Opinion
Cause No. IP99-1506-C-T/G
April 10, 2001.
Richard J Darko Lowe Gray Steele Darko Indianapolis, IN.
Alphonso Manns Manns Manns Bloomington, IN.
Entry On I.S.T.A. Insurance Trust's Motion For Summary Judgment, Supplemental Motion For Summary Judgment And Motion To Strike
Though this entry is being made available to the public on the court's web site, it is not intended for commercial publication either electronically or in paper form. Under the law of the case doctrine, it is presumed that the ruling or rulings in this entry will govern throughout the litigation before this court. See, e.g., Tr. of Pension, Welfare, Vacation Fringe Benefit Funds of IBEW Local 701 v. Pyramid Elec., 223 F.3d 459, 468 n. 4 (7th Cir. 2000); Avitia v. Metro. Club of Chicago, Inc., 49 F.3d 1219, 1227 (7th Cir. 1995). It should be noted, however, that this district judge's decision has no precedential authority and, therefore, is not binding on other courts, other judges in this district, or even other cases before this district judge. See, e.g., Howard v. Wal-Mart Stores, Inc., 160 F.3d 358, 359 (7th Cir. 1998) ("a district court's decision does not have precedential authority"); Malabarba v. Chicago Tribune Co., 149 F.3d 690, 697 (7th Cir. 1998) ("district court opinions are of little or no authoritative value"); Old Republic Ins. Co. v. Chuhak Tecson, P.C., 84 F.3d 998, 1003 (7th Cir. 1996) ("decisions by district judges do not have the force of precedent"); Anderson v. Romero, 72 F.3d 518, 525 (7th Cir. 1995) ("District court decisions have no weight as precedents, no authority.").
Plaintiff/Counterclaim Defendant I.S.T.A. Insurance Trust ("ISTA" or "Trust") moves for summary judgment both on its Complaint against Defendant/Counterclaim Plaintiff Colleen S. Loveland and on Ms. Loveland's Counterclaim against ISTA. In addition, ISTA moves to strike an exhibit attached to Ms. Loveland's supplemental answer brief. Having considered the motions, the court rules as follows.
I. Motion to Strike
ISTA contends that Exhibit I to Ms. Loveland's Supplemental Answer Brief fails to comply with Rule 56(e) of the Federal Rules of Civil Procedure and Local Rule 56.1 because it has not been authenticated under Rule 901 of the Federal Rules of Evidence and contains inadmissible hearsay. ISTA is absolutely correct. Accordingly, ISTA's motion to strike is GRANTED and Exhibit I will be disregarded by the court when considering the pending dispositive motions.
Exhibit I contains a fax cover sheet from Pettay Legal Services to Alphonso Manns, Ms. Loveland's current counsel, a letter from Pettay Legal Services to Greg Silver and handwriting allegedly by Mr. Silver to Lee Pettay.
It is noted that Ms. Loveland has not responded to the motion to strike although the time for doing so has passed.
II. Summary Judgment Standard
Summary judgment is proper only if the record shows "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party bears the burden of informing the court of the basis for its motion and demonstrating the "absence of evidence on an essential element of the non-moving party's case," Celotex Corp., 477 U.S. at 323, 325. To withstand a motion for summary judgment, the non-moving party may not simply rest on the pleadings, but rather must "make a showing sufficient to establish the existence of [the] element[s] essential to that party's case, and on which that party will bear the burden of proof at trial. . . ." Celotex Corp., 477 U.S. at 322. If the non-moving party fails to make this showing, then the moving party is entitled to judgment as a matter of law. Celotex Corp., 477 U.S. at 323.
In determining whether a genuine issue of material fact exists, the court must view the record and all reasonable inferences in the light most favorable to the non-moving party. Nat'l Soffit Escutcheons, Inc. v. Superior Sys., Inc., 98 F.3d 262, 264 (7th Cir. 1996). No genuine issue exists if the record viewed as a whole could not lead a rational trier of fact to find for the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
III. Facts
The Trust is an employee benefit trust established by an Agreement and Declaration of Trust dated May 3, 1985. The Trust provides disability insurance benefits to qualified beneficiaries under a Group Benefit Plan ("Plan"). The Trust engaged Huttleston Benefit Group as the Plan's third-party administrator. Colleen Loveland was a participating member of the trust. Following a motor vehicle accident in 1996, she submitted a claim for long-term disability benefits under the Plan. Huttleston determined that Ms. Loveland was totally disabled under the Plan and notified her that she was eligible for benefits as of May 7, 1996.
