Administrative Committee of the Dillard's Inc. Group Health, Dental, and Vision Plan v. Sarrough et al

Filing 35

Order signed by Judge James S. Gwin on 3/18/15. The Court, as set forth in this Order, denies defendants' motion for judgment on the pleadings without prejudice to refiling later. Plaintiff's motion to stay defendants' motion f or judgment on the pleadings and to convert same to a motion for summary judgment, along with the motions to strike part of the motion for judgment on the pleadings, are denied as moot. Plaintiff's motion for a pretrial conference, and to compel defendants' attendance at a Rule 26(f) discovery conference is denied. Plaintiff's motion to file a second amended complaint is granted and the amended complaint shall be filed for the limited purpose of adding another attorney as a named party possessing funds to which plaintiff asserts a claim. (Related Docs. 9 , 12 , 13 , 14 , 25 , 32 ) (M,G)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
------------------------------------------------------:
ADMINISTRATIVE COMMITTEE OF
:
THE DILLARD’S, INC. GROUP HEALTH,:
DENTAL, AND VISION PLAN,
:
:
Plaintiff,
:
:
v.
:
:
MAY SARROUGH, et al.,
:
:
Defendants.
:
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CASE NO. 1:14-CV-01165

ORDER
[Resolving Docs. 9, 12, 13, 14, 25, 32]

JAMES S. GWIN, UNITED STATES DISTRICT JUDGE:
Plaintiff the Administrative Committee of the Dillard’s, Inc. Group Health, Dental, and
Vision Plan (“Dillard’s) seeks a constructive trust and equitable lien over settlement proceeds that
Defendants control.1/
I. Background
Dillards provided an ERISA benefit plan to decedent Hanan Saah. After Saah was injured
in a car accident in February 2011, Dillards paid for $260,370.63 of Saah’s medical expenses. Saah
passed away in July 2011. Since that time, May Sarrough, the administrator of Saah’s estate, and the
law firm of Bashein & Bashein have won settlements related to the February 2011 car accident.
Dillard’s asserts a claim to these settlement proceeds to recoup the medical costs it incurred between
February and July 2011.2/

1/

Doc. 1.

2/

Id. at 2-7.

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Case No. 1:14-CV-01165
Gwin, J.
Saah’s estate remains open in Cuyahoga County Probate Court.3/ Dillard’s moved to
intervene in that matter on May 20, 2014.4/ Dillard’s filed a complaint in this Court on May 30, 2014.
The primary issue in the probate proceeding is the allocation of settlement funds. Dillard’s
argues the funds should be allocated to a survivorship claim as damages for the decedent’s pain and
suffering. Defendants argue that the settlement funds should be allocated entirely as wrongful death
claims, with the estate recovering the entirety and Dillard’s recovering none.
On November 6, 2014, a Magistrate Judge issued a report and recommendation that the
settlement proceeds be entirely allocated to the decedent’s estate. Dillard’s has filed voluminous
objections to that report, and the matter remains pending before the Probate Court. No final ruling
as to the allocation of settlement proceeds has been made.
II. Analysis
Numerous factors counsel in favor of resolving this matter in Probate Court. Dillard’s
intervened in the Probate Court matter before filing its complaint in this Court. Questions of state
law predominate in deciding how to allocate the settlement. The Probate Court has a greater interest
and expertise in resolving the matter, and has invested considerable time and resources in directing
the matter to final judgment.5/
Finally, the Probate Court’s judgment as to the allocation of the settlement funds would

3/

The Estate of Hanan Saah, 2011-EST-173562. Docket available at http://probate.cuyahogacounty.us.
Doc. 9-5.

4/
5/

“Considerations of judicial economy and federal-state comity may justify abstention in situations involving
the contemporaneous exercise of jurisdiction by state and federal courts. As the [Supreme] Court explained, the
principles underlying this doctrine rest on considerations of wise judicial administration, giving regard to conservation
of judicial resources and comprehensive disposition of litigation.” Romine v. Compuserve Corp., 160 F.3d 337, 339 (6th
Cir. 1998) (citing Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976)) (internal
quotation marks omitted).

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Case No. 1:14-CV-01165
Gwin, J.
constitute res judicata in this matter.6/ Dillard’s claim for a constructive trust requires demonstrating
that Dillard’s is entitled to the settlement funds in the first place. The question of who is entitled to
the funds will, and indeed should be, resolved in Probate Court.
While principles of comity and efficient use of judicial resources counsel in favor of waiting
for the state court to resolve the matter, the Court must nonetheless address several motions which
have been pending for some time in this case.
Defendants have moved for judgment on the pleadings.7/ In light of the foregoing discussion,
the Court DENIES Defendants’ motion, but without prejudice to refiling later. Dillard’s motion to
stay the Defendants’ motion for judgment on the pleadings and to convert it to a motion for summary
judgment,8/ along with Dillard’s motions to strike part of the motion for judgment on the pleadings,9/
are therefore DENIED as moot. Dillard’s motion for a pretrial conference, and to compel
Defendants’ attendance at a Rule 26(f) discovery conference10/ is DENIED. The Court sees no need
to schedule conferences or hearings in this matter.
Finally, Dillard’s motion to file a second amended complaint11/ is GRANTED. Dillard’s
seeks to add another attorney as a named party possessing funds to which Dillard’s asserts a claim.

6/

“Federal courts are required to ‘give the same preclusive effect to a state-court judgment as another court of
that State would give.’” Tyler v. DH Capital Mgmt., Inc., 736 F.3d 455, 460 (6th Cir. 2013) (citing Parsons Steel, Inc.
v. First Ala. Bank, 474 U.S. 518 (1986)).
7/

Doc. 9.

8/

Doc. 12.

9/

Doc. 25, Doc 32.
Doc. 14.

10/
11/

Doc. 13.

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Case No. 1:14-CV-01165
Gwin, J.
The complaint may be refiled for this limited purpose.
IT IS SO ORDERED.

s/
James S. Gwin
JAMES S. GWIN
UNITED STATES DISTRICT JUDGE

Dated: March 18, 2015

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