On March 2, 2011, the court heard argument on defendants Sierra Railroad Company's and Vanna M. Walker's motion to amend the answer to assert the defense of illegality or to construe the final pretrial order as effecting such an amendment. Thomas A. Cregger, Randolph, Cregger & Chalfant, LLP appeared for defendants; Ross E. Lampe, Muro & Lampe, Inc. appeared personally, and Daniel J. Zollner, Dykema Gossett PLLC, appeared telephonically for plaintiffs Medical Benefits Administrators and Custom Rail Employer Welfare Trust Fund.
Plaintiffs Medical Benefits Administrators (MBA) and Custom Rail Employer Welfare Trust Fund (CREW) filed their complaint on October 30, 2006. ECF No. 1. In their first amended complaint, filed May 24, 2007, plaintiffs seek equitable relief under 29 U.S.C. § 1132(a)(3) to recover CREW's payments for medical benefits made to or on behalf of Walker in reliance upon defendants' misstatements and misrepresentations. ECF No. 45. Defendants Sierra Railroad Company and Vanna Walker answered the amended complaint on November 16, 2007 and April 4, 2008 respectively. ECF Nos. 69, 77. The defendants asserted nine affirmative defenses, including the defense of unclean hands. ECF No. 69 at 10-11; ECF No. 77 at 11-12. Each "reserve[d] the right to assert additional affirmative defenses if Defendant becomes aware of the existence of such defenses arising during the course of discovery." ECF No. 69 at 11; ECF No. 77 at 12. The pretrial scheduling order set the close of discovery for October 31, 2008; the deadline was extended, on stipulation of the parties, until April 30, 2009. ECF Nos. 71, 88, 97.
Although plaintiffs filed a motion for summary judgment on July 21, 2009, defendants did not file a cross-motion for summary judgment. ECF Nos. 120, 127. The court denied summary judgment on September 2, 2009. ECF No. 131. After the court denied a motion for reconsideration of its ruling, it directed the parties to file their joint pretrial statement by May 14, 2010. ECF Nos. 138, 140. Under the heading "Disputed Evidentiary Issues" the parties noted:
Plaintiffs anticipate that Defendants will attempt to offer testimony of a California Department of Insurance witness(es). Plaintiff further anticipates that Defendants will offer testimony regarding whether CREW was "fully funded" or acting illegally in the State of California. Plaintiffs will oppose any such proffered evidence.
Joint Pretrial Statement, ECF No. 143 at 27. Under the heading "Special Factual Information in Certain Actions," the parties observed that, "Defendants contend that plaintiff is estopped from seeking any relief as the CREW contract was illegal under California law." Id. at 28. The following was included under the heading "Points of Law":
Defendants further believe that the following points of law will be at issue and likely in dispute:
1. Whether CREW was fully insured under 29 US.C. § 1002 et seq. and had been issued a certificate to that effect by the Secretary of Labor, such that it could legally do business in California under section 742.1, et seq., of the California Insurance Code.
2. The res judicata effect of the decision of the Fifth Circuit in Custom Rail Employer Welfare Trust Fund v. Geeslin, 419 F.3d 233 (5th Cir. 2007), holding that CREW was not "fully insured" under the ERISA statutes.
Id. at 29. After hearing, the court directed the parties to file an amended joint pretrial statement; it contains the same information about defendants' intent to raise the issue of CREW's status under California law. ECF No. 153 at 26, 27-28.
The Final Pretrial Conference Order contains the following information:
E. Disputed Evidentiary Issues/Motions In Limine
A. Plaintiff Anticipates The Following ...