The Plan contains a provision entitling the Trust to reimbursement in the event of overpayment caused by other benefits received by a participant. The provision states in relevant part:
The Monthly Disability Benefits paid to the Participants will be reduced by the amount of lump sum or periodic payments the Participant or his dependents are entitled to receive from:
a) group insurance coverage or like coverage for persons in a group;
b) coverage under the Federal Social Security Act (this included benefits paid to the Participant or his dependents on account of Participant's disability);
c) coverage under a state or federal government disability or retirement plan, excluding Indiana State Teachers' Retirement Fund disability plans;. . . .
(Compl., Ex. B, art. V, ¶ 5.01.) A letter to Ms. Loveland from Huttleston, dated July 31, 1996, advised her that:
This plan integrates with income you and your dependents are eligible to receive from other sources such as Workers Compensation, Social Security Disability, Social Security Retirement and other disability or retirement plans as described in the Benefit Plan. . . .
Frequently, back benefits from other sources are sent to you in a lump sum amount. If we have already paid benefits for those months, it is considered a duplicate payment and you must repay I.S.T.A. Insurance Trust any overpayment for that time period.
(Admin. R. at 160-61) (emphasis in original). On August 23, 1996, Ms. Loveland executed a Reimbursement Agreement which provides that she would reimburse the Trust for any overpayments resulting from receipt of other income benefits, including but not limited to Social Security and the Indiana Public Employee Retirement Fund ("PERF"). She understood that she was required to repay the Trust for any overpayment of benefits.
Thereafter, Ms. Loveland was placed on partial disability effective June 1, 1997, for a maximum of six months. Huttleston notified Ms. Loveland of her appeal rights. Ms. Loveland acknowledges receipt of the June 20, 1997, appeal letter and the appeal procedures. On September 30, 1997, Huttleston notified Ms. Loveland that the finding of disability was no longer supported by the available medical information. Huttleston also informed her of her appeal rights and right to submit additional medical information for consideration. Ms. Loveland's long term disability benefits under the Trust ended after September 1997. She did not submit additional medical information. She contacted Huttleston in October 1997 regarding her benefits and was advised to submit any other medical information in a timely manner and that Huttleston would review that information.
Ms. Loveland applied for and was awarded social security disability benefits retroactive to August 1996. She received a lump sum payment of approximately $6,400 to $7,000 from the Social Security Administration ("SSA") in February or March 1998. She still receives monthly disability checks from the SSA. Ms. Loveland also was awarded benefits from the PERF. She received a lump sum payment in the amount of approximately $6,500 to $7,000 in late spring 1998. She continues to receive monthly checks from PERF.
On June 18, 1998, Huttleston notified Ms. Loveland that it had determined the Trust overpaid her in the amount of $7,156.81 and requested reimbursement. Ms. Loveland does not dispute this amount. Huttleston also advised her that her appeal rights had been extended until July 15, 1998. On June 22, 1998, the Trust mailed a copy of the Appeal Procedure to Ms. Loveland who acknowledges receiving the copy. Ms. Loveland did not appeal the denial of benefits.
On August 28, 1997, Ms. Loveland filed a petition for bankruptcy. She filed her Schedules and Statement of Affairs on September 2, 1997, and Amended Schedule on November 7, 1997. Schedule B which lists assets does not schedule any potential action or claim against the Trust. Ms. Loveland was discharged in bankruptcy on January 2, 1998.
Ms. Loveland's bankruptcy case was reopened by order of October 12, 2000. ISTA objected, and the bankruptcy court held a hearing on the matter. On January 11, 2001, the bankruptcy court sustained ISTA's objection, revoked the order reopening the case, struck Ms. Loveland's amended schedules filed after the order was entered and ordered the case closed.
IV. Motion for Summary Judgment
ISTA contends it is entitled to summary judgment on its claims against Ms. Loveland because of its overpayment of benefits to her. The court agrees. The Plan documents and the Reimbursement Agreement expressly provide for reimbursement to the Trust of overpayments due to benefits received from Social Security and PERF. Ms. Loveland argues that reimbursement is not required because none of the payments to her by the Social Security or PERF were made during the same time she received benefits from the Trust. This argument is rejected because reimbursement is not contingent upon contemporaneous receipt of other benefits. This argument is an attempt to rewrite the clear and unambiguous provisions of the Plan, which attempt fails. The Trust is entitled to summary judgment on its claim against Ms. Loveland.
