United States District Court, D. North Dakota
ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY
JUDGMENT AND MOTION TO DISMISS AND DENYING DEFENDANT'S
MOTION FOR PARTIAL SUMMARY JUDGMENT
L. Hovland, Chief Judge United States District Court
the Court are the parties cross motions for summary judgment,
as well as the Plaintiff's motion to dismiss the
Defendant's counterclaim. See Docket Nos. 25,
30, and 36. For the reasons set forth below, the Court grants
the Plaintiff's motions and denies the Defendant's
MBI Energy Services (“MBI”) is a sponsor and
administrator of the Missouri Basin Health Plan
(“Plan”). The Plan is a self-funded health
benefit plan subject to the Employee Retirement Income
Security Act of 1974 (“ERISA”). Defendant Robert
Hoch (“Hoch”) was a member and beneficiary of the
plan. Hoch sustained injuries in an accident that occurred on
December 20, 2012. MBI claims the plan paid $68, 210.38 in
health benefits related to Hoch's injuries. Hoch settled
a tort claim with the individual who allegedly caused the
accident for $320, 000. See Docket No. 3-2, p. 4.
filed a complaint against Hoch and his attorney, Charles
Kannebecker (“Kannebecker”), and the Law Office
of Charles Kannebecker, LLC (“Law Office”) to
recover the medical benefits MBI asserts the Plan paid on
Hoch's behalf. MBI's complaint was accompanied by an
itemized benefit statement showing the Plan paid a total of
$68, 210.38. See Docket No. 1-1. MBI asserts the
Plan requires members to reimburse the Plan for benefits it
pays if a member obtains a recovery from a tortfeasor. The
Summary Plan Description (“SPD”) contains a
provision entitled “Rights of Subrogation,
Reimbursement, and Assignment.” It states, in part:
If a member makes any recovery from a third party . . .
whether by judgment settlement or otherwise, the Member must
notify the Claims Administrator of said recovery and must
reimburse the Claims Administrator on behalf of the Group to
the full extent of any benefits paid by the Claims
Administrator, not to exceed the amount of the recovery.
See Docket No. 1-2, p. 74. The Plan's claims
administrator is Blue Cross Blue Shield of North Dakota
(“BCBSND”). MBI entered into an Administrative
Service Agreement (“ASC”) with BCBSND that sets
forth various provisions regarding claims administration.
See Docket No. 28-2, p. 18. The SPD is attached to
the ASC as an exhibit. See Docket No. 32-1, p. 33.
Hoch, and Kannebecker entered into a stipulation agreement on
September 26, 2016. MBI agreed to dismiss its claim against
Kannebecker and his Law Office without prejudice. In turn,
Hoch and Kannebecker agreed to deposit $45, 473.59
(“the Disputed Funds”) with the Court pending
resolution of MBI's claim. See Docket No. 7.
Kannebecker deposited the Disputed Funds with the Registry of
the Court on September 29, 2016. Hoch then reduced its
reimbursement claim by one-third (for a total claim amount of
$45, 473.59) to account for costs Hoch incurred due to his
tort recovery efforts. See Docket No. 25, p. 2.
moved for summary judgment on March 29, 2017. Hoch brought a
counter motion for partial summary judgment on April 13,
2017. On the same date, Hoch also brought a counterclaim. MBI
moved to dismiss Hoch's counterclaim on April 27, 2017.
summary judgment motion asserts the SPD's reimbursement
language gives the Plan an equitable lien on Hoch's
recovery proceeds. Hoch's counter motion for summary
judgment argues the SPD is not a valid plan document and thus
MBI has no right to reimbursement. Hoch's counterclaim
asserts MBI breached fiduciary duties it owed to himself and
other plan members. MBI, as fiduciary for the Plan, asserts
it has a right to reimbursement pursuant to the SPD's
reimbursement provision. MBI claims the SPD creates an
equitable lien on a portion of the proceeds Hoch recovered
from the alleged tortfeasor. Hoch contends MBI is not
entitled to reimbursement because the SPD is only a summary
of the plan, and it conflicts with the ASC, which is the
controlling plan document. Hoch also argues there are issues
of material fact that preclude a grant of summary judgment in
judgment is appropriate when the evidence, viewed in a light
most favorable to the non-moving party, indicates no genuine
issues of material fact exist and the moving party is
entitled to judgment as a matter of law. Davison v. City
of Minneapolis, 490 F.3d 648, 654 (8th Cir. 2007);
see also Fed.R.Civ.P. 56(a). Summary judgment is not
appropriate if there are factual disputes that may affect the
outcome of the case under the applicable substantive law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). A genuine issue of material fact is not the
“mere existence of some alleged factual dispute between
the parties.” State Auto Ins. Co. v. Lawrence,
358 F.3d 982, 985 (8th Cir. 2004). Rather, an issue of
material fact is genuine “if the evidence is such that
a reasonable jury could return a verdict for the nonmoving
party.” Anderson, 477 U.S. at 248. The moving
party always bears the burden of demonstrating the absence of
a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). The non-moving party
may not rely merely on allegations or denials; it must set
out specific facts showing a genuine issue for trial.
Forrest v. Kraft Foods, Inc., 285 F.3d 688, 691 (8th
Cir. 2002). The court must view the facts in the light most
favorable to the non-moving party. Adickes v. S.H. Kress
& Co., 398 U.S. 144, 157 (1970).
MBI IS ENTITLED ...