Memorandum & Order Adopting Report and Recommendation
The court has reviewed plaintiffs objections to the report issued by United States Magistrate Judge Cheryl L. Pollack on August 17, 2007 recommending that, with the exception of plaintiffs claim of equitable subrogation, which requires further briefing, plaintiffs summary judgment motion be denied and that defendant’s cross-motion for entry of a final judgment be granted as to plaintiffs claim for restitution. For the reasons set forth below, the court adopts the report and recommendation (“R & R”) in full. 1
Standard of Review
A court may adopt those portions of a magistrate judge’s report and recommendation to which the parties do not object and with which the court finds no clear error.
See
Fed.R.Civ.P. 72(b);
see also Grassia v. Scully,
Although Union Labor challenges these specific aspects of Judge Pollack’s report in the preliminary statement of its objections, the supporting arguments are copied almost verbatim from the memorandum of law and its subsequent amendment that Union Labor filed in support of its original motion. Judge Pollack comprehensively addressed these claims and Union Labor’s submission offers no new arguments or research explaining why the court should reject her analysis. “[W]here a party’s objections are simply a regurgitation of the arguments [it] made to the magistrate judge, a
de novo
review is unwarranted. Instead, the report and recommendation is reviewed by the district judge for clear error.”
Gee Chan Choi v. Jeong-Wha Kim,
04-CV-4693,
Summary Judgment Standard
Summary judgment is appropriate where “the pleadings, depositions, answers
*135
to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). The court must view all facts in the light most favorable to the nonmoving party, but “only if there is a ‘genuine’ dispute as to those facts.”
Scott v. Harris,
Restitution under Section 502(a)(8) of ERISA
Union Labor first objects that it is entitled to restitution under section 502(a)(3) of ERISA, which provides that a fiduciary of a plan may obtain “appropriate equitable relief’ to enforce the terms of a plan or to redress their violation. 29 U.S.C. § 1132(a)(3). Union Labor argues that because defendants’ failure to pay benefits to the Rodrigues family violated the coordination of benefits provisions in both plaintiffs and defendants’ plans, the court should grant Union Labor restitution in the form of an equitable lien or a constructive trust to reimburse it for the benefits it paid in defendants’ stead.
Because section 502(a)(3) authorizes only equitable relief, the court may order only “those categories of relief that were
typically
available in equity.”
Sereboff v. Mid Atlantic Medical Sevs., Inc.,
Union Labor has failed to identify any particular fund in defendants’ possession, distinct from its general assets, from which it seeks to be reimbursed. Labeling the portion of defendants’ assets that they refused to disperse a “fund of money” does not remedy this deficiency. (See PI. Obj. at 5-6.) Moreover, Union Labor’s attempt to diminish the import of the Second Circuit’s decision in Coan v. Kaufman is un *136 persuasive. Although Union Labor notes several factual differences between the situation before the Second Circuit in Corn and the situation presently before this court, these do not undermine Judge Pollack’s conclusion that “[t]he Second Circuit has interpreted Sereboff as specifically maintaining the requirement that plaintiff seek particular funds in defendant’s possession.” (R & R at 12.)
Union Labor also directs the court’s attention to a non-binding decision of a Mississippi district court.
See Schultz v. The Progressive Health, Life, and Disability Benefits Plan,
After careful review of all of Union Labor’s arguments, the court finds that Judge Pollack’s interpretation of Sereboff and its progeny was correct. A plaintiff cannot seek restitution under section 502(a)(3) without identifying a particular fund in defendant’s possession distinct from its general assets. Because Union Labor has failed to make such a showing, the court adopts Judge Pollack’s recommendation and grants summary judgment in favor of defendants on Union Labor’s claim for restitution under section 502(a)(3).
Equitable Subrogation
Union Labor also objects to Judge Pollack’s recommendation that relief not be granted at this stage of the litigation under a theory of equitable subrogation. In equity, the rule of equitable subrogation applied “[w]here property of one person [was] used in discharging an obligation owed by another ... under such circumstances that the other would be unjustly enriched by the retention of the benefit thus conferred.”
