FMC Medical Plan v. Owens

122 F.3d 1258, 97 Daily Journal DAR 11002, 21 Employee Benefits Cas. (BNA) 1724, 97 Cal. Daily Op. Serv. 6766, 1997 U.S. App. LEXIS 22630, 1997 WL 489033
CourtCourt of Appeals for the Ninth Circuit
DecidedAugust 25, 1997
DocketNo. 96-16160
StatusPublished
Cited by33 cases

This text of 122 F.3d 1258 (FMC Medical Plan v. Owens) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
FMC Medical Plan v. Owens, 122 F.3d 1258, 97 Daily Journal DAR 11002, 21 Employee Benefits Cas. (BNA) 1724, 97 Cal. Daily Op. Serv. 6766, 1997 U.S. App. LEXIS 22630, 1997 WL 489033 (9th Cir. 1997).

Opinion

STAGG, Senior District Judge:

Jeffrey M. Owens (“Owens”) appeals the district court’s grant of summary judgment in favor of FMC Corporation (“FMC”). The district court determined that it had subject matter jurisdiction under the Employee Retirement Income and Security Act of 1974 (“ERISA”), specifically 29 U.S.C. § 1132(a)(3), to hear FMC’s claim for reimbursement. The district court’s finding is REVERSED. The remedy sought by FMC is not available under 29 U.S.C. § 1132(a)(3).

I. FACTS

FMC is the Plan Administrator and a plan fiduciary for the FMC Health Care Plan, the FMC Short-Term Disability Plan, and the FMC Long-Term Disability Plan, (hereinafter collectively referred to as the “Plans”) under which benefits are paid to employees of FMC Corporation and its subsidiaries. Each of the Plans specifically provides that FMC, as Plan Administrator, has discretionary authority to construe and interpret its terms. Owens was an employee of FMC Gold Company, a subsidiary of FMC and, as such, was a participant in the Plans.

On November 8, 1991, Owens was in an automobile accident. As a result of the accident, Owens incurred medical bills and was absent from work. The FMC Health Care Plan paid his medical bills, and the FMC Short-Term and Long-Term Disability Plans paid him disability benefits. FMC alleges in its Second Amended Complaint that the Plans paid Owens a total of $50,066.76 as a result of his automobile accident.

Each of the FMC Plans contained the following declaration to the participant:

If you bring a liability claim against any third party, benefits payable under this Plan must be included in the claim, and when the claim is settled you must reimburse the Plan for the benefits provided.
Unless you sign the Company’s third party reimbursement form, the Claims Administrator will not process any claim where there is possible liability of a third party.

Owens signed the required “reimbursement form” in order to receive the Plans’ benefits. That form provided in pertinent part:

I agree for myself and dependent(s), to reimburse FMC Corporation for any amounts paid by the plan and recovered from another person or company. If I bring a claim against any party, benefits payable under this Plan must be included in the claim, and when the claim is settled I must reimburse the Plan for the benefits provided.

Jerry Miller (“Miller”) was the driver of the other vehicle involved in the accident with Owens. At the time of the accident, Miller was driving a vehicle owned by his employer, John Jay Aguiar (“Aguiar”). Aguiar maintained automobile insurance with Farmers Insurance Exchange. Owens settled his claim against Aguiar for $100,000, which was paid by Farmers Insurance Exchange.

FMC brought the present action in its capacity as Plan Administrator against Owens to enforce the terms of the Plans and to obtain “equitable reimbursement” from Owens’s third party recovery for the benefits previously paid to or on his behalf by the Plans. FMC contends that such a claim for reimbursement is authorized by 29 U.S.C. § 1132(a)(3) (hereinafter “section 1132(a)(3)”).

The district court, on its own motion, advised FMC that it was not satisfied that it had subject matter jurisdiction as alleged in the original complaint and granted FMC a period of time in which to amend its complaint. Thereafter, FMC filed a Second Amended Complaint, alleging that it sought “equitable reimbursement” pursuant to section 1132(a)(3). Subsequently, FMC filed a motion for summary judgment on its claim for reimbursement. Owens opposed the mo[1260]*1260tion for summary judgment and filed a separate motion to dismiss the Second Amended Complaint for lack of subjéct matter jurisdiction. Owens claimed that FMC was not seeking an equitable remedy under section 1132(a)(3) and that FMC was actually seeking money damages disguised as a claim for equitable relief. The district court granted FMC’s summary judgment motion in favor of reimbursement and denied Owens’s motion to dismiss for subject matter jurisdiction. The district court held that it had subject matter jurisdiction to hear FMC’s reimbursement claim under section 1132(a)(3). Owens appeals from that decision.

II. STANDARD OF REVIEW

A grant of summary judgment is reviewed de novo. T.W. Electrical Serv. Inc. v. Pacific Elec. Contractors Ass’n., 809 F.2d 626 (9th Cir.1987). The existence of subject matter jurisdiction is a matter of law that is reviewed de novo. MSR Exploration, Ltd. v. Meridian Oil Co., 74 F.3d 910, 912 (9th Cir.1996).

III. DISCUSSION

Section 1132(a) provides in pertinent part: A civil action may be brought—
(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.

(emphasis added).

This section authorizes a civil cause of action by a fiduciary, in this case FMC, to enforce the terms of its plan. However, only specific types of remedies are available under section 1132(a)(3). This section allows a fiduciary to seek an injunction or “other appropriate equitable relief.” In the present case, “other appropriate equitable relief’ must encompass FMC’s claim for reimbursement. If not, the remedy sought by FMC is not available under ERISA, and the district court has no subject matter jurisdiction.

The district court held that FMC’s right under the Plans was that of subrogation. The court considered subrogation to be an equitable remedy, stating that “[a]t a minimum ... [section] 1132(a)(3) authorizes relief such as injunction, mandamus, restitution, and other equitable remedies typically available in equity. Subrogation is such a remedy.” The district court’s classification of FMC’s right under the Plans is flawed. FMC’s right under the Plans is not one of subrogation.1 In a subrogation situation, the subrogee can assert the rights of the subrogor. FMC’s Plans say nothing of its ability to assert the rights of Owens against a third party so that FMC can recover the amounts it paid to Owens. FMC does not “step into the shoes” of Owens with respect to any claims against the third party tortfeasors. The Plans indicate that if Owens recovers from a third party, he must reimburse FMC for its payments made on his behalf. FMC’s claim is one of contractual reimbursement, not subrogation.

The leading case interpreting the phrase “other appropriate equitable relief’ is Mertens v. Hewitt Associates, 508 U.S. 248, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993). In Mertens,

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122 F.3d 1258, 97 Daily Journal DAR 11002, 21 Employee Benefits Cas. (BNA) 1724, 97 Cal. Daily Op. Serv. 6766, 1997 U.S. App. LEXIS 22630, 1997 WL 489033, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fmc-medical-plan-v-owens-ca9-1997.