Rosy Relief in Sight for the Plan in CGI Technologies & Solutions v Rose; Guest blog by Emily Hootkins (Hoort)

April 25, 2013 | Posted by Emily Catherine Hootkins | Topic(s): Benefit Claims & Claims Process Litigation, Other Interesting Cases & Issues

On April 22, 2013, the Supreme Court granted the petition for a writ of certiorari in CGI Technologies & Solutions v. Rose, et al., and then immediately vacated and remanded the Ninth Circuit’s judgment in light of US Airways, Inc. v. McCutchen, No. 11-1285, 2013 WL 1567371 (U.S. Apr. 16, 2013).

In McCutchen, the Supreme Court issued a two-part opinion in which it held that (1) equitable principles cannot override clear plan terms, but (2) equitable principles can be used to construe ambiguous or missing plan terms.

Last June, we blogged about CGI Technologies & Solutions v. Rose after the Ninth Circuit ruled that equitable defenses (such as the common-fund rule) can trump express contractual language in lawsuits seeking “appropriate equitable relief” under ERISA § 502(a)(3). 683 F.3d 1113 (9th Cir. 2012). The facts of this case are quite similar to McCutchen. Thus, it is not surprising that the Supreme Court simply vacated and remanded with a reference to its recent opinion in McCutchen.

In CGI Technologies & Solutions v. Rose, plaintiff Rhonda Rose was seriously injured in a car accident. Her ERISA-governed employee welfare benefits plan paid about $32,000 in her ensuing medical expenses. Rose later recovered $376,906.84 from the third party tortfeasor and her automobile insurance provider. After Rose’s recovery, CGI sought reimbursement of the full $32,000 the plan had paid in medical expenses in accordance with the plan’s subrogation and reimbursement provisions. When Rose refused to reimburse the plan in full (she later argued that any reimbursement must be reduced by the make-whole and common fund doctrines), CGI filed suit seeking “appropriate equitable relief,” under ERISA § 502(a)(3) in the form of a constructive trust and/or equitable lien.

At this point, the facts of CGI Technologies & Solutions v. Rose seem quite similar to McCutchen, and it may appear that these two cases will face similar fates on remand. However, we actually expect opposite results on remand of these two cases due to the Supreme Court’s two-part opinion in McCutchen.  Unlike in McCutchen, the plan in CGI Technologies & Solutions v. Rose expressly disclaims the common-fund doctrine and requires full reimbursement to the plan regardless of whether the beneficiary is made whole by their recovery. Thus, on remand under McCutchen, the Ninth Circuit must not consider equitable doctrines such as the common-fund or make-whole rules. Instead, the Ninth Circuit must stick to part-one of McCutchen, namely that the express terms of the plan trump any conflicting equitable principles.

This case is a good example of the importance of unambiguous plan provisions. Here, because the plan expressly disclaims the common-fund and make-whole doctrines, there is no need for the Ninth Circuit to reach part-two of McCutchen, where equitable principles may be considered to fill in plan gaps.

Tripling the amount of restitution in a criminal case.

In People v Lloyd, __ Mich App __ (#310355, 5/14/2013) defendant assaulted the victim by striking her in the eye with a high-heeled shoe. The victim lost her eye and now wears a prosthetic. The prosecution charged defendant with assault with intent to do great bodily harm less than murder, MCL 750.84, and assault with a dangerous  weapon, MCL 750.82. The jury found defendant guilty of the lesser-included offense of misdemeanor assault.  At sentencing, the victim testified that the assault has left her emotionally, physically, and financially devastated. Plaintiff requested $42,187.21 in actual restitution pursuant to MCL 780.766(2), and asked the court to triple the award pursuant to MCL 780.766(5). The trial court agreed and ordered restitution in the amount of $126,561.63.

On appeal defendant argued that the trial court should not have ordered three times the amount of restitution under MCL 780.766(5), which states, “If a crime resulting in bodily injury also results in the death of a victim or serious impairment of body function of a victim, the court may order up to 3 times the amount of restitution otherwise allowed under this section.” As used in this subsection, “serious impairment of body function of a victim” includes loss of an eye.  Because there is no dispute that the victim suffered a serious impairment of a body function, the trial court was authorized to order restitution under this section of the statute. Significantly, the plain language of the statute gives the trial court discretion to order as much as triple the amount of any other restitution allowed, but neither limits nor specifies what the trial court may consider in exercising the discretion to do so.

Expert testimony---Gangs and otherwise.

