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Bishop v. Burgard12/1/2000
The defendant-appellant, Administrative Committee (Committee), administers the Employment Retirement Income Security Act (ERISA) plan (plan) in which the plaintiff-appellee, Catherine Bishop, participates. The Committee appeals the Tazewell County circuit court's entry of summary judgment in favor of the plaintiff-appellee, Catherine Bishop, in her action on a petition to adjudicate lien. In granting summary judgment, the circuit court reduced the amount of money Bishop is required to pay the plan as reimbursement of medical benefits the plan paid to Bishop for injuries she received in an automobile accident. On review, this court must decide whether the circuit court erred (1) in not dismissing the action for lack of subject matter jurisdiction over the petition because the federal Employment Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq. (1994)) (ERISA) preempted state court action, and (2) in applying the common fund doctrine to reduce the amount Bishop must pay to the plan as reimbursement of medical benefits it paid to Bishop for injuries she received in an automobile accident. We conclude that the circuit court erred in applying the common fund doctrine rather than the terms of the plan contract. Accordingly, we reverse the circuit court's grant of summary judgment.
FACTS
The plaintiff, Bishop, incurred medical expenses in the amount of $8,576.30 for injuries she received in an automobile accident on September 3, 1997. Bishop, an employee of Wal-Mart and a participant in the company's ERISA plan, received that amount from the plan for her injuries. The plan's benefit book for 1996 and 1998 included the following provisions:
"Right to Reduction and Reimbursement (Subrogation) The Plan has the right to reduce or deny benefits otherwise payable by the Plan * and * recover (subrogate) 100% of the benefits previously paid by the Plan to the extent of any and all of the following: Any judgment, settlement, or any payment, made or to be made by a person for the condition giving rise to the expense or by their insurers.
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Attorney's fees.
Cooperation Required
The Plan requires that you or your covered dependent cooperate to guarantee reimbursements to the Plan from third party benefits. Failure to comply with this request will entitle the Plan to withhold benefits due you under the Plan Document. You or your covered dependents may not do anything to hinder reimbursement of overpayment to the Plan after you have received benefits.
Note: All attorney's fees and court costs are the responsibility of the participant, not the Plan.
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Participant's Responsibility Regarding Right of Recovery
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Subrogation is when Wal-Mart pays your medical charges relating to your accident while waiting for the responsible party to settle. Repayment to the Plan of 100% will be made at the time the settlement is received by the associate, dependent, or their attorney."
Under the plan, the plan administrator has discretionary authority to resolve all questions regarding plan administration, interpretation and application.
Bishop retained counsel and, on June 9, 1998, filed a personal injury action against Kelly Burgard, the driver of the other automobile involved in the accident, seeking damages in excess of $50,000. Bishop signed an agreement under which she would pay her attorneys a percentage of her recovery as attorney fees and costs. Bishop accepted a $21,500 settlement. On February 19, 1999, Bishop filed a petition for adjudication of lien in the circuit court in which she alleged that (1) Blue Cross/Blue Shield (Blue Cro
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