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Employee Painters' Trust v. Clifton

United States District Court, D. Nevada

December 30, 2019

BRANDON S. CLIFTON, an individual; and KIMBERLY A. COMINSKY, an individual; Defendants.



         Before the Court is Plaintiff's Motion for Default Judgment (the “Motion”) seeking a monetary judgment against Defendants Brandon S. Clifton (“Clifton”) and Kimberly A. Cominsky (“Cominsky” and, together with Clifton, “Defendants”). ECF No. 11. The Motion was filed on August 30, 2019. No response to the Motion was filed.

         I. BACKGROUND

         This case commenced on May 29, 2019 when Plaintiff the Employee Painters' Trust (“Plaintiff” or the “Trust”) filed its Complaint against Defendants asserting seven claims for relief. ECF No. 1. These claims include Unjust Enrichment Under ERISA, Fraud, Fraudulent Misrepresentation, Fraudulent Concealment, Negligent Misrepresentation, Conversion, and Unjust Enrichment. Id. Clifton was named as a defendant because, as an employee of certain employers, he was entitled to participate in a health and welfare plan administered by the Trust pursuant to the Employee Retirement Income Security Act (“ERISA”). Clifton's dependents (also referred to as beneficiaries) were entitled to participate in health and welfare benefits under circumstances specified in health and welfare plan documents.

         Clifton married Cominsky on or about February 4, 2004. Defendants were divorced in September 2012. The Trust admits that Clifton notified the Trust of his divorce from Cominsky in March 2017. ECF No. 11 at 3:11-13; 4:2-3. In fact, while Clifton apparently did not submit documentation of the divorce, the Trust admits that, in March 2017, Clifton advised the Trust that he and Cominsky were legally divorced “through a Decree of Divorce” entered on September 14, 2012. Id. at 4:2-4.

         Despite the March 2017 notice, sometime in early 2018 (the exact date is not provided by the Trust), Cominsky contacted the Trust's third party administrator seeking to confirm her continued coverage eligibility under the Plan, as well as new member cards. The Trust also, alternately, states that:

(1) “Cominsky received health benefits from the Trust for the period February 2004 through August 2018” (id. at 3:18-19);
(2) it “paid $37, 828.12 in medical and prescription benefits” for Cominsky for the period “December 2016 until July 2017” (id. at 3:24-25); and
(3) it paid “$37, 828.12 in benefits for Ms. Cominsky from approximately October 2012, forward for which she was ineligible.” ECF No. 11-1 (Declaration of Connie Callahan) ¶ 21.

         A claims summary attached as Exhibit 2 to Plaintiff's Motion definitively shows that the claims for which the Trust seeks reimbursement arose from invoices dated September 22, 2017 through July 9, 2018. These dates are confirmed by Plaintiff's Exhibit 4. The amounts on Plaintiff's Exhibits 2 and 4 each total $37, 828.12.

         The Trust attaches three versions of the Employee Painters' Trust Health and Welfare Plan (each the “H & W Plan” or the “Plan”) to its Motion. Exhibits 1-A, 1-B, and 1-C. On page 18 of the 2007 Plan, it states “lawful spouse[s]” are eligible dependents under the Plan. Ex. 1-A at 18. Page 20 of the 2007 Plan lists those dependents not eligible for benefits including “divorced spouse[s].” Id. at 20. On page 20 it also states, inter alia, that “[a] dependent's insurance will end at midnight on the earliest of: . . . the last day of the Plan month the dependent is no longer eligible.” Id. Finally, on page 59 of the 2007 Plan it states that divorce is a qualifying event for COBRA and, in order to be eligible for COBRA, the Plan participant or dependent has the responsibility to notify the Trust of the loss of coverage eligibility in writing within 60 days of the qualifying event. Id. at 59.[1] The 2013 Plan identifies the same basic definitions of eligibility for lawful spouses, loss of coverage based on divorce, and when a dependent's insurance will end. Ex. 1-B at 6-7.

         The 2018 Plan, effective in August 2018, includes the same lawful spouse eligibility, loss of eligibility, and timing applicable to when coverage ends as the 2007 and 2013 Plans. Ex. 1-C at 12 and 13. However, for the first time, this Plan includes a provision titled “Your Obligation to Notify the Plan of Changes in Dependent Status.” Id. at 13. The “Obligation” in the 2018 Plan document states that “[y]ou must notify the Trust Office in writing if there is a change in the qualifying status of any of your dependents within 60 days of the date on which the change occurs.” Id. at 13. This provision is conspicuously absent from the 2007 and 2013 Plans submitted by Plaintiff.

         Neither Clifton nor Cominsky have appeared in this matter despite effective service. ECF Nos. 4 and 5. Thus, obviously, neither Defendant offers a reason for their failure to notify the Trust of their divorce at any time before March 2017. The Trust also offers no facts evidencing that it received information regarding the reason for Defendants' failure to provide notification of the event disqualifying Cominsky from continued eligibility for benefits prior to March 2017. Importantly, however, the Trust provides no document or authority for asserting that Clifton's oral notice to the Trust in March 2017 was insufficient under the terms of the then-effective 2013 Plan (Plaintiff's Ex. 1-B), which is silent with respect to what constitutes effective notice of a change in eligibility (distinct from what is required when COBRA coverage is sought). Plaintiff offers no explanation for why, once notice of Clifton's divorce from Cominsky was received in March 2017, the Plan paid any benefits on behalf of Cominsky.[2]

         The pending Motion seeks $37, 828.12 in medical benefits paid on behalf of Cominsky, all of which were incurred after Clifton provided oral notice of his divorce and the divorce date to the Trust. ECF No. 11 at 4:2-3 (“On or about March 2017, Mr. Clifton informed the Trust that he and Ms. Cominsky had been legally divorced, through a Decree of Divorce which was entered on September 14, ...

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