Archive for the ‘11th’ Category

Diamond Crystal Brands, Inc. v. Wallace, 531 F.Supp.2d 1366 (N.D. Ga.2008)

After the negligent medical care and consequential death of Deborah Hayes, the Estate and her daughter Tamara Hayes pursued a wrongful death claim against the hospital.  In Georgia State Court plaintiffs settled for $900,000, of which $837,000 went to Tamara Hayes and $63,000 to the Estate of Deborah Hayes.

Prior to Deborah Hayes’s death, her employer, Diamond Crystal provided $261,863.58 in medical benefits related to the medical malpractice.  After the settlement, Diamond Crystal sought reimbursement of claims paid. Read more

With the U.S. Supreme Court decision in Sereboff v. Mid Atlantic Medical Services, Inc., it became clear that ERISA plans can enforce their subrogation and/or reimbursement provisions by asserting a claim for a constructive trust or equitable lien against clearly identifiable tort settlement or judgment proceeds. In most instances, those proceeds end up either in the plan participant’s attorney’s escrow or trust accounts or are held by a court if the third party’s casualty insurer deposits the funds there. Read more

An employee health and welfare plan appealed a Northern District of Georgia decision in favor of defendants: a minor, a conservator of the minor, and a bank, in its action seeking to enforce reimbursement provisions of its ERISA Plan.  The insured settled a personal injury suit and received funds from a liable third party.  The Plan, which had previously paid the minor insured’s medical expenses, included provisions in the Plan Document identifying funds paid by the Plan as separate from the insured’s assets, and asserting a trust and equitable lien over settlement proceeds. 

The Eleventh Circuit Court of Appeals found that the Plan properly sought under ERISA § 502(a)(3) equitable restitution of a specifically identifiable fund in possession of defendants, since it asserted title and right to possession of the particular property, identified as being in the hands of the conservator. The money held in trust by the conservator had been identified as belonging in good conscience to the fiduciary by virtue of the plan’s terms, and the money could be clearly traced to a particular fund in defendants’ possession. The fact that the conservator held the funds as a third party did not defeat the fiduciary’s claim because the settlement funds were intact and constituted an identifiable res that could be restored to its rightful recipient. SEE ENTIRE CASE