This week’s notable decision, Simonoff v. Saghafi, et al., No. 19-3001, __F.App’x__, 2019 WL 4691468 (6th Cir. Sept. 26, 2019), is one where your sympathies may align with the end result, but one which seemingly makes a case that it is difficult to get attorneys’ fees if you’re a successful party in an ERISA action.

As the panel noted in its opening line, “[a]ll family disputes are sad.”  The underlying dispute involved a QDRO enforcement action between a husband and his wife’s guardian following 55 years of marriage.  In short, Defendant Dr. Saghafi, alleged that his estranged daughter took advantage of his wife’s (her mother’s) dementia by isolating her from the family and hiring a divorce attorney who convinced the family court to issue two QDROs requiring Dr. Saghafi to sign off on the division of certain retirement funds.  He refused.  So, Plaintiff, the guardian of the wife’s estate, brought suit to enforce the QDROs.  Dr. Saghafi responded by bringing several counterclaims, including a civil RICO claim.  The district court enforced the QDROs and dismissed the counterclaims, not on their merits, but because of the Rooker-Feldman doctrine which prohibits federal appellate review of state judgments.

Plaintiff sought attorneys’ fees under ERISA against Dr. Saghafi and his lawyer.  The district court denied fees on the basis that Dr. Saghafi did not litigate in bad faith and that his positions were not objectively unreasonable.  The Sixth Circuit, in an unpublished opinion, found that the district court did not abuse its discretion and affirmed the decision.

The five factors the district court considered included:  (1) the opposing party’s culpability or bad faith; (2) the party’s ability to satisfy an award; (3) the general deterrent value of an award; (4) whether the party seeking fees was pursuing a “common benefit” for a plan’s beneficiaries or aiming to “resolve significant legal questions”; and (5) the merits of the parties’ positions.  Only the first and fifth factors were in dispute on appeal.

On the first factor, the Court appears to conflate culpability and bad faith.  The court explained that “[b]ad faith is often in the eye of the beholder.”  It was not unreasonable for the district court to see that Defendant was an elderly man who believed, sincerely, “that his daughter and her lawyers had teamed up to loot him by taking ruthless advantage of an old woman’s dementia and duping the Ohio courts.”  And, the district court is in a much better position to make these calls than an appellate court having only a cold record.

On the fifth factor, the Court did not find Dr. Saghafi’s legal positions to be frivolous.  He believed that the divorce proceedings were a fraud on the court.  His contention that the QDROs were void was a reasonable defense to the ERISA action.  Even though the Ohio courts already rejected his challenge to the validity of the divorce proceedings, the Court noted that res judicata can always be waived or forfeited.  “By itself, a prior adjudication is not enough to make a legal theory frivolous.”  The court also found that it was debatable whether his counterclaims breached the Rooker-Feldman doctrine.  Ultimately, it was enough for the Court that Dr. Saghafi’s defense theory was not “the legal equivalent of outer space.”

While the outcome of this case may seem fair depending on how you view Dr. Saghafi’s motivations and actions, a successful party in an ERISA action, particularly an ERISA plaintiff, should not have to show that a defendant’s legal theories are frivolous or out of this world to get an award of fees.

The rest of this past week’s cases are not out of this world, at least not for ERISAland.  Enjoy!

Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.

Attorneys’ Fees

Third Circuit

Atlantic Plastic and Hand Surgery, et al., v. Anthem Blue Cross Life and Health Insurance Company, et al., No. CV 17-4600 (FLD), 2019 WL 4635482 (D.N.J. Sept. 24, 2019) (Chief Judge Freda L. Wolfson). Having successfully sought dismissal of Plaintiff’s claims pursuant to Section 502(a)(1)(B), which arose from a partial denial of benefits under the health benefits plan, Defendant moved for an award of attorney’s fees and costs in the amount of $34,725.29. The court granted the motion, but denied it as to the amount sought because the attorney certification generally stating that the requested fee was “fair and reasonable under the circumstances” was insufficient to satisfy the initial burden of demonstrating that the requested rates are reasonable. Rather, to succeed on the motion, Defendant must establish that the requested rates compare with those prevailing in the community for similar services by providing additional affidavits from non-party lawyers of reasonably comparable skill, experience and reputation who practice within the forum within which the litigation is lodged. The court allowed Defendant to provide the appropriate proof for the purpose of establishing that the hourly rates at which it sought to recover attorney’s fees are reasonable.

