PricewaterhouseCoopers LLP Health and Welfare Benefits Plan v. Mayer et al

Filing 81

ORDER granting 51 Motion for Summary Judgment; denying 58 Motion for Summary Judgment; granting 68 Motion for Summary Judgment. Signed by Judge Victor A. Bolden on 5/31/2019. (Washington, Gregory)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

PRICEWATERHOUSECOOPERS LLP
HEALTH AND WELFARE BENEFITS
PLAN &PRICEWATERHOUSECOOPERS
LLP,
Plaintiffs,

No. 3:18-cv-526 (VAB)

v.
ARTHUR A. MAYER & JAMES O.
GASTON,
Defendants.

RULING AND ORDER ON THE CROSS-MOTIONS FOR SUMMARY JUDGMENT
AND PLAINTIFFS’ MOTION FOR A MORE DEFINITE STATEMENT
PricewaterhouseCoopers LLP Health and Welfare Benefits Plan and
PricewaterhouseCoopers LLP (collectively “PricewaterhouseCoopers” or “PWC”) brings this
action against Arthur Mayer and James O. Gaston (collectively “Defendants”) under the
Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §§ 1001, et seq.
(“ERISA”) for medical payment reimbursement.
PricewaterhouseCoopers moves for summary judgment on its health insurance
reimbursement and against Defendants’ counterclaims. Motion for Summary Judgment by
PricewaterhouseCoopers LLP, ECF No. 51; Motion for Summary judgment on Defendants’
Counterclaim, ECF No. 68.
Defendants also move for summary judgment. Motion for Summary Judgment, ECF
No. 58.
For the following reasons, the Court GRANTS PricewaterhouseCoopers’s motions for
summary judgment and DENIES Defendants’ motion for summary judgment.
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I.

FACTUAL AND PROCEDURAL BACKGROUND
A.

Factual Allegations

PricewaterhouseCoopers is a self-funded employee welfare benefit plan under 29 U.S.C.
§ 1001. Amended Complaint, ECF No. 14 (“Am. Compl.”). PricewaterhouseCoopers covered
Mr. Mayer. Id at ¶ 5; Pamela Copeland Affidavit, ECF No. 52-4 (“Copeland Aff.”). The
PricewaterhouseCoopers Summary Plan Description gives full rights to PricewaterhouseCoopers
to recover from employees or dependents for the cost of health benefits paid on their behalf
under the PricewaterhouseCoopers health plan. Am. Compl. at ¶ 8. The plan description states in
pertinent part:
RIGHT TO SUBROGATION/THIRD PARTY RECOVERY
You shall cooperate with PWC and its agents in a timely manner to
protect its legal and equitable rights to subrogation and
reimbursement.
...
If a third party may be liable for a covered medical expense that you
or your Dependent have incurred, the Plan has a right of subrogation
to any claim that you or your Dependent have against the third party.
The Plan will then be entitled to be paid back from any amount that
you or your Dependent recover against the third party for any
expenses that the Plan has had, and the recipient of any such
recovered amounts shall hold the funds in constructive trust for the
Plan. The Plan has a right of reimbursement against any recovery by
you or your Dependents from a third party. No court costs or
attorneys' fees may be deducted from the Plan's recovery without the
Plan's express written consent and the Plan is not required to
participate in or pay court costs or attorneys' fees to the attorney
hired by you or your Dependents to pursue damages or personal
injury claims. No so-called "fund doctrine" or "common fund
doctrine" right shall defeat the Plan's rights. Regardless of whether
you or your Dependents have been fully compensated or made
whole, the Plan may collect from you or your Dependents the
proceeds of any full or partial recovery that you or your Dependents
or legal representative obtain, whether in the form of a settlement
(either before or after any determination of liability) or judgment.
The proceeds available for collection by PWC shall include, but not
be limited to, any and all amounts whether designated in any
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settlement or judgment as economic damages, noneconomic
damage, punitive damages, attorneys' fees or otherwise. You shall
not, without PWC's written consent, settle any claim for an amount
less than the amount that PWC has paid or advanced on your behalf.
Id.; Summary Plan Description, ECF No. 52-3, at 109.
On May 11, 2015, Mr. Mayer suffered injuries in an automobile accident. Am. Compl. at
¶ 9; Mayer v. Kong Litigation Complaint. ECF No. 52-6 (“Mayer Litigation Compl.”).
PricewaterhouseCoopers spent $44,167.59 for Mr. Mayer’s health care in connection with those
injuries. Am. Compl. at ¶ 9; Copeland Aff. at ¶ 11; Medical Payment Summary, ECF No. 52-5,
at 4.
Mr. Gaston represented Mr. Mayer in the civil action arising from Mr. Mayer’s accident
in Connecticut Superior Court (“Mayer Litigation”). Am. Compl. at ¶ 6; Mayer Litigation
Compl. at 4. Before the Mayer litigation settled, PricewaterhouseCoopers allegedly gave notice
to Mr. Mayer, through Mr. Gaston, of PricewaterhouseCoopers’s right of subrogation and
reimbursement from all proceeds of payment, settlement, or judgment in the Mayer Litigation.
Am. Compl. at ¶ 12; Copeland Aff. at ¶ 7.
PricewaterhouseCoopers alleges that Mr. Gaston settled the Mayer Litigation for at least
$250,000. Am. Compl. at ¶ 11; Amended Answer to Amended Complaint with Special Defenses,
Counterclaim against Plaintiff, ECF No. 64 (“Amended Answer”), at ¶ 11 (“Admitted that Mayer
v. Long case settled for $250,000”). The Amended Complaint also alleges that Mr. Gaston holds
or has disbursed part of the proceeds of the Mayer Litigation to himself, while no payment has
been to PricewaterhouseCoopers. Am. Compl. at ¶ 13–14; see also Gaston Memorandum of Law
in Support of Motion to Dismiss, ECF No. 20, at 5.
Defendants contend that the settlement did not fully compensate Mr. Mayer for his noneconomic damages. James Gaston Affidavit, ECF No. 59-1 (“Gaston Aff.”), at ¶ 5. Instead,
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Defendants contend that PricewaterhouseCoopers paid for medical expenses related to a preexisting cervical condition, which was unrelated to the May 11, 2015 automobile collision. Id.
at ¶ 7.
B.

