Board of Trustees of the Southwest Carpenters Health and Welfare Trust v. Jackson

• Court: District Court, D. Arizona
• Decided: July 12, 2023
• Docket: 2:22-cv-01781
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Board of Trustees of the Southwest No. CV-22-01781-PHX-SMM Carpenters Health and Welfare Trust, 10 ORDER Plaintiff, 11 v. 12 Veloria Jackson, et al., 13 Defendants. 14 15 Pending before the Court is Defendants’ Motion to Dismiss. (Doc. 46). The Motion 16 is fully briefed (Docs. 47 and 48). For the following reasons, the Motion is denied. 17 I. Background and Procedural History 18 Plaintiff Board of Trustees of the Southwest Carpenters Health and Welfare Trust 19 is plan administrator and fiduciary of the Southwest Carpenters Health and Welfare Plan 20 for Active Carpenters (“the Plan”). (Doc. 1 at 2). 21 Defendant Darwin Jackson participated in the Plan and enrolled his daughter, Cyndi 22 Jackson, as a beneficiary of the Plan. (Doc. 1 at 3). The Plan, in a section titled 23 “Reimbursement,” provides that “[i]f you obtain a recovery and the Plan has not been 24 repaid for the benefits the Plan paid on your behalf, the Plan shall have a right to be repaid 25 from the recovery in the amount of the benefits paid on your behalf . . .” (Doc. 1-2 at 131). 26 The section states, “[n]otwithstanding any allocation or designation of your recovery (e.g. 27 pain and suffering) made in a settlement agreement or court order, the Plan shall have a 28 right of full recovery, in first priority, against any recovery.” (Doc. 1 at 5; Doc.1-2 at 131). 1 Further, “[i]f the covered person is a minor, any amount recovered by the minor, the 2 minor’s trustee, guardian, parent, or other representative, shall be subject to this provision. 3 Likewise, if the covered person’s relatives, heirs, and/or assignees make any recovery 4 because of injuries sustained by the covered person, that recovery shall be subject to this 5 provision.” (Doc. 1 at 5; Doc. 1-2 at 132). 6 On February 5, 2020, Cyndi Jackson was admitted to Chinle Hospital where she 7 was diagnosed with symptomatic diverticulum and a possible sealed perforation. (Doc. 1 8 at 3). The following day, she was flown to Phoenix Children’s Hospital, where she died on 9 February 9, 2020. (Id.) The Plan paid $105,569.44 worth of benefits on behalf of Cyndi 10 Jackson for medical treatment associated with her treatment at Phoenix Children’s 11 Hospital. (Id. at 5). 12 On July 16, 2020, Darwin and his wife, co-Defendant Veloria Jackson, filed a 13 medical malpractice lawsuit against the Phoenix Children’s Hospital in Arizona state court. 14 (Doc. 1-1 at 1). That lawsuit sought “general damages for Veloria and Darwin for the loss 15 of their daughter, . . . purusant [sic] to A.R.S. § 12-613 and Arizona law;” “economic 16 damages incurred by Cyndi’s Estate including medical bills…;” and “all other damages 17 allowable under Arizona law;” as well as other damages. (Doc. 1 at 4; Doc. 1-1 at 7-8). On 18 April 4, 2022, Darwin and Veloria Jackson settled the claims alleged in that lawsuit for a 19 confidential amount. (Doc. 1 at 4). Alongside the settlement, the Jacksons—on behalf of 20 themselves, the Estate of Cyndi Jackson, and the Statutory Beneficiaries of the wrongful 21 death claim—signed a “Memorandum of Settlement Agreement” (“MSA”) which states 22 that the settlement resolved “all claims asserted or which could be asserted” in the 23 malpractice lawsuit. (Id.; Doc. 37-2). Veloria signed the MSA on behalf of herself and the 24 statutory beneficiaries and Darwin signed the MSA “on behalf of himself & the Estate.” 25 (Doc. 37-2 at 2). The MSA does not divide the settlement amount into specific amounts 26 for the settling of individual claims, but instead presents the settlement as a single amount 27 for all claims asserted or which could have been asserted. 28 $105,569.44 of the settlement is being held in the trust account of the law firm that 1 represented the Jacksons in their malpractice suit, Kelly & Lyons, PLLC. (Doc. 1-1 at 5). 2 The remainder of the settlement has been disbursed to the Jacksons and/or to Kelly & 3 Lyons, PLLC. (Id.) 4 On June 16, 2022, Plaintiff filed a Complaint in the United States District Court for 5 the Central District of California. (Doc. 1). The Complaint sought an equitable lien on 6 $105,569.44 of the settlement proceeds held by Kelly & Lyons, PLLC and/or the 7 Jacksons—the amount that the Plan paid out for Cyndi’s medical expenses. (Id. at 6). 