Community Health Plan of Ohio v. Joseph J. Mosser

*The Honorable James S. Gwin, United States District Judge for the
Northern District of Ohio, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2003 FED App. 0372P (6th Cir.)
File Name: 03a0372p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
COMMUNITY HEALTH PLAN
OF OHIO,
Plaintiff-Appellee,
v.
JOSEPH J. MOSSER,
Defendant-Appellant.
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No. 01-4095
Appeal from the United States District Court
for the Southern District of Ohio at Columbus.
No. 99-00961—George C. Smith, District Judge.
Argued: February 6, 2003
Decided and Filed: October 21, 2003
Before: SILER and ROGERS, Circuit Judges; GWIN,
District Judge.*
2 Community Health Plan
of Ohio v. Mosser
No. 01-4095
_________________
COUNSEL
ARGUED: J. Gerard Swank, SWANK & ASSOCIATES,
Newark, Ohio, for Appellant. Daran P. Kiefer, KREINER
& PETERS, Cleveland, Ohio, for Appellee. ON BRIEF:
J. Gerard Swank, SWANK & ASSOCIATES, Newark,
Ohio, William F. Goodrich, GOODRICH, GOODRICH &
LAZZARA, Pittsburgh, Pennsylvania, for Appellant.
Daran P. Kiefer, Ted M. Traut, KREINER & PETERS,
Cleveland, Ohio, for Appellee.
_________________
OPINION
_________________
GWIN, District Judge. With this appeal, we examine
whether the district court erred when it granted Plaintiff-
Appellee Community Health Plan of Ohio (“CHPO”)
summary judgment on its claims for specific performance
and restitution against Defendant-Appellant Joseph J.
Mosser (“Mosser”).
In reviewing Mosser’s appeal, we first consider whether
the federal courts have jurisdiction over this case. Under
the recent United States Supreme Court decision in Great-
West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204,
122 S. Ct. 708, 151 L. Ed. 2d 635 (2002), federal subject
matter jurisdiction does not exist in this matter, and
therefore, this case is not properly before the federal courts.
Finding that the district court did not have jurisdiction over
this case, we REVERSE and REMAND this case with
directions that the district court dismiss this case for lack of
subject matter jurisdiction.

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No. 01-4095 Community Health Plan
of Ohio v. Mosser
3
This case arises from efforts by an insurance company,
CHPO, to enforce its plan’s subrogation provision. The
subrogation provision requires those insured by CHPO to
cooperate with CHPO in its efforts to recover amounts
CHPO paid on the insured’s behalf. Although the
subrogation provision states no explicit obligation to
reimburse the insurer for monies received from tortfeasors,
CHPO says such a duty should be found in the subrogation
provision.
Appellant Mosser says that under the Supreme Court’s
recent holding in Great-West Life, the district court, and
this court, do not have jurisdiction to entertain this action.
Arguing that federal courts are courts of limited
jurisdiction, not courts of general jurisdiction, Mosser says
that district courts are empowered to hear only those cases
that the Constitution and Congress have given them
jurisdiction over. Insurance Corp. of Ireland, Ltd. v.
Compagnie des Bauxites de Guinee, 456 U.S. 694, 701, 102
S. Ct. 2099, 72 L. Ed. 2d 492 (1982); Sweeton v. Brown, 27
F.3d 1162, 1167 (6th Cir. 1994) (“Federal courts are courts
of limited jurisdiction and are empowered to hear only such
cases as are within the judicial power of the United States
as defined in Article III, § 2 of the Constitution.”).
While Mosser denies that the district court had
jurisdiction over this action, Mosser says that even if the
district court had jurisdiction, it incorrectly found the
subrogation provision required reimbursement. In addition,
Mosser says the district court wrongly found that the
subrogation provision gave explicit notice that CHPO
claimed a priority right to proceeds recovered from third-
party tortfeasors and that CHPO claimed this right even
when the injured insured had not been made whole for his
damages.
CHPO, an Ohio company, insures the Licking Memorial
Hospital through its Employee Health Benefit Plan (the
4 Community Health Plan
of Ohio v. Mosser
No. 01-4095
“Plan”). In this case, CHPO sued Mosser, a Plan
participant, in the U.S. District Court for the Southern
District of Ohio, requesting specific performance and
restitution. With its lawsuit, CHPO sought to recover
medical benefits that CHPO paid on Mosser’s behalf.
Mosser incurred the medical expenses as a result of injuries
he sustained in an automobile accident.
CHPO claimed that the Plan’s provision titled
“Subrogation” gave CHPO the right to recover the money
paid on Mosser’s behalf because Mosser recovered money
in a settlement with the alleged tortfeasor. Responding to
CHPO’s complaint, Mosser asserted a counterclaim for bad
faith. Both parties moved for summary judgment. The
district court granted CHPO summary judgment on its
claim for specific performance and restitution, and denied
Mosser summary judgment on his bad faith claim. Mosser
appeals the district court’s grant of the defendant’s motion
for summary judgment. He does not appeal the district
court’s denial of his motion for summary judgment on the
bad faith claim.
In his appeal, Mosser claims that Pennsylvania law
applies to this matter and prohibits CHPO from obtaining
subrogation or reimbursement from Mosser. Mosser also
claims that the Plan precludes CHPO from recovering the
funds it paid Mosser because the Plan’s “Subrogation
Provision” is both ambiguous and not a reimbursement
provision. CHPO claims it is entitled to recover the funds
because Ohio law applies to this matter and the applicable
Ohio law is preempted by ERISA. CHPO further argues
that the plan’s subrogation provision is not ambiguous and
is, in fact, also a reimbursement provision.
History
On October 1, 1995, Joseph J. Mosser, an Ohio resident,
was involved in an automobile accident in Murrysville,