In re Chateaugay Corp.,
Judge Pollack also raised the possibility that Union Labor may be able to assert a claim for equitable subrogation under section 502(a)(1) of ERISA. (R
&
R at 20-23.) That section applies to participants and beneficiaries, but unlike section 502(a)(3), it does not apply to fiduciaries and does not limit a plaintiffs recovery to appropriate equitable relief. 29 U.S.C. § 1132(a)(1). In its objections, Union Labor requested an opportunity to brief this issue. (PI. Obj. at 1 n. 1.) The court agrees that further consideration is merited and that granting summary judgment at this point would be premature. Defendants also have asserted a number of defenses that raise issues of material fact about whether Brittany Rodrigues was actually covered by the Olsten Plan. Such issues must be resolved before the court can determine whether a party “standing in the shoes” of the Rodrigues family may sue to recover the benefits that the Olsten Plan withheld.
See Gibbs v. Hawaiian Eugenia Corp.,
The Court’s Inherent Power to Fashion Relief
Union Labor also objects to Judge Pollack’s conclusion that the court lacks the inherent power to fashion appropriate relief to enforce its earlier declaratory judgment finding the Olsten Plan to be primary and that Union Labor’s claim for reimbursement could proceed. Union Labor concedes that “[wjhile ERISA does authorize the equitable relief sought by Union Labor Life, it does not contain an express statutory provision specifically addressing the coordination of benefits.” (PI. Obj. at 15.) Relying on the authority of federal courts to develop a body of federal common law under ERISA, Union Labor argues that “[t]he lack of statutory guidance ... does not mean that there is no remedy available.”
(Id.)
Although Union Labor marshals some support for this proposition from the decisions of courts in other circuits, no mention is made of the Second Circuit’s proscription, noted by Judge Pollack, that, in light of recent Supreme Court precedent, courts “are no longer free to fill in unwritten gaps in ERISA’s civil remedies.”
Gerosa v. Savasta & Co.,
Conclusion
Plaintiffs objections are overruled and Judge Pollack’s report and recommendation is adopted in its entirety. Accordingly, Union Labor’s motion for summary judgment is denied. Judgment in favor of defendants is granted with respect to Un *138 ion Labor’s claim for restitution under section 502(a)(3).
SO ORDERED.
REPORT AND RECOMMENDATION
On September 21, 2001, plaintiff The Union Labor Life Insurance Company (“Union Labor”) commenced this action against defendants Olsten Corporation Health and Welfare Benefit Plan (the “Olsten Plan”), Adecco, Inc. (“Adecco”), as successor in interest to the Olsten Corporation (“Olsten”), and Connecticut General Life Insurance Company (“Connecticut General”), seeking a declaratory judgment and asserting claims for equitable subrogation and unjust enrichment. In both the original Complaint and the Amended Complaint (“Am. Compl.”), which was filed on December 28, 2001, plaintiff alleges that the Olsten Plan was primarily liable for the payment of all medical expenses incurred by Brittany Rodrigues, including claims that were processed and paid by Union Labor.
In February 2002, the parties filed cross-motions for summary judgment. By Memorandum and Order dated March 14, 2005 (“Mem.”), the Honorable Dora L. Irizarry adopted this Court’s Report and Recommendation of January 3, 2004 (“Report”) insofar as it recommended denial of defendants’ motion for summary judgment based on lack of standing. The court also dismissed plaintiffs state law claims as preempted and granted plaintiffs motion for a declaratory judgment, declaring the Olsten Plan the primary plan under the coordination of benefits provisions.
By Notice of Motion dated July 5, 2006, plaintiff now moves for summary judgment seeking an order enforcing the coordination of benefits provisions in the respective plans and requiring defendants to reimburse Union Labor for the amounts that should have been paid by Olsten as the primary plan. Defendants oppose the motion, and cross-move for entry of a final judgment, contending that the Court lacks jurisdiction to order compensatory damages.
By Order dated October 23, 2006, plaintiffs motion for summary judgment and defendants’ cross-motion were referred to the undersigned to prepare a Report and Recommendation.