8 On September 9, 2022, Defendants filed a Motion to Dismiss. (Doc. 32). In that 9 Motion, Defendants asked the court to dismiss Plaintiff’s complaint for (1) lack of personal 10 jurisdiction, (2) forum non conveniens, (3) failure to state a claim upon which relief may 11 be granted, or (4) failure to join an indispensable party. (Doc. 32 at 1). Defendants’ 12 arguments under the first two theories centered around the contention that the case should 13 not be adjudicated in California. (Id. at 5). Defendants argued that the case should be tried, 14 if at all, in Arizona. (Id. at 10). 15 On October 5, 2022, Judge Stanley Blumenfeld, Jr.—the judge presiding over the 16 case in the Central District of California—issued an order transferring the case to the 17 District of Arizona. (Doc. 41). That order did not rule on Defendants’ arguments for 18 dismissal under Rule 12(b)(6) and (7), which remained pending. (Id.) The parties’ briefs 19 from the Motion to Dismiss filed in the Central District of California focused on whether 20 the case should be tried in California or Arizona. As a result, upon receiving this case, this 21 Court denied without prejudice the initial Motion to Dismiss and welcomed Defendants to 22 file a new Motion to Dismiss that more fully addressed their arguments under Rule 12(b)(6) 23 and (7). Defendants did so and that Motion is fully briefed. (Docs. 46-48). 24 II. Legal Standard 25 A motion to dismiss pursuant to Rule 12(b)(6) challenges the legal sufficiency of a 26 complaint. Cook v. Brewer, 637 F.3d 1002, 1004 (9th Cir. 2011) (citation omitted). Rule 27 12(b)(6) must be read in conjunction with Rule 8, which requires “a short and plain 28 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2); 1 see also Ileto v. Glock, Inc., 349 F.3d 1191, 1199-1200 (9th Cir. 2003). A complaint need 2 not provide detailed factual allegations but must provide more than “labels and 3 conclusions.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). It must contain 4 factual allegations sufficient to raise a right to relief above the speculative level and to 5 “state a claim that is plausible on its face.” Id. at 555, 570. “A claim has facial plausibility 6 when the pleaded factual content allows the court to draw the reasonable inference that the 7 defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 8 (citing Twombly, 550 U.S. at 556). A court may dismiss a claim either because it lacks “a 9 cognizable legal theory” or because it fails to allege sufficient facts to support a cognizable 10 legal claim. See SmileCare Dental Grp. v. Delta Dental Plan of Cal., Inc., 88 F.3d 780, 783 11 (9th Cir. 1996). 12 When a court is deciding a motion to dismiss, “[a]ll allegations of material fact are 13 taken as true and construed in the light most favorable to the nonmoving party.” Smith v. 14 Jackson, 84 F.3d 1213, 1217 (9th Cir. 1996) (citing Everest & Jennings v. Am. Motorists 15 Ins. Co., 23 F.3d 226, 228 (9th Cir. 1994)). However, legal conclusions couched as factual 16 allegations are not given a presumption of truthfulness, and “conclusory allegations of law 17 and unwarranted inferences are not sufficient to defeat a motion to dismiss.” Pareto v. 18 FDIC, 139 F.3d 696, 699 (9th Cir. 1998). 19 Ordinarily, a court may not consider evidence outside the pleadings in ruling on a 20 Rule 12(b)(6) motion to dismiss. See United States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 21 2003). However, courts may consider matters of judicial notice. (Id. at 908). “A court may 22 take judicial notice of matters of public record,” Khoja v. Orexigen Therapeutics, Inc., 899 23 F.3d 988, 999 (9th Cir. 2018). As such, judgments and other court documents are proper 24 subjects of judicial notice. See, e.g., United States v. Black, 482 F.3d 1035, 1041 (9th Cir. 25 2007). A Court is permitted to take judicial notice sua sponte. See, e.g., Callan v. N.Y. 26 Cmty. Bank, 643 Fed. Appx. 666, 666 (9th Cir. 2016). 27 Further, the “incorporation by reference” doctrine allows a court deciding a Rule 28 12(b)(6) motion to consider documents incorporated by reference, but not physically 1 attached to the complaint if such documents are central to the plaintiff’s claim and their 2 authenticity is undisputed. Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006) (citation 3 omitted). Doing so does not convert the motion to dismiss into a motion for summary 4 judgment. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). 5 III. Discussion 6 As an initial matter, the Court takes judicial notice of the underlying medical 7 malpractice complaint, which is a matter of public record. See Black, 482 F.3d at 1041. 8 The Court incorporates by reference the Plan as it is referenced in the Complaint, (Doc. 1 9 at 5), is central to Plaintiff’s claim, and its authenticity is not disputed. See Marder, 450 10 F.3d at 448. Similarly, the Court incorporates by reference the Memorandum of Settlement 11 Agreement, (Doc. 37-2), because it is referenced in the Complaint, (Doc. 1 at 4), is central 12 to Plaintiff’s claim, and its authenticity is not disputed. By contrast, the Court will not 13 consider the email correspondence between parties’ counsel that Defendants have attached 14 to their Motion to Dismiss, (Docs. 46-1. 46-2), because such correspondence was not 15 referenced in the Complaint and is not central to Plaintiff’s claim. 16 While Defendants move to dismiss this case based on both Rule 12(b)(6) and 17 12(b)(7), Defendant’s arguments under the former—specifically, their arguments 18 pertaining to Cyndi’s estate—also cover their arguments under the latter. Thus, while the 19 Court begins by addressing some of Defendants’ arguments under Rule 12(b)(6), it will 20 not include a separate analysis under 12(b)(7). 21 Defendants move to dismiss Plaintiff’s complaint pursuant to Rule 12(b)(6), arguing 22 that Arizona’s Wrongful Death Act precludes Plaintiff from seeking recovery from the 23 Settlement funds. (Doc. 46 at 3). In response, Plaintiff argues, inter alia, that is entitled to 24 recover because the Wrongful Death Act is preempted by ERISA and because the 25 settlement settled not only a claim under the Wrongful Death Act, but also a survival action 26 for medical expenses under A.R.S. § 14-3110. (Doc. 47 at 4-7). 27 Defendants’ underlying malpractice suit included claims under two Arizona 28 statutes: the wrongful death statute—A.R.S. § 12-611 et seq., and the survival statute, 1 A.R.S. 14-3110—as well as “all other damages allowable under Arizona law.” (Doc. 1-1 2 at 4). It sought damages incurred by Veloria and Darwin and economic damages incurred 3 by Cyndi’s Estate, including medical bills. (Id. at 7-8). 4 Central to the parties’ arguments here is the distinction in Arizona law between the 5 two aforementioned state statutes. Although a wrongful death action and a survival action 6 stem from the same wrongful act, they are distinct claims with important differences. 7 Barragan v. Superior Ct., 470 P.2d 722, 725 (Ariz. Ct. App. 1970) (citation omitted). A 8 wrongful death action is an “original and distinct claim for damages sustained by the 9 statutory beneficiaries and is not derivative of or a continuation of a claim” that the 10 decedent could themselves have brought. Id. at 724. A survival action, on the other hand, 11 allows the personal representative of a decedent’s estate to bring or enforce a claim that the 12 decedent could have themselves brought if not for their death. Id. A survival action plaintiff 13 may not recover for pain and suffering, A.R.S. § 14-3110, but may recover medical 14 expenses. Gartin v. St. Joseph’s Hosp. & Med. Ctr., 749 P.2d 941, 943 (Ariz. App. 1988) 15 (citing Barragan, 470 P.2d at 725). A wrongful death claim begins where a survival action 16 ends, and a plaintiff may recover under both theories—not as a double recovery but as 17 “separate recoveries for different wrongs.” Barragan, 470 P.2d at 725. 