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US Airways, Inc. v. McCutchen

August 30, 2010

US AIRWAYS, INC. IN ITS CAPACITY AS FIDUCIARY AND PLAN ADMINISTRATORS OF THE US AIRWAYS, INC. EMPLOYEE BENEFITS PLAN, PLAINTIFF,
v.
JAMES E. MCCUTCHEN AND ROSEN, LOUIK & PERRY, P.C., DEFENDANTS.



The opinion of the court was delivered by: David Stewart Cercone United States District Judge

Electronic Filing

MEMORANDUM OPINION

I. INTRODUCTION

Plaintiff, US Airways, Inc. ("US Airways"), in its capacity as fiduciary and administrator of the US Airways, Inc. Health Benefit Plan (the "Plan"), filed this action against Defendants, James E. McCutchen ("McCutchen") and the law firm of Rosen, Louik and Perry, PC ("RL&P") seeking equitable relief under Section 502(a)(3) of the Employee Retirement Income Security Act of 1974, as amended, ("ERISA"), 29 U. S. C. § 1132(a)(3), to enforce certain subrogation/reimbursement provisions of the Plan. US Airways has filed a motion for summary judgment, Defendants have responded and the motion is now before the Court.

II. STATEMENT OF THE CASE

On January 24, 2007, McCutchen sustained multiple injuries in an automobile accident (the "Accident"). Plaintiff's Concise Statement of Undisputed Material Facts ("Pl. SUMF") ¶ 4; Affidavit of Jon Perry ("Perry Aff.") ¶¶ 2 & 3. At the time of the accident, McCutchen was an employee of US Airways, and allegedly a beneficiary under the Plan which provided medical expense benefits to its participants. Pl. SUMF ¶ 3. The Plan paid accident-related medical expenses on behalf of McCutchen in the amount of $66,865.82. Pl. SUMF ¶ 5.

Attorney Jon R. Perry and the law firm of Rosen, Louik and Perry, PC were retained by the McCutchens to pursue claims related to the accident. Pl. SUMF ¶ 6; Perry Aff. ¶ 2. In June of 2007, Perry and RL&P were notified by Ingenix Subrogation Services ("Ingenix") that it had been retained by the Plan to recover medical benefits paid by the Plan on behalf of McCutchen for treatment of injuries arising out of the Accident. Pl. SUMF ¶ 7; Perry Aff. Exhibit 1. McCutchen denied the Plan's right to reimbursement out of any settlement proceeds. Pl. SUMF ¶ 9. McCutchen's claims were eventually settled for $10,000.00 from the driver whose vehicle struck McCutchen's, and $100,000.00 in underinsured motorist benefits (the "UIM Claim"), the limits of the policy, under McCutchen's automobile insurance policy. Perry Aff. ¶¶ 6, 7, 10 &11.

RL&P deducted its fee and a proportionate share of the expenses from the total settlement and placed $41,500.00 in its trust account for any lien against McCutchen found to be valid. Perry Aff. Exhibit 21; Pl. SUMF ¶¶ 13 & 14. The Plan is seeking the $41,500.00 held by RL & P, as well as $25,365.82 allegedly in the possession of McCutchen. Defendants contend that the Plan does not have an enforceable lien in this matter.

III. LEGAL STANDARD FOR SUMMARY JUDGMENT

Pursuant to FED. R. CIV. P 56(c), summary judgment shall be granted when there are no genuine issues of material fact in dispute and the movant is entitled to judgment as a matter of law. To support denial of summary judgment, an issue of fact in dispute must be both genuine and material, i.e., one upon which a reasonable fact finder could base a verdict for the non-moving party and one which is essential to establishing the claim. Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). When considering a motion for summary judgment, the court is not permitted to weigh the evidence or to make credibility determinations, but is limited to deciding whether there are any disputed issues and, if there are, whether they are both genuine and material. Id. The court's consideration of the facts must be in the light most favorable to the party opposing summary judgment and all reasonable inferences from the facts must be drawn in favor of that party as well. Whiteland Woods, L.P. v. Township of West Whiteland, 193 F.3d 177, 180 (3d Cir. 1999), Tigg Corp. v. Dow Corning Corp., 822 F.2d 358, 361 (3d Cir. 1987).

When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In the language of the Rule, the nonmoving party must come forward with "specific facts showing that there is a genuine issue for trial." FED. R. CIV. P 56(e). Further, the nonmoving party cannot rely on unsupported assertions, conclusory allegations, or mere suspicions in attempting to survive a summary judgment motion. Williams v. Borough of W. Chester, 891 F.2d 458, 460 (3d Cir.1989) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). The non-moving party must respond "by pointing to sufficient cognizable evidence to create material issues of fact concerning every element as to which the non-moving party will bear the burden of proof at trial." Simpson v. Kay Jewelers, Div. Of Sterling, Inc., 142 F. 3d 639, 643 n. 3 (3d Cir. 1998), quoting Fuentes v. Perskie, 32 F.3d 759, 762 n.1 (3d Cir. 1994).

IV. DISCUSSION

ERISA expressly authorizes fiduciaries of ERISA-governed plans to sue to seek redress of violations or enforce provisions of ERISA or of particular plans. 29 U.S.C. § 1132(a)(3). Further, where an ERISA-governed plan seeks to impose a constructive trust or equitable lien on "particular funds or property in the defendant's possession," such plan is seeking equitable restitutionary relief as contemplated by ERISA under § 502(a)(3). Sereboff v. Mid-Atlantic Medical Services, 547 U.S. 356, 361-362 (2006). Here, US Airways is seeking to enforce certain subrogation/reimbursement provisions of the Plan.

As an initial matter, Defendants argue that there is an issue of fact regarding whether McCutchen was actually covered by the US Airways, Inc. Health Benefit Plan. The Court finds such contention to be without merit. There is no dispute that at the time of the accident, McCutchen was an employee of US Airways. US Airways has explained the confusion regarding McCutchen's coverage which occurred in an out-of-court representation early in this litigation. See U.S Airways Appendix, Ex. 1, Affidavit of Kimie Shanahan*fn1 ("Shanahan Aff.") ΒΆΒΆ 4 & 5. Moreover, Defendants have offered no material evidence to the contrary. Because the Court finds that the US Airways, Inc. Health ...


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