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HEALTH COST CONTROLS v. BICHANICH

June 30, 1997

HEALTH COST CONTROLS, Plaintiff,
v.
KAREN BICHANICH, Defendant.



The opinion of the court was delivered by: PLUNKETT

 Health Cost Controls ("HCC") sued Karen Bichanich ("Bichanich") under ERISA to recover medical benefits paid to her through her employer-sponsored health care plan. Both parties filed motions pursuant to Fed. R. Civ. P. ("Rule") 56(c) for summary judgment. On May 9, 1997, the Court directed HCC to submit evidence establishing that it is a fiduciary within the meaning of the statute. For the reasons set forth below, the Court finds that HCC is a fiduciary, grants HCC's motion for summary judgment in part, denies Bichanich's motion for summary judgment and dismisses the supplemental state law claim.

 Facts1

 In 1993, Bichanich was an employee of Abbott Laboratories and a participant in its Employee Welfare and Benefit Plan ("the Plan"). The Plan is an employee welfare benefit plan within the meaning of Section 302(1) of ERISA.

 On March 10, 1993, Bichanich was injured in an accident. She received medical treatment for her injuries and was reimbursed $ 14,215.63 by the Plan for the treatment.

 Sometime after the accident, Bichanich received $ 100,000 in partial settlement of her claims against the third-parties responsible for the accident. Following the settlement, HCC made a demand on Bichanich's counsel for reimbursement of the $ 14,215.63 the Plan had previously paid for her treatment.

 On October 28, 1996, HCC returned the check to Bichanich's attorneys. The sole explanation for its return was HCC's belief that the common fund doctrine could not be applied to ERISA plans.

 On November 4, 1996, Bichanich's attorneys wrote a letter to HCC protesting the return of the check. The letter noted that "the check sent to HCC was for the full amount claimed and reflected no deductions for the attorney fees and costs which we claim are owed."

 At about the same time, HCC filed this complaint, seeking a declaration that the Plan is entitled to recover from Bichanich an amount equivalent to the unreimbursed benefits it has paid to her.

 Discussion

 Subject Matter Jurisdiction

 Federal courts must resolve jurisdictional issues before proceeding to the merits of a case. See, e.g., Crawford v. United States, 796 F.2d 924, 928 (7th Cir. 1986); A.G. Edwards & Sons Inc. v. Public Bldg. Comm'n of St. Clair County, 921 F.2d 118, 120 at n. 2 (7th Cir. 1990) (citing Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1, 7, 56 L. Ed. 2d 30, 98 S. Ct. 1554 (1978)). Thus, the Court must decide whether it has subject matter jurisdiction over this action before addressing defendants' summary judgment motions.

 HCC claims the Court has subject matter jurisdiction over this case pursuant to 29 U.S.C. § 1132(e)(1) because it is an ERISA plan fiduciary. See 29 U.S.C. § 1002(21). HCC has submitted an affidavit of Raymond Hess, Abbott Laboratories' Plan Administrator, in support of this claim. Hess asserts that HCC has been appointed to prosecute the Plan's claims to reimbursement and subrogation. (Hess Aff. P 3.) These ...


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