FACTUAL BACKGROUND
As set forth in greater detail in this Court’s earlier Report, in January 1997, Maribel Rodrigues, an employee of Olsten, applied for and received single medical benefits coverage under the Olsten Plan, including coverage for her daughter, Brittany Rodrigues, born December 26, 1997. (Rept. at 2). 1 Brittany Rodrigues was also covered by her father’s plan, offered by the Trustees of the Milk Industry — Local 680 Welfare Fund (the “Milk Fund Plan”), and issued by Union Labor. (Id. at 2; Pl.’s 56.1 Stmnt ¶ l). 2
Both plans contain Coordination of Benefits (“COB”) provisions that provide for priority of coverage based on the parent whose birthday occurs first in the calendar year. (Rept. at 2-3; PL’s 56.1 Stmnt ¶ 5). The district court has declared that under *139 this “birthday rule,” the Olsten Plan was the primary insurer. (Mem. at 3).
As a result of Brittany Rodrigues’ health problems, the family incurred medical expenses of over $300,000.00 from December 1997 through November 30, 1998. (Rept. at 3). Claims for reimbursement of these expenses were submitted by the Rodrigues family and the health care providers to the claims administrator for the Olsten Plan, 3 W.J. Jones Administrative Services, Inc. (“W.J. Jones”). 4 (Rept. at 3; Pl.’s 56.1 Stmnt ¶ 8; Defs.’ Mem. at 4-5). It is undisputed that W.J. Jones denied primary coverage, and that the Milk Fund Plan paid over $300,000.00 in claims for Brittany Rodrigues. (Rept. at 3; Pl.’s 56.1 Stmnt ¶ 2). At the time the payments were made, the Milk Fund claims that it was unaware that Brittany had insurance under the Olsten Plan. 5 (Rept. at 3; Pl.’s 56.1 Stmnt ¶ 12). Upon learning of the Olsten Plan coverage, the Milk Fund Plan sought reimbursement in accordance with the COB provisions in the plans. (Rept. at 3-4; Pl.’s 56.1 Stmnt ¶ 13).
The Olsten Plan has consistently refused to reimburse Union Labor Life, raising a number of arguments in its initial motion, including the failure of the Milk Fund to comply with certain prerequisites for reimbursement. (Rept. at 4-5). One such provision in the Summary Plan Description requires that all claims for reimbursement must be filed within 90 days after the expense is incurred and in any event within 12 months after the expense is incurred. (Id. at 5). The court concluded that this provision did not preclude plaintiffs claim and that W.J. Jones’ decision denying the claim on the basis of its 12-month reporting requirement was arbitrary and capricious. (Mem. at 3^4).
Plaintiff now moves for summary judgment, contending that, as the primary insurer, defendant Olsten was obligated to pay Brittany Rodrigues’ medical expenses and therefore should be Ordered to pay restitution to the Milk Plan in the amount of the funds paid. Defendants cross-move for the entry of a final judgment in their favor.
DISCUSSION
A. Summary Judgment Standards
It is well-settled that a party moving for summary judgment has the burden of establishing that there is no genuine issue of material fact in dispute and that the moving party is entitled to judgment as a matter of law.
See Anderson v. Liberty Lobby, Inc.,
Once the moving party discharges its burden of proof under Rule 56(c), the party opposing summary judgment “has the burden of coming forward with ‘specific facts showing that there is a genuine issue for trial.’ ”
Phillips v. Kidder, Peabody & Co.,
In reversing a grant of summary judgment, the Second Circuit noted that the “[tjrial court’s task at the summary judgment motion stage of the litigation is carefully limited to discerning whether there are any genuine issues of material facts to be tried, not to deciding them.”
Quaratino v. Tiffany & Co.,
B. Restitution Under ERISA
1) “Equitable Relief’ Under Section 502(a)(3)
Plaintiff contends that Section 502(a)(3) of ERISA not only authorizes Union Labor to bring this civil action to enforce the terms of the COB provision, but that it also authorizes an award of restitution. (Pl.’s Mem. 6 at 5 (citing 29 U.S.C. § 1132(a)(3))). Defendants counter that in the absence of specific identifiable funds, the court may not order the payment of compensatory damages under ERISA. (Defs.’ Mem. at 5).
