Simon, Stephen v. Allstate Employee ( 2001 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 00-3120
STEPHEN SIMON,
Plaintiff-Appellant,
v.
ALLSTATE EMPLOYEE GROUP MEDICAL PLAN
and RODNEY T. DANIELS,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 99 C 5212--Harry D. Leinenweber, Judge.
Submitted July 23, 2001--Decided August 14, 2001
Before BAUER, COFFEY, and WILLIAMS, Circuit
Judges.
WILLIAMS, Circuit Judge. Stephen Simon
filed this suit under ERISA, 29 U.S.C.
sec.sec. 1001-1461, and numerous state
and common law theories against the
Allstate Employee Group Medical Plan
(also known as the ALLCARE Plan) and Plan
Administrator Rodney T. Daniels. The
district court dismissed Simon’s suit. We
affirm and find that his suit was barred
on res judicata and collateral estoppel
grounds.
I. BACKGROUND
Simon alleges that in the early 1990s
the Humanistic Mental Health Foundation
provided medical care to a participant in
the ALLCARE Plan identified as "C.R."
According to Simon, C.R. assigned his
benefits claim to Humanistic, which then
reassigned the claim to Simon. Simon does
not reveal his relation to Humanistic or
why Humanistic assigned its claim to him.
Simon’s attempts to collect on the claim
were rebuked by the ALLCARE Plan in July
1994. Simon then sued under ERISA, 29
U.S.C. sec. 1132(a), alleging that the
ALLCARE Plan improperly denied him
benefits. Simon also alleged that Daniels
violated his fiduciary duties under ERISA
by failing to turn over unspecified plan
documents, 29 U.S.C. sec. 1132(c)(3).
The district court dismissed Simon’s
ERISA claims on the grounds of res
judicata and collateral estoppel, noting
that Simon had brought a similar claim
against the ALLCARE Plan in an earlier
lawsuit filed in the Central District of
California. In that case, Simon sued 1600
defendants, including the ALLCARE Plan,
for recovery of ERISA claims assigned to
him by Humanistic and other health care
providers. The district court dismissed
Simon’s suit on the ground that Simon--as
a third party claim assignee who was not
a health care provider--did not have
standing to sue under ERISA, and the
Ninth Circuit affirmed. See Simon v.
Value Behavioral Health, Inc., 955 F.
Supp. 93 (C.D. Cal. 1997), aff’d, 208
F.3d 1073 (9th Cir. 2000). The district
court in the present case noted that
Simon was raising the same issues against
the same defendant and his claims
therefore were barred by res judicata and
collateral estoppel. The district court
allowed Simon to amend his complaint in
order to allege violations of state and
common law such as breach of contract,
promissory estoppel, fraud, conspiracy,
and deceptive trade practices. The
district court then dismissed those
claims as untimely or preempted by ERISA.
On appeal Simon devotes much of his
brief to arguing that the decisions of
the Central District of California and
the Ninth Circuit that he lacked standing
to sue under ERISA were incorrect.
Simon’s argument misses the point. The
doctrine of res judicata bars
relitigation of a claim for relief
decided on the merits in a previous suit
involving the same parties or their
privies. See Bethesda Lutheran Homes &
Serv., Inc. v. Born, 238 F.3d 853, 857
(7th Cir. 2001); Brzostowski v. Laidlaw
Waste Sys., Inc., 49 F.3d 337, 338 (7th
Cir. 1995). Simon does not dispute that
this suit raises the same ERISA claim
against the ALLCARE Plan as his suit
filed in the Central District of
California and therefore offers nothing
to dispel us of the conclusion that res
judicata bars his ERISA claim.
