JP Express Service Inc., JP Express Service Inc. Healthcare Benefit Plan v. KG Administrative Services; The Keiser Group LLC; Tracey Keiser; Robert Frazier
Published: Oct. 30, 2020 | Result Date: Oct. 2, 2020 | Filing Date: Jan. 23, 2018 |Case number: 8:18-cv-00134-CJC-RAO Bench Decision – $325,000
Judge
Court
CD CA
Attorneys
Plaintiff
Melissa R. Shimizu
(Fisher & Phillips LLP)
Christine D. Baran
(Fisher & Phillips LLP)
Defendant
Michael W. Feenberg
(Nemecek & Cole)
Vikram Sohal
(Nemecek & Cole)
Facts
Plaintiffs JP Express Service, Inc. a general freight trucking company that offered its employees' health care benefits through Plaintiff JP Express Service Inc. Healthcare Benefit Plan, filed suit against Defendants KG Administrative Services, The Keiser Group, LLC, Tracey Keiser, and Robert Frazier.
Contentions
PLAINTIFFS' CONTENTIONS: Plaintiffs contended defendants were hired as a third-party administrator to administer Plaintiffs self-insured employee benefit Plan. According to the terms to their service contract, Plaintiffs paid substantial amounts of money to Defendants as premiums (Plan Assets). Defendants were, in turn, supposed to use the Plan Assets to process and pay, as eligible, Plaintiffs' employee health care claims using insurer network discounts. Defendants were also supposed to secure stop loss insurance to ensure payment of larger claims. Plaintiffs claimed that Defendants mishandled and misappropriated Plan assets by not paying eligible employee health care claims; defaulting on premiums for Plaintiffs' stop loss insurance; losing applicable insurer network discounts; and failing to provide a proper accounting regarding the status of premium amounts paid. Plaintiffs contended that defendants breached their fiduciary duties and violated the Employee Retirement Income Security Act of 1974.
DEFENDANTS' CONTENTIONS: Defendants denied the contentions, and contended that as plan fiduciaries, defendants had discretion over Plan assets and thus did not mishandle or misappropriate any funds.
Result
The court granted judgment in favor of Plaintiffs for the total sum of $325,000 plus attorneys' fees and costs.
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