It is well established that, in general, compensatory monetary damages are not available under Section 502(a)(3)(B) of ERISA.
See Mertens v. Hewitt Assocs.,
Plaintiff argues that because restitution was a form of relief typically available in courts of equity, it is a proper form of relief for this violation of ERISA. (See Pl.’s Mem. at 5-6). However, in a series of cases examining Section 502(a)(3), the Supreme Court has made it clear that the type of relief sought by plaintiff is not available through an action brought pursuant to this provision of ERISA.
In the first of this series of cases,
Mertens v. Hewitt Associates,
the Supreme Court considered the extent to which Section 502(a)(3) of ERISA limits suits to recover money damages brought by plan participants against a non-fiduciary who participates in a breach of fiduciary duties that causes a loss to an ERISA plan.
In a subsequent case,
Great-West Life & Annuity Ins. Co. v. Knudson,
7
Janette Knudson, who was injured in a car accident, received a settlement in satisfaction of her tort claim against the manufacturer of the car in which she was driving.
See
At the time of suit, the funds upon which the plan sought to impose a constructive trust had been placed in a “Special Needs Trust”
8
under California law. The Court,
*142
again analyzing the limitation of Section 502(a)(3) to “equitable relief,” defined the term “equitable relief’ as used in Section 502(a)(3) as “ ‘those categories of relief that were
typically
available in equity.’ ”
Id.
at 210,
... where the property sought to be recovered or its proceeds have been dissipated so that no product remains, the plaintiffs claim is only that of a general creditor and the plaintiff cannot enforce a constructive trust or equitable lien upon other property of the defendant. Thus, for restitution to lie in equity, the action generally must seek not to impose personal liability on the defendant, but to restore to the plaintiff particular funds or property in the defendant’s possession.
Id.
at 213-14,
The Court in
Knudson
concluded that because the plan’s claim was not that the Knudsons held “particular funds that in good conscience, belong to petitioners,” but rather sought to impose personal liability on the Knudsons to pay a sum of money based on a contractual provision in the plan, the action was “ ‘quintessentially an action at law.’ ”
Id.
at 210,
Defendants argue that the language in
Knudson
makes it clear that unless there is a specific fund or identifiable property, the Court may not award a payment of monies from the defendants’ general assets. (Defs.’ Mem. at 8). They cite numerous cases in which claims for money damages characterized as equitable claims were denied because there was no specific fund upon which to impose the restitution.
Id.
(citing
Nechis v. Oxford Health Plans, Inc.,
In its latest analysis of the extent of relief available under Section 502(a)(3), the Supreme Court in
Sereboff v. Mid Atlantic Medical Services, Inc.,
*144
Plaintiff here argues that
Sereboff
is controlling because “ ‘no tracing requirement ... applies to equitable liens by agreement or assignment.’ ” (Pl.’s Mem. at 7 (quoting
Sereboff v. Mid Atlantic Medical Serv’s., Inc.,
The Second Circuit has interpreted
Sereboff
as specifically maintaining the requirement that plaintiff seek particular funds in defendant’s possession. In
Coan v. Kaufman,
In a recent decision, this Court rejected the argument that it had jurisdiction to impose a constructive trust or equitable lien in the absence of clearly traced, particularized funds.
See Vacca v. Trinitas Hospital,
The
Vacca
court also rejected the argument that recovery should be permitted under a theory of unjust enrichment.
Id.