Procedural History

On March 28, 2018, PricewaterhouseCoopers filed its Complaint for equitable relief for
medical bill payments under ERISA. Complaint, ECF No. 1.
On May 5, 2018, Mr. Mayer and Mr. Gaston moved for a more definite statement
because PricewaterhouseCoopers did not specify which counts applied to Mr. Mayer and which
applied to Mr. Gaston. Motion for a More Definite Statement, ECF No. 12. On November 1,
2018, the Court found this motion moot. Order, ECF No. 36.
On May 14, 2018, PricewaterhouseCoopers amended its Complaint, separating the
allegations against Mr. Mayer and Mr. Gaston into separate counts. Am. Compliant, ECF No. 14.
On June 21, 2018, Mr. Gaston moved for nonsuit. Motion for Nonsuit, ECF No. 15. On
November 1, 2018, the Court found this motion moot. Order, ECF No. 36.
On June 27, 2018, Mr. Mayer moved to dismiss the Complaint under Rule 12(b)(1).
Motion to Dismiss, ECF No. 17. On July 13, 2018, Mr. Mayer moved to withdraw his motion to
dismiss in its entirety. Motion to Withdraw, ECF No. 21. On August 2, 2018, the Court granted
Mr. Mayer’s motion to withdraw motion to dismiss. Order, ECF No. 27.
On June 27, 2018, Mr. Gaston moved to dismiss the claim brought against him under
Rules 12(b)(1) and 12(b)(6). Motion to Dismiss, ECF No. 19. On July 13, 2018, Mr. Gaston
moved to withdraw his motion to dismiss, as to the diversity of jurisdiction, while still preserving
the claim that he is an inappropriate party to this action. Motion to Withdraw, ECF No. 22. On

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August 2, 2018, the Court granted Mr. Gaston’s motion to withdraw his 12(b)(1) claim. Order,
ECF No. 27.
On August 17, 2018, PricewaterhouseCoopers opposed the remaining portions of Mr.
Gaston’s motion to dismiss claim, arguing that Mr. Gaston is a proper party to this action.
Memorandum in Opposition to Defendant Gaston’s Motion to Dismiss, ECF No. 28.
On December 10, 2018, the Court held a hearing on Mr. Gaston’s motion to dismiss.
Minute Entry, ECF No. 46.
On December 13, 2018, the Court denied Mr. Gaston’s motion to dismiss. Order Denying
Motion to Dismiss, ECF No. 47.
On January 31, 2019, PricewaterhouseCoopers moved for summary judgment, claiming a
legal entitlement to reimbursement from the proceeds of the Mayer litigation settlement.
Plaintiffs’ Motion for Summary Judgment, ECF No. 51.
On February 20, 2019, Defendants filed their memorandum in opposition to Plaintiffs’
motion for summary judgment. Memorandum in Opposition, ECF No. 57 (“Mem. in Opp. to
Pl.’s MSJ”).
On February 20, 2019, Defendants responded to the Amended Complaint with special
defenses and counterclaims against PricewaterhouseCoopers. Answer with Special Defenses,
Counterclaim against Plaintiffs, ECF No. 56. On March 4, 2019, PricewaterhouseCoopers moved
for a more definite statement as to the Answer. Motion for a More Definite Statement as to
Defendants’ Answer, ECF No. 63. On March 12, 2019, Defendants amended their Answer to
provide more clarity. Amended Answer to Amended Complaint with Special Defenses,
Counterclaim against Plaintiffs, ECF No. 64 (“Am. Answer”). Defendants also objected to the
motion for a more definite statement. Objection re Motion for More Definite Statement, ECF No.