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No. 01-4095 Community Health Plan
of Ohio v. Mosser
5
Westmoreland County, Pennsylvania. A negligent
Murrysville police officer caused the accident when he ran
a red light. As a result of the accident, Mosser sustained
severe personal injury.
At the time of the accident, CHPO insured Mosser as a
Licking Memorial Employee Health Benefit Plan covered
participant. As a covered participant, CHPO paid most of
Mosser’s hospital and medical expenses. CHPO says it
paid $261,267.27 in medical expenses on Mosser’s behalf.
Mosser later settled his claims against the City of
Murrysville (the “Murrysville Settlement”). After the
Murrysville Settlement, Mosser did not reimburse CHPO
for the monies that CHPO had paid on his behalf. In
September 1999, CHPO filed a breach of contract claim
against Mosser requesting specific performance and
restitution for medical payments made by CHPO on
Mosser’s behalf.
CHPO based its specific performance and restitution
claims on a provision within the CHPO Plan which states:
SUBROGATION
CHPO has a right of recovery against any person, firm
or organization for medical, hospital or other health
services provided by the Plan to you or your
Dependents. This applies to any money recovered by
suit, settlement or otherwise. You must cooperate with
the plan in all actions necessary to do this. If legal
collection costs are incurred on a contingency fee
basis, these costs will be deducted before the
remaining sum is distributed to the Plan and the
Enrollees.
6 Community Health Plan
of Ohio v. Mosser
No. 01-4095
On August 30, 2001, the district court awarded CHPO
summary judgment on its claims against Mosser. Mosser
filed a timely notice of appeal.
Standard of Review
We review the district court’s summary judgment
decision de novo. Flint v. Kentucky Dep’t of Corr., 270
F.3d 340 , 346 (6th Cir. 2001). Summary judgment is
proper where no genuine issue of material fact exists and
the moving party is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(c). In considering such a motion, the
court must view the evidence and draw all reasonable
inferences in favor of the nonmoving party. Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587,
89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). The central issue
is “whether the evidence presents a sufficient disagreement
to require submission to a jury or whether it is so one-sided
that one party must prevail as a matter of law.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 91 L. Ed. 2d
202, 106 S. Ct. 2505 (1986).
Analysis
Defendant-Appellant Mosser raised the issue of subject
matter jurisdiction for the first time in his reply brief. We
generally will not hear issues raised for the first time in a
reply brief. United States v. Crozier, 259 F.3d 503, 517
(6th Cir. 2001). “Court decisions have made it clear that
the appellant cannot raise new issues in a reply brief, he can
only respond to arguments raised for the first time in
appellee’s brief.” Id. (quoting United States v. Jerkins, 871
F.2d 598, 602 n.3 (6th Cir. 1989)).
Despite the general rule that we will not hear issues
raised for the first time in a reply brief, “[t]he existence of
subject matter jurisdiction, moreover, is an issue that may
be raised at any time, by any party or even sua sponte by

