United States District Court, Eastern District of Michigan, Southern Division
OPINION AND ORDER DENYING DEFENDANT’S MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION [#18], DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [#19] AND CANCELLING APRIL 28, 2015 HEARING
GERSHWIN A. DRAIN, UNITED STATES DISTRICT JUDGE.
Presently before the Court are the following motions: (1) Defendant’s Motion to Dismiss for Lack of Subject Matter Jurisdiction, filed on October 30, 2014, and (2) Plaintiff’s Motion for Summary Judgment, also filed on October 30, 2014. Responses were filed to each pending motion [Dkt. Nos. 22 and 24] and Defendant filed a Reply in Support of its Motion to Dismiss. Upon review of the parties’ submissions, the Court concludes that oral argument will not aid in the resolution of these matters. Accordingly, both motions will be decided on the briefs. See E.D. Mich. L.R. 7.1(f)(2). For the reasons that follow, the Court will deny Defendant’s Motion to Dismiss for Lack of Subject Matter Jurisdiction and will deny Plaintiff’s Motion for Summary Judgment.
II. FACTUAL BACKGROUND
Plaintiff Giuseppe Vultaggio filed the instant action in the Macomb County Circuit Court on May 13, 2014, alleging claims of breach of contract, unjust enrichment, fraud and fraudulent misrepresentation, innocent misrepresentation and conversion stemming from a purported settlement agreement between Plaintiff and Defendant, Liberty Mutual Fire Insurance Company. Defendant removed the action to this Court on June 11, 2014.
In the Complaint, Plaintiff alleges he sustained a serious back and hip injury while working for Prince Macaroni of Michigan on February 20, 1988. At the time of Plaintiff’s injury, Defendant provided workers’ compensation insurance coverage to Plaintiff’s employer. In 1988, Plaintiff began receiving workers’ compensation benefits in the amount of $266.38 per week.
On February 7, 2008, Claims Specialist Christopher Kijovsky sent correspondence to Plaintiff stating in relevant part:
This is a settlement offer I have prepared for you. Please note that this offer provides a benefit to you greater than what you are currently receiving from Liberty Mutual and the monthly payments would be directly deposited into an account of your choice. Also, please note that the monthly payment will be paid for the rest of your life with a minimum guarantee of 5 years. What this means is that if [you] were to pass away before 5 years of this benefit is paid the payments will continue to your noted beneficiary.
See Compl., Ex. A. According to Plaintiff, the settlement offer provided for a $10, 000.00 lump sum payment, plus an annuity which paid $1, 565.00 per month beginning in January of 2009, and, in return, Plaintiff would no longer receive the $266.38 in weekly payments. Compl., ¶ 11. Plaintiff further claims that the $1, 565.00 monthly payments were guaranteed for a minimum of five years and if he expired prior to the five-year term, the benefits would be paid to his beneficiary. He also contends that if he were alive past the five-year term, the $1, 565.00 monthly payments would continue for the remainder of his life.
Contrarily, Defendant claims that several offers were made during the parties’ negotiation of the settlement agreement. See Def.’s Resp., Ex. D. Defendant claims that while it is true Plaintiff was offered a lifetime monthly benefit award, the payment amount was lower than the amount the parties ultimately agreed upon. Id. Specifically, Defendant argues that the first option extended by Mr. Kijovsky included a lump sum payment of $10, 000.00, and monthly payments of $1, 565.00, which were guaranteed only for five years. Id. The second option provided for a lump sum payment of $5, 000.00 and monthly payments of $725.00, guaranteed for ten years. Id. With the second option, the payments were to continue for life if Plaintiff was still alive past the ten-year guarantee. Id.
A hearing was held before Magistrate Rosemary Wolock on Defendant’s redemption offer. During the hearing, the terms of the parties’ agreement were placed on the record. Specifically, Defendant’s attorney explained the parties agreed to a $10, 000.00 lump sum payment plus an annuity that would pay monthly benefits in the amount of $1, 565.00. See Plf.’s Mot. for Summ. J., Ex. B at 10. In exchange, the weekly payments of $266.38 would cease. Id. As to Plaintiff’s claim that the monthly benefits were to continue if he was still living beyond the five-year term, the following exchange occurred between Plaintiff’s interpreter and Defendant’s attorney:
THE INTERPRETER: Okay, I explained to him that it continues for his lifetime but if he expires that you only cover the first five years.
MR. SCHOENER: Right, right, and then after the five years the benefits stop upon his expiration.
Id. at 25.
After the hearing, the parties executed an “Agreement to Redeem Liability, ” authorized by the Workers’ Compensation Act. Specifically, the Agreement to Redeem Liability states in relevant part:
WHEREFORE, it is agreed to by and between the parties that the Agency may enter an order in this cause providing that the sum of NINETY-EIGHT THOUSAND FORTY-ONE DOLLARS ($98, 041.00) BROKEN DOWN AS FOLLOWS: $10, 000 CASH AND $88, 041.00 FOR THE COST OF TH[sic] ANNUITY be forthwith paid by the employer/carrier to: Giuseppe Vultaggio
and that upon such payment the liability of the employer/carrier for the payment of compensation for said injury shall be redeemed in accordance with Sections 418.835, 418.836 and R408.39 of the Workers’ Disability ...