Sixth Circuit

Simonoff v. Saghafi, et al., No. 19-3001, __F.App’x__, 2019 WL 4691468 (6th Cir. Sept. 26, 2019) (BEFORE: SUTTON, COOK, and THAPAR, Circuit Judges).  See Notable Decision summary.

Breach of Fiduciary Duty

Sixth Circuit

Kushner v. Nationwide Mutual Insurance Company, et al., No. 2:17-CV-00715, 2019 WL 4696306 (S.D. Ohio Sept. 26, 2019) (Judge Algenon L. Marbley).  Plaintiff alleged that Defendants breached their fiduciary duty under ERISA § 502(a)(3) to furnish accurate employee benefits information where Nationwide provided him with inaccurate Rewards Statements for ten straight years.  “And where there is a wrong, there must be a remedy. Whether Plaintiff is entitled to a judicial remedy, however, is a question best left for a jury.”  The court denied Nationwide’s motion for summary judgment on this claim.  However, the court found that the Administrative Committee, which delegated its responsibility to Nationwide, did not breach its fiduciary duty to Plaintiff.  The court also found that a reasonable juror could conclude that the balance of the equities warrants estoppel so the court denied dismissal of Plaintiff’s equitable estoppel claim.

Disability Benefit Claims

First Circuit

Weeman v. Life Insurance Company of North America, No. 2:18-CV-00278-JAW, 2019 WL 4724275 (D. Me. Sept. 26, 2019) (Judge John A. Woodcock, Jr.).  The court found that LINA’s denial of “any occupation” long-term disability benefits was not arbitrary and capricious.  Plaintiff did not present sufficient evidence that he could not work full-time in a sedentary position beyond his subjective affidavit and the opinions of his treating physicians.  The court found that LINA did not cherry-pick the record when it relied on six physician reviews, five of whom concluded that he was capable of sedentary work.

Fourth Circuit

Jordan v. AT&T Integrated Disability Service Center Disability Plan, No. CV 3:18-0094, 2019 WL 4696347 (S.D.W. Va. Sept. 25, 2019) (Judge Robert C. Chambers).  The parties in this case reached a lump sum settlement of Plaintiff’s short-term disability and long-term disability benefit claims.  Plaintiff objected to Defendants withholding taxes from the lump sum payment amount since they did not discuss reduction for taxes when they reached an agreement in principle.  The court denied Plaintiff’s Motion to Enforce Settlement and his request for the Court to direct Defendants to pay the full amount of the lump-sum payment without any withholdings.  The court found that the settlement qualifies as replacement wages for tax purposes.  The court also found that 26 U.S.C. §§ 105, 3401, and 3402 of the Internal Revenue Code supports the court’s conclusion that Defendants must withhold taxes from the settlement in this case.  

Sixth Circuit

Bustetter v. Standard Insurance Company, No. CV 18-1-DLB-EBA, 2019 WL 4645568 (E.D. Ky. Sept. 24, 2019) (Judge David L. Bunning). Plaintiff was initially approved for LTD and LWOP benefits based on inability to engage in his own occupation as a truck driver due to neck sprain, left shoulder pain, cervicalgia, spinal stenosis, SLAP lesion, and shoulder tendinosis. Several conditions, including diseases or disorders of the spine, were “limited conditions” under the terms of the plan for which the maximum benefit period was 24 months. In July 2016, Plaintiff was diagnosed with myelitis of cervical spine – a condition expressly excepted from the “limited conditions.” Based on three peer reviews and a TSA that determined Plaintiff could perform sedentary and light work, Defendant notified Plaintiff that he did not meet the “any occupation” disability standard and therefore, did not qualify for LTD and LWOP benefits. Plaintiff appealed and provided additional medical records and an FCE report. Defendant conducted another peer review and TSA. The vocational expert concluded that Plaintiff could engage in sedentary activities. The court granted Plaintiff’s motion for summary judgment in part, and denied Defendant’s motion. The court explained that although Defendant could have had Plaintiff examined by a physician of its choice, it chose not to do so. In addition, the peer reviewer devoted a mere paragraph to discussing Plaintiff’s FCE results, and failed to even acknowledge that Plaintiff’s treating physicians disagreed with her conclusions. While Defendant provided additional reasons for discounting the FCE results, the court held that Defendant was limited to relying on explanations it provided in the AR and not a post-hoc explanation. Finally, the court took particular issue with the peer reviewer discounting Plaintiff’s subjective complaints of pain, thereby making an implicit credibility determination without physically examining Plaintiff.  Based on the foregoing, the court held that Defendant’s denial of LTD benefits and LWOP was “arbitrary and capricious” (noting that the life insurance policy did not contain “limited conditions” provisions and also that Defendant did not address Plaintiff’s entitlement to LWOP in the appeal denial letter). 

