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Segerberg v. Pipe Fitters' Welfare Fund

United States District Court, N.D. Illinois, Eastern Division

January 22, 2013

John SEGERBERG and Cindy Segerberg, as parents and next friend of Matthew Segerberg, Plaintiffs,
v.
PIPE FITTERS' WELFARE FUND, LOCAL 597, successor in interest to Pipe Fitters' Welfare Fund, Local 422, Defendant.

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Diane Karp Ehrhart, George J. Manos, Lewis Brisbois Bisgaard & Smith LLP, Chicago, IL, for Plaintiffs.

Joseph Edward Mallon, Dennis R. Johnson, Jeffrey Allen Krol, Jennifer Lynn Schroeder, Jessica Leigh Adelman, Kelley Christine Robinson, William P. Callinan, Johnson & Krol, LLC, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

EDMOND E. CHANG, District Judge.

Plaintiffs John and Cindy Segerberg allege that Defendant Pipe Fitters' Welfare Fund, Local 597, violated the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., when it stopped providing medical benefits to the Segerbergs.[1] The Segerbergs also allege two Illinois state-law claims stemming from this failure to provide benefits, as well as from Local 597's attempt to get reimbursement of medical payments already made. Local 597 moves to dismiss [R. 18] Counts Two (promissory estoppel) and Three (tortious interference)— the two state-law claims in the Segerbergs' Amended Complaint for Declaratory Judgment [R. 14]— pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons below, Local 597's motion is granted as to both claims.

I.

In evaluating a motion to dismiss, the Court must accept as true the complaint's factual allegations and draw reasonable inferences in the plaintiff's favor. Ashcroft v. al-Kidd, __ U.S. __, 131 S.Ct. 2074, 2079, 179 L.Ed.2d 1149 (2011). In 2005, the Segerbergs' son, Matthew,[2] was seriously brain injured during birth. R. 14, Am. Compl. ¶ 7. At the time of Matthew's birth, his father was a participant in Pipe Fitters' Welfare Fund, Local 422, which was an entity providing medical benefits to its working and retired members and their families. Id. ¶¶ 6, 8. As a plan beneficiary, Matthew received medical benefits from Local 422. Id. ¶ 9.

During the time when Matthew was receiving benefits from Local 422, his mother settled a lawsuit for damages relating to Matthew's birth injuries. Id. ¶¶ 11-12. Local 422 never requested that the Segerbergs sign a subrogation agreement for the settlement amount, even though Local 422 could demand subrogation under the terms of the Summary Description and Plan Document. Id. ¶¶ 14-15. Additionally, Local 422 placed a medical lien on the settlement amount, settled that lien for an amount less than the full amount of benefits it had paid, and continued to provide Matthew with medical benefits. Id. ¶ 17-19.

In 2011, Local 422 merged with Local 597 and Local 422 ceased to exist. Id. ¶ 20. In March of that year, Local 597 advised John Segerberg that, pursuant to

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Local 422's plan terms, it was denying future benefits to Matthew and seeking an offset of medical benefits paid after the settlement of the lawsuit. Id. ¶ 22. Local 597 then contacted Matthew's medical providers directly to seek the offset. Id. ¶ 23.

The Segerbergs make three claims in their Amended Complaint, the last two of which are at issue here. In Count Two, the Segerbergs assert a promissory estoppel claim. They allege that Local 422 made an implied promise that it would continue to pay Matthew's medical benefits by not requesting the Segerbergs sign a subrogation agreement and by settling the medical lien for less than the amount of benefits paid out. Id. ¶ 34. The Segerbergs detrimentally relied on this promise when they restricted their medical providers and services to those covered by Local 422, which may have been more expensive or less preferable than those outside Local 422's plan. Id. ¶ 35. They would also have chosen out-of-plan medical providers had they known that Local 597 would seek reimbursement of the payments ...


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