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No. 01-4095 Community Health Plan
of Ohio v. Mosser
7
1See also Cmty. Ins. Co. v. Morgan, No. 99-6669, 2002 WL
31870325 (6th C ir. Dec. 20, 200 2). Comm unity Insurance involved an
Administrator of a motorist's health insurance plan filing suit under
ERISA against the motorist, the tortfeaso r, and the mo torist's autom obile
insurer. Id. at *2. The Ad ministrato r sought reimb ursem ent for b enefits
paid by plan to motorist to cover his medical expenses resulting from
injuries he incurred in the moto r vehicle accident. Id. In deciding
Comm unity Insurance, this Court held:
the court itself.” Ford v. Hamilton Inv., Inc., 29 F.3d 255,
257 (6th Cir. 1994). Any court may address the issue of
subject matter jurisdiction at any time, with or without the
issue being raised by a party to the action. In re Millers
Cove Energy Co., Inc., 128 F.3d 449, 450 (6th Cir. 1997).
Therefore, we will hear Mosser’s subject matter jurisdiction
issue despite the fact that he raised it for the first time in his
reply brief.
The Employee Retirement Income Security Act
(“ERISA”) does not authorize actions brought by ERISA
plan fiduciaries against plan beneficiaries to enforce plan
reimbursement provisions through money damages. Great-
West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204,
122 S. Ct. 708, 151 L. Ed. 2d 635 (2002). In Knudson, an
ERISA plan fiduciary brought an action against a plan
beneficiary to enforce a reimbursement provision in the
plan and to compel that beneficiary to make restitution to
the plan from a recovery that she obtained from a
third-party tortfeasor. Id. The Supreme Court held that
when a fiduciary seeks to impose personal liability on a
plan beneficiary for a contractual obligation to pay money,
the action is an action at law, not an action in equity. Id. at
209-10. Since 29 U.S.C. § 1132(a)(3) only authorizes
actions seeking equitable relief, ERISA does not provide
jurisdiction for fiduciaries seeking to enforce a contract’s
reimbursement provisions through money damages. Id. at
209-10.1
8 Community Health Plan
of Ohio v. Mosser
No. 01-4095
W e hold that Community, like Great-West, does not seek
equitable relief, but rather “seek[s] legal relief – the imposition
of . . . liability on respondents for a contractual obligation to pay
money.” Knudson, 122 S. Ct. at 719. For that reason, as was the
case with Great-W est, § 1132 (a)(3) does not authorize this
action.
Id. at *12.
To be authorized under § 1132(a)(3), CHPO’s claim must
be one “(A) to enjoin any act or practice which violates any
provision of this subchapter or the terms of the plan, or (B)
to obtain other appropriate equitable relief (i) to redress
such violations or (ii) to enforce any provisions of this
subchapter or the terms of the plan.” Cmty. Ins. Co. v.
Morgan, No. 99-6669, 2002 WL 31870325 at *11 (6th Cir.
Dec. 20, 2002).
CHPO, like Great-West in Knudson, does not seek
equitable relief, but rather “seek[s] legal relief – the
imposition of . . . liability on respondents for a contractual
obligation to pay money.” Knudson, at 221; see also Cmty.
Ins. at *12. In Knudson, the Supreme Court noted that “the
term ‘equitable relief’ in [29 U.S.C. § 1132(a)(3)] must
refer to ‘those categories of relief that were typically
available in equity. . . .’” Id. at 210 (quoting Mertens v.
Hewitt Assoc., 508 U.S. 248, 256 (1993)).
Mosser, like the petitioners in Knudson, seeks restitution.
Id. at 212. In determining that the insurer’s restitution
claim was not cognizable under § 1132(a)(3), the Supreme
Court in Knudson distinguished between restitution in
equity and restitution at law. Id. at 212-15. As the Court
noted, “whether [restitution] is legal or equitable depends
on ‘the basis for [the plaintiff’s] claim’ and the nature of
the underlying remedies sought.” Id. at 213 (second
alteration in original) (quoting Reich v. Cont’l Cas. Co., 33
F.3d 754, 756 (7th Cir. 1994)).