Ninth Circuit 

Perez v. Lincoln National Life Insurance Co., No. 218CV07422CASJCX, 2019 WL 4673216 (C.D. Cal. Sept. 25, 2019) (Judge Christina A. Snyder).  On de novo review, the court determined that Plaintiff did not meet her burden of proving by the preponderance of the evidence that she is totally disabled and unable to do the material duties of her occupation or any other occupation for purposes of LTD and life insurance waiver of premium benefits.  The court considered medical evidence from five treating physicians, two independent medical examinations (Drs. Jay and Tashakkor), and three paper reviews (Drs. Aliyu, Liebermann, and Mohan).  The court also considered self-reported narratives from Plaintiff and her children but concluded that they could not support a finding of total disability.  In addition, the ALJ in Plaintiff’s SSDI benefits determination ruled against her and also did not find that Plaintiff was credible. 

Tenth Circuit

Foust v. Lincoln Nat’l Life Ins. Co., No. 2:17-CV-01208-TC, 2019 WL 4645416 (D. Utah Sept. 24, 2019) (Judge Tena Campbell).  Lincoln denied Plaintiff’s life waiver of premium (LWOP) benefits on the basis that he could have worked part-time in a sedentary job.  Lincoln paid Plaintiff two years of LTD benefits and then terminated his claim after determining that he could perform sedentary work.  The court granted Plaintiff’s motion for summary judgment, concluding that Defendant’s decision to deny LWOP benefits and to terminate LTD benefits was arbitrary and capricious. In reaching this conclusion regarding the LWOP, the court noted that Defendant did not consider all the evidence it had, such as the vocational assessment, and the opinions of treating doctors. The court stated that this was not a case where Defendant disagreed with certain medical evidence in favor of other medical evidence, but rather, Defendant simply ignored evidence that was inconvenient to its conclusion. With respect to LTD benefits, the court concluded that even if Defendant were to accept the more favorable conclusions reached by its peer reviewers, the unrebutted evidence provided by Plaintiff outweighed any finding that Plaintiff was employable. The court concluded that insurance companies cannot simply ignore inconvenient evidence, as Defendant had done here.


Seventh Circuit

Senior Lifestyle Corporation v. Key Benefit Administrators, Inc., No. 1:17-cv-02457 (JMS) (MJD), 2019 WL 4572811 (S.D. Ind. Sept. 20, 2019) (Magistrate Judge Mark J. Dinsmore). Plaintiff brought this action against Defendant for failure to pay premiums due under the stop-loss policy, asserting claims for breach of fiduciary duty and breach of contract. Before the court was Plaintiff’s motion to compel production of documents and for leave to take limited testimony on those documents. The court denied the motion because Plaintiff had ample time to realize it did not have certain invoices – which it now represents as critical to this case – and request any additional information with regard to them during the discovery period. The court, “at the risk of sounding like a broken record,” applied the same rationale to other discovery sought by Plaintiff.

Ninth Circuit

Rowekamp v. Providence Health & Services, No. 3:19-CV-0071-HRH, 2019 WL 4684436 (D. Alaska Sept. 25, 2019) (Judge H. Russel Holland).  In this dispute over medical coverage under a self-funded plan, the court denied Plaintiff’s motion to compel discovery because he has not shown that there was a structural conflict of interest.  The court did not find it compelling that the claims administrator is an affiliate or subsidiary of the plan sponsor; Plaintiff did not show they are so closely related that they should be treated as the same entity.  The court explained that Glenn does not support the proposition that there can be a conflict of interest even when the claims administrator and the plan sponsor are different entities.

