Pacificare Inc., Dba Pacificare of California v. Vernon D. Martin Sherrie Sue Martin, and Scott Douglas Martin, a Minor

Opinion by Judge O’Scannlain; Dissent by Judge Norris.

We must decide whether an ERISA plan health insurer has a cause of action against its insured for reimbursement of medical expenses advanced under the policy when the insured recovers a full award against a third party.

I

Scott Martin was insured under a pre-paid health plan pursuant to a group subscriber agreement between Pacificare, a federally-qualified health maintenance organization, and his father’s employer, Thums Long Beach Company (“Thums”). The agreement included a provision requiring the insured to reimburse Pacificare for the cost of care for injuries caused by a third party if the insured recovered from the third party for the injuries.

In September 1986, Martin was hit by a car and severely injured, rendering him a quadriplegic. Pacificare covered Martin’s medical and hospital expenses, eventually paying over $1 million for his care. Martin filed suit against the driver of the car and several other defendants. The suit was ultimately settled for an annuity paying $18,000 per month for Martin’s life, separate payments totaling $1 million in cash, and over $2 million in fees and costs to Martin’s…

dissenting.

I agree with the majority that we should not create federal common law causes of action when plans fall under the purview of ERISA. The majority, however, fails to decide whether Pacificare has pleaded and proved a claim for equitable relief under 29 U.S.C. § 1132 (a)(3).

Although the district court was wrong in ruling that Pacificare had a federal common law claim, it was correct in characterizing Pacificare’s claim for reimbursement as an equitable claim for unjust enrichment. As such, the claim qualifies for equitable relief under ERISA, 29 U.S.C. § 1132 (a)(3).

The fact that Pacificare cited Provident Life & Acc. Ins. Co. v. Waller, 906 F.2d 985 (4th Cir.), cert. denied, 498 U.S. 982 , 111 S.Ct. 512 , 112 L.Ed.2d 524 (1990), in its amended complaint as legal authority for bringing its equitable claim under the federal common law is irrelevant. A plaintiff is not required to cite legal authority in its complaint; it is only required to allege facts which would entitle it to relief under any legal theory. As long as Pacificare alleges and proves facts sufficient to establish an equitable claim for unjust enrichment under § 1132(a)(3), it is entitled to relief even…

34 F.3d 834 18 Employee Benefits Cas. 2146 PACIFICARE INC., dba Pacificare of California, Plaintiff-Appellee, v. Vernon D. MARTIN; Sherrie Sue Martin, Defendants, and Scott Douglas Martin, a minor, Defendant-Appellant. No. 92-55476. United States Court of Appeals, Ninth Circuit. Argued Aug. 4, 1993. Submission Deferred Aug. 20, 1993. Submitted Dec. 2, 1993. Decided Sept. 1, 1994. Ernest J. Franceschi, Jr., Los Angeles, CA and William E. Cavanaugh, Costa Mesa, CA, for defendant-appellant. Jon N. Manzanares, Konowiecki & Rank, Los Angeles, CA, for plaintiff-appellee. Appeal from the United States District Court for the Central District of California. Before: NORRIS, WIGGINS, and O'SCANNLAIN, Circuit Judges. Opinion by Judge O'Scannlain; Dissent by Judge Norris. O'SCANNLAIN, Circuit Judge: 1 We must decide whether an ERISA plan health insurer has a cause of action against its insured for reimbursement of medical expenses advanced under the policy when the insured recovers a full award against a third party. 2 * Scott Martin was insured under a pre-paid health plan pursuant to a group subscriber agreement between Pacificare, a federally-qualified health maintenance organization,…