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Biegajski v. Priority Health

United States District Court, W.D. Michigan, Southern Division

January 25, 2017

JACQUELINE BIEGAJSKI, Plaintiff,
v.
PRIORITY HEALTH, et al., Defendants.

          OPINION

          ELLEN S. CARMODY United States Magistrate Judge

         This matter is before the Court on Defendant Priority Health's Motion for Summary Judgment, (ECF No. 33), Defendant Farm Bureau's Motion to Decline Supplemental Jurisdiction, (ECF No. 39), Defendant Farm Bureau's Motion for Summary Judgment, (ECF No. 48), Plaintiff's Motion for Summary Judgment as to Defendant Priority Health, (ECF No. 49), and Plaintiff's Motion for Summary Judgment as to Defendant Farm Bureau, (ECF No. 50).

         On March 7, 2016, the parties consented to proceed in this Court for all further proceedings, including trial and an order of final judgment. 28 U.S.C. § 636(c)(1). By Order of Reference, the Honorable Janet T. Neff referred this case to the undersigned. (ECF No. 23). For the reasons discussed herein, Defendant Priority Health's Motion for Summary Judgment, (ECF No. 33), is denied; Defendant Farm Bureau's Motion to Decline Supplemental Jurisdiction, (ECF No. 39), is denied; Defendant Farm Bureau's Motion for Summary Judgment, (ECF No. 48), is granted; Plaintiff's Motion for Summary Judgment as to Defendant Priority Health, (ECF No. 49), is granted; Plaintiff's Motion for Summary Judgment as to Defendant Farm Bureau, (ECF No. 50), is denied; and this case is terminated.

         BACKGROUND

         On or about May 27, 2013, Arthur Biegajski was involved in an automobile accident in Toledo, Ohio. As a result of this accident, Biegajski was seriously injured and received significant medical treatment. At the time of this accident, Biegajski had no-fault automobile insurance through Farm Bureau and medical insurance through Priority Health. In light of the coordination of benefits provisions in each of Biegajski's policies, and the insurers interpretation thereof, Priority Health assumed primary responsibility for the payment of Biegajski's medical bills, eventually paying more than three hundred thousand dollars ($300, 000.00) in medical bills on Biegajski's behalf.

         Following Biegajski's passing, from causes unrelated to the aforementioned accident, Biegajski's estate (hereinafter Biegajski) subsequently pursued in Ohio state court a civil tort action against the other driver involved in the subject accident. Biegajski settled this lawsuit for payment of six hundred thousand dollars ($600, 000.00). Priority Health claimed that it was entitled to recover from this settlement the amounts it paid for Biegajski's medical care following his accident. In light of Priority Health's claim to reimbursement, Biegajski placed in trust a portion of the settlement proceeds equal to the amount claimed by Priority Health. Biegajski soon thereafter initiated the present action seeking a declaration of its rights to the disputed amount. Priority Health subsequently asserted a counterclaim alleging entitlement to the disputed amount. Biegajski also seeks a declaration of rights vis-a-vis Farm Bureau and its obligation, if any, to pay the medical expenses incurred by Biegajski following his accident. The parties have now filed the various motions described above.

         SUMMARY JUDGMENT STANDARD

         Summary judgment “shall” be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A party moving for summary judgment can satisfy its burden by demonstrating “that the respondent, having had sufficient opportunity for discovery, has no evidence to support an essential element of his or her case.” Minadeo v. ICI Paints, 398 F.3d 751, 761 (6th Cir. 2005). Once the moving party demonstrates that “there is an absence of evidence to support the nonmoving party's case, ” the non-moving party “must identify specific facts that can be established by admissible evidence, which demonstrate a genuine issue for trial.” Amini v. Oberlin College, 440 F.3d 350, 357 (6th Cir. 2006).

         While the Court must view the evidence in the light most favorable to the non-moving party, the party opposing the summary judgment motion “must do more than simply show that there is some metaphysical doubt as to the material facts.” Amini, 440 F.3d at 357. The existence of a mere “scintilla of evidence” in support of the non-moving party's position is insufficient. Daniels v. Woodside, 396 F.3d 730, 734-35 (6th Cir. 2005). The non-moving party “may not rest upon [his] mere allegations, ” but must instead present “significant probative evidence” establishing that “there is a genuine issue for trial.” Pack v. Damon Corp., 434 F.3d 810, 813-14 (6th Cir. 2006).