Baird v. BlackRock Institutional Tr. Co., N.A., No. 17-CV-01892-HSG (KAW), 2019 WL 4620407 (N.D. Cal. Sept. 24, 2019) (Magistrate Judge Kandis A. Westmore). Plaintiffs sought documents concerning fee charges and revision of documents, including investment guidelines. Parties disputed whether such changes and revisions fell within the fiduciary exception to attorney-client privilege in ERISA cases which prohibits an employer acting in the capacity of ERISA fiduciary from asserting the privilege against plan beneficiaries on matters of plan administration. The court determined that some of the documents were discoverable under the fiduciary exception, because those documents concerned changes and revisions to fees and investment guidelines, which presumably occurred after Defendant was appointed as the securities lending agent (emphasis in original.) The court denied production of any documents which contained legal advice, as those documents were not subject to fiduciary exception. 

ERISA Preemption 

Fifth Circuit

Soileau & Associates, LLC, et al. v. Louisiana Health Service & Indemnity Company, No. CV 18-710-WBV-JCW, 2019 WL 4643601 (E.D. La. Sept. 24, 2019) (Judge Wendy B. Vitter). Plaintiffs brought several claims based on denial of continued inpatient medical treatment to Plaintiffs’ minor child. The case was removed by Defendant Blue Shield to federal court because the subject policy was governed by ERISA. Defendant Louisiana Health Service & Indemnity Company (“LHSIC”) brought a motion to dismiss all of Plaintiffs’ claims. The court granted the motion because Plaintiffs conceded that they had no ERISA claim against LHSIC. Plaintiffs’ state law claims under theories of negligence, bad faith, breach of fiduciary duty, unjust enrichment, civil conspiracy, and tortuous interference with contract were preempted by ERISA because the claims specifically addressed Plaintiffs’ right to receive benefits under an ERISA plan at issue, even if LHSIC was not an ERISA Defendant. Accordingly, the court dismissed all claims against LHSIC with prejudice. The court reached the same conclusion as to Defendant New Directions Behavioral health, LLC. The decision can be found at Soileau & Associates, LLC, et al. v. Louisiana Health Service & Indemnity Company, No. CV 18-710-WBV-JCW, 2019 WL 4643601 (E.D. La. Sept. 25, 2019).

Exhaustion of Administrative Remedies

Second Circuit

Weyant v. The Phia Group LLP, et al., No. 17 CIV. 8230 (LGS), 2019 WL 4688666 (S.D.N.Y. Sept. 26, 2019) (Judge Lorna G. Schofield).  In this putative class action challenging Defendants’ reimbursement efforts, the court granted Defendants’ motion for summary judgment due to Plaintiff’s failure to exhaust administrative remedies.  The court considered and rejected Plaintiff’s reasons for why she did not need to exhaust.  First, Plaintiff cannot rely on the fact that the Plan does not contain an exhaustion requirement for disputes regarding the Plan’s right to reimbursement.  Had she made any attempt to seek clarification, the issue may have been resolved immediately.  Second, exhaustion is still required despite Plaintiff’s alleged statutory nature of her claim.  The dispute is about the correct application of the Plan to her claims; judicial efficiency dictates that Plaintiff be required to exhaust administrative remedies.  Lastly, the Plan is a grandfathered health plan under § 147.140 so it was not required to follow the notice requirements of 45 CFR § 147.136(b)(2)(ii)(F).  Thus, its failure to do so does not excuse exhaustion.