Furthermore, the social security disability benefits were retroactive to August 1996 and, thus, cover some of the same time period for which Ms. Loveland received disability benefits from the Trust.
V. Supplemental Motion for Summary Judgment
ISTA moves for summary judgment on Ms. Loveland's Counterclaim, contending her claims against it are barred because she failed to list her claims against ISTA as an asset on her bankruptcy schedules. The court agrees.
Courts have held that a debtor who fails to disclose a potential cause of action in a bankruptcy proceeding is barred from later bringing such undisclosed claim in subsequent litigation after the bankruptcy proceeding has been closed. See, e.g., In re Coastal Plains, Inc., 179 F.3d 197, 210-13 (5th Cir. 1999), cert. denied, 528 U.S. 1117 (2000); Payless Wholesale Distrib., Inc. v. Alberto Culver (P.R.) Inc., 989 F.2d 570, 571-72 (1st Cir. 1993); Hay v. First Interstate Bank of Kalispell, N.A., 978 F.2d 555, 557 (9th Cir. 1992); Oneida Motor Freight, Inc. v. United Jersey Bank, 848 F.2d 414, 417-18 (3rd Cir. 1988); Monroe County Oil Co. v. Amoco Oil Co., 75 B.R. 158, 162 (S.D.Ind. 1987) (Steckler, J.); Schlosser v. Bank of W. Ind., 589 N.E.2d 1176, 1179 (Ind.Ct.App. 1992) (citations omitted); McDonald v. Fairfield Pathologists, Inc., 580 N.E.2d 690, 692 (Ind.Ct.App. 1991). The subsequent litigation has been barred under the doctrines of standing, equitable estoppel, judicial estoppel, and res judicata. See, e.g., In re Coastal Plains, Inc., 179 F.3d at 210-13 (judicial estoppel); Hay, 978 F.2d at 557 (debtor estopped from asserting claim); Monroe County Oil, 75 B.R. at 162 (equitable estoppel and res judicata barred debtor's claims in existence during bankruptcy proceedings, but not disclosed in bankruptcy petitions, plans of reorganization or disclosure statements); Schlosser, 589 N.E.2d 1179 (citing cases).
Ms. Loveland's claim against ISTA arose at the latest on September 30, 1997, when she was denied long-term benefits. She did not, however, disclose the potential action against ISTA in her amended schedule of assets filed on November 7, 1997, and her bankruptcy case was closed on January 2, 1998. Therefore, following the authorities cited, Ms. Loveland is precluded from bringing that claim in this action.
Ms. Loveland argues that her claim is not barred because there is no evidence that the failure to list her claim was intentional or fraudulent. But she cites no authority to establish that a debtor's claim is not barred unless the failure to disclose the potential action is intentional or fraudulent. She adds that after her bankruptcy case was reopened, she notified the bankruptcy trustee of the asset by amending her schedules (after the bankruptcy was closed) but the trustee chose to abandon the asset. This ignores the undisputed facts that the bankruptcy court revoked its order reopening Ms. Loveland's bankruptcy case and struck her amended schedules. Though the trustee expressed an intent to abandon the claim against ISTA, because the order reopening the case was revoked, the trustee never actually had the chance to abandon that claim. Ms. Loveland's arguments fail to persuade the court that her claim against ISTA should not be barred for failure to disclose the claim in the original bankruptcy case.
Even assuming that Ms. Loveland's claim against ISTA is not barred, she could not prevail on said claim because she failed to exhaust her administrative remedies. See Robyns v. Reliance Standard Life Ins. Co., 130 F.3d 1231, 1236-38 (7th Cir. 1997) (affirming district court's summary judgment to plan administrator and plan based upon claimant's failure to exhaust administrative remedies). The uncontradicted evidence establishes that Ms. Loveland did not exhaust her administrative remedies, that is, she did not appeal the denial of benefits. The evidence does not raise a genuine issue as to whether Ms. Loveland was denied meaningful access to the review procedures or whether exhaustion would have been futile. See Robyns, 130 F.3d at 1236 (stating a court can excuse failure to exhaust administrative remedies "(1) if there has been a lack of meaningful access to the review procedures or (2) if exhaustion of internal remedies would be futile.").
VI. Conclusion
ISTA's motion to strike is GRANTED and ISTA's motion for summary judgment and supplemental motion for summary judgment will be GRANTED. Judgment will be entered accordingly.
ALL OF WHICH IS ORDERED.