(citing
Blanck v. Consolidated Edison Retirement Plan,
No. 02 CV 7718,
2) Application
In this case, there is no dispute that the Olsten Plan did not maintain a separate account or segregated fund for the pay *145 ment of claims for Maribel Rodrigues. (See Defs.’ Mem. at 5). Plaintiff asserts, however, that the Olsten Plan “is in possession of money representing reimbursement for medical expenses already paid by Union Labor Life.” (Pl.’s Mem. at 6-7). Plaintiff in essence argues that because it paid medical expenses that defendants owed, the money that defendants saved was transformed into a particularized fund apart from defendants’ general assets sufficient to satisfy the requirements of an equitable lien. (See Pl.’s Mem. at 8 (asserting that by refusing “its obligation to pay benefits ... the Olsten Plan caused to be created a fund of money that it should have paid to the beneficiary”)).
This theory impermissibly stretches the boundaries of equitable relief far beyond the limits prescribed by the Supreme Court to include every remedy that would be available at law. Plaintiffs argument to compel the creation of an equitable lien or constructive trust could be made any time a party failed to properly make payment from its general assets. It was this type of broad interpretation of equitable relief under Section 502(a)(3)(B) that the Supreme Court warned against in
Mertens,
and reaffirmed in
Knudson. See Mertens v. Hewitt
Assocs.,
To the extent that plaintiff argues that “the Olsten Plan had a contractual undertaking requiring it to pay those funds over to Union Labor Life” (PL’s Mem. at 7), plaintiff has not indicated what “those funds” are to which it is referring. Thus, even were this a contractually based equitable lien, enabling it to avoid the tracing requirement, plaintiff must nonetheless seek payment from a specific fund, rather than from defendants’ general assets.
See Sereboff v. Mid Atlantic Medical Serv’s., Inc.,
Accordingly, because plaintiff does not identify any specific assets or funds in defendants’ possession, but rather seeks recovery from defendants’ general assets, its claim is not for restitution at equity but rather, is a claim, as in
Knudson,
that defendant is contractually obligated to pay funds to plaintiff.
9
While the limitation of
*146
Section 502(a)(3)(B) to equitable relief produces a seemingly unfair result under the circumstances, the Court concludes that, under the restrictions of ERISA, it lacks jurisdiction to issue an injunction requiring the defendant to restore funds to plaintiff and thus “transform what is effectively a money damages request into equitable relief.”
Coan v. Kaufman,
Accordingly, it is respectfully recommended that plaintiffs motion for summary judgment on its claims for restitution be denied and defendants’ cross-motion be granted.
C. Equitable Subrogation
Plaintiff also seeks recovery under a theory of equitable subrogation, pursuant to Section 502(a)(3), as “a remedy typically available in equity.” (Pl.’s Mem. at 12). Subrogation “simply means substitution of one person for another; that is, that one person is allowed to stand in the shoes of another and assert that person’s rights against the defendant.”
JPMorgan Chase Bank v. Cook, 318
F.Supp.2d 159, 165 (S.D.N.Y.2004) (internal quotations omitted),
reconsideration denied,
Apart from the fact that plaintiff has cited no cases in the context of an ERISA claim related to subrogation under a COB provision, defendants urge the *147 Court to reject plaintiffs argument for two reasons. First, defendants argue that the position now taken by plaintiff is inconsistent with its previous posture in this lawsuit — namely, that plaintiff had its own non-derivative right to sue directly under ERISA. (See Defs.’ Mem. at 11). Defendants assert that plaintiff should be es-topped from arguing that it is entitled to recovery through equitable subrogation because plaintiff “has consistently argued (at significant legal expense to defendant) that it had its own non-derivative right to sue directly under ERISA.” (Defs.’ Mem. at 11). However, while plaintiff has pursued a non-derivative claim, it has, from the inception of the lawsuit, simultaneously asserted that it was entitled to recovery through equitable subrogation. (See Am. Compl. ¶¶ 34-37). Plaintiffs argument for its own non-derivative rights, which was placed in greater controversy by defendants’ summary judgment motions, does not preclude it from pursuing its longstanding alternative claim of equitable subrogation.