Life Insurance & AD&D Benefit Claims

Tenth Circuit

Howell v. Liberty Life Assurance Company of Boston, No. 17-CV-02976-CMA-NYW, 2019 WL 4674335 (D. Colo. Sept. 25, 2019) (Judge Christine M. Arguello).  The court concluded that Liberty Life’s denial of AD&D benefits was not arbitrary capricious where the decedent died while driving recklessly (a misdemeanor under New York law) and the policy does not pay “for any loss that is contributed to or caused by…committing or attempting to commit a felony or misdemeanor….”  The court attributed little weight to Liberty Life’s dual role of insurer and claims administrator because it took steps to minimize the impact of its dual-role and promote accuracy.  “Specifically, Defendant implemented an appeal procedure, according to which Plaintiff’s initial claim denial was reviewed by a consultant who had no prior role in Plaintiff’s claim, and Defendant encouraged Plaintiff submit additional information in support of her claim.”

Medical Benefit Claims

Seventh Circuit

Mitchell v. I CAN Schools, et al., No. 1:19-CV-1744-JMS-DML, 2019 WL 4572938 (S.D. Ind. Sept. 20, 2019) (Chief Judge Jane Magnus-Stinson). Plaintiff brought suit alleging that her employer-provided health plan was cancelled without her knowledge, leaving her liable for medical costs incurred when she gave birth to her child. In a motion to dismiss, Defendants argued that Plaintiff was not an employee following certain transfers of schools by the management company. Plaintiff alleged the school for which she worked was not part of the transfer. The court determined that Plaintiff alleged sufficient facts to infer that there was an employer-employee relationship and that the employer was responsible for the erroneous cancellation of her health plan. Additionally, the court declined to take judicial notice of the records from the Ohio Secretary of State because the offered documents did not address whether the Defendants were related to each other in any way, and that, while this may have supported an inference that there was no relationship, it did not prove that inference was true.

Ninth Circuit

Cromwell v. Kaiser Found. Health Plan, No. 18-CV-06187-EMC, 2019 WL 4601527 (N.D. Cal. Sept. 23, 2019) (Judge Edward M. Chen). Plaintiff, whose daughter has autism, challenged Defendant’s classification of speech therapy as a non-mental health service pursuant to SB 946, and thus subject to the plan’s standard speech therapy benefits. This change resulted in Plaintiff needing to pay the $2,000 deductible before the $20 co-pay is triggered, whereas prior to the classification, Plaintiff only had to pay the $20 co-pay at each visit.  The court granted Defendant’s motion for summary judgment, holding that it did not violate the California Mental Health Parity Act because Kaiser’s policy regarding speech therapy services treats mental and physical conditions equally.

Tenth Circuit

E. M., T. M., & H. M. v. Humana & Northside Hospital Inc Flexible Benefit Plan, No. 2:18-CV-00789-CMR, 2019 WL 4696281 (D. Utah Sept. 26, 2019) (Magistrate Judge Cecilia M. Romero).  Plaintiffs brought two causes of action for payment of residential treatment services covering January 13, 2016 through May 25, 2018.  The court dismissed Plaintiffs’ claim under the Parity Act because they did not allege or identify a discriminatory process, strategy, standard or other factors or criteria used to deny benefits.  The court also found that Plaintiffs’ proposed amendment would be futile because the Parity Act claim under Section 502(a)(3) is duplicative of the Section 502(a)(1)(B) claim for benefits.  The court granted Humana’s motion to dismiss.

Pension Benefit Claims

Second Circuit

Romero v. Teamsters Union Local 272, No. 1:15-CV-07583-GHW, 2019 WL 4688642 (S.D.N.Y. Sept. 25, 2019) (Judge Gregory H. Woods).  The court dismissed the pro se plaintiff’s ERISA claims for denial of pension benefits against the Union because it is not an entity which can be held liable for his denial of benefits.  The court denied leave to amend the proper parties since Plaintiff did not exhaust his administrative remedies.

Astudillo v. United Food & Commercial Workers International Union Industry Pension Fund, No. 3:18-CV-394 (MPS), 2019 WL 4600302 (D. Conn. Sept. 23, 2019) (Judge Michael P. Shea). Plaintiff brought an action against Defendant alleging wrongful denial of payment of her deceased husband’s pension. The court granted Defendant’s motion for summary judgment because the decedent and Plaintiff were not legally married for the full one-year period ending on the date of Plaintiff’s husband’s death, and as such, Plaintiff did not qualify for the Surviving Spouse Benefit under the terms of the plan.