18 To begin, Plaintiff is entitled to recover under the plain language of the Plan. Under 19 the Plan’s “Subrogation and Reimbursement” section, the Jacksons agreed that “[i]f you 20 obtain a recovery and the Plan has not been repaid for the benefits the Plan paid on your 21 behalf, the Plan shall have a right to be repaid from the recovery in the amount of the 22 benefits paid on your behalf . . .” (Doc. 1-2 at 131). The Plan gives Plaintiff has “a right 23 of full recovery, in first priority, against any recovery,” “[n]otwithstanding any allocation 24 or designation of your recovery (e.g., pain and suffering) made in a settlement agreement 25 or court order.” (Id.) That section goes on to state that “if the covered person is a minor, 26 any amount recovered by the minor [or] the minor’s . . . parent . . . shall be subject to this 27 provision. Likewise, if the covered person’s relatives, heirs, and/or assignees make any 28 recovery because of injuries sustained by the covered person, that recovery shall be subject 1 to this provision.” (Doc. 1 at 5; Doc. 1-2 at 132). 2 The Jacksons argue that they did not recover “because of injuries sustained by” 3 Cyndi; that their damages were for their own injuries. (Doc. 48 at 4-5.) Although some of 4 their legal injuries were their own—for pain and suffering under their Wrongful Death Act 5 claim—others were Cyndi’s, brought under a survivorship action. Further, whether or not 6 the Jacksons’ pain and suffering were in fact factually and/or proximately caused by 7 Cyndi’s injuries is a question of fact that the Court will not decide at the motion to dismiss 8 stage. See Firetrace USA, LLC v. Jesclard, 800 F.Supp.2d 1042, 1055 (D. Ariz. 2010) 9 (quoting Kavanaugh v. Kavanaugh, 641 P.2d 258, 266 (Ariz. App. 1981)). In addition, the 10 Jacksons explicitly brought and settled claims for medical expenses—expenses which were 11 paid by the Plan. Thus, the Jacksons’ recovery for medical expenses falls squarely within 12 remit of the plan’s “Subrogation and Reimbursement” section. 13 Under ERISA, a plan fiduciary may bring a claim under § 502(a)(3) to “obtain 14 appropriate equitable relief . . . to enforce . . . the terms of the plan.” 29 U.S.C. § 15 1132(a)(3)(B). This includes the right to reimbursement of “specifically identifiable funds 16 . . . within the possession and control of the [beneficiaries].” Sereboff v. Mid Atl. Med. 17 Servs., Inc. 547 U.S. 356, 362-63 (2006). A plan fiduciary may seek an equitable lien to 18 collect for medicals bills, when the plan’s reimbursement section “specifically identifie[s] 19 a particular fund, distinct from the [beneficiaries’] general assets” and a “particular share 20 of that fund to which [the plan fiduciary] [is] entitled.” Id. at 364. 21 Here, Plaintiff is the plan fiduciary and has identified a “particular fund”— 22 Defendant’s recovery—distinct from Defendants’ general assets. So too has Plaintiff 23 identified a “particular share of that fund” to which it is entitled—$105,569.44, which is 24 the amount that Plaintiff paid on behalf of Cyndi for medical treatment associated with the 25 alleged medical negligence of Phoenix Children’s Hospital. (Doc. 1 at 5). 26 Thus, under ERISA and the terms of the Plan, Plaintiff’s pleadings suggest a 27 plausible claim for an equitable lien to enforce its right to reimbursement of the 28 $105,569.44 1 ERISA Preemption 2 Under the terms of the Plan, Plaintiff’s pleadings suggest it is entitled to recovery. 3 However, the Jacksons argue that the state statutes under which they brought their claims 4 prevent such a recovery. The Court must therefore examine the relationship between the 5 Plan, ERISA, and these state statutes. 6 The Jacksons’ arguments under 12(b)(6) focus on Arizona’s Wrongful Death Act. 7 (Doc. 46 at 3-4). Because that statute only permits recovery for economic injuries suffered 8 by the Jacksons upon Cyndi’s death and because any money recovered under the statute is 9 not subject to Cyndi’s debts or liabilities, the Jacksons argue that any money they received 10 in compensation for their Wrongful Death Act claim is not subject to subrogation or 11 reimbursement. (Id.) 12 In response, Plaintiff points out that, to the extent that these arguments are correct, 13 this would put the wrongful death statute—and the cases that interpret it—in direct conflict 14 with the Plan itself, which—by its plain language—allows Plaintiff to receive 15 reimbursement for paying Cyndi’s medical expenses. (Doc. 47 at 7). Plaintiff argues that 16 because of this conflict, ERISA preempts the state statute and case law interpreting it. (Id.) 17 Section 514(a) of ERISA preempts “any and all State laws insofar as they relate to” 18 an ERISA plan. 29 U.S.C. § 1144(a). This preemption clause is “deliberately expansive.” 