Second, defendants have raised numerous defenses based on the evidence, suggesting, inter alia, that: (1) Brittany Rodrigues was not properly covered by the Olsten Plan because when her mother first commenced employment with Olsten, she declined coverage under the Olsten Plan (Marks Deck, Ex. B); (2) Maribel Rodrigues may have made certain misrepresentations regarding the cancellation of her prior insurance coverage and the extent of her pre-natal care; and (3) the claims were not properly submitted to W.J. Jones under the terms of the Olsten Plan. (Defs.’ Mem. at 4-5). While these defenses may not be applicable to plaintiffs non-derivative claims, the parties agree that such defenses are available to defendants when plaintiff “stands in the shoes” of Brittany Rodrigues via equitable subrogation. (See PL’s Reply at 5). Despite the defendants’ claim to the contrary, plaintiff argues that there is in actuality no dispute that Brittany was covered by the Plan. (Id. at 2). Plaintiff contends that the district court has already found that the Olsten Plan is the primary insurer and that the claims for benefits were timely submitted. (Id.) Plaintiff contends that defendants should therefore be estopped from arguing that Brittany was not eligible for coverage. (Id.)
The district court’s earlier declaratory judgment in this case was, however, narrower than plaintiff suggests, finding that “(a) the Olsten Plan is primary to the Milk Fund Plan, (b) that the 12-month reporting requirement does not preclude plaintiffs claim for reimbursement ... and (c) that Union Labor is not bound to the same procedural requirements as a beneficiary when seeking to enforce the COB provisions of the Plan at issue.” (Order at 3-4). The earlier summary judgment decision was in fact designed to address only limited issues of standing and the application of the 12-month reporting requirement, and did not, as plaintiff .suggests, determine that funds were “due and owing from the Olsten Plan.” (Ph’s Mem. at 13). Defendants’ newly raised defenses have accordingly not yet been evaluated by the court. Having reviewed the documents submitted in support of defendants’ defenses, this Court notes that there is sufficient evidence to raise a disputed issue of material fact as to their validity. (See Marks Deck, Exs. A-H). However, this finding is not alone sufficient to resolve the summary judgment motion on this claim because plaintiff must first establish that it is legally entitled to recovery under a theory of equitable subrogation.
Unfortunately, the parties failed to address this issue in any detail in their motion papers. Defendants concede in then-papers that “[f]rom the outset of the litiga *148 tion, the Olsten Plan has argued that ULL’s rights, if any, were as a subrogee of Maribel Rodrigues .... ” (Defs.’ Mem. at 11). Defendants’ apparent concession of this point, however, is insufficient to satisfy this Court that the plaintiff has a right to bring a claim of equitable subrogation in these circumstances.
Equitable subrogation is generally appropriate where the “ ‘property of one person is used in discharging an obligation owed by another ... under such circumstances that the other would be unjustly enriched by the retention of the benefit thus conferred, the former is entitled to be subrogated to the position of the obligee.’ ”
In re Chateaugay Corp.,
In
Sereboff,
the plaintiff based its claim upon a theory of equitable subrogation. The Court rejected this characterization because it found that the right to subrogation in that case was based upon agreement, not equity.
See Sereboff v. Mid Atlantic Medical Serv’s., Inc.,
In this case, such a lien would not be appropriate because, as discussed
supra,
there is no particularized fund available. Moreover, this Court has determined that neither a claim of restitution nor unjust enrichment is available to plaintiff because this case is, in essence, a suit for legal monetary damages.
See supra
at 145-46. Plaintiff cannot recover restitution through an equitable lien or constructive trust because it has failed to identify a particularized fund in defendants’ possession.
See Coan v. Kaufman,
*149 D. Subrogation and Section 502(a)(1)
Perhaps plaintiff seeks recovery under Section 502(a)(1) of ERISA. Although plaintiff has failed to articulate this argument, the Court notes that other non-beneficiaries have sought to avoid the equitable limitation found in Section 502(a)(3) by stepping into the shoes of beneficiaries or participants and suing under Section 502(a)(1). However, even if Union Labor had attempted to pursue this route, the Court is not persuaded that such a course would be permissible.