Dubuske, et al., v. PepsiCo, Inc., et al., No. 18 CV 11618 (VB), 2019 WL 4688706 (S.D.N.Y. Sept. 25, 2019) (Judge Vincent L. Briccetti). Under the plan, employees could take early retirement, before attaining the normal retirement age of 65. Plaintiffs alleged that Defendant’s formula set a fixed conversion factor and applied it to all plan participants alike, regardless of the prevailing interest rate of the day or the life expectancy of each participant in calculating early retirement benefits, which resulted in lower present values of their pensions and a forfeiture of vested benefits. The court granted Defendant’s motion to dismiss because Plaintiffs failed to plausibly allege a violation of ERISA’s anti-forfeiture provision. ERISA Section 203(a), 29 U.S.C. § 1053(a), applies only to normal retirement benefits upon the attainment of normal retirement age. The court further held that Plaintiffs’ claim for breach of fiduciary duty fails for the same reason.

Pleading Issues & Procedure

Sixth Circuit

Parker v. Metro. Life Ins. Co., No. 5:17CV01066, 2019 WL 4600630 (N.D. Ohio Sept. 23, 2019) (Judge John R. Adams). Plaintiff asserted various state law claims related to discrepancies regarding the beneficiaries of life insurance policies and a flexible retirement annuity. Defendant moved to dismiss Plaintiff’s complaint alleging the court lacked subject matter jurisdiction. The court granted the motion, holding that, although Plaintiff alleged that this court had jurisdiction over his claims because they were brought pursuant to ERISA, and, therefore, presented a federal question, the downfall for him was that ERISA did not actually apply to his claims because ERISA is only applicable in cases where employee benefit plans are at issue – in other words, where insurance or retirement benefits are established or maintained by an employer. Plaintiff failed to plead a connection between the employer and the policies at issue. The court declined to exercise jurisdiction over any state law claims.

Provider Claims

Third Circuit

Emami v. Empire Healthchoice Assurance, Inc., et al., No. CV 18-679 (JMV), 2019 WL 4597521 (D.N.J. Sept. 20, 2019) (Judge John Michael Vazquez). Plaintiff claimed that he was entitled to greater payment from Defendants pursuant to his patient’s health insurance benefits. Defendants argued that Plaintiff failed to state a claim under section 502(a)(1)(B), that the 2016 dates of service were time-barred, and that Plaintiff failed to exhaust administrative remedies. The court granted in part and denied in part Defendants’ motion to dismiss. The court held that the complaint failed to plausibly state a claim because Plaintiff set forth the allegations in a conclusory fashion without any facts to support his allegations. In addition, it concluded that while New Jersey usually adopted a six-year statute of limitations in ERISA claims, the plan could contract for a shorter period, as it has done here. However, Defendant failed to conduct an analysis as to the applicability of FRCP 15 relation back doctrine regarding the original complaint, and the court denied this part of the motion without prejudice. Finally, the court did not definitively rule on the exhaustion issue because it had already determined that the complaint failed to state a claim. The court did note, however, that both the plan and the EOB clearly indicated Plaintiff had 180 days to appeal.

Sixth Circuit

DaVita, Inc. v. Marietta Mem’l Hosp. Employee Health Benefit Plan, No. 2:18-CV-1739, 2019 WL 4574500 (S.D. Ohio Sept. 20, 2019) (Judge Sarah D. Morrison).  Plaintiffs are dialysis care providers who allege that the self-funded health plan reimburses them at a low rate in violation of federal law.  The court dismissed all six of their ERISA claims.  The court dismissed the Section 502(a)(1)(B) claim because it is based on allegedly illegal Plan provisions that the court determined were not illegal.  Specifically, Plaintiffs allege that Defendants violated ERISA by complying with Plan provisions that violate the Medicare Secondary Payer Act (“MSPA”).  The court determined that the Plan provisions do not violate the MSPA.  The court also found that Defendants do not violate the nondiscrimination provisions of ERISA because those with End Stage Renal Disease are treated the same as those without.  Lastly, the court determined that Plaintiffs do not have standing based on the assignment of benefits to bring breach of fiduciary duty claims on behalf of their patients.

