United States District Court, D. Minnesota
Weston Wilson and David Manderson, as Trustees of the South Central Minnesota Electrical Workers' Family Health Plan, and each of their successors, Plaintiffs,
O'Brien & Wolf, LLP, and Travis R. Schurhammer, Defendants.
R. Cefalu and Bryan J. Morbeu, Kutak Rock, for Plaintiffs.
J. Heuel, O'Brien & Wolf, LLP, for Defendants.
MEMORANDUM OPINION AND ORDER
RICHARD NELSON, UNITED STATES DISTRICT JUDGE
matter is before the Court on two motions: Plaintiffs'
Motion for Preliminary Injunction and Expedited Discovery
[Doc. No. 4] and Defendants' Joint Motion to Dismiss
Pursuant to Rule 12(b)(6) (“Motion to Dismiss”)
[Doc. No. 22]. For the reasons stated below, the Court grants
Defendants' motion in part and denies it in part. The
Court finds that the remaining claims are not ripe for
judicial determination, and dismisses them without prejudice.
The Court denies Plaintiffs' motion as moot.
Weston Wilson and David Manderson (“Plaintiffs”)
are trustees of the South Central Minnesota Electrical
Workers' Family Health Plan (“the Plan”), an
employee benefit plan administrated under the federal
Employee Retirement Income Security Act
(“ERISA”). On June 6, 2017, Plaintiffs filed suit
against Defendants O'Brien & Wolf, LLP
(“O'Brien & Wolf) and Travis R. Schurhammer
(“Schurhammer”), seeking injunctive relief under
ERISA, 29 U.S.C. § 1132(a)(3), and the Declaratory
Judgment Act, 28 U.S.C. § 2201. (Compl. [Doc. No. 1].)
evaluating a motion to dismiss under Rule 12(b)(6), the Court
assumes the facts in the complaint to be true and construes
all reasonable inferences from those facts in the light most
favorable to the plaintiff. Morton v. Becker, 793
F.2d 185, 187 (8th Cir. 1986). Thus, the Court recites the
facts as alleged in Plaintiffs' Complaint.
September 2015, Schurhammer was a participant in the Plan,
and had agreed to the General Plan Provisions, including the
Plan's provisions requiring subrogation and reimbursement
from the proceeds of any recovery obtained by a participant
against a third party. The General Plan Provisions include
the following statements:
• In return for receipt of benefits from the Plan, the
Eligible Individual agrees that the Plan has first priority
subrogation and reimbursement rights . . . .
• The Plan's first priority subrogation and
reimbursement rights grant the Plan an equitable lien on the
proceeds of any recovery obtained by the Eligible Individual
from a Third-Party, whether by settlement, judgment or
otherwise. The Plan's recovery operates on every dollar
received by the Employee or Beneficiary from a third party. .
. . If the Eligible Individual fails to hold the recovery
proceeds in trust or in any other way prejudices or adversely
impacts the Plan's first priority subrogation and
reimbursement rights, the Plan reserves the right to, among
other things, pursue all available equitable action and
offset future benefits . . . .
• The Plan will not be responsible for any
attorney's fees or cost incurred by the Eligible
Individual in any legal proceeding or claim for recovery . .
(Compl. ¶ 16.) After Schurhammer was injured in a
snowmobile accident on February 15, 2014, the Plan paid for
his medical and disability benefits, totaling $152, 738.95.
(Id. ¶¶ 17, 19.) In order to receive these
benefits, Schurhammer signed a “subrogation
acknowledgement agreement, ” which restated the Plan
provisions for subrogation and reimbursement after recovery
from third parties. (See Id. ¶ 18; id,
Ex. C [Doc. No. 1-3].)
hired O'Brien & Wolf to represent him in relation to
the snowmobile accident. (Compl. ¶¶ 8, 20.)
Plaintiffs allege, upon information and belief, that
Schurhammer agreed to pay O'Brien & Wolf one-third of
any recovery plus costs. (Id. ¶ 37.)
O'Brien & Wolf reached a settlement of
Schurhammer's claims, for a total sum of $800, 000.
(Id. ¶ 20.) Plaintiffs allege, upon information
and belief, that Defendants then agreed that Schurhammer
would pay O'Brien & Wolf one-third of his net
recovery only, that is, one-third of the money that ...