19 Pilot Life Ins. V. Dedeaux, 481 US. 41, 45-46 (1987). Indeed, ERISA’s preemption clause 20 is “one of the broadest preemption clauses ever enacted by Congress.” Greany v. W. Farm 21 Bureau Life Ins., 973 F.2d 812, 817 (9th Cir. 1992) (quotation omitted). Under the clause, 22 a state law “relate[s] to” an ERISA plan if it “has a connection with or reference to such a 23 plan.” Egelhoff v. Egelhoff ex rel. Breiner, 523 U.S. 141, 147 (2001) (citing Shaw v. Delta 24 Air Lines, Inc., 463 U.S. 85, 97 (1983)). 25 “[T]o determine whether a state law has the forbidden connection, we look both to 26 the objectives of the ERISA statute as a guide to the scope of the state law that Congress 27 understood would survive, as well as to the nature of the effect of the state law on ERISA 28 plans.” Id. (internal quotations omitted) (citing Cal. Div. of Lab. Standards Enf’t v. 1 Dillingham Constr., N.A., Inc., 591 U.S. 316, 325 (1997)). In the Ninth Circuit, courts 2 employ a “relationship test” to determine whether a state law has a “connection with” and 3 ERISA plan. Providence Health Plan v. McDowell, 385 F.3d 1168, 1172 (9th Cir. 2004). 4 Under this test, “a state law claim is preempted when the claim bears on an ERISA- 5 regulated relationship, e.g., the relationship between plan and plan member . . . .” Bafford 6 v. Northrop Grumman Corp., 994 F.3d 1020, 1031 (9th Cir. 2021) (internal quotations 7 omitted) (citing Paulsen v. CNF, Inc., 559 F.3d 1061, 1082 (9th Cir. 2009)). 8 The Ninth Circuit has not directly addressed the issue of whether an ERISA plan 9 preempts a state wrongful death statute—or, for that matter, a survival statute. However, 10 this Court had the opportunity to address the issue in Am. Express Co. v. Ponnambalam, 11 No. CV-18-03237-PHX-SMM, 2019 WL 13195129 (D. Ariz. June 3, 2019). Both parties 12 cite to that case to support their positions. (Doc. 47 at 7-8; Doc. 48 at 2-3). 13 In Ponnambalam, an ERISA health plan granted the plan the right to subrogation 14 and reimbursement where a third party was legally responsible for the payment of medical 15 expenses related to a covered person’s illness or injury. 2019 WL 13195129 at *1. These 16 subrogation and reimbursement rights expressly applied to a covered person’s estate, 17 personal representative, and heirs in the event of the covered person’s wrongful death or 18 survival claim. Id. The defendant’s daughter was covered under the plan and died following 19 injuries caused by a third-party tortfeasor. Id. at *2. Following her death, the father brought 20 and settled a wrongful death claim against the third-party tortfeasor. Id. The plan then filed 21 suit, seeking to impose an equitable lien on the proceeds of the settlement. Id. The plan 22 asserted that the settlement included a broad release for claims for the recovery of medical 23 expenses that could have been brought by the daughter’s estate in a survivorship action. Id. 24 The father filed a motion to dismiss, arguing that a wrongful death recovery is not subject 25 to the debts or liabilities of a decedent. Id. at *3. 26 In assessing the parties’ arguments, the Court found that “the critical inquiry is 27 whether the [p]lan, which is in direct conflict with the Arizona Wrongful Death Act, 28 preempts the Arizona Wrongful Death Act pursuant to ERISA.” Id. Adopting the reasoning 1 of the Fourth Circuit, this Court held that: 2 “the question of preemption turns on whose damage claim is at issue. If the damage claim belongs to [a] [d]ecedent’s 3 beneficiaries, then the Arizona Wrongful Death Act is too 4 remote to relate to the Plan. However, if the damage claim belongs to [the] [d]ecedent or [d]ecedent’s estate, then the 5 wrongful death statute relates to the Plan such that it is 6 preempted by ERISA.” 7 Id. at *5 (citations omitted). 8 It is important to note that where, in Ponnambalam, the Court was analyzing only 9 Arizona’s Wrongful Death Act and not the State’s survival statute, the Fourth Circuit—in 10 the cases relied upon by the Court in Ponnambalam—was essentially analyzing both a 11 wrongful death claim and a survival claim, because North Carolina’s wrongful death 12 statute permitted a personal representative to seek in a wrongful death action all of the 13 damages it could have sought in a separate survival action. Liberty Corp. v. NCNB Nat. 14 Bank of S.C., 984 F.2d 1383, n. 5 (4th Cir. 1993); McInnis v. Provident Life & Acc. Ins. 15 Co., 21 F.3d 586, 589-90 (4th Cir. 1994). 