A trial court may permit a witness who is qualified “by knowledge, skill, experience, training, or education” to testify as an expert, if it determines that “scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue.” MRE 702. However, trial courts must be vigilant to ensure that the expert’s testimony remains within proper bounds:  There is always the concern that jurors will disregard their own common sense and give inordinate or dispositive weight to an expert’s testimony. See People v Peterson, 450 Mich 349, 374 (1995) (noting the potential that a jury might defer to an expert’s seemingly objective view of the evidence). For that reason, trial courts must—at every stage of the litigation—serve as the gatekeepers who ensure that the expert and his or her proposed testimony meet the threshold requirements. Gilbert v DaimlerChrysler Corp, 470 Mich. 749, 782 (2004).

            A trial court errs when it abandons its duty to ensure the integrity of the expert’s testimony or performs its gatekeeper function inadequately. Gilbert, 470 Mich at 780. Where the proffered testimony is not relevant or not helpful because it does not involve matters beyond the common understanding of jurors, it is inadmissible under MRE 702. People v Kowalski, 492 Mich 106, 121-122 (2012).   In addition to the requirements provided under MRE 702, trial courts must ensure that an expert’s testimony complies with the general rules of admissibility. See MRE 401, MRE 402, and MRE 403. Applying all these rules, courts have developed specific limitations on expert testimony that implicate a defendant’s right to have an impartial jury find the facts. As Justice Brickley explained in the context of a criminal sexual conduct case, because of the danger that jurors might be tempted to defer to an expert on the issue of guilt, courts have established “appropriate safeguards” to accommodate the need for expert testimony in specific circumstances while avoiding the possibility that a jury might unduly rely on the expert’s testimony:  Given the nature of the offense and the terrible consequences of a miscalculation—the consequences when an individual, on many occasions a family member, is falsely accused of one of society’s most heinous offenses, or, conversely, when one who commits such a crime would go unpunished and a possible reoccurrence of the act would go unprevented—appropriate safeguards are necessary. To a jury recognizing the awesome dilemma of whom to believe, an expert will often represent the only seemingly objective source, offering it a much sought-after hook on which to hang its hat. [People v Beckley, 434 Mich 691, 721-722 (1990).  

An expert may testify regarding the characteristics of sexually abused children, but only for the purpose of explaining potentially unusual behaviors. Peterson, 450 Mich at 365.  The expert may not offer an opinion as to whether the victim was actually abused. Id. A prosecutor may not present expert testimony on the characteristics of drug dealers—commonly referred to as profile evidence—in order to establish that the defendant was in fact a drug dealer.  People v Hubbard, 209 Mich App 234, 241-242 (1995). The prosecutor may, however, present such evidence as background or modus operandi evidence, but the trial court and the parties must be careful to ensure that the testimony is not offered as substantive evidence of guilt and the expert should not be permitted to opine that the defendant is guilty or otherwise testify in such a way as to imply that the defendant is guilty. People v Williams, 240 Mich App 316, 320-321; 614 NW2d 647 (2000). Although an expert’s testimony may “embrace”  ultimate issues to be decided by the jury, see MRE 704, the expert may not generally offer an opinion on fault, guilt, or a witness’ truthfulness. See Kowalski, 492 Mich at 129  (stating that an expert may testify about the phenomena of false confessions and interrogation techniques, but may not comment on the truthfulness of a defendant’s confession); People v McGillen, 392 Mich 278, 285-286 (1974) (stating that a medical doctor cannot offer expert testimony that the victim was actually raped or that she is truthful); O’Dowd v Linehan, 385 Mich 491, 513 (1971) (holding that it was error to allow the expert to “fix the blame for the accident” because there was nothing exceptional about the evidence that required an expert opinion on the ultimate issue).

