Kolbe & Kolbe Health & Welfare Benefit Plan v. Med. Coll. of WI, No. 12-3837 (7th Cir. 2014)
Annotate this CaseAn employee benefits plan sued a medical college that provides patient care in clinics and hospitals and an affiliated children’s hospital, with which it had provider agreements, alleging ERISA violations and breach of contract under Wisconsin law. The suit was based on the plan’s determination that an employee’s child was not covered by the plan and the hospital’s denial of its subsequent request that the hospital refund about $1.7 million the plan had already paid on behalf of the child. The plan makes no mention of refunds. The district court dismissed and awarded attorneys’ fees to the hospital as a sanction for having filed frivolous claims. The Seventh Circuit affirmed dismissal of the ERISA claims but reversed dismissal of the breach of contract claim, rejecting the district court’s finding of preemption, and imposition of sanctions. On remand of the contract claim, the district court granted summary judgment in favor of the hospital. The Seventh Circuit affirmed, noting that the hospital, having been paid in full by the plan, has no possible claim against Medicaid, that the plan took 11 months to determine that the child was not a beneficiary, and that the hospital has not been unjustly enriched.
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