EBIA reports that the appellate court agreed with the U.S. District Court for the Western District of Washington that the $70,000 reimbursement is considered equitable relief under the Employee Retirement Income Security Act (ERISA). The courts rejected Ralph W. Cutter’s argument that because the benefits were not paid directly to him and were not in his possession, the plan could not seek reimbursement from him.
In its decision, the district court pointed out that in Mertens v. Hewitt Associates, the U.S. Supreme Court decided that equitable relief “includes restitution of ill-gotten plan assets or profits . . .” The district court decided it was through Cutter and due to his misrepresentation of Rosalie Devereaux as his spouse that Devereaux was able to receive medical benefits (see Court Approves Reimbursement of Benefits for Beneficiary not a Legal Spouse ).
Cutter was a former truck driver for Safeway and participated in the Washington Teamsters Welfare Trust Fund. On several forms filled out for benefits, Cutter indicated he was married to Devereaux.
Northwest Administrators, Inc., which administered medical benefits for the trust fund, paid Devereaux’s medical expenses until she died of cancer. When Cutter presented a claim against her estate, however, a state court determined she and Cutter were never legally married under Washington law.
Northwest Administrators then filed suit to recover benefits paid.
The case is Northwest Administrators Inc. v. Ralph W. Cutter.
« Pension Funds Lose Effort to Stop Chrysler Sale