Furthermore, res judicata also bars
Simon’s state and common law claims
because Simon could have raised those
claims in the prior suit against the
ALLCARE Plan. See Brzostowski, 49 F.3d at
338./1
On the other hand, res judicata does not
bar Simon’s claim that Daniels breached
his fiduciary duties under ERISA because
the alleged breach occurred in 1998, well
after Simon filed his previous suit in
the Central District of California. This
breach-of-fiduciary-duties claim,
however, was barred by collateral
estoppel. The collateral estoppel
doctrine bars the relitigation of an
issue of law or fact that was litigated
and decided in a prior case between the
same parties or their privies. See Havoco
of Am., Ltd. v. Freeman, Atkins &
Coleman, Ltd., 58 F.3d 303, 307-08 (7th
Cir. 1995); Kraushaar v. Flanigan, 45
F.3d 1040, 1050 (7th Cir. 1995). In order
to be entitled to relief for Daniels’s
purported breach of his fiduciary duties
under ERISA, Simon must be a participant
or beneficiary of an employee benefit
plan. See 29 U.S.C. sec.sec. 1024(b)(4),
1132(c)(3). The issue of whether Simon is
a participant or beneficiary of the
ALLCARE Plan, however, has already been
decided against Simon in the Central
District of California suit. See Simon,
208 F.3d at 1080-82. Collateral estoppel
precludes Simon from relitigating that
issue here, and therefore Simon cannot
establish that he is entitled to relief
on his breach-of-fiduciary-duties claim.
We decide this case in a published
opinion to alert other federal courts
that Simon is flooding the courts with
ERISA claims virtually identical to the
ones raised here. After the Central
District of California dismissed Simon’s
suit against 1600 employee benefit plans
and employers, Simon filed ten suits in
1999 and three suits in 2000 against
individual employee benefit plans and
their administrators seeking to recover
on ERISA claims. Each suit presented the
same basic allegations as the ones raised
in this case: that a participant in an
employee benefit plan covered under ERISA
assigned a claim for benefits to a health
care provider/2 which, in turn,
assigned the claim to Simon. To date no
court has ruled in favor of Simon and in
fact four circuits have rejected Simon’s
attempts to recover on the ERISA claims
because, as a third party assignee who is
not a health care provider, Simon is not
a participant or beneficiary of the
employee benefit plans. See Simon v.
Cyrus Amax Minerals Health Care Plan, No.
00-1331, 2001 WL 640410 (10th Cir. June
11, 2001) (unpublished); Simon v. Belwith
Int’l, Inc., No. 00-1680, 2001 WL 111651(6th Cir. Jan. 21, 2001) (unpublished);
Simon v. Quaker Oats Employee Benefit
Plan, No. 00-2342, 2000 WL 1657967 (7th
Cir. Oct. 27, 2000) (unpublished); Simon
v. Value Behavioral Health, Inc., 208
F.3d 1073, 1080-82 (9th Cir. 2000).
Despite these rulings, Simon has
continued his litigious ways by filing 18
new ERISA suits since May 18, 2001. In
light of this pattern of repetitious and
meritless litigation, we ORDER Simon to
show cause within 14 days of this opinion
why he should not be sanctioned.
AFFIRMED
FOOTNOTES
/1 We note that the defendants have erroneously
agreed that the district court had diversity
jurisdiction over Simon’s state and common law
claims. See 28 U.S.C. sec. 1332. In his amended
complaint and appellate brief, Simon alleged only
his residence, not his citizenship. An allegation
of residency, however, is insufficient to estab-
lish diversity jurisdiction. See Held v. Held,
137 F.3d 998, 1000 (7th Cir. 1998); Guaranty Nat’l
Title Co. v. J.E.G. Assoc., 101 F.3d 57, 59 (7th
Cir. 1996). Normally we would permit a litigant
to correct this error before dismissing the case
for lack of jurisdiction, see Held, 137 F.3d at
1000; Guaranty Nat’l Title, 101 F.3d at 59, but
we will not insist upon this step here because
Simon’s claims are barred by res judicata and
collateral estoppel.
/2 The health care providers are identified as
Holistic Mental Health Foundation, Sunstar Health
Care, HolistiCare, Suncrest Hospital, or College
Hospital.