With regard to evidence concerning gang membership and gang culture, there are no published Michigan authorities that specifically address its permissible scope. Nevertheless, other courts have held that such testimony can be helpful to jurors. See People v Memory, 182 Cal App 4th 835, 858 (2010) (stating that evidence of gang membership is admissible to prove motive); New Jersey v Torres, 183 NJ 554, 569; 874 A2d 1084 (2005) (listing cases where courts have determined that expert testimony about gangs and gang culture is relevant and helpful to the jury); United States v Mansoori, 304 F3d 635, 654 (CA 7, 2002) (holding that the police expert’s testimony on the history, structure, and involvement of the Travelling Vice Lords gang was useful to the jury); United States v Lemon, 239 F3d 968, 971 (CA 8, 2001) (“Evidence of gang membership is admissible if relevant to a disputed issue.”); United States v Hankey, 203 F3d 1160 (CA 9, 2000) (stating that a police expert could testify about the defendants’ gang affiliations and general tenets of gang culture to impeach testimony). Nevertheless, courts have recognized the high potential that such evidence will be unduly prejudicial.   In United States v Garcia, 151 F3d 1243 (CA 9, 1998), the court reversed a defendant’s conviction for conspiracy because the only evidence that the prosecutor presented in support of the conspiracy was evidence that the defendant was in a gang: Recent authority in this circuit establishes that “[m]embership in a gang cannot serve as proof of intent, or of the facilitation, advice, aid, promotion, encouragement or instigation needed to establish aiding and abetting.” Mitchell v Prunty, 107 F3d 1337, 1342 (CA 9, 1997), cert denied, 522 US 913, 118 S Ct. 295; 139 L Ed 2d 227 (1997), overruled in part on other grounds, Santamaria v Horsley, 133 F3d 1242 (CA 9, 1998) (en banc). In overturning the state conviction of a gang member that rested on the theory that the defendant aided and abetted a murder by “fanning the fires of gang warfare,” the Mitchell [court] expressed concern that allowing a conviction on this basis would “smack[ ] of guilt by association.” Id. at 1342. The same concern is implicated when a conspiracy conviction is based on evidence that an individual is affiliated with a gang which has a general rivalry with other gangs, and that this rivalry sometimes escalates into violent confrontations. [Id. at 1246.]  Although there may be evidence that gang members are generally looking for trouble or prepared for violence, that evidence does not itself establish that they have actually made plans to initiate it and, for that reason, it is not evidence of a criminal conspiracy. Id. Further, the court warned that allowing evidence of gang membership to serve as evidence of aiding and abetting or conspiracy would invite absurd results: “Any gang member could be held liable for any other gang member’s act at any time so long as the act was predicated on the common purpose of fighting the enemy.” Id. (internal quotations and citation omitted). Accordingly, expert testimony that a defendant is in a gang and that the gang members have a basic agreement to back one another up in fights is insufficient to establish a conspiracy to commit assault or other illegal acts. Id. at 1245-1246. Where an expert testifies about gang membership and culture, trial courts must be certain to ensure that the jury does not get the impression that gang membership alone equates to guilt. Evidence regarding the beliefs and practices of an organization may be relevant to explain a member’s conduct on a particular occasion, but only with an appropriate foundation and limitations. Memory, 182 Cal App 4th at 862. When admitted without a proper foundation and an appropriate limiting instruction, there is a danger that the jury will make an improper inference: “Membership in an organization does not lead reasonably to any inference as to the conduct of a member on a given occasion. Hence, the evidence was not relevant. It allowed, on the contrary, unreasonable inferences to be made by the trier of fact that the [defendant] was guilty of the offense on the theory of ‘guilt by association.’” [Id. at 859 (citation omitted).] See also Kennedy v Lockyer, 379 F3d 1041, 1055-1056 (CA 9, 2004) (stating that evidence of gang membership cannot be introduced to prove a substantive element of the crime, such as intent, because it amounts to guilt by association); Mansoori, 304 F3d at 654 (noting that the expert testified that membership is not a crime and that membership in the gang does not necessarily indicate that the member is involved in illegal activities and that the trial court instructed the jury that it is not illegal to be a member of, or associated with, a gang); United States v Roark, 924 F2d 1426 (CA 8, 1991) (ordering a new trial because the government’s witnesses’ testimony about the Hell’s Angels organization unfairly introduced improper propensity evidence and transformed the theme of the trial into one of guilt by association).

An expert may not testify that the defendant is guilty, or offer an opinion that a disputed act actually occurred. Peterson, 450 Mich at 365; McGillen, 392 Mich at 285-286. Similarly, although evidence that a defendant is a member of a gang implicates improper propensity evidence, when the evidence is admitted for a relevant purpose and the jury is properly instructed on the limits of evidence, it may be admissible under MRE 404. People v VanderVliet, 444 Mich 52, 74-75 (1993); Memory, 182 Cal App 4th at 862. 

Modification of an Interim Order for Attorney Fees.

In  Rugiero v Dinardo, __ Mich __ (#145577-84, 4/3/2013) the Michigan Supreme Court remanded the case to the trial court  for an evidentiary hearing regarding whether the fees granted in the court’s earlier interim awards pursuant to MCR 3.206(C) should be imposed as a final matter or otherwise modified as the evidence and circumstances may warrant.

The missing witness instruction.

In People v Mathis, Unpub Per Curiam (#305687, 3/14/2013) the Court of Appeals held that the trial court abused its discretion by denying the defendant’s request to read the missing witness jury instruction, CJI2d 5.12, and that the prosecutor did not exercise due diligence in its attempts to locate an endorsed res gestae witness.  Defendant's conviction was reversed and a new trial ordered.

