Holzmeyer v. Walgreen Income Protection Plan for Pharmacists & Registered Nurses
Holzmeyer v. Walgreen Income Protection Plan for Pharmacists & Registered Nurses
Opinion of the Court
ORDER GRANTING SUMMARY JUDGMENT ON DEFENDANT’S COUNTERCLAIM
This cause is before the Court on Defen-danWCounterclaimant Walgreen Income Protection Plan’s (“the Plan”) Motion for Summary Judgment [Docket No. 29], filed on October 1, 2013, and Defendant-Coun-terclaimant’s Motion to Amend [Docket No. 36], filed on September 10, 2014. For the reasons set forth below, Defendant Counterclaimant’s motion for summary judgment is GRANTED in relevant part, and the motion to amend is GRANTED.
Background
In August and October, 2013, respectively, the parties submitted cross motions for summary judgment on Plaintiffs claim for long-term disability benefits pursuant to ERISA.
Standard of Review
A. For summary judgment under Rule 56
Federal Rule of Civil Procedure 56 provides that summary judgment should be granted when the record evidence shows that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. Pro. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-323, 106 S.Ct. 2548, 91 L,Ed.2d 265 (1986). The purpose of summary judgment is to “pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106. S.Ct. 1348, 89 L.Ed.2d 538 (1986). Disputes concerning material facts are genuine where the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In deciding whether genuine issues of material fact exist, the court construes all facts in a light most favorable to the non-moving party and draws all reasonable inferences in favor of the non-moving party. See id. at 255, 106 S.Ct. 2505. However, neither the “mere existence of some alleged factual dispute between the parties,” id., 477 U.S. at 247, 106 S.Ct. 2505, nor the existence of “some metaphysical doubt as to the material facts,” Matsushita, 475 U.S. at 586, 106 S.Ct. 1348, will defeat a motion for summary judgment. Michas v. Health Cost Controls of Ill., Inc.; 209 F.3d 687, 692 (7th Cir. 2000).
B. Under Rule 60(a)
Federal Rule of Civil Procedure 60(a) authorizes the district court to “correct a clerical mistake or a mistake arising from oversight or omission whenever one is found in a judgment.” Fed. R. Civ. Pro. 60(a). Motions to amend under Rule 60(a) are not the proper vehicle for relief where the original judgment is “infected by error,” either legal or factual; rather, they serve to allow the remedying of clerical oversights or omissions. See Klingman v. Levinson, 877 F.2d 1357, 1360-1361 (7th Cir. 1989).
Discussion
I. Background to the Counterclaim
Plaintiff Michael Holzmeyer is a former employee of Walgreen, Inc. who was enrolled in the company’s Income Protection Plan for Pharmacists and Registered Nurses (“the Plan”). The Plan contains a provision explaining that the company retains the right to recover overpayments for “retroactive awards received from sources shown in the Benefit Offset (Reductions) section”- — sources that the Plan elsewhere defines to include payments from Social Security. Pl.’s Ex. 2 at 10-11. On December 9, 2010, Holzmeyer signed a “Reimbursement Agreement” in connection with his application for disability benefits from the Plan. In that document, he affirmed that: “I understand that my benefits from the Walgreens Income Protection Plan for my disability are subject to reduction for certain benefits I am eligible for from Social Security, Workers Corn-
Holzmeyer had stopped his work as a “home pharmacist” for Walgreens on April 4, 2010, due to back pain that he alleged rendered him disabled. Holzmeyer. applied for, and received, short term disability benefits under the Plan for six months — from April 7 to October 3, 2010. R. 176-177; Pl.’s Ex. 2 at 8. Starting on October 4, 2010, Holzmeyer also received long term disability benefits under the Plan, until the Plan terminated his benefits effective September 20, 2011. See Docket No. 36 at 10-13. During this same period, Plaintiff also applied for SSDI benefits from the Social Security Administration (SSA). SSA approved Holzmeyer’s application, and it awarded him SSDI benefits retroactive to October 2010.
On November 4, 2011, the Walgreens Disability Department sent Mr. Holzmeyer a letter informing him that his SSDI benefits had resulted in an overpayment of $23,709.33 in long-term disability benefits for the period in which he was receiving both SSDI benefits and benefits under the Plan; the letter sought immediate repayment of this amount. Def.’s Ex. C.