16 Ultimately, however, the Court in Ponnambalam did not reach a conclusion on the 17 preemption issue, finding that the Wrongful Death Act “may relate to the Plan at issue such 18 that it may be preempted by ERISA.” Id. at *6 (emphasis added). The Court explained that 19 it would need to review the wrongful death settlement contract and release to determine 20 whose damage claims were settled. Id. Ultimately, it never reached that inquiry, as the case 21 was concluded on other grounds. 22 Here, however—unlike in Ponnambalam—the Court has the MSA before it, which 23 explains whose claims were settled. (Doc. 37-2). Per the MSA, Defendants settled “all 24 claims asserted or which could be asserted” in the underlying medical malpractice 25 complaint. (Id. at 1). The MSA thus incorporates the claims made in the underlying medical 26 malpractice complaint, which belonged to Veloria and Darwin and to Cyndi’s Estate, in 27 addition to other, unspecified claims which could have been asserted. (Doc. 11 at 7-8). As 28 such, the settlement settled both a Wrongful Death Act damage claim belonging to the 1 decedent’s beneficiaries and—unlike in Ponnambalam—a survival statute damage claim 2 belonging to the decedent’s estate. As a result—per the Fourth Circuit’s reasoning adopted 3 by this Court in Ponnambalam—the Wrongful Death Act may not relate to the Plan such 4 that it is preempted by ERISA, because that damage claim belongs to the Cyndi’s 5 beneficiaries—the Jacksons. Regardless, Arizona’s survival statute does relate to the Plan 6 such that it is preempted by ERISA, because the relevant damage claim belonged to the 7 Estate. Plaintiffs are seeking recovery of the medical expenses they paid out, which the 8 Jacksons secured in settlement of their claim under the survival statute—the only of the 9 two statutes in question that allows for recovery of medical expenses. See Gartin, 749 P.2d 10 at 943 (quoting Barragan, 470 P.2d at 725). Therefore, the survival statute, A.R.S. § 14- 11 3110, is preempted and does not prevent Plaintiff from seeking to recover under its claims 12 here. 13 Lack of Estate 14 Throughout their Motion to Dismiss, the Jacksons repeatedly highlight the fact that 15 an estate for Cyndi has not been opened as a reason why this Court must dismiss Plaintiff’s 16 claim. (E.g., Doc. 48 at 3). This argument, predicated upon Arizona’s survival statute, is 17 central to certain of their arguments under both Rule 12(b)(6) and (7). Plaintiff counters 18 that the lack of estate “has no bearing on the Plan’s lien on the proceeds of the malpractice 19 settlement.” (Doc. 47 at 6). Indeed, the Court has already found that Arizona’s survival 20 statute—which forms the basis of the Jacksons’ arguments concerning the lack of estate— 21 is preempted here by ERISA. The Court will nonetheless address the parties’ arguments as 22 to Cyndi’s estate, or lack thereof. Neither party has cited to a case with the precise factual 23 scenario presented here: involving a claim brought and settled by the purported 24 representative of an estate, an estate which the representative never opened. The Court has 25 been unable to locate any such case. Nevertheless, the Court finds that Plaintiff has the 26 better of this issue. 27 The Jacksons contend that the settlement—contrary to the plain language of the 28 MSA—did not settle the claims of Cyndi’s estate because they never opened the estate. 1 (Doc. 46 at 5-6). In fact, the Jacksons go further and argue that no estate claim ever existed. 2 (Doc. 46 at 5). In effect, they are arguing that they brought and settled an invalid survival 3 action against the hospital. 4 However, the Jacksons brought and settled a survival action, in which Darwin 5 Jackson held himself out as personal representative of Cyndi’s estate, yet to be opened. 6 Indeed, Defendants signed the Memorandum of Settlement Agreement on behalf of the 7 Estate of Cyndi Jackson. (Doc. 37-2 at 2). But now, in order to avoid Plaintiff’s subrogation 8 claim, the Jacksons argue that their settled claim for Cyndi’s medical expenses was invalid 9 because they decided not to establish an estate for Cyndi, meaning Darwin was never truly 10 a personal representative of Cyndi’s estate. 