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65. On May 22, 2019, the Court found the motion for a more definite statement moot. Order,
ECF No. 79.
On February 20, 2019, Defendants also moved for summary judgment, and argued that
PricewaterhouseCoopers: (1) failed to disclose the experts necessary to prove its legal
entitlement to the automobile settlement proceeds; (2) failed to disclose experts capable of
distinguishing between injuries from the automobile collision and pre-existing conditions; (3)
lacked evidence that the third-party tortfeasor compensated Mr. Mayer for his medical expenses;
and (4) incurred civil penalties under 29 U.S.C. § 1132(c) that exceeded the claimed
reimbursement. Motion for Summary Judgment, ECF No. 58.
On April 10, 2019, PricewaterhouseCoopers filed a memorandum in opposition to
Defendants’ motion for summary judgment. Memorandum in Opposition and in Response to
Defendants’ Opposition to Plaintiffs’ Motion for Summary Judgment, ECF No. 67.
PricewaterhouseCoopers also moved for summary judgment on Defendants’ counterclaims in
their Amended Answer. Memorandum of Law in Support of Plaintiffs’ Motion for Summary
Judgment on Counterclaim, ECF No. 68 (“Pls.’ Mem. in Supp. of Counterclaim MSJ.”).
On May 1, 2019, Defendants replied to PricewaterhouseCoopers’s motion for summary
judgment. Defendants’ Reply to Plaintiffs’ Response to Defendants’ Opposition to Plaintiffs’
Motion for Summary Judgment and Reply to Defendants’ Opposition to Plaintiffs’ Motion for
Summary Judgment, ECF No. 76 (“Defs.’ Response to Pl.’s Counterclaim MSJ.”).
On May 29, 2019, the Court held a hearing on the parties’ motions for summary
judgment. Minute Entry, ECF No. 80.
II.

STANDARD OF REVIEW
A motion for summary judgment will be granted when the record shows no genuine issue

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as to any material fact, and the movant is “entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a). The moving party bears the initial burden of establishing the absence of a genuine
dispute of material fact. Celotex Corp. v. Cartrett, 477 U.S. 317, 323 (1986). The non-moving
party may defeat the motion by producing specific facts to prove that there is a genuine issue of
material fact for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986).
“[T]he mere existence of some alleged factual dispute between the parties will not defeat
an otherwise properly supported motion for summary judgment; the requirement is that there be
no genuine issue of material fact.” Id. at 247–48 (emphasis in original). The moving party,
however, may satisfy this burden by pointing to an absence of evidence to support the nonmoving party’s case. See PepsiCo, Inc. v. Coca-Cola Co., 315 F.3d 101, 105 (2d Cir. 2002) (per
curiam).
When documentary evidence and sworn affidavits supporting a motion for summary
judgment “demonstrate[] the absence of a genuine issue of material fact,” the non-moving party
must do more than vaguely assert the existence of some unspecified disputed material facts or
“rely on conclusory allegations or unsubstantiated speculation.” Robinson v. Concentra Health
Servs., Inc., 781 F.3d 42, 44 (2d Cir. 2015) (citation omitted).
The party opposing the motion for summary judgment then “must come forward with
specific evidence demonstrating the existence of a genuine dispute of material fact.” Id.; see also
Atkinson v. Rinaldi, 3:15-cv-913 (DJS), 2016 WL 7234087, at *1 (D. Conn. Dec. 14, 2016)
(holding non-moving party must present evidence that would allow reasonable jury to find in his
favor to defeat motion for summary judgment); Pelletier v. Armstrong, 3:99-cv-1559 (HBF),
2007 WL 685181, at *7 (D. Conn. Mar. 2, 2007) (“[A] nonmoving party must present
‘significant probative evidence to create genuine issue of material fact.’” (quoting Soto v.

