United States District Court, E.D. Arkansas, Eastern Division
CHARLES P. WITCHER PLAINTIFF
TEAMCARE, a Central States Health Plan DEFENDANT
OPINION AND ORDER
Kristine G. Baker United States District Judge.
the Court is a motion for summary judgment filed by defendant
TeamCare, a Central States Health Plan (“Central
States”) (Dkt. No. 14). Plaintiff Charles P. Witcher
failed to respond timely to the motion, but Mr. Witcher did
file a belated response (Dkt. No. 16). Central States replied
(Dkt. No. 17). The Court issued a short Order granting
summary judgment (Dkt. No. 18), and the Court now enters this
Opinion and Order stating its reasons.
Undisputed Material Facts
States filed a statement of material facts (Dkt. No. 14-1).
Mr. Witcher did not respond to, or dispute any allegations
in, the statement. Therefore, the Court adopts Central
States' statement of material facts as the undisputed
facts in this case. The Court does not repeat those facts
here but incorporates them by reference.
Summary Of Claim
States operates throughout the United States under the trade
name TeamCare (Id., ¶ 1). Central States is an
employee welfare benefit plan regulated by the Employee
Retirement Income Security Act of 1974 (“ERISA”),
as amended, 29 U.S.C. § 1001 et seq., and is
established as an Illinois trust (Id., ¶¶
2-3). Mr. Witcher was covered by Central States' Retiree
Plan after his retirement on June 30, 2008 (Id.,
¶ 4). Prior to his retirement, Mr. Witcher and his
spouse, Vicki Witcher, were covered by Central States'
Active Plan while Mr. Witcher was an active employee of
United Parcel Service (“UPS”) (Id.). Mr.
Witcher was the Covered Participant, and Ms. Witcher was the
Covered Dependent (Id., ¶ 5). When he retired
on June 30, 2008, Mr. Witcher elected coverage only for
Witcher alleges that Central States denied payment of his
medical expenses, in violation of § 502(a)(1)(B) of
ERISA (Dkt. No. 3, ¶¶ 7-8). See 29 U.S.C.
§ 1132(a)(1)(B). Mr. Witcher claims that this provision
permits him as a plan participant to bring an action
“to recover benefits due to him under the terms of his
plan” and also “to enforce his rights under the
terms of the plan.” (Dkt. No. 3, ¶ 8).
Specifically, Mr. Witcher alleges that he was a member of the
Central States Health Plan and that, on or about January 3,
2005, one of the individuals covered by the Central States
Health Plan, Ms. Witcher, was in an automobile accident
(Id., ¶ 4). Mr. Witcher alleges that Central
States “refused to pay a single claim of the
Plaintiff's after May of 2011” and that Central
States claimed a subrogation lien in the amount of $9, 728.85
(Id., ¶ 6).
States maintains that it paid medical bills of $9, 728.85 on
behalf of Ms. Witcher as a result of the accident (Dkt. No.
15, at 1). Ms. Witcher, through her attorney, settled a
third-party claim against the party responsible for the
accident in the amount of $50, 000.00 (Id., at 1-2).
After this recovery, Ms. Witcher refused to reimburse Central
States based upon her attorney's assertion that the
“make whole” defense applied regarding Central
States' subrogation lien (Id., at 3).
Witcher retired on June 30, 2008, and elected coverage for
himself under Central States' Retiree Plan (Id.,
at 2). Because neither Mr. Witcher nor his spouse reimbursed
Central States in the amount of its subrogation lien, Central
States placed an overpayment against Mr. Witcher's
Retiree Plan health and welfare coverage (Id.).
According to Central States, until the overpayment was
collected, Mr. Witcher's coverage was suspended, and his
current claims were not paid (Id.). Central States
sent a letter to Mr. Witcher on May 26, 2011, along with
pertinent provisions of the Active Plan Document, that
explained Central States' decision and the basis for that
decision in the Active Plan Document language (Dkt. No.
13-4). The letter also advised Mr. Witcher of his right to
appeal the determination (Id.).
pertinent part, the May 26, 2011, letter put Mr. Witcher on
notice of the Claim of the Health and Welfare Fund
(“Fund”) for recovery of its subrogation rights
in the amount of $9, 728.85 (Dkt. No. 13-4, at 1). Central
The plan document basis of the Fund's Claim is Section
11.14 of the Active Plan Document which governs your
obligations as a Covered Individual of the Fund. That
provision, of which a copy is enclosed, states in part
“(e) If at any time, either before or after the Fund
becomes vested with Subrogation Rights, a Covered
Individual directly or indirectly receives any Proceeds
as full or partial satisfaction of his Loss Recovery Rights,
including arrangements for an annuity or other similar
installment benefit plan, and including any payment or
reimbursement of expenses (including attorneys' fees)
incurred by or on behalf of the Covered Individual,
without prior written approval of an authorized Fund
representative, the Fund shall be vested with each of
the following mutually independent rights:
(1) The right, at any time, to decline to make any
payment for any benefits on behalf of the Covered Individual
related to the Disability on which the Proceeds were
(2) The right, at any time after the Fund becomes vested
with Subrogation Rights, to decline to make any payment for
any benefits on behalf of the Covered Individual, related to
any circumstance or condition for which the Fund otherwise
has a Coverage obligation, until the amount of such unpaid
Coverage is equal to and offset by the unrecovered amount of
the Fund's Subrogation Rights . . . .”
Notice is hereby provided to you that the Fund has decided to
exercise its right to decline to make any payment for any
benefits on your dependent's behalf until the full amount
of the Fund's Claim has been recovered by the Fund
through denial of your dependent's benefit claims.
This decision by the Fund constitutes an adverse benefit
determination upon your dependent's right to past,
present, and future Coverage . . . .
(Dkt. No. 13-4, at 1-2) (emphasis in original). The letter
explained the appeal process available to Mr. Witcher and
enclosed portions of the Active Plan Document.
States sent a letter to Mr. Witcher on October 24, 2011, in
response to an inquiry regarding coverage for Ms. Witcher,
informing Mr. Witcher of the overpayment on file due to
subrogation overpayment from a motor vehicle accident that
occurred on June 27, 2008, and setting forth the language
upon which Central States relied for the subrogation claim
(Dkt. No. 13-5, at 52-53).
States set forth the following:
The Fund, whenever it makes any payment for any benefits on
behalf of a Covered Individual or other person related to any
illness, injury or disability (collectively and separately
“Disability”) of the person, is immediately
subrogated and vested with subrogation rights
(“Subrogation Rights”) to all present and future
rights of recovery (“Loss Recovery Rights”)
arising out of the Disability which that person and his
parents, heirs, guardians, executors, attorneys, agents and
other representatives (individually and collectively called
the “Covered Individuals”) may have. The
Fund's Subrogation Rights extend to all Loss Recovery