United States District Court, D. Arizona
For MedCath Incorporated Employee Health Care Plan, Plaintiff: Jeremy Todd Bergstrom, Steven E Stern, LEAD ATTORNEYS, Miles Bauer Bergstrom & Winters LLP, Henderson, NV; Matthew T Anderson, LEAD ATTORNEY, Luper Neidenthal & Logan LPA, Columbus, OH.
For Dustin Stratton, surviving son of Tracie Stratton, deceased, on his own behalf and on behalf of Co.S., Ca.S. and T.S., surviving minor children of Tracie Stratton, and Lori Cornwall surviving mother of Tracie Stratton deceased Tracie Stratton, on behalf of Co.S., on behalf of Ca.S., on behalf of T.S., on behalf of Lori Cornwall, Defendant: John Allen Phebus, LEAD ATTORNEY, Law Offices of John Phebus PLC, Glendale, AZ; Joseph W Phebus, LEAD ATTORNEY, Phebus & Koester LLP, Urbana, IL.
Neil V. Wake, United States District Judge.
Before the Court is Defendants Dustin Stratton, et al.'s Motion to Dismiss First Amended Complaint (Doc. 42), which seeks dismissal under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. Two of the five counts of the First Amended Complaint and four of the Defendants were dismissed after the Motion was filed, rendering portions of the Motion moot. Plaintiff has filed a response in opposition to the Motion, and Defendant Dustin Stratton has filed a reply in support of the Motion. (Docs. 53, 59.)
I. UNDISPUTED MATERIAL FACTS
Plaintiff MedCath Incorporated Employee Health Care Plan (the " Plan" ) is a self-funded employee welfare benefit plan governed by the Employee Retirement Income Security Act of 1974 (" ERISA" ). From approximately September 2009 to November 2011, Tracie Stratton was employed by MedCath Incorporated, became a participant in the Plan, and received health benefits under the Plan. Ms. Stratton enrolled her four children as dependents under the Plan.
On July 25, 2011, Ms. Stratton filed a professional negligence action in the Superior Court of the State of Arizona, Mohave County, related to medical care she had received under the Plan. Plaintiff alleges that it paid medical expenses totaling $506,769.62 arising from the negligence alleged by Ms. Stratton. On September 12, 2011, Plaintiff notified Ms. Stratton's counsel regarding its right to recover its expenses from any future recovery in the
negligence action. On February 15, 2012, Ms. Stratton's counsel acknowledged the Plan's right to recovery.
On September 11, 2013, shortly after Ms. Stratton's death on July 10, 2013, her surviving son, Defendant Dustin Stratton (" Defendant" ), intervened as plaintiff and filed an amended complaint for himself and on behalf of his minor siblings and Ms. Stratton's surviving mother. On September 24, 2013, Defendant filed a notice stating that the amended complaint asserted an Arizona Wrongful Death Act claim on behalf of Ms. Stratton's four surviving children and one surviving parent. The notice also stated that no claim under the Arizona Survival Act or any other Arizona statute had been or will be asserted by or on behalf of Ms. Stratton's estate. The amended complaint was brought pursuant to A.R.S. § 12-612 and seeks monetary judgment on behalf of each of the statutory beneficiaries as compensation for grief and sorrow and for the loss of Ms. Stratton's love, affection, companionship, tutelage, and guidance. It does not seek to recover any damages incurred by Ms. Stratton.
In April 2014, Defendant reached a settlement agreement with two of the defendants in the Mohave County wrongful death action. Plaintiff intervened in the action, asserted a counterclaim, and objected to the proposed allocation of settlement proceeds.
On June 18, 2014, Plaintiff filed the present federal court action to adjudicate its subrogation claim under ERISA and additional state law claims. On July 18, 2014, Plaintiff withdrew its motion for temporary restraining order and preliminary injunction based on Defendant's counsel's representation that the settlement monies to which Plaintiff claims a subrogation interest will be held in trust and not distributed until Plaintiff's claim in this court is adjudicated.
On September 24, 2014, Plaintiff filed a First Amended Complaint, which among other things added the Estate of Tracie Stratton as a defendant " solely to the extent that the Estate may have a right to receive monies subject to the Health Plan's claims asserted herein." (Doc. 37.) The Court had previously granted Plaintiff leave to file the First Amended Complaint and ordered that Plaintiff serve it on all parties under Rule 5 of the Federal Rules of Civil Procedure. (Doc. 35.) Plaintiff has not filed proof of service on the Estate, and the Estate has not appeared in this matter.
II. SUBJECT MATTER JURISDICTION
A. Legal Standard
On a motion to dismiss under Federal Rule of Civil Procedure Under Rule 12(b)(1), a defendant may challenge the plaintiff's jurisdictional allegations by either (1) attacking the plaintiff's allegations as insufficient on their face to invoke federal jurisdiction or (2) contesting the truth of the plaintiff's factual allegations, usually by introducing evidence outside the pleadings. Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). The first, a facial attack, is resolved by the district court as it would be under Rule 12(b)(6), i.e., accepting the plaintiff's allegations as true and drawing all reasonable inferences in the plaintiff's favor, the court determines whether the allegations are legally sufficient to invoke the court's jurisdiction. Id. The second, a factual attack, requires the
plaintiff to support its jurisdictional allegations with competent proof, under the same evidentiary standard applied in the summary judgment context. Thus, the plaintiff bears the burden of proving by a preponderance of the evidence that each of the requirements for subject matter jurisdiction has been met. Id. Here, Defendant's jurisdictional challenge is a facial attack, and the Court determines whether Plaintiff's allegations are legally sufficient to invoke the court's jurisdiction.
B. The Employee Retirement Income Security Act of 1974 (" ERISA" )
An employee benefit plan may sue or be sued under ERISA as an entity. 29 U.S.C. § 1132(d)(1). A civil action may be brought under ERISA by a fiduciary to (a) enjoin any act that violates the terms of the plan or (b) obtain appropriate equitable relief to redress such violations or to enforce the terms of the plan. 29 U.S.C. § 1132(a)(3). Section 1132(a)(3) does not authorize equitable relief generally, but only such relief as will enforce the terms ...