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Meachum, 3:90-cv-270 (WWE), 1991 WL 218481, at *6 (D. Conn. Aug. 28, 1991)).
A court must view any inferences drawn from the facts in the light most favorable to the
party opposing the summary judgment motion. Dufort v. N.Y.C., 874 F.3d 338, 347 (2d Cir.
2017). A court will not credit conclusory allegations or denials. Brown v. Eli Lilly & Co., 654
F.3d 347, 358 (2d Cir. 2011). After drawing all inferences in favor of the non-moving party, if
the court finds that no reasonable trier of fact could find in the non-movant’s favor, the court will
find for the moving party as a matter of law and grant the summary judgment motion. See
Anderson, 477 U.S. at 248 (“summary judgment will not lie if the dispute about a material fact is
‘genuine,’ that is, if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.”).
III.

DISCUSSION
A.

PricewaterhouseCoopers’s ERISA Claim

A health-plan administrator may bring a civil suit “under 29 § 502(a)(3) of ERISA . . . to
obtain other appropriate equitable . . . to enforce any provisions of . . . the terms of the plan.”
Sereboff v. Mid Atlantic Med. Servs., Inc., 547 U.S. 356, 361 (2006) (citing 29 U.S.C. §
1132(a)(3)) (internal quotation marks omitted). Under the traditional rules of equity, a party may
follow a portion of the recovery into the hands of beneficiary as soon as the settlement fund was
identified and impose either a constructive trust or equitable lien on those funds. Id. at 365
(citing Barnes v. Alexander, 232 U.S. 117, 123 (1914)).
To obtain relief under 29 § 502(a)(3) of ERISA, a health-plan administrator must be “a
(1) ‘fiduciary’ that is (2) seeking ‘appropriate equitable relief’ (3) ‘to enforce the terms of the
plan.’” Quest Diagnostics v. Bomani, No. 3:11-cv-951(MPS), 2013 WL 3148651, at *5.

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1.

PricewaterhouseCoopers’s Ability to Seek Equitable Relief

PricewaterhouseCoopers argues that all health benefits provided by its staff medical plan
are self-funded, with the source of benefits being assets of PricewaterhouseCoopers.
Memorandum of Law in Support of Plaintiffs’ Motion for Summary Judgment, ECF No. 52
(“Mem. of Law in Supp. of Pl.’s MSJ.”), at 7. PricewaterhouseCoopers asserts that the staff
medical plan, which acts as the ERISA plan document, establishes that the plan is self-insured,
plan contributions come from employees and PricewaterhouseCoopers, and the source benefits
are assets of PricewaterhouseCoopers. Id. (citing Summary Plan Description, ECF No. 52-3, at
138). PricewaterhouseCoopers also asserts that the plans status is confirmed by
PricewaterhouseCoopers’s Director of National Benefits. Id. (citing Mayerson Aff.). Finally,
PricewaterhouseCoopers argues that Defendants’ contention that the plan benefits were funded
by insurance is not based on any facts.
Defendant does not contest that PricewaterhouseCoopers offers a self-funded plan.
The Court agrees.
First, PricewaterhouseCoopers has provided admissible evidence that the
PricewaterhouseCoopers plan was an ERISA plan for which PricewaterhouseCoopers is a
fiduciary within the meaning of 29 § 502(a)(3). See Mayerson Aff. at ¶¶ 3–5; Copeland Aff.; see
also Summary Plan Description, ECF No. 53, at 138. Mr. Mayer was also a participant in the
health benefit plan. Copeland Aff. at ¶ 3. And PricewaterhouseCoopers paid $44,167.59 in
medical bills for Mr. Mayer related to his May 11, 2015 automobile accident injuries. Medical
Payment Summary, ECF No. 52-10; Copeland Aff. at ¶ 11.
Second, PricewaterhouseCoopers seeks equitable relief for repayment of the $44,167.59
in medical bills paid, see Am. Compl. 16–18; 20–22, because Mr. Mayer received a $250,000

9

personal injury settlement related to his automobile accident, see Am. Answer at ¶ 11 (“Admitted
that Mayer v. Long case settled for $250,000”). See Sereboff, 547 U.S. at 361 (“under 29 §
502(a)(3) of ERISA . . . to obtain other appropriate equitable . . . to enforce any provisions of . . .
the terms of the plan.”).
Third, PricewaterhouseCoopers seeks this relief to “enforce the terms of the plan.” Id. at
362–63 (holding that medical bill reimbursement under ERISA was equitable relief because the
“nature of the recovery” was a claim of “specifically identifiable funds” within the beneficiary’s
control).
Accordingly, PricewaterhouseCoopers properly seeks equitable relief under ERISA.
2.

