United States District Court, D. Minnesota
JOHN G. RAINES and TIMOTHY MCGOUGH, Plaintiffs,
JOHN FLASCHER and ROBINS KAPLAN, LLP, Defendants.
R. CEFALU AND ANDREW R. SHEDLOCK, KUTAK ROCK, LLP, FOR
BRANDON THOMPSON, CIRESI CONLIN, LLP, AND RICHARD B. ALLYN
AND SCOTT A. JURCHISIN, ROBINS KAPLAN, LLP, FOR DEFENDANTS.
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANTS'
MOTION TO DISMISS
R. TUNHEIM UNITED STATES DISTRICT JUDGE
Raines and Timothy McGough (“Plaintiffs”) bring
this action against John Flascher and Robins Kaplan, LLP
(“Defendants”) seeking a constructive trust,
equitable and declaratory relief, and injunction to enforce
their alleged right to reimbursement. Defendants move to
dismiss for failure to state a claim upon which relief can be
granted under Federal Rule of Civil Procedure 12(b)(6).
Specifically, Defendants claim that Plaintiffs fail to
sufficiently plead how or why their right to reimbursement
applies. Because Plaintiffs' Complaint lacks sufficient
non-conclusory facts, the Court will grant the motion to
dismiss and dismiss the Complaint without prejudice.
are trustees of the Carpenters and Joiners Welfare Fund (the
“Fund”). (Am. Compl. ¶ 1, Nov. 15, 2018,
Docket No. 8.) The Fund is a “fringe benefit
plan” created under the Labor Management Relations Act
and administered in accordance with the Employee Retirement
Income Security Act of 1974. (Id. ¶ 3.) As a
fringe benefit plan, the Fund provides health and welfare
benefits to plan participants and their dependents.
(Id. ¶ 10.)
Summary Plan Description and Plan Document
(“SPD”) governs the Fund benefits. (Id.
¶ 12; Ex. A (the “SPD”), Oct. 25, 2018,
Docket No. 1-1.) Relevant here, the SPD has several
provisions setting out the Fund's subrogation and
reimbursement rights when a third party may be liable for an
expense paid by the Fund. For example, the SPD explicitly
notes that the Fund will not cover expenses “for which
a Third Party may be liable.” (SPD at 10-11.) However,
should the Fund provide benefits in this situation, the SPD
provides that the Fund “has a first priority
subrogation and reimbursement right if it provides benefits
resulting from or related to an injury, occurrence, or
condition for which the Employee or Beneficiary has a right
of redress against any third-party.” (Id. at
further notes that the Fund's “subrogation and
reimbursement rights grant the [Fund] an equitable lien on .
. . any recovery . . . from a third-party, whether by
settlement, judgment or otherwise.” (Id. at
16.) Under the SPD, the proceeds of any recovery should be
held in trust on which the Fund may impose a constructive
trust or equitable lien. (Id.)
John Flascher is/was a participant in the Fund and is/was
eligible for benefits in accordance with the SPD. (Am. Compl.
¶ 11.) Plaintiffs claim that on January 26, 2016, a
dependent of Flascher's, Justin Flascher,
“sustained injuries out of and in connection with a
surgery and hospitalization” which ultimately
“resulted in his death on February 14, 2016.”
(Id. ¶ 14.) Plaintiffs state that the Fund
“paid medical benefits in the amount of $182, 910.92 on
behalf of . . . Justin Flascher, for injuries sustained in
and relating to an injury, occurrence, or condition occurring
between January 26, 2016 and February 14, 2016.”
(Id. ¶ 18.) Finally, Plaintiffs claim that
Flascher “had a right of redress against any [sic]
third-party” for the expenses the Fund paid on behalf
of Justin Flascher. (Id.)
Justin Flascher's death, Flascher allegedly retained
Defendant Robins Kaplan, LLP to represent him “in
connection with claims against Allina and other third-parties
for injuries and damages sustained arising out of the
treatment and death of Justin Flascher.” (Id.
¶ 19.) Subsequently, Plaintiffs claim, Robins Kaplan
contacted the Fund and “recognized” that the
Fund's subrogation and reimbursement rights were
implicated by Justin Flascher's death. (Id.
¶ 20.) Accordingly, over the following few months,
Robins Kaplan and the Fund negotiated but ultimately
disagreed about the value and scope of the subrogation claim.
(Id. ¶ 21-23.) On August 22, 2018, Flascher
settled his liability claims for $1.4 million dollars.
(Id. ¶ 24.) Plaintiffs claim they requested a
copy of Flascher's mediation statement which resulted in
the settlement, but that Defendants denied the request.
(Id. ¶ 26.)
filed this action on October 25, 2018, alleging that Flascher
violated the terms of the SPD by failing to reimburse the
Fund for payments it made on expenses for which Flascher had
a right of redress against a third-party. (Id.
¶ 29.) Accordingly, Plaintiffs seek a constructive trust
and/or an equitable lien on “the portion of
Defendants' settlement proceeds . . . which in good
conscience belong to the Fund in accordance with” the
SPD. (Id. at 9-10.) Further, Plaintiffs seek a
declaratory judgment from the Court that the SPD governs the
rights of the parties in this dispute. (Id. ¶
November 15, 2018, Defendants brought a Motion to Dismiss
under Federal Rule of Civil Procedure 12(b)(6), asserting
that Plaintiffs failed to adequately state a claim upon which
relief can be granted. (Mot. to Dismiss, Nov. 15, 2018,
Docket No. 10.) Plaintiffs filed an Amended Complaint on the
same day, which is now the operative complaint. (Am. Compl.)
Subsequently, Defendants filed an Amended Motion to Dismiss,
asserting the same grounds as the original. (Am. Mot. to
Dismiss, Nov. 29, 2018, Docket No. 15.)