A participant or beneficiary, unlike a fiduciary, may sue pursuant to Section 502(a)(1) “to recover benefits due to him under the terms of his plan, [or] to enforce his rights under the terms of the plan.” 29 U.S.C. § 1132(a)(1). Section 502(a)(1) thus does not limit plan beneficiaries solely to equitable relief. Unlike in
Sereboff,
where plaintiff sought reimbursement from beneficiaries who had received a settlement from a tortfeasor, plaintiff in this case would be stepping into the shoes of its beneficiary in order to assert her rights against another ERISA fiduciary. It is thus at least theoretically possible that plaintiff in this case could seek non-equitable relief under Section 502(a)(1), a subsection of ERISA that is unavailable to fiduciaries, but under which beneficiaries are permitted to bring suit.
See Wilkins v. Mason Tenders Dist. Council Pension Fund,
While the Circuit has not directly addressed this question, courts in this district have noted that even if a beneficiary had properly assigned his rights to an insurer in a subrogation clause, “it is not clear that such a designation would pass jurisdictional muster under the Second Circuit’s literal construction of § 502(a) of ERISA.”
Liberty Life Assurance Co. of Boston v. Toys “R” Us, Inc.,
The Third Circuit has held that a fiduciary may not sue under Section 502(a)(1) in part because “Congress simply made no provision in § 1132(a)(1)(B) for persons other than participants and beneficiaries to sue, including persons purporting to sue on their behalf ... [and] the intentions of the parties and the district court regarding federal jurisdiction are irrelevant to the determination whether such jurisdiction exists.”
Northeast Dep’t ILGWU v. Teamsters Local Union No. 229,
The Fifth Circuit has found that where a participant has validly assigned his or her rights to a health care provider, that provider may bring suit under Section 502(a)(1). See
Tango Transport v. Healthcare Financial Services LLC,
To bring a claim under Section 502(a)(1) in this case, plaintiff would have to overcome the skepticism of courts in this district toward fiduciaries bringing suit under this subsection by subrogation. Plaintiff would additionally have to persuade this Court that equitable subrogation, rather than subrogation through agreement, would enable a fiduciary to bring suit where they would otherwise be precluded. However, as plaintiff has failed to make any argument for standing pursuant Section 502(a)(1), this Court declines sua sponte to determine that plaintiff has standing to bring a claim on this doubtful basis.
In summary, the Court is hesitant to decide whether or not plaintiff may properly step into the shoes of Brittany Rodrigues under a theory of equitable subrogation in order to thereby obtain relief through either Sections 502(a)(1) or 502(a)(3) without additional briefing from both parties beyond the scant few paragraphs on the topic that have so far been submitted. Neither party has effectively argued this issue, and accordingly, defendants’ motion for summary judgment is denied without prejudice. Plaintiffs motion for summary judgment on this matter is, however, denied in its entirety because defendants have demonstrated, in any event, issues of fact relating to the Osten Plan’s defenses to this claim.
E. Inherent Power to Enforce Ruling
Plaintiffs final argument is that, pursuant to 28 U.S.C. § 2202, the Court has the inherent power to fashion appropriate relief to give effect to its declaratory judgment order, including an award of monetary relief. (Pl.’s Mem. at 13-14). Particularly here, where ERISA lacks an express provision dealing with disputes under COB provisions, plaintiff argues that the Court should revisit its earlier order and consider the viability of a federal common law claim for unjust enrichment and restitution. (See id. at 14-15 (citing cases)).
It has been established that the Declaratory Judgment Act, 28 U.S.C. § 2202, does not expand the court’s jurisdiction or create new substantive rights,
see
12 James Wm. Moore et al.,
Moore’s Federal Practice
§ 57.02[1], but rather is merely “a procedural device” that was not intended to allow the plaintiff
“to
avoid the requirements imposed by the substantive law as a predicate to obtaining such relief.”
B. Braun Med., Inc. v. Abbott Labs.,
As for the argument that the Court should create federal common law to deal with this apparent gap in the law, the Court in
Mertens
specifically noted that the ERISA “statute’s carefully crafted and detailed enforcement scheme provides ‘strong evidence that Congress did
not
intend to authorize other remedies that it simply forgot to incorporate expressly.’”