PricewaterhouseCoopers’s Right to Reimbursement for Medical
Expenses

PricewaterhouseCoopers argues that it is entitled to equitable relief under ERISA. Mem.
of Law in Supp. of Pl.’s MSJ. at 8. According to PricewaterhouseCoopers, the United States
Supreme Court’s holdings in Sereboff v. Mid Atlantic Med. Servs., Inc., 547 U.S. 356 (2006) and
McCutchen v. U.S. Airways, 133 S. Ct. 1537 (2013) establish that self-funded ERISA plan is
entitled to reimbursement from the proceeds of a third-party settlement as an equitable remedy
under the ERISA statute. Id. at 8–10. Finally, PricewaterhouseCoopers cites other district courts
within the Second Circuit for the proposition that an ERISA plan is seeking appropriate equitable
relief when pursuing reimbursement of benefits already paid to the plan beneficiary. Id. at 10–11
(citing Quest Diagnostics v. Bomani, No. 3:11-cv-951 (MPS), 2013 WL 3148651 (D. Conn. June
19, 2013); Fishbein v. Miranda, 670 F. Supp. 2d 266, 276–77 (S.D.N.Y. 2009); Borden v. Blue
Cross & Blue Shield, 418 F. Supp. 2d 266, 273 (W.D.N.Y. 2006)).
Next, PricewaterhouseCoopers asserts that ERISA preempts Connecticut’s antisubrogation statute, rendering it inoperable in this reimbursement action. Id. at 11 (citing FMC
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Corp. v. Holliday, 498 U.S. 52, 58 (1990)). Because of the breadth of ERISA’s preemption
clause, PricewaterhouseCoopers argues that Connecticut’s anti-subrogation statute regulating
insurance does not reach PricewaterhouseCoopers’s self-funded plan. Id.at 12–13.
Finally, PricewaterhouseCoopers contends that Defendants have misinterpreted the plan’s
Form 5500, which has no bearing on the funding status of the medical plan. Id. at 13. Because
the Form 5500 is merely an administrative filing with the United States Department of Labor,
PricewaterhouseCoopers argues that the form has no practical effect on the plan’s self-funded
administration. Id. at 14. PricewaterhouseCoopers also argues that its benefit payments on behalf
of Arthur Mayer were made with PricewaterhouseCoopers’s own assets, consistent with the selffunded plan. Id. at 16.
In response, Defendants argue that PricewaterhouseCoopers has failed to disclose any
experts that would be able to prove that medical benefits paid by the PricewaterhouseCoopers
plan were related to Mr. Mayer’s May 11, 2015 automobile collision injuries. Defendants’
Memorandum of Law in Support of their Motion for Summary Judgment, ECF No. 59 (“Mem. in
Supp. of Def.’s MSJ.”), at 2. Defendants argue that the medical bills paid by the
PricewaterhouseCoopers plan are not connected to the Mr. Mayer’s auto collision injuries unless
there is expert testimony to establish the connection between the injuries and third-party liability.
Id. at 3. Moreover, Defendants assert that Mr. Mayer had a pre-existing condition that was the
actual cause of some of the medical bills paid by the PricewaterhouseCoopers plan. Id.
Defendants also argue that PricewaterhouseCoopers is only entitled to subrogation from
the medical expenses related to the automobile collision and that there is no evidence presented
by PricewaterhouseCoopers that Mr. Mayer received economic damages for his medical
expenses in the $250,000 settlement. Id. at 5. Rather, Defendants claim that the entirety of the

11

settlement was for non-economic damages related to cervical injuries, which means that the
settlement total was not for economic damages from the medical bills. Id. at 6.
The Court disagrees.
In Sereboff, the U.S. Supreme Court permitted a health-plan administrator to bring a suit
under 29 § 502(a)(3) of ERISA for medical expense reimbursement. There, Mid Atlantic paid
$74,869.37 in medical expenses for married beneficiaries after they were injured in a car
accident. Sereboff , 547 U.S. at 360. Under the plan’s coverage provisions, the plan paid the
couple’s medical expenses. Id. The Sereboffs later filed a state-law tort action against several
third parties for compensatory damages for injuries suffered during the accident. Id. In
anticipation of proceeds from the suit, Mid Atlantic sent letters throughout the next two years of
litigation asserting a lien on any proceeds and detailing the medical expenses already paid by the
health plan. Id. The case eventually settled for $750,000 and neither the Sereboffs nor their
attorney reimbursed Mid Atlantic. Id.
The Supreme Court held that Mid Atlantic’s medical bill reimbursement under ERISA
was equitable relief because the “nature of the recovery” was a claim of “specifically identifiable
funds” within the Sereboffs’ control—e.g. a portion of the settlement received by the claim
beneficiaries. Id. at 362–63 (internal quotation marks omitted). Because a “contract to convey a
specific object” not yet acquired “creates a lien” on that object as soon as “the contractor . . . gets
title to the thing,” see id. at 363–64 (quoting Barnes, 232 U.S. at 121) (internal quotation marks
omitted), Mid Atlantic could bring a reimbursement action under 29 § 502(a)(3) seeking funds
that its beneficiaries had promised to turn over.
Here, as in Sereboff, the basis for PricewaterhouseCoopers’s claim is equitable. For an
ERISA action to be rendered equitable, the plan must seek “specifically identifiable funds that