To establish that it exercised “due diligence,” the prosecution is required to prove that it attempted to do everything reasonable in order to obtain an endorsed witness’s presence at trial. People v Eccles, 260 Mich App 379, 389 (2004); see also People v Bean, 457 Mich 677, 684 (1998).

A res gestae witness is someone who has “witness[ed] some event in the continuum of the criminal transaction and [whose] testimony would . . . have aided in developing a full disclosure of the facts at trial.” People v Long, 246 Mich App 582, 585 (2001).  A prosecutor who endorses a witness under MCL 767.40a(3) is obliged to exercise due diligence to produce that witness at trial. Eccles, 260 Mich App at 388. In fact, the prosecution is required to produce a listed witness at trial even if the prosecution was not actually required to endorse the witness in the first instance. See People v Wolford, 189 Mich App 478, 483-484 (1991).  A prosecutor who fails to produce an endorsed witness may show that the witness could not be produced despite the exercise of due diligence.” Eccles, 260 Mich App at 388. “Due diligence” is the attempt to do everything reasonable to obtain the presence of a witness, not everything possible. Id. at 391; see also People v Cummings, 171 Mich App 577, 585 (1988). If the trial court finds a lack of due diligence, the jury should be instructed that it may infer that the missing witness’s testimony would have been unfavorable to the prosecution’s case. Eccles, 260 Mich App at 388; see also CJI2d 5.12. A prosecutor’s efforts to secure a witness must be reasonable based on “the facts and circumstances of each case, i.e., whether diligent good-faith efforts were made to procure the testimony, not whether more stringent efforts would have produced it.” Bean, 457 Mich at 684.

Expert testimony concerning battered woman syndrome.

In criminal cases expert testimony is admissible if “the court determines that scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue . . . .” MRE 702. But before the trial court admits expert testimony, the court must determine that the evidence is “from a recognized discipline, relevant and helpful to the trier of fact, and presented by a qualified witness.” People v Daoust, 228 Mich App 1, 9-10 (1998), overruled on other grounds by People v Miller, 482 Mich 540 (2008).

In People v Christel, 449 Mich 578, 591 (1995), the Supreme Court determined that expert testimony concerning battered-woman syndrome may be admissible “when appropriate, [to] explain the generalities of characteristics of the syndrome.” The Christel Court observed that, “when a witness’ actions or responses are incomprehensible to average people,” expert testimony is generally needed. Id. at 592. However, the testimony must be “‘limited to a description of the uniqueness of a specific behavior brought out at trial.’” Id. at  591 (citation omitted). Moreover, the expert may not offer an opinion about whether the victim is a battered woman, whether the defendant is a batterer, whether the defendant is guilty, or whether the victim is being truthful. Id. The testimony must also meet the threshold  requirements of relevancy and helpfulness. Id. at 592.   

It has been suggested that expert testimony concerning battered-woman syndrome must be raised by the defense—not by the prosecution. But the Christel Court explained that such testimony may be permissible to explain the “uniqueness of a specific behavior brought out at trial,” and specifically observed that it may be introduced “in the prosecution’s case-in-chief[.]”  Id. at 591, 594. Indeed, Christel does not stand for the proposition that the defense must be the party to introduce the evidence. Defendant cites People v Beckley, 434 Mich 691 (1990), to support his proposition. However, Beckley dealt with evidence of child sexual abuse. Although both cases addressed types of syndrome testimony, Christel is directly applicable and does not support defendant’s position.

CSC and the requirement of a relationship by blood (birth).

In People v Zajaczkowski, __ Mich __ (#143736, 12/19/2012) the Michigan Supreme Court held that a defendant cannot be convicted of CSC 1^st under MCL 750.520b(1)(b)(ii) if the defendant is not related to the victim by blood.  Under MCL 750.520b(1)(b)(ii) the prosecution is required to prove: (1) sexual penetration, (2) a victim who is at least 13 years old but less than 16 years old, and (3) a relationship by blood or affinity to the fourth degree between the victim and the defendant.

A relationship by “blood” is defined as “a relationship between persons arising by descent from a common ancestor” or a relationship “by birth rather than by marriage.” In that regards the civil presumption of legitimacy in domestic related matters cannot be substituted for a blood relationship in order to fulfill this element of the crime charged.

The Court acknowledged the concerns by the prosecution that this interpretation will result in unintended consequences regarding adopted children because if the blood relationship element can only be established through a biological relationship, then a sexual penetration committed by a member of an adoptive family against an adopted minor child may not be punishable under MCL 750.520b(1)(b)(ii). However, such policy concerns are best left to the Legislature to address. It is this Court’s duty to enforce the clear statutory language that the Legislature has chosen.