Brown v. Metropolitan Life Insurance Company et al

Filing 78

ORDER Granting Defendants' Motion to Recover Overpayment 64 , Denying Plaintiff's Motion for Leave to File Motion to Assess Penalties 61 , and Closing Case. Signed by District Judge Denise Page Hood. (LSau)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
MATTHEW BROWN,
Plaintiff/Counter-Defendant,
Case No. 10-CV-14442
Honorable Denise Page Hood

v.
WALGREENS INCOME PROTECTION
PLAN FOR STORE MANAGERS,
WALGREEN CO., and METROPOLITAN
LIFE INSURANCE COMPANY,
Defendants/Counter-Plaintiffs.
______________________________________/

ORDER GRANTING DEFENDANTS’ MOTION TO RECOVER
OVERPAYMENT [#64], DENYING PLAINTIFF’S MOTION FOR LEAVE
TO FILE MOTION TO ASSESS PENALTIES [#61], AND CLOSING CASE
This matters comes before the Court on two separate motions: Defendants’
Motion to Recover the Overpayment of Plan Benefits and Plaintiff’s Motion for Leave
to File Motion to Assess Penalties against Defendant Walgreen Co. The matter is now
fully

briefed.

For

the

reasons

stated

in

more

detail

below,

Defendants/Counter-Plaintiffs’ Motion to Recover the Overpayment of Plan Benefits
Received By Plaintiff/Counter-Defendant [Docket No. 64, filed May 23, 2013] is
GRANTED. Motion for Leave to File Motion to Assess Penalties Against Defendant
Walgreen Co. Pursuant to 29 U.S.C. § 1132(c) [Docket No. 61, filed May 6, 2013]
is DENIED.

Plaintiff/Counter-Defendant Matthew Brown filed this action against
Defendants/Counter-Plaintiffs Metropolitan Life Insurance, Walgreen Co., and
Walgreens Income Protection Plan for Store Managers on November 6, 2010. On
March 4, 2011, Defendants filed a Counterclaim against Plaintiff for repaying of
overpayment of long term disability benefits. On June 22, 2011, Defendants filed a
motion to dismiss, which the Court denied on March 29, 2012. On March 14, 2013,
the Court granted Defendants’ motion for reconsideration and granted Defendants’
motion to dismiss, dismissing Plaintiff’s complaint.

All that now remains is

Defendants’ counterclaim, which is now before the Court.
II.

ANALYSIS
Defendants argue that Plaintiff is obligated to repay $30,214.80 for

overpayment of long term disability plan benefits pursuant to section 502(a)(3)(B)(ii)
of the Employment Retirement Income Security Act, 29 U.S.C. §§ 1132(a)(3)(B)(ii).
Pursuant to section 502(a)(3), a fiduciary may bring a civil action for equitable relief
to enforce the provisions of the Plan. To qualify as equitable relief, the insurance plan
must “identif[y] a particular fund, distinct from [the participant’s] general assets” and
the portion of that specified fund that the plan is entitled to receive. Sereboff v. Mid
Atl. Med. Servs., Inc., 547 U.S. 356, 364 (2006). “[S]trict tracing of funds is not
required and the fund need not have been in existence when the contract was
2

executed.” Gilchrest v. UNUM Life Ins. Co. of Am., 255 Fed. Appx. 38, 44–45 (6th
Cir. 2007) (citing Sereboff, 547 U.S. at 364–65). The Sixth Circuit has held that
identifying the fund as overpayment of Social Security benefits is sufficient to satisfy
Sereboff. Id. at 45–46.
The Plan provides that Defendants are entitled to reduce or offset plan benefits
by other income that Plaintiff receives, such as social security benefits.1 It further
provides that Plaintiff must “sign a reimbursement agreement . . . [, which] states that
[the participant] agree[s] to refund any benefit payments that may have been overpaid

1

In offering this plan, Walgreens goal is to provide you continuing income during your
disability. If you receive disability or disability-related income from other sources,
your benefits under this plan will be reduced, or offset, by the amount received as the
primary benefit. The primary benefit amount is the amount you, the covered
employee, receiver from other sources. This amount does not include benefits
received from other sources for the benefit of eligible family members.
Your benefits under this plan will be reduced by the amount of benefits you are
eligible to receive from other sources, such as:
<
<
<
<
<

Social Security
workers’ compensation
state-mandated or Commonwealth of Puerto Rico-mandated plans,
any other disability plan which Walgreens sponsors or any other employer
sponsors or contributes to,
any award in a third party claim for a loss that caused or aggravated the
disabling condition.

<
[Defendants’ Motion to Recover, Docket No. 64, Ex. B, AR 937]
3

by the Plan.”2 The agreement further reserved the right to recover overpayment by:
<
<

<

reducing or offsetting against any future benefits payable to you
or your survivors;
stopping future benefit payments (including minimum benefits
described on page 9) which would otherwise be due under this
plan. Payments may continue when the overpayment has been
recovered; or
demanding immediate refund of the overpayment from you.