Retaliation Claims

Sixth Circuit

Kushner v. Nationwide Mutual Insurance Company, et al., No. 2:17-CV-00715, 2019 WL 4696306 (S.D. Ohio Sept. 26, 2019) (Judge Algenon L. Marbley).  Plaintiff alleges that he was terminated from his job in retaliation for pursuing his entitlement to retirement benefits.  The court found that he failed to show that Nationwide’s reduction in force was used as a pretext for his termination.  Nationwide fired Plaintiff and nine others based on poor job performance.  Plaintiff did not point to any evidence that Nationwide failed to follow its own standards or company policies prior to terminating him.  

Subrogation/Reimbursement Claims

Second Circuit

Northwell Health Inc. v. Lamis, et al., No. 18CV1178, 2019 WL 4688704 (S.D.N.Y. Sept. 25, 2019) (Judge William H. Pauley, III). Defendant was injured while undergoing surgery at Northwell Forest Hills Hospital. Plaintiff partially covered her expenses. Thereafter, Defendant received a settlement as a result of her malpractice suit against the parties involved in her surgery. Plaintiff then moved for imposition of an equitable lien or a constructive trust over medical expenses it paid to treat Lamis’s injuries after the surgery. Defendants moved to dismiss the complaint, which the court denied. The court explained that the doctrine of “unclean hands” advanced by Defendants ran counter to the central purpose of ERISA, which was to protect contractually defined benefits. The plan at issue specifically required that beneficiaries reimburse the plan for injuries caused by a third party. The court also rejected Defendants’ argument that the PD/SPD did not comply with § 402 because ERISA did not require written instruments to set forth complex procedures. Finally, the court determined that Plaintiff was a “third party” for purposes of reimbursement, and even if it were not, other parties to the medical malpractice lawsuit were, which triggered Defendants’ reimbursement obligations.


First Circuit

MacNaughton v. Paul Revere Life Ins. Co., No. CV 4:19-40016-TSH, __F.Supp.3d__, 2019 WL 4573540 (D. Mass. Sept. 20, 2019) (Judge Timothy S. Hillman).  In this case involving denied long-term disability benefits, where Plaintiff is a resident of Kansas and Paul Revere is an insurance company formed under the laws of the Commonwealth of Massachusetts, the court denied Defendants’ motion to transfer the case to the District of Kansas.  The dispute is whether the public interest factors favor transfer to Kansas.  The court found that they did not.  First, Kansas and Massachusetts both have a local interest in the resolution of the case so this factor is neutral.  Second, docket congestion does not weigh in favor of transfer where the difference in caseload is 20 cases and average time for disposition is roughly three months.  Third, this case is related to Massachusetts because Paul Revere is a Massachusetts-based company and at least one medical review occurred in Massachusetts.  Lastly, the court found that Plaintiff has not engaged in forum shopping where there was a valid reason to file her complaint in Massachusetts.

Withdrawal Liability & Unpaid Contributions

Second Circuit

Rochester Laborers’ Welfare-S.U.B. Fund v. Akwesasne Constr., Inc., No. 15-CV-6757-FPG, 2019 WL 4673431 (W.D.N.Y. Sept. 25, 2019) (Judge Frank P. Geraci, Jr.).  The court determined that Plaintiffs have standing to sue a third-party alter ego (Akwesasne) for pre-petition debt of a debtor (Cardinell) who enjoys bankruptcy protection.  Akwesasne continues to exist and do the same work as Cardinell.  Though Cardinell is a signatory to the CBAs, Akwesasne may be held liable as an alter ego.

Trustees Of The Bricklayers And Allied Craftworkers, Local 5 New York Retirement, Welfare, Labor Management Coalition v. Preferred Masonry Restoration, Inc., et al., No. 17-CV-3662 (KMK), 2019 WL 4688601 (S.D.N.Y. Sept. 25, 2019) (Judge Kenneth M. Karas).  The Court granted Plaintiffs’ Motion To Amend and directed Plaintiff to file an amended complaint that (1) corrects the case caption to comply with 40 U.S.C. § 3133(b)(3)(A); (2) corrects the bond number; and (3) further develops their Miller Act claim.

