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Rhodia, Inc. v. Bollinger

March 20, 2008

RHODIA, INC., PLAINTIFF,
v.
WILLIAM BOLLINGER, DEFENDANT.



The opinion of the court was delivered by: Simandle, District Judge

MEMORANDUM OPINION

1. Plaintiff Rhodia Inc. ("Plaintiff" or "Rhodia"), in its capacity as sponsor and fiduciary of the Rhodia Inc. Flexoptions Medical Plan ("the Plan"), brings this action pursuant to 28 U.S.C. § 1132 (a)(3)(B)(ii), for equitable relief to enforce the terms of the Plan. Specifically, Plaintiff seeks an equitable lien and constructive trust on funds Defendant William Bollinger ("Defendant"), Administrator of the Estate of Kyle Koskey ("the Estate"), recovered in settlement of a wrongful death action. Kyle Koskey was a beneficiary of the Plan at the time of his injury and subsequent medical treatment.

2. Rhodia claims that the Plan provides it with a subrogation right to a portion of the funds Koskey's Estate recovered in an amount equal to what Rhodia spent on Koskey's medical benefits for the accident that caused Koskey's death and led to the settlement. Plaintiff alleges that this Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 (federal question jurisdiction) and 29 U.S.C. § 1132 (e)(1) (ERISA § 502(e)(1)) (providing exclusive original jurisdiction in federal district courts over certain ERISA claims).

3. Defendant filed this motion to dismiss in lieu of an answer, pursuant to Fed. R. Civ. P. 12(b)(1) and (6), arguing that this Court lacks subject matter jurisdiction over Plaintiff's claim and that the Complaint fails to state a claim on which relief may be granted as a matter of law.

3. A motion to dismiss for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) can take on two very different forms depending on whether it is a facial attack on the complaint or a factual attack.

The facial attack does offer similar safeguards to the plaintiff [as a 12(b)(6) motion does]: the court must consider the allegations of the complaint as true. The factual attack, however, differs greatly for here the trial court may proceed as it never could under 12(b)(6) or Fed. R. Civ. P. 56. Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction - its very power to hear the case - there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. In short, no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims. Moreover, the plaintiff will have the burden of proof that jurisdiction does in fact exist.

Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977).

4. Although Defendant does not discuss whether it is making a facial or factual attack on jurisdiction, the Court shall assume it is a facial attack because Defendant argues that the Court lacks subject matter jurisdiction under 28 U.S.C. § 1132

(a)(3)(B)(ii), which only provides jurisdiction over claims in equity and not simple contract or other legal claims. Thus, the Court may take the facts alleged in the Complaint as true for purposes of deciding this aspect of the motion.

5. The same is true for the Rule 12(b)(6) argument. "[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint," Erickson v. Pardus, 127 S.Ct. 2197, 2200 (2007), and determine whether they "state a legal claim," Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d Cir. 1990). The Court must "'accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.'" Phillips v. County of Allegheny, ___ F.3d ___ , No. 06-2869, slip op. at 15 (3d Cir. Feb. 5, 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)).

6. However, "[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, U.S. , 127 S.Ct. 1955, 1964-1965 (2007) (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). "To survive a motion to dismiss, a civil plaintiff must allege facts that 'raise a right to relief above the speculative level on the assumption that the allegations in the complaint are true (even if doubtful in fact).'" Victaulic Co. v. Tieman, 499 F.3d 227, 234 (3d Cir. 2007) (quoting Twombly, 127 S.Ct. at 1965). Only the allegations in the complaint, matters of public record, orders, and exhibits attached to the complaint are taken into consideration. Chester County Intermed. Unit v. Pennsylvania Blue Shield, 896 F.2d 808, 812 (3d Cir. 1990).

7. Defendant argues that the Court lacks subject matter jurisdiction over Plaintiff's claim because the claim is not legally cognizable under 29 U.S.C. § 1132 (a)(3)(B)(ii), which provides for a plan fiduciary's right of action for equitable relief to enforce a provision of an ERISA plan. This Court disagrees, insofar as Rhodia seeks money in Defendant's possession which belongs to Rhodia, that is, money paid allegedly by the tortfeasor for the medical care of Koskey.

8. The Plan has a "Subrogation/Reimbursement Rights" provision, which states:

If your injury or illness was caused by the neglect of another person or party, that person or party may be responsible for your hospital or medical bills - for example, if you are injured in an automobile accident or on another's property.

Since collecting payment for these expenses from a third party may take a long time, the plans will provide the appropriate benefits and then seek repayment from any settlement you may receive. You may be asked to sign a form that acknowledges the plans' right to be reimbursed and verifies you will help the plans secure their rights. If you bring a liability claim against a third party, benefits payable under the plans must be included in the claim. When the claim is resolved, you must reimburse the plans for the benefits provided. You are legally obligated to avoid doing anything that would prejudice the plan's right of reimbursement. (Compl. Ex. A at 98.) As the Court reads it, this provision entitles Rhodia to make an equitable claim on money that comes into the possession of a beneficiary, or his estate, that represents the cost of medical care Rhodia paid for under the Plan.

9. The Court is focused on Rhodia's equitable interest in such funds because Rhodia's cause of action is premised on Section 502(a)(3) of ERISA, 29 U.S.C. ยง ...


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