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8th Cir. – Proper Party, Equitable Claim, and Plan Administrator

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  • 8th Cir. – Proper Party, Equitable Claim, and Plan Administrator

    Here’s a new case out of the Eighth Circuit entitled CeCelia Catherine Ibson v. United Healthcare Services, Inc. This case has been around for sometime and the court is now addressing a new set of issues. The court first finds that for an § 1132(a)(1)(B) claim for benefits, the estate of the decedent would need to be the plaintiff rather than the decedent’s widow.

    The fact that Ibson was the plan “participant” is of no significance. The alleged benefits accrued to Wagner for his treatment as a “beneficiary,” and § 1132(a)(1)(B) provides a cause of action to the “participant or beneficiary” to whom benefits were “due.” Bolstering this conclusion is the opinion in Harrow v. Prudential Insurance Company of America, 279 F.3d 244 (3d Cir. 2002)—a decision cited as support for our holding in Geissal. There, a plan participant was granted standing to sue for benefits owed a deceased beneficiary solely because she was the administrator of the decedent-beneficiary’s estate, and thus “[stood] in the shoes of the decedent.” Id. at 248 & n.7 (internal quotation marks omitted). Thus, for benefits “due to [Wagner],” § 1132(a)(1)(B), a legal representative of his estate must bring the claim, not Ibson in her personal capacity.
    Next, the court concludes that the plaintiff’s claim for benefits, formulated as an equitable remedy claim, should be dismissed, but her claim for return of premiums may survive.

    As for Ibson’s claim for premiums under restitution, “not all relief falling under the rubric of restitution is available in equity.” Great-W. Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 212 (2002). A restitution claim is cognizable in equity only if “money or property belonging in good conscience to the plaintiff [can] clearly be traced to particular funds or property in the defendant’s possession.” Id. at 213. In Sereboff, the Court found an action equitable where recovery was sought on “a specifically identified fund, not from the [defendant’s] assets generally.” 547 U.S. at 363. Much like in Sereboff, Ibson has identified specific funds—her premiums—that are potentially in UHS’s possession. As a result, the restitutionary remedy she seeks for her premiums is equitable. Cf. Cent. States, Se. & Sw. Areas Health & Welfare Fund v. First Agency, Inc., 756 F.3d 954, 960 (6th Cir. 2014) (finding relief requested to be legal rather than equitable because plaintiff’s request had “no connection to any particular fund at all,” and defendant could “satisfy that obligation by dipping into any pot it chooses”).

    But, that does not end the inquiry. Ibson must still show that the funds (her premiums) have not “dissipated.” Montanile, 136 S. Ct. at 659 (restitution inappropriate where “defendant once possessed a separate, identifiable fund . . . but then dissipated it all”). The critical question is whether Ibson’s premiums are “separate from [UHS’s] general assets”—rather than “mixed” with those assets—“or dissipated . . . on nontraceable assets.” Id. at 662. If the funds are indeed separate, an equitable remedy to her premiums is potentially available to Ibson under § 1132(a)(3)(B).
    Finally, the court concludes that the statutory penalty claim does not survive because the plan administrator was not named and, therefore, does not de facto become UHS.

    More importantly, ERISA, by its plain language, forecloses this argument: where a plan administrator is not explicitly designated, as is the case here, the “plan sponsor” is also the plan administrator. 29 U.S.C. § 1002(16)(A)(ii). Here, under ERISA, Ibson’s former law firm was the plan sponsor. § 1002(16)(B)(i). Therefore, it was also the plan administrator. While this may seem at odds with the functional roles the law firm and UHS played, the statutory language of ERISA compels the conclusion that the law firm was the plan administrator in this case, and our role is “to apply, not amend, the work of the People’s representatives.” Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718, 1726 (2017).
    The opinion is attached below.

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