Trustees of Pavers & Rd. Builders Dist. Council Welfare, Pension, Annuity & Apprenticeship, Skill Improvement & Safety Funds v. Genrus Corp., No. 18CV04232AMDCLP, 2019 WL 4602880 (E.D.N.Y. Sept. 23, 2019) (Judge Ann M. Donnelly).  The court adopted the R&R and granted Plaintiff’s motion for default judgment.  The court awarded Plaintiff $15,999.28 and ordered Defendant to submit to an audit of its books and records for the period of December 1, 2014 through the present within 30 days of this order and to pay any amounts determined to be due and owing. 

Trustees of the New York City District Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund v. Piccini MNM, Inc., No. 18-CV-08202 (ALC), 2019 WL 4593649 (S.D.N.Y. Sept. 23, 2019) (Judge Andrew L. Carter, Jr.).  The court granted Petitioners’ motion to confirm the arbitration award and awarded “judgment in favor of the Petitioners and against Respondent in the amount of $13,217.17 pursuant to the June 4, 2018 arbitration award with interest to accrue at the rate of 5.75% from the date of the Award, pursuant to the arbitrator’s Award, plus $1,807 in attorneys’ fees and $75 in costs arising out of this petition, and post-judgment interest at the statutory rate.” 

Gesualdi, et al., v. BKS-NY, LLC, No. CV 18-1708 (SJT) (AKT), 2019 WL 4571113, (E.D.N.Y. Sept. 20, 2019) (Magistrate Judge A. Kathleen Tomlinson). Plaintiffs brought an action against Defendant to recover unpaid contributions, interest, liquidated damages, and attorney’s fees and costs. The court previously entered default judgment and ordered Defendant to pay $516,943.78. Thereafter, Plaintiffs brought a motion seeking an order: (1) compelling Defendant’s principal, Luke Kollasch to appear for a post-judgment deposition and to produce documents in compliance with the duly-served subpoena; and (2) imposing sanctions in the form of attorneys’ fees and costs for “flouting” the subpoena. The court ordered Kollasch to appear and show cause why sanctions should not be imposed upon him for his failure to comply with a duly authorized subpoena and to produce the records called for in the subpoena. The court also ordered Kollasch to produce documents responsive to Plaintiffs’ subpoena.

Annuity, Pension, Welfare, Training & Labor Mgmt. Cooperation Tr. Funds of Int’l Union of Operating Engineers v. Coastal Envtl. Grp. Inc., No. 18-CV-5773 (AMD)(ST), 2019 WL 4602851 (E.D.N.Y. Sept. 23, 2019) (Judge Ann M. Donnelly). The court granted in part and denied in part Plaintiffs’ motion for default judgment and awarded a sum total of $17,623.58 for unpaid contributions, prejudgment interest, statutory damages, unpaid non-ERISA contributions, and attorney’s fees and costs. In addition, the court entered judgment against the Defendant and found it liable for unpaid contributions for all of the ERISA funds except the Annuity Voluntary Fund because the Plaintiffs failed to allege that any named Plaintiff was authorized to collect delinquent contribution on this fund’s behalf.

Fourth Circuit

Trustees of The Ironworker Local Union No. 16, Pension Plan et al. v. Ole Men & Sons, LLC, No. 1:18-CV-03219-ELH, 2019 WL 4576302 (D. Md. Sept. 20, 2019) (Magistrate Judge J. Mark Coulson).  The court granted Plaintiff’s motion for default judgment and awarded Plaintiffs a total judgment of $180,338.21 for unpaid contributions.

Seventh Circuit

Acosta v. Air, LLC d/b/a TantaComm, et al., No. 18-Cv-235-Wmc, 2019 WL 4670189 (W.D. Wis. Sept. 25, 2019) (Judge William M. Conley). The Department of Labor filed a lawsuit against Defendants alleging several violations of ERISA, including breach of fiduciary duty and failure to remit contributions made by employees intended for the 401(k) and the health plans, and instead using them to pay Defendants’ expenses. The court entered default judgment, and awarded $203,788.20 for withheld contributions. The court also granted a permanent injunction preventing Defendants from serving as fiduciaries to any ERISA-covered employee benefit plan.