[Defendants’ Motion to Recover, Docket No. 64, Ex. B, AR 939] The offset or
reduction would not include any cost of living increases.
On September 12, 2006, Plaintiff signed the “Agreement to Reimburse

2

You will be required to sign a reimbursement agreement to receive benefits under
this plan. This agreement states that you agree to refund any benefit payments that
may have been overpaid by the Plan. Walgreens or MetLife has the right to recover
from you any amount that is determined to be an overpayment. You have the
obligation to refund any such amount. Rights and obligations in this regard are also
set forth in the reimbursement agreement you are required to sign when you become
eligible for benefits under this plan. The agreement: (i) confirms that you will repay
all overpayments; and (ii) authorizes Walgreens or Metlife to obtain any information
relating to other income benefits.
An overpayment occurs when it is determined that the total amount paid on your claim
is more than the total of the benefits due under this plan. This includes any
overpayment resulting from:
<

retroactive awards received from sources shown in the Benefit Offset
(Reductions) section on page 6;
fraud or misstatement; or
any error made in processing your claim.

<
<
<
[Defendants’ Motion to Recover, Docket No. 64, Ex. B, AR 939]
4

Overpayment of Long Term Disability Benefits” [Id. at Ex. D, AR 776] Plaintiff
agreed to notify Defendants if he received disability benefits and to repay any
overpayment. He further agreed to “repay MetLife in a single lump sum any
overpayment on my Long Term Disability claim due to integration of retroactive
Social Security Benefits.” [Id.] Plaintiff began receiving social security disability
insurance benefits in June 2006 and these continue until the present. For the period
of June 2006 until October 2008, Plaintiff received a lump sum payment of
$44,491.00. From June 2006 until December 2007, Plaintiff received long term
disability benefits from the Plan totaling $51,624.00.
It would appear that Defendants’ request for equitable relief, specifically for
repayment of overpaid long term disability benefits is appropriate. The Plan provides
that Defendants may recoup overpayment when Plaintiff receives social security
benefits. The Plan language is clear that Defendants are entitled to a lump sum
payment in the event that Plaintiff receives retroactive social security benefits. The
Plan does not seek repayment from Plaintiff’s general assets but rather from a specific
pool of funds: overpaid benefits.
In response, Plaintiff again argues that Defendants have not relied on the right
Plan. However, the Court rejected this argument in its Order Denying Plaintiff’s
Motion for Reconsideration. [Docket No. 74, filed July 9, 2013] Plaintiff argues that
5

he has not received any benefits; therefore, Defendants cannot claim an overpayment
of what has not been received. He further notes that Defendants cannot attach his
Social Security insurance benefits so the only pool of funds available would be
overdue benefits, which Walgreens can get from MetLife. Defendants note, and the
record demonstrates, that Plaintiff received disability benefits from the period of
December 30, 2005, until December 30, 2007.

During this time Plaintiff also

received a lump sum payment of Social Security insurance benefits. Plaintiff is
correct that the Court cannot place a lien on the Social Security benefits. See 42
U.S.C. § 407(a) (“The right of any person to any future payment under this subchapter
shall not be transferable or assignable, at law or in equity, and none of the moneys
paid or payable or rights existing under this subchapter shall be subject to execution,
levy, attachment, garnishment, or other legal process . . . .”) However, Defendants are
not asking the Court to place a lien on Plaintiff’s Social Security insurance benefits
but, instead, to require repayment of overpaid long term disability benefits.
Defendants’ Motion to Recover Overpayment of Plan Benefits is GRANTED.
Plaintiff asks the Court for leave to file a motion to assess penalties against
Defendant Walgreen Co. based on its alleged failure to provide the correct plan. The
Court has already addressed this argument in its Order Denying Plaintiff’s Motion for
Reconsideration. Specifically, the Plan documents that Plaintiff requests have no
6

relevance to Plaintiff. Plaintiff’s requested relief is DENIED.
Accordingly,
IT IS ORDERED that Defendants/Counter-Plaintiffs’ Motion to Recover the
Overpayment of Plan Benefits Received By Plaintiff/Counter-Defendant [Docket No.
64, filed May 23, 2013] is GRANTED.
IT IS FURTHER ORDERED that Plaintiff’s Motion for Leave to File Motion
to Assess Penalties Against Defendant Walgreen Co. Pursuant to 29 U.S.C. § 1132(c)
[Docket No. 61, filed May 6, 2013] is DENIED.
IT IS FURTHER ORDERED that this case is DISMISSED.
IT IS SO ORDERED.
S/Denise Page Hood
Denise Page Hood
United States District Judge
Dated: March 28, 2014
I hereby certify that a copy of the foregoing document was served upon counsel of
record on March 28, 2014, by electronic and/or ordinary mail.
S/LaShawn R. Saulsberry
Case Manager

7