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No. 01-4095 Community Health Plan
of Ohio v. Mosser
9
2CH PO attemp ts to blur the line between equitable subrogation and
reimbursement to fit its claim within the scope of § 1132(a)(3). As we
have noted in discussing conventional subrogation, the two doctrines are
distinct. See Hiney Printing Co. v. Brantner, 243 F.3d 95 6, 959 (6th Cir.
2001).
3Even if this were a true sub rogation claim, it is not clear whether
such a claim would be eq uitable for the purpo ses of § 113 2(a)(3). See
Restatement (Third) of Restitution Unjust Enrichment § 2 6 cmt. a
(Tentative Draft No . 2, 2002) (“Neither the fact that the remedy of
subrogation is equitable in origin, nor the fact that a claim under this
Section will freque ntly be identified as a claim to ‘equitable subrogation’
should be taken as establishing that a claim under this Section is
necessarily ‘equitable’ rather than ‘legal.’ . . . So long as the claimant
seeks only money judgment against the defendant . . . a claim with § 26
. . . draws on sources that are at least as much legal as equitable.”).
At oral argument, CHPO argued that subrogation is an
equitable remedy, and therefore, its personal liability suit
against Mosser is justified. CHPO’s claim, however,
cannot be considered a subrogation claim. Equitable
subrogation, also known as legal subrogation, is an
equitable remedy that prevents the unjust enrichment of a
defendant-obligor. Restatement (First) of Restitution § 162
(1937); 1 Dan B. Dobbs, Law of Remedies § 4.3(4) (2d ed.
1993) (hereinafter Dobbs). Unjust enrichment is prevented
by granting the plaintiff a right to exercise those remedies
that the obligee had before the obligation was discharged.
See Restatement (First) of Restitution § 162 cmt. a; 1
Dobbs § 4.3(4). Applying that remedy here, CHPO would
be granted Mosser’s rights against the city of Murraysville,
not a judgment of personal liability against Mosser.2 Thus,
the nature of equitable subrogation as a remedy, and the
parties involved, would not justify judgment against
Mosser under § 1132(a)(3).3
Nor would CHPO’s restitution claim be cognizable under
§ 1132(a)(3) as a claim for either a constructive trust or an
equitable lien. As the Knudson court noted, at equity these
10 Community Health Plan
of Ohio v. Mosser
No. 01-4095
4W e need not decide whether or in what circumstance such a
restitution claim could result in the imposition of a constructive trust or
an eq uitable lien as a remed y.
5Subsection 1132(a)(3) is one subsection of three that permits a civil
action under ERISA by a plan fiduciary such as CHPO. 29 U.S.C.
§ 1132. The other two subsections, § 1132(a)(2) and § 1132(a)(9), are not
implicated by CHPO’s claim.
remedies contemplated a situation in which “money or
property identified as belonging in good conscience to the
plaintiff could clearly be traced to particular funds or
property in the defendant’s possession.” Knudson, 534
U.S. at 213. CHPO did not, in its complaint, allege that it
had given certain funds to Mosser, trace those funds to the
settlement funds from Murraysville, allege that Mosser was
unjustly enriched by retaining the settlement funds, and
seek the return of the settlement funds in Mosser’s
possession.4 Rather, CHPO sought “restitution from the
Defendant for all covered services.” (R.1, Complaint, ¶ 13,
J.A. at 9). Thus, the basis of CHPO’s claim was not an
assertion of the right to possess certain settlement funds,
but essentially a claim in contract (actual or implied) to
impose personal liability on Mosser. Such a claim is
restitution at law and is not within the scope of §
1132(a)(3). Knudson, 534 U.S. at 212-13.
As CHPO’s claim is outside the scope of § 1132(a)(3),
subject matter jurisdiction is not proper under § 1132(e).
See 29 U.S.C. § 1132. CHPO’s claim did not implicate any
other ERISA subsection that would permit this action, and
federal question jurisdiction does not exist under 28 U.S.C.
§ 1331 if ERISA does not authorize the suit.5 See Bauhaus
USA, Inc. v. Copeland, 292 F.3d 439, 442 n.6 (5th Cir.
2002); see also Unicare Life & Health Ins. Co. v. Saiter,
No. 00-3856, 2002 WL 1301574, at **1-2 (6th Cir. June
10, 2002). Finally, as the parties are not diverse,

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No. 01-4095 Community Health Plan
of Ohio v. Mosser
11
jurisdiction is not proper under 28 U.S.C. § 1332. See 28
U.S.C. § 1332.
Conclusion
For the foregoing reasons, we conclude that the district
court lacked subject matter jurisdiction over this matter,
and therefore we REMAND with instructions to DISMISS
this matter for lack of jurisdiction.

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