Accordingly, the Court declines to recommend that a suit for damages be implied under these circumstances simply because there seems to be a gap in coverage under ERISA.
CONCLUSION
For the reasons set forth above, the Court respectfully recommends that, with the exception of plaintiffs claim of equitable subrogation, for which more briefing is required, the court deny plaintiffs motion for summary judgment and grant judgment in favor of defendants on plaintiffs claim for restitution under Section 502(a)(3).
Any objections to this Report and Recommendation must be filed with the Clerk of the Court, with a copy to the undersigned, within ten (10) days of receipt of this Report. Failure to file objections within the specified time waives the right to appeal the District Court’s order.
See
28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(e), 72;
Small v. Secretary of Health and Human Servs.,
The Clerk is directed to send copies of this Report and Recommendation to the parties electronically through the Electronic Case Filing (ECF) system.
SO ORDERED.
Notes
. Familiarity with the facts and background of this matter as set forth in Judge Poliak’s R & R is assumed, and thus, shall not be rapeated herein. Only those facts necessary to the discussion shall be set forth.
. Citations to "Rept.” refer to this Court’s earlier Report and Recommendation of January 3, 2005.
. Citations to "Pl.’s 56.1 Stmnt” refer to Union Labor Life Insurance Company’s Statement of Undisputed Material Facts in Support of Motion for Summary Judgment, dated July 5, 2006.
.Defendants dispute that it was the Rodrigues family who properly submitted claims for reimbursement, asserting in their Memorandum of Law in Opposition to Plaintiff's Motion for Reimbursement of Money Paid and in Support of Cross Motion for Entry of Final Judgment, dated August 3, 2006 (“Defs.’ Mem.”), that it was the health care providers who submitted claims directly to the Olsten Plan for "the vast majority, if not all, of the claims.” (Defs.’ Mem. at 4-5).
. The original claims administrator, W.J. Jones, was replaced by USI Administrators, Inc. (“USI”). (Rept. at 3).
. Defendants reject plaintiff's assertion that it was unaware of Brittany’s potential coverage by the Olsten Plan, pointing to an insurance claim form received by the Milk Fund Plan in or about May 1998 that disclosed such coverage. (Defs.’ Mem. at 4).
. Citations to "Pl.’s Mem.” refer to Union Labor Life Insurance Company's Memorandum of Law in Support of Motion for Summary Judgment, dated July 5, 2006.
. At the time defendants filed their objections to this Court's original Report and Recommendation, they argued to the district court that Knudson barred plaintiff's recovery of monetary relief under ERISA. In its Memorandum and Order adopting the Report, the district court, in response to the defendants' argument, noted that the argument, which had not been raised before the undersigned, was untimely. The court briefly distinguished Great-West Life & Annuity Ins. Co. v. Knudson from the present case, noting that the Report recommended only an award of equitable relief and citing certain factual differences between the two cases. (See Mem. at 1-2). Now that the parties have had an opportunity to fully brief the issue of whether the relief sought by plaintiff is equitable in nature, and with the additional guidance provided by more recent Supreme Court and Second Circuit cases, it becomes apparent that the guidelines set forth in Knudson apply in the present case.
. Plaintiff suggests that the outcome in the case would have been different if the plan had attempted to obtain recovery from the Trust. (PL's Mem. at 11).
. Plaintiff argues that the Court should impose a constructive trust in its favor, contending that a constructive trust is designed to give the court flexibility to fashion a remedy to deal with unconscionable conduct. (PL's Mem. at 8-9). Plaintiff contends that the imposition of a constructive trust is particularly appropriate here, where plaintiff erroneously paid benefits that should have been paid by defendants.
(Id.
at 10) (citing
Mid-Century Ins. Co. v. Menking,
. Defendant argues that even if the Court were to determine that plaintiff was entitled to recover from the Olsten Plan, judgment could only be enforced against the Olsten Plan and not against its successor in interest, Adecco, Inc.
(See
Def's. Mem. at 9) (citing
Coan v. Kaufman,