         Moreover, the non-moving party cannot defeat a properly supported motion for summary judgment by “simply arguing that it relies solely or in part upon credibility considerations.” Fogerty v. MGM Group Holdings Corp., Inc., 379 F.3d 348, 353 (6th Cir. 2004). Rather, the non-moving party “must be able to point to some facts which may or will entitle him to judgment, or refute the proof of the moving party in some material portion, and. . .may not merely recite the incantation, ‘Credibility, ' and have a trial on the hope that a jury may disbelieve factually uncontested proof.” Id. at 353-54. In sum, summary judgment is appropriate “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Daniels, 396 F.3d at 735.

         While a moving party without the burden of proof need only show that the opponent cannot sustain his burden at trial, a moving party with the burden of proof faces a “substantially higher hurdle.” Arnett v. Myers, 281 F.3d 552, 561 (6th Cir. 2002). Where the moving party has the burden, the plaintiff on a claim for relief or the defendant on an affirmative defense, “his showing must be sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party.” Calderone v. United States, 799 F.2d 254, 259 (6th Cir. 1986). The Sixth Circuit has repeatedly emphasized that the party with the burden of proof “must show the record contains evidence satisfying the burden of persuasion and that the evidence is so powerful that no reasonable jury would be free to disbelieve it.” Arnett, 281 F.3d at 561. Accordingly, summary judgment in favor of the party with the burden of persuasion “is inappropriate when the evidence is susceptible of different interpretations or inferences by the trier of fact.” Hunt v. Cromartie, 526 U.S. 541, 553 (1999).

         ANALYSIS

         The primary dispute in this matter, between Priority Health and Arthur Biegajski's Estate, is whether Priority Health is entitled to reimbursement of the amounts it paid for Biegajski's care following his accident. Secondarily, Biegajski's Estate asserts against Farm Bureau the claim that, in the event Priority Health is entitled to reimbursement of the amounts it paid for Biegajski's care, Farm Bureau is obligated to reimburse Biegajski's Estate. As discussed herein, the Court concludes that: (1) Priority Health is not entitled to reimbursement of the amounts it paid for Biegajski's medical care and that, therefore, (2) Farm Bureau has no obligation to pay or reimburse Biegajski's Estate.

         I. ERISA Preemption

         Priority Health asserts that the health plan pursuant to which it paid Biegajski's medical bills is a plan governed by the Employee Retirement Income Security Act of 1974 (ERISA), an assertion which no other party disputes.

         Federal law provides that ERISA “shall supercede any and all State laws” that “relate to any employee benefit plan.” 29 U.S.C. § 1144(a). ERISA contains another provision, however, which saves from preemption “any law of any State which regulates insurance, banking, or securities.” 29 U.S.C. § 1144(b)(2)(A); see also, Kentucky Ass'n of Health Plans, Inc. v. Miller, 538 U.S. 329, 333 (2003). This provision is known as the ERISA “saving clause.” Miller, 538 U.S. at 333. The saving clause must be considered in conjunction with the “deemer clause” which provides that a self-funded ERISA plan, as opposed to a plan which provides coverage through the purchase of insurance (i.e., an insured plan), is exempt from state laws which regulate insurance. See FMC Corp. v. Holliday, 498 U.S. 52, 60-61 (1990) (citing 29 U.S.C. § 1144(b)(2)(B).

         Priority Health concedes that the plan in question is not a self-funded plan. Thus, the deemer clause is presently inapplicable. Accordingly, the Priority Health plan at issue in this matter is subject to Michigan laws regulating insurance. See, e.g., Horrell v. CEC Entertainment, Inc., 2011 WL 4954031 at *4 (W.D. Mich., Oct. 18, 2011). Priority Health does not dispute this particular conclusion, but, as discussed below, instead advances several arguments to avoid the application in the present circumstance of Michigan regulatory law.

         II. Priority Health was ...


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