Cement Masons Health and Welfare Trust Fund for Northern California v. Stone, 197 F.3d 1003 (9th Cir. 1999)-Raymond Stone, whose wife Kimberly Stone died as a result of hospital negligence following an accident, signed a reimbursement agreement with Cement Masons. The reimbursement agreement required Stone to pursue diligently any claims for medical payments for his wife's injuries against a third party and to reimburse the Fund if he were to recover from such a third party. Through a guardian ad litem, Mr. Stone’s two minor children sued the driver for negligent infliction of emotional distress and received $50,000, the coverage limit under the driver's insurance policy. A month later, Mr. Stone, along with his two minor children (through the guardian ad litem), filed suit against several defendants to include the hospital. However, a year later, Mr. Stone dismissed all of his claims, leaving only the minor children as plaintiffs in the second suit.
When Mr. Stone failed to reimburse the Fund out of the $50,000 awarded to his children in the first suit, appellants Cement Masons and its Board of Trustees sued him for restitution under the terms of the reimbursement agreement of the plan and under 29 U.S.C. § 1132(a)(3). The Plaintiffs alleged that Mr. Stone failed to give priority to claims to recover the medical expenses paid for Ms. Stone's hospitalization and surgeries, and sought to avoid his obligations under the agreement. Appellants sought restitution, declaratory relief, and an injunction requiring Mr. Stone help them gain reimbursement. The district court, with the Ninth Circuit’s approval, denied Plaintiffs their requested relief.
Injunctive and "other appropriate equitable relief" is available under 29 U.S.C. § 1132(a)(3). "Such relief includes restitution [here meaning 'ill-gotten gains'], but it does not include contract damages, Id., or reimbursement pursuant to contract." FMC Med. Plan v. Owens, 122 F.3d 1258 (9th Cir. 1997). This court observed that this case did not involve an ERISA plan granting the insurer rights of subrogation. Rather the Plan’s claim was for contractual reimbursements.
Although the district court properly dismissed plaintiff’s claim, this court held that a dismissal of an ERISA claim under 29 U.S.C. § 1132(a)(3) is properly a dismissal on the merits rather than a dismissal for want of subject matter jurisdiction. The unavailability of an equitable remedy does not mean that the district court is without subject matter jurisdiction, but, rather, means that the plaintiff has failed to state a claim upon which relief can be granted.
