Case Information
*1 Before LOKEN, REAVLEY and JOHN R. GIBSON, Circuit Judges.
___________
*2
JOHN R. GIBSON, Circuit Judge.
Rеine and Brian Stillmunkes appeal from an order of the district court affirming an order of the bankruptcy [2]
court that refused to reduce the claim of the Hy-Vee [3]
Employee Benefit Plan and Trust in the Stillmunkeses' Chapter 7 bankruptcy to require Hy-Vee to pay its share of certain attorneys' fees and expenses as required by Iowa law. The Stillmunkeses argue that the bankruptcy cоurt should have reduced Hy-Vee's claim because Iowa state law limits the amount of Hy-Vee's claim to less than the bankruptcy court allowed and because Hy-Vee's claim should be reduced to pay Hy-Vee's share of the attorneys' fees and expenses. Hy-Vee cross-appeals from the denial of its motion for sanctions against the Stillmunkeses' attorneys. We аffirm the order of the district court.
Reine was severely injured in a car accident. At the time of the accident Reine's husband Brian was a member of Hy-Vee, which is a self-funded employee benefit plan and is governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461. Hy-Vee extends medical benefits to its members and their dependents, and it paid Reine's medical bills resulting from thе accident.
The Honorable Charles R. Wolle, Chief Judge, United States District Court for the Southern District of Iowa. The Honorable Lee M. Jackwig, United States Bankruptcy Judge for the
Southern District of Iowa.
Less than a month аfter the accident Reine and Brian filed for bankruptcy. One of the assets was Reine's cause of action against the state of Iowa for its negligence in causing the accident in which she was injured. Reine sued the state of Iowa, but the Trustee of the Stillmunkeses' bankruptcy was later substituted for her in the lawsuit.
The Trustee and the state eventually reached a settlement in which the state paid $350,500 to the Trustee for the damages Reine suffered in the car accident.
Hy-Vee filed a claim in the Stillmunkeses' bankruptcy seeking reimbursement for the medical bills that it paid on behаlf of Reine. The Stillmunkeses argued in the [4]
bankruptcy court that subsections 668.5(3) and 668.5(4) of the Iowa Code limited Hy-Vee's claim for reimbursement to 35% of the amount Hy-Vee claimed. They also [5]
Hy-Vee basеs its claim on a provision in its plan which provides:
RIGHT OF REIMBURSEMENT
If you or one of your Dependents:
- receive benefit payment as described in this booklet as the result of a sickness or injury; and
- have a lawful claim against another pаrty or parties for compensation, damages or other payment because of the same sickness or injury; and
- receive payment from the other party or parties (regаrdless of the reason or nature of the payment, and whether or not the other party or parties acknowledge liability in connection with the payment);
this Plan shall have right [sic] to be rеimbursed for benefits paid under this Plan.
Subsection 668.5(3) of the Iowa Code provides:
Contractual or statutory rights of persons not enumerated in section 668.2 for subrogation for losses recovered in proceedings pursuant to this *5 argued that Hy-Vee's claim should be reduced by Hy-Vee's proportionate share of the attorneys' fees and expenses incurred in the lawsuit against the state of Iowa.
The bankruptcy court rejеcted the Stillmunkeses' arguments, ruling that subsections 668.5(3) and 668.5(4) could not reduce Hy-Vee's claim because ERISA pre-empted them. The court permitted Hy-Vee to submit an unsecured claim for the full amоunt of Reine's accident-related medical bills that Hy-Vee paid. The Stillmunkeses appealed to the district court, and the district court affirmed, again ruling that ERISA pre-empted subsections 668.5(3) and 668.5(4) of the Iowa Code. The Stillmunkeses appeal the order of the district court.
I.
The Stillmunkeses argue that ERISA does not pre-empt subsections 668.5(3) and 668.5(4) and that Hy-Vee's claim should be reduced according to the terms of subsections chapter shall not exceed that portion of the judgment or verdict specifically related to such losses, as shown by the itemization of the judgment or verdict returned under section 668.3, subsection 8, and according to the findings made pursuant to section 668.14, subsection 3, and such contractual or statutory subrogated persons shall be respоnsible for a pro rata share of the legal and administrative expenses incurred in obtaining the judgment or verdict.
Subsection 668.5(4) of the Iowa Code provides:
Subrogation payment restrictions imposed pursuant to [subsection 668.5(3)] apply to settlement recoveries, but only to the extent that the settlement was reasonable.
668.5(3) and 668.5(4). The question of whether ERISA pre-empts
The Stillmunkeses argued at oral argument that Hy-Vee was сontractually bound to pay its proportionate share of the attorneys' fees and expenses incurred in the lawsuit against the state of Iowa because Hy-Vee had agreеd to do so in a letter. Although the Stillmunkeses referred to the letter in their initial brief to this court, their reference lacked sufficient clarity to be recognized as an argument. We refuse to сonsider an argument presented to this court for the first time at oral argument. Cf. Wiener v. Eastern Ark. Planting Co., 975 F.2d 1350, 1357 n.6 (8th Cir. 1992) (refusing to consider an argument raised for the first time in a reply brief).
subsections 668.5(3) and 668.5(4) is one of lаw.
Therefore, we review the decision de novo. See Wegner v.
Grunewaldt,
Our analysis must continue, however, bеcause Hy-Vee is an employee benefit plan governed by ERISA. ERISA, through its "deemer" clause, exempts self-funded *9 ERISA plans from state laws that regulate insurance. See 29 U.S.C. § 1144(b)(2)(B); FMC Corp. v. Holliday, 498 U.S. 52, 57-58, 61 (1990). The dеemer clause provides: "Neither an employee benefit plan described in section 1003(a) of this title, which is not exempt under section 1003(b) of this title (other than a plan established primarily for the purpose of providing death benefits), nor any trust established under such a plan, shall be deemed to be an insurance company or other insurer, . . . or to be engaged in the business оf insurance . . . for purposes of any law of any State purporting to regulate insurance companies, [or] insurance contracts . . . ." 29 U.S.C. § 1144(b)(2)(B). Subsections 668.5(3) and 668.5(4) are state laws that regulate insurance. See FMC Corp., 498 U.S. at 58-61 (holding Pennsylvania statute regulating subrogation is a law regulating insurance). Therefore, we conclude that Hy-Vee, as a self-funded ERISA plan, is exempt from subsections 668.5(3) and 668.5(4) pursuant to ERISA's deemer clause, and we reject the Stillmunkeses' argument that subsections 668.5(3) and 668.5(4) reduce Hy-Vee's claim. See FMC Corp., 498 U.S. at 61.
II.
The Stillmunkeses argue that the common fund doctrine in fеderal common law requires the reduction of Hy-Vee's claim by Hy-Vee's proportionate share of the attorneys' fees and expenses incurred in the lawsuit against the *10 state of Iowa. We conclude that the bankruptcy court did not err in denying these arguments.
III.
Hy-Vee cross-appeals from the bankruptcy court's
denial of Hy-Vee's motion for sanctions against the
Stillmunkеses' attorneys. We review the bankruptcy
court's refusal to impose sanctions for an abuse of
discretion. See Grunewaldt v. Mutual Life Ins. Co. (In
re Coones Ranch, Inc.),
We affirm the district court's order in all respects. A true coрy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
Notes
[1] The HONORABLE THOMAS M. REAVLEY, United States Circuit Judge for the United States Court of Appeals for the Fifth Circuit, sitting by designation.
[7] We realize that this court has recently reached a conclusion in Waller v. Hormel
Foods, No. 96-2080,