11 Yet the MSA settled all claims that were asserted—including a survival action filed 12 on behalf of Cyndi’s estate, yet to be opened—or “which could be asserted.” The Jacksons’ 13 assertion that no estate claim ever existed is simply false. At best, the Jacksons’ estate claim 14 was not technically, at the time of settlement, a valid one. But neither the Plan nor the MSA 15 make the distinction that Defendants now appear to offer between valid and invalid claims. 16 Neither do the Jacksons offer any caselaw supporting this distinction. Further, the Jacksons 17 could have validated their supposedly invalid claim by opening the Estate of Cyndi, which 18 the Court imagines they would have done had their medical malpractice lawsuit not 19 settled.1 In arguing that they had no power to bind Cyndi’s estate to the MSA, the Jacksons 20 offer an analogy to a scenario in which they attempted to bind the NBA’s Phoenix Suns to 21 the MSA. (Doc. 48 at 3). However, unlike the Phoenix Suns, (a) Darwin held himself out 22 as the personal representative of Cyndi’s estate and signed the MSA as such, (b) Darwin 23 could have opened the estate any time he wanted, and (c) the Jacksons are proper personal 24 representatives of Cyndi’s estate, pursuant to A.R.S. § 14-3203(A)(5). And, of course, the 25 Phoenix Suns did not agree to reimburse the Plan for medical expenses that the Plan paid 26 1 In their Reply, the Jacksons argue that Plaintiff could have opened Cyndi’s estate itself 27 and sought to recoup its expenses earlier but missed its chance owing to a statute of limitations. (Doc. 48 at 5). However, this argument relies on a series of emails between the 28 parties’ counsel, which—as the Court has previously explained—is not properly before the Court at this time. 1 on Cyndi’s behalf. 2 The Jacksons point to multiple Arizona cases that deal with an estate’s involvement 3 in litigation, although none feature the factual scenario presented here. E.g., Ader v. Estate 4 of Felger, 375 P.3d 97, 104-05 (Ariz. Ct. App. 2016); Barragan, 470 P.2d at 724. In Ader, 5 for example, the Court held that “when an estate is involved in litigation, the personal 6 representative is the proper named defendant.” However, the Ader court was simply noting 7 that an estate itself cannot bring or defend a suit. Id. at 104. As that court explained, an 8 estate can only bring or defend a suit through a personal representative, and it is the latter 9 who is the “proper named defendant” or plaintiff. Id. at 104. Here, in the underlying 10 medical malpractice complaint, the survival claim was not brought by the estate itself, but 11 by “Darwin Jackson on behalf of the Estate of Cyndi Rae Jackson . . . .” (Doc. 1-1 at 1). 12 Darwin was thus acting as the estate’s personal representative—even if at that point the 13 estate had not yet been formally opened—and therefore the claim was brought in 14 accordance with the rule stated in Ader. For the same reason, Cyndi’s estate is not an 15 indispensable party, without which the case must be dismissed under Rule 12(b)(7), as the 16 Jacksons argue. (Doc. 46 at 4). 17 IV. Conclusion 18 The Jacksons agreed to reimburse Plaintiff for the medical expenses it paid from 19 any recovery received by the relatives of a covered person, because of injuries sustained 20 by that covered person. (Doc. 1-2 at 130-32). Cyndi was a covered person under the Plan 21 and the Jacksons—her parents—recovered based on injuries she sustained, including for 22 medical expenses that Plaintiff paid for. Under the plain language of the Plan, therefore, 23 Plaintiff is entitled to seek reimbursement from the Jacksons for these medical expenses. 24 To the extent that Arizona’s survival statute contradicts the Plan’s language, it is preempted 25 by ERISA. Plaintiff’s claims may proceed. 26 Accordingly, 27 /// 28 ./// 1 IT IS HEREBY ORDERED denying Defendants’ Motion to Dismiss. (Doc. 46). 2|| The Court will issue a separate order setting a Rule 16 Preliminary Pretrial Conference. 3 Dated this 12th day of July, 2023. 4 5 Laphee Z.. - Br aera Hdhorable Stephen M. McNamee 6 Senior United States District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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