Suter v. The Carpenter Health and Welfare Trust Fund of St. Louis

Filing 29

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that defendant's Motion For Reconsideration Or, In The Alternative, For Leave To File An Amended Complaint (Docket No. 22) is denied. IT IS FURTHER ORDERED that defendant's Motion For Leave To Amend Memorandum In Support Of Motion For Reconsideration And Motion To Amend Count II Of The Counterclaim By Interlineation (Docket No. 26) is denied. Denying 22 Motion for Reconsideration; denying 26 Motion for Leave to Amend Memorandum In Support Of Motion For Reconsideration And Motion To Amend Count II Of The Counterclaim. Signed by Magistrate Judge Frederick R. Buckles on 7/22/2011. (NCL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
MICHAEL SUTER, et al.,
Plaintiffs/Counter-Defendants,

v.
THE CARPENTER HEALTH AND
WELFARE TRUST FUND OF
ST. LOUIS,
Defendant/Counter-Claimant.

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Case No. 4:10CV1855 FRB

MEMORANDUM AND ORDER
Presently

before

the

Court

is

the

Motion

For

Reconsideration Or, In The Alternative, For Leave To File An
Amended Complaint (Docket No. 22) and the Motion For Leave To Amend
Memorandum In Support Of Motion For Reconsideration And Motion To
Amend Count II Of The Counterclaim By Interlineation (Docket No.
26) filed by defendant The Carpenter Health And Welfare Trust Fund
Of St. Louis (“defendant”).

All matters are pending before the

undersigned United States Magistrate Judge, with consent of the
parties, pursuant to 28 U.S.C. § 636(c).
Defendant seeks reconsideration of this Court’s June 17,
2011 Order to the extent Count II of its Counterclaim was dismissed
for failure to state a claim under the civil enforcement provision
of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C.
§ 1132(a)(3), and alternately seeks leave to amend Count II of its
Counterclaim although the deadline for doing so has passed.

In

support of the instant motions, defendant states that Count II is
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not asserted against plaintiffs, but only against a fund that may
never exist, and will apply only to “funds that may become payable
to the Plaintiffs in the future in the event that Plaintiffs would
otherwise be entitled to medical benefits under the terms of the
Plan Document.”

(Docket No. 22 at page 2) (emphasis in original).

In its Motion For Leave To Amend, (Docket No. 26), defendant seeks
to amend its Memorandum In Support Of Motion For Reconsideration
such that paragraph 5 on the second page reads:
The claim, does not seek to impose personal
liability upon Plaintiffs.
This is clearly
set forth in paragraphs 6(f)-(h) of the
Answer,
which
paragraphs
are
expressly
incorporated in Count II (also Count I) of the
Counterclaim.
The claim, as stated in
paragraph 20 of the Counterclaim, is asserted
not against Plaintiffs but only against a Fund
that, in fact, may never exist. The claim, by
its own terms, and consistent with the ROR
provision of the Plan Document will only apply
to funds that may become payable to the
Plaintiffs in the future in the event that
Plaintiffs would otherwise be entitled to
medical benefits under the terms of the Plan
Document. Clearly, although this is unlikely,
that development may never occur in which case
the claim by its own terms would not apply.
(Docket No. 26 at page 2).
Defendant emphasizes that it does not seek to impose
personal liability upon plaintiffs, but seeks only to impose an
equitable lien by agreement upon specific funds that belong to the
Fund.

(Id.)

Citing Sereboff v. Atlantic Medical Services, Inc.,

547 U.S. 356 (2006), defendant adds that this claim “is clearly
equitable relief within the meaning of § 502 of ERISA (29 U.S.C. §
1132).”

(Docket No. 26 at page 2).

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Plaintiff subsequently filed

a response opposing the relief defendant seeks.

(Docket No. 28).

The facts of this case and the applicable Supreme Court
precedent were discussed in this Court’s previous Memorandum and
Order, and will not be fully set out again here.

Briefly, however,

the equitable relief provided for by § 1132(a)(3) is limited to
“those categories
equity.”

of relief that were typically available in

Great-West Life & Annuity Insurance Co. v. Knudson, 534

U.S. 204 (2002) (quoting Mertens v. Hewitt Associates, 508 U.S.
248, 256 (1993)).

In the instant motions, however, defendant

describes only legal relief, inasmuch as defendant alleges that, to
compensate it for benefits it conferred upon plaintiffs, it should
be entitled to a lien over other funds that may become payable to
plaintiffs in the future in the event they are otherwise entitled
to medical benefits under the Plan’s terms.
2).

(Docket No. 26 at page

The basis of this claim is not that plaintiffs hold particular

funds that, in good conscience, belong to defendant, but that
defendant is contractually entitled to recover some funds for
benefits it conferred.

This is the type of remedy rejected by the

Supreme Court as impermissible under § 1132(a)(3).

Knudson, 534

U.S. at 214 (“[t]he basis for petitioners’ claim is not that
respondents hold particular funds that, in good conscience, belong
to petitioners, but that petitioners are contractually entitled to
some

funds

for

benefits

that

they

conferred.

The

kind

of

restitution that petitioners seek, therefore, is not equitable the

imposition

of

a

constructive

trust

or

equitable

lien

on

particular property - but legal - the imposition of personal
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liability for the benefits that they conferred upon respondents.”)
(emphasis in original).
Defendant states that it is seeking funds that in good
conscience belong to it; that under Sereboff, the relief it seeks
is clearly equitable; and that the other funds it seeks are
specific, identifiable, and in the hands of plaintiffs.

However,

defendant’s conclusory statements do little to overcome the fact
that it is claiming that it is contractually entitled to some funds
to compensate it for benefits it conferred upon plaintiffs, which
is a legal, not an equitable, remedy.

See Id.

Based upon the Supreme Court precedent discussed herein
and in this Court’s previous Memorandum and Order, the undersigned
concludes that the relief defendant seeks is not authorized by §
1132(a)(3) because it cannot be characterized as equitable relief.
On the claims defendant raises in the instant motions, defendant is
not entitled to reconsideration of this Court’s June 17, 2011
Order, and it fails to establish the good cause required by Rule
16(b)

of

the

Federal

Rules

of

Civil

Procedure

to

amend

its

Counterclaim following the expiration of the time to do so.

See

Travelers Indem. Co. of America v. Holtzman Properties, L.L.C.,
2009 WL 485056, *1 (E.D. Mo. 2009) (internal citations omitted)
(“Where a party seeks leave to amend its complaint after the
deadline in the applicable case management order has passed,
Federal

Rule

of

Civil

Procedure

16(b)’s

good-cause

standard

applies, not the standard of Rule 15(a). Under Rule 16(b), the
party must show good cause in order to be granted leave to amend.”)
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Therefore, for all of the foregoing reasons, on the
claims that defendant raises,
IT

IS

HEREBY

ORDERED

that

defendant’s

Motion

For

Reconsideration Or, In The Alternative, For Leave To File An
Amended Complaint (Docket No. 22) is denied.
IT IS FURTHER ORDERED that defendant’s Motion For Leave
To Amend Memorandum In Support Of Motion For Reconsideration And
Motion To

Amend Count II Of The Counterclaim By Interlineation

(Docket No. 26) is denied.

_______________________________
Frederick R. Buckles
UNITED STATES MAGISTRATE JUDGE
Dated this 22nd day of July, 2011.

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