12

were within the possession and control” of the beneficiaries—not recovery from that
beneficiary’s “assets generally.” Sereboff, 547 U.S. at 362–63. As the Second Circuit has noted,
“Sereboff stands for the proposition that if the parties to a contract agree to the transfer of
property . . . [t]he agreement is sufficient to identify the property or funds subject to a lien. This
property becomes recoverable in equity.” Central State, Se. & Sw. Areas Health & Welfare Fund
v. Gerber Life Ins. Co., 771 F.3d 150, 156 (2d Cir. 2014).
PricewaterhouseCoopers seeks reimbursement for $44,167.59 medical bills paid related
to Mr. Mayer’s May 11, 2015 automobile collision. See Am. Compl. at ¶ 9; Copeland Aff.
at ¶ 11; Medical Payment Summary, ECF No. 52-5, at 4. Because of that auto collision, Mr.
Mayer received a $250,000 settlement for state-law tort claims. Am. Answer at ¶ 11 (“Admitted
that Mayer v. Long case settled for $250,000”). Under the terms of the plan agreement,
PricewaterhouseCoopers therefore had the right to attach an equitable lien to Defendants’
settlement funds, when they obtained title to that fund, making the nature of
PricewaterhouseCoopers’s underlying remedy equitable and immediately enforceable. See
Summary Plan Description, ECF No. 52-3, at 109.
Accordingly, PricewaterhouseCoopers has properly placed an equitable lien on
Defendants funds for reimbursement for medical expenses already paid. See Thurber v. Aetna
Life Ins. Co., 712 F.3d 654, 665 (2d Cir. 2013) (“In the context of an equitable lien by
agreement, . . . all that matters is that the beneficiary did, at some point, have possession and
control of the specific portion of the particular fund sought by the insurer.”).1

1

PricewaterhouseCoopers also properly raises the argument that Defendants’ Motion for Summary Judgment could
be dismissed for failure to comply with local rules 56(a)(1) and 56(a)(2) regarding statements of material facts. See
Plaintiffs’ Consolidated memorandum of Law in Opposition to Defendants’ Motion for Summary Judgment and in
Response to Defendants’ Opposition to Plaintiffs’ Motion for Summary Judgment, ECF No. 67, at 1–2; see also
Holtz v. Rockefeller & Co., Inc., 258 F.3d 62, 73 (2d Cir. 2001) (“A district court has broad discretion to determine
whether to overlook a party's failure to comply with local court rules . . . [and] is not required to consider what the

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B.

Defendants’ Counterclaims

On March 12, 2019, Defendants filed an Amended Answer to Plaintiffs’ Amended
Complaint. In the Amended Answer, Defendants made two counterclaims against Plaintiffs
regarding: (1) a failure to timely provide coverage information in violation of 29 U.S.C. §
1132(c), arguably entitling Defendants to $100.00 per day, in excess of Plaintiffs’ claim; and (2)
an entitlement by Mr. Gaston to an offset of one-third of any recoverable subrogation in shared
attorney’s fees. Am. Answer at 3–4.
On April 10, 2019, PricewaterhouseCoopers moved for summary judgment on
Defendants counterclaims. Pls.’ Mem. in Supp. of Counterclaim MSJ.
The Court will now address the timeliness of any requests made of
PricewaterhouseCoopers and the viability of any attorney fee offset to Mr. Gaston.
1.

The Timeliness of the Timeliness Claim

While ERISA allows for causes of action by health plans, it does not have a statute of
limitations. See Burke v. PricewaterhouseCoopers LLP, 572 F.3d 76, 78 (2d Cir. 2009). And
“[b]ecause ERISA ‘does not prescribe a limitations period for [Section 502(c)(1)] actions . . . the
applicable limitations period is that specified in the most nearly analogous state limitations
statute.’” Brown v. Rawlings Fin. Servs., LLC, 868 F.3d 126, 128 (2d Cir. 2017). As a result of
its similarity to civil statutory penalties in Conn. Gen. Stat. § 52—585, courts in this Circuit have
applied Connecticut’s one-year statute of limitations period. See id. at 130 (applying
Connecticut’s one-year statute of limitations period to an ERISA non-responsiveness penalty
claim); Tritt v. Automatic Data Processing, Inc., No. 3:06-cv-2065(CFD), 2008 WL 2228841, at
*6–7 (D. Conn. May 27, 2008) (same).

parties fail to point out in their Local Rule 56.1 statements . . . .” (internal quotation marks omitted)). The Court
nevertheless will address the substantive bases for this case’s dismissal.