II. ERISA entitlement to recovery
Defendant brings this counterclaim under ERISA, which authorizes claims for equitable relief to enforce the terms of a covered benefits plan. See 29 U.S.C. § 1132(a)(3). Plaintiff admits that he has been overpaid by $23,709.33, Answer to Counterclaim, at ¶ 8, but asserts that “Defendant has failed to properly plead and prove their [sic] entitlement- to this recoupment.” Docket No. 31 at 27. Specifically, Plaintiff asserts that since Defendant seeks the enforcement of an equitable lien by agreement, Defendant must show: “(1) the existence of a promise to reimburse the fiduciary for benefits if there is recovery from a third party; (2) [that] the reimbursement agreement identifies a specific fund apart from the beneficiary’s general assets from which the anticipated reimbursement will be paid; and (3) [that] the funds identified by the Defendant [are] ‘within the possession and control’ of the plaintiff.” Id. (citing Bilyeu v. Morgan Stanley Long Term Disability Plan, 683 F.3d 1083, 1092 (9th Cir. 2012); Sereboff v. Mid Atl. Med. Servs., Inc., 547 U.S. 356, 364-365, 126 S.Ct. 1869, 164 L.Ed.2d 612 (2006)). Plaintiff argues that Defendant
In Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356, 126 S.Ct. 1869, 164 L.Ed.2d 612 (2006), the United States Supreme Court clarified the scope of equitable relief that is available to a plan trustee seeking to enforce a plan’s provisions pursuant to 29 U.S.C. § 1132(a)(3). The Court held that a provision of an ERISA plan calling for recovery of funds where the beneficiary had also recovered from a third party was an “equitable lien by agreement,” and action to enforce it was “equitable” in nature, even though it shared many of the characteristics of a legal action for breach of contract. 547 U.S. at 362-363, 126 S.Ct. 1869. The Court distinguished this holding from several of its previous decisions by noting that, in the case before it, the funds sought by the trustee were “specifically identifiable” and “within the possession and control” of the beneficiaries. Id. In the Ninth Circuit decision relied upon by Plaintiff— Bilyeu v. Morgan Stanley Long Term Disability Plan, 683 F.3d 1083 (9th Cir. 2012) — the court read Sereboff as establishing a three-part test, requiring not only the existence of a promise to reimburse, but the agreement’s identification of a specific fund apart from the beneficiary’s general assets which is under the “possession and control” of the beneficiary. 683 F.3d at 1092-1093.
We agree with Defendant that Seventh Circuit case law, rather than the reasoning of the Ninth Circuit in Bilyeu, is controlling here.
Defendant’s counterclaim here is analogous to that at issue in Gutta in all relevant respects. Although he seeks reimbursement for SSDI overpayments rather than proceeds from a separate group insurance policy, the difference is immate
Defendant has demonstrated a clear entitlement to recover its overpayment. The facts are not in dispute, and the Seventh Circuit’s decision in Gutta recognizes the viability of Defendant’s Counterclaim to recover overpayment pursuant to a plan’s terms under 29 U.S.C. § 1132(a)(3). We possess the power to amend our judgments without notice, sua sponte or on the motion of a party, in order to correct an omission. Fed. R. Civ. Pro. 60(a).
Conclusion
Our resolution -of Defendant’s Counterclaim does not affect the conclusions we reached in our Order of September 4, 2014, which we reaffirm in its entirety. Because our previous Order omitted discussion of the Counterclaim, we GRANT IN PART Defendant’s motion for summary judgment with respect only to the Counterclaim,
IT IS SO ORDERED.
. See the Court's order of September 4, 2014 [Docket No. 36] for a full discussion of the
. Although SSA found Holzmeyer disabled as of April 2010, SSDI rules provide that a claimant must be disabled for five full calendar months in a row before he becomes enti- • tied to benefits. R. 298.
. Citations to the Record (R.) refer to the administrative record compiled by the Plan and attached to Defendant’s motion for summary judgment [Docket No. 30],
.The discrepancy between the SSDI award of $24,669.00 and Defendant's claimed overpayment amount of $23,709.33 appears to be due to the fact that Plaintiff only received double payment for the first 19 days of September 2011 until the Plan terminated his long-term disability benefits.
. We also disagree with Plaintiff's contention that the Supreme Court's recent decision in CIGNA Corp. v. Amara, - U.S. -, 131 S.Ct. 1866, 179 L.Ed.2d 843 (2011) reinforces Plaintiff’s preferred reading of the distinction between legal and equitable relief or undermines the reasoning of Gutta. Plaintiff correctly quotes the Court as underscoring that, "traditionally speaking, relief that sought a lien or a constructive trust was legal relief, not equitable relief, unless the funds in question were 'particular funds or property in the defendant's possession.' ” 131 S.Ct. at 1879. This quotation, however, merely summarizes the principle recognized in Knudson and distinguished by Sereboff (and Gutta). The Supreme Court in Amara did not reject or call into question its holding in Sereboff, and Amara at any rate dealt with a different issue than those presented in Sereboff, Gutta, and this case.
. The Counterclaim was fully .briefed as part of the parties’ briefing on their cross motions for summary judgment. See Docket Nos. 30, 31, 32. Because Rule 60(a) authorizes us to correct a clerical oversight sua sponte and without notice, we need not wait for Plaintiff to file a response to Defendant's Rule 60(a) motion before we issue this Order.
. . As stated in our September 4, 2014 Order, Defendant's motion for summary judgment is denied in all other respects.
Reference
- Full Case Name
- Michael HOLZMEYER, Plaintiff-Counterclaim v. WALGREEN INCOME PROTECTION PLAN FOR PHARMACISTS AND REGISTERED NURSES, Defendant-Counterclaimant
- Status
- Published