plan documents)