14

PricewaterhouseCoopers argues that Defendants’ timeliness claim is time-barred because
the statute of limitations for Defendants’ timeliness claim would begin to accrue on May 26,
2017, thirty days after Attorney Gaston’s last request for the Form 5500. Pls.’ Mem. in Supp. of
Counterclaim MSJ. at 2. Id. Defendants, however, did not file their counterclaim until February
20, 2019, which is beyond the one-year statute of limitations. Id.
Alternatively, PricewaterhouseCoopers argues that Defendants failed to submit a written
request to PricewaterhouseCoopers as the plan administrator. Id. at 4. Under the terms of ERISA,
PricewaterhouseCoopers argues that Defendants may only seek civil penalties when the written
request is made to a plan administrator that refuses the information request. Id. at 5. Because the
duty cannot be transferred to a third-party administrator, Defendants’ letters to Optum, who is
not the plan administrator, would not trigger the ERISA civil enforcement provision. Id. at 6.
Even if the request was addressed to the proper part, PricewaterhouseCoopers argues that
Defendants never specified which Forms 5500 he wanted other than the courtesy copy provided
by Optum. Id. at 6–7.
In response, Defendants argue that Optum functioned as an agent of the
PricewaterhouseCoopers plan, which makes PricewaterhouseCoopers subject to the $100.00 per
day penalty for non-response. Defs.’ Response to Pl.’s Counterclaim MSJ. at 3. Again,
Defendants argue that this total exceeds the amount of medical bills for which
PricewaterhouseCoopers seeks reimbursement. Id.
The Court disagrees.
Defendants last sent a Form 5500 request letter on April 26, 2017. 2 See Mem. in Supp. of

2

At oral argument, Mr. Gaston argued that his February 16, 2018 letter to Theodore Tucci, counsel for
PricewaterhouseCoopers, was the last communication from which the statute of limitations should run. See Ex. E,
ECF No. 76-5. Yet Mr. Tucci responded to this letter on February 20, 2018. In the Second Circuit, a damages award
for refusal to comply with a document request are discretionary and “often depends on whether the administrator's

15

Def.’s MSJ. at 7. The statute of limitations therefore would begin to accrue, at the latest, on May
26, 2017, thirty days after Attorney Gaston’s last request for the Form 5500. As a result, with a
one-year statute of limitations period, any claim for a civil penalty would have to be filed within
one year of that date. See Brown, 868 F.3d at 13.
But Defendants did not file their counterclaim until they filed an Answer on February 20,
2019, see Answer with Special Defenses, Counterclaim against Plaintiffs, ECF No. 56, which is
beyond the applicable one-year statute of limitations deadline.
Accordingly, Defendants’ civil penalty claims are time-barred, and
PricewaterhouseCoopers’s motion for summary judgment should be granted on that claim. 3
2.

Attorney Fee Offset

PricewaterhouseCoopers also argues that Defendants are not entitled to any attorney fee
offset under the common fund doctrine. Pls.’ Mem. in Supp. of Counterclaim MSJ. at 7.
PricewaterhouseCoopers contends that when an ERISA plan’s language sets out unambiguous
terms of subrogation, those terms must be enforced as written, regardless of alleged equitable
defenses. Id. at 8.

delay resulted from bad faith, further suggesting that Section 502(c)(1) is meant to punish an administrator's failure
to follow statutory duties.” See Brown, 868 F.3d at 129. While Defendants may have wanted additional information,
without more in this record, this is insufficient to create a genuine issue of fact for trial as to
PricewaterhouseCoopers’ alleged bad faith. Price v. Cushman & Wakefield, Inc., 808 F. Supp. 2d 670, 685
(S.D.N.Y. 2011) (“In seeking to show that there is a genuine issue of material fact for trial, the non-moving party
cannot rely on mere allegations, denials, conjectures or conclusory statements, but must present affirmative and
specific evidence showing that there is a genuine issue for trial.” (citations omitted)).
3
In any event, PricewaterhouseCoopers is the plan administrator and Optum is not an agent of the plan. See
Summary Plan Description, ECF No. 52-3, at 120 (“The relationship between the Claims Administrator and the Plan
Administrator is a contractual one and the Claims Administrator is not an entity of the Plan Administrator.”).
Because Optum “is not ‘the person specifically so designated by the terms of the instrument under which the plan is
operated,’ 29 U.S.C. § 1002(16)(A)(i), it is not a plan ‘administrator’ within the meaning of ERISA § 502(c)(1), 29
U.S.C. § 1132(c)(1).” See Kraus v. Oxford Health Plans, Inc., 517 F.3d 614, 631 (2d Cir. 2008); see also Giordano
v. Thomson, No. 03-CV-5672 JS AKT, 2007 WL 1580081, at *4 (E.D.N.Y. May 29, 2007) (“A plan administrator
may not be held liable for requests directed to someone other than the administrator.”). Accordingly,
PricewaterhouseCoopers’s motion for summary judgment would be granted, even if the counterclaim was not timebarred.

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PricewaterhouseCoopers argues that the summary plan description states that “[n]o court
costs or attorneys’ fees may be deducted from the Plan’s recovery without the Plan’s written
consent and the Plan is not required to participate in or pay court costs or attorneys’ fees to the
attorney hired by you or your dependents to pursue damages or personal injury claims,” and
expressly prohibited common fund doctrine rights. Id. (citing Summary Plan Description, ECF
No. 52-3, at 109). The PricewaterhouseCoopers plan thus was not required to participate in the
Mayer litigation or pay court costs or attorney’s fees to Defendant Gaston. Id. at 9.
In response, Defendants argue that two Illinois cases to support the quasi-contract claim
that Mr. Gaston should receive one-third in attorney’s fees, independent of the benefit plan based
on equitable considerations. Defs.’ Response to Pl.’s Counterclaim MSJ. at 6–7.4
The Court disagrees.
In McCutchen, the U.S. Supreme Court stated that “if the agreement governs, the
agreement governs.” 569 U.S. at 99. “”Even in equity, when a party sought to enforce a lien by
agreement, all provisions of the agreement controlled.” Id. at 100. There, a beneficiary suffered
serious injuries in a car accident. Id. at 92. As a participant in US Airways self-funded plan, the
plan paid $66,866 in medical expenses arising from the accident on the beneficiary’s behalf. Id.
The beneficiary retained counsel and eventually recovered $10,000 from the other driver and
$100,000 from the beneficiary’s automobile insurance provider. Id. After learning of the
settlement, US Airways sought reimbursement of the medical expenses under 29 § 502(a)(3) of
ERISA, while the beneficiary claimed that plan could not reap the benefits of the settlement
because, among other reasons, it had not participated in the lawsuit. Id. at 93. The Supreme
Court upheld US Airways’ entitlement to reimbursement under the clear terms of the plan. See

4

To the extent that Mr. Gaston is arguing that he is not liable for attorneys’ fees incurred by
PricewaterhouseCoopers in bringing this action, the issue is not yet before this Court and will not be addressed here.

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id. at 101 (“The plan, in short, is at the center of ERISA. And precluding McCutchen’s equitable
defenses from overriding plain contract terms helps it to remain there.”).
Thus, because ERISA’s principal function is to “protect contractually defined benefits.”
Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 148 (1985), the Court must strictly construe
the terms of the PricewaterhouseCoopers plan.
Here, the unambiguous language of the summary plan description specifically states that
attorney’s fees would not apply to medical payment reimbursements. According to the summary
plan description,
the recipient of any such recovered amounts shall hold the funds in constructive
trust for the Plan . . . [and] [n]o court costs or attorneys’ fees may be deducted
from the Plan’s recovery without the Plan’s express written consent and the Plan
is not required to participate in or pay court costs or attorneys’ fees to the attorney
hired by you or your Dependents to pursue damages or personal injury claims. No
so-called ‘fund doctrine’ or ‘common fund doctrine’ right shall defeat the Plan’s
rights.
Summary Plan Description, ECF No. 52-3, at 109. While the terms of the plan in McCutchen
were “silent on the allocation of attorney’s fees, and in those circumstances, the common-fund
doctrine provides the appropriate default,” see 569 U.S. at 101, there is no such issue with this
contract’s terms.
The common-fund doctrine thus does not apply in this case. See McCutchen, 569 U.S. at
105 (“Only if the [health-benefit] plan expressly addressed the costs of recovery would it alter
the common-fund doctrine.”); see also Quest Diagnostics v. Bomani, 3:11 No:11-cv-951 (MPS),
2013 WL 3148651, at *2 (D. Conn. June 19, 2013) (“Unlike the plan in McCutchen, the plain
language of the plan in this case is unambiguous, leaving no room for equitable defenses to
operate.”).

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IV.

CONCLUSION
For the foregoing reasons, the Court GRANTS PricewaterhouseCoopers’s motions for

summary judgment as to the medical bill reimbursements and dismissal of the counterclaims and
DENIES Defendants motion for summary judgment.
The clerk of the court is directed to close this case.
SO ORDERED at Bridgeport, Connecticut, this 31st day of May 2019.
/s/ Victor A. Bolden
VICTOR A. BOLDEN
UNITED STATES DISTRICT JUDGE

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