ERISA Plan Wins Subrogation Case
Anderson v. Dergance, 2009 U.S. Dist. LEXIS 51593 (N.D. Ill. June 18, 2009)
This ERISA plan reimbursement case applies the Sereboff holding to find in favor of an ERISA plan’s claims to specifically identifiable funds held in an attorney’s trust account following a personal injury settlement.
Dergance was injured at a Dollar General store and subsequently settled a personal injury claim for $ 30,000. The medical bills were paid by the Painters’ District Council No. 30 Health and Welfare Plan, administered by Plaintiff Painters’ District Council No. 30 Health and Welfare Fund. Dergance’s attorney held $ 14,365.13 in benefits paid to Dergance.
The Court stated that based on the Sereboff decision the claim for reimbursement is properly brought as a claim for equitable relief in accordance with both ERISA and the terms of the Plan. The Court stated that an ERISA fund was entitled to recover on an equitable relief claim because it sought to recover specifically identifiable funds under ERISA ยง502(a)(3).
However, the plan’s procedures regarding acknowledgment of a repayment obligation created an argument over the plan’s rights. Dergance had never signed the subrogation agreement document as he was required to do under the plan terms for benefits to be paid.
The attorney for Dergance argued that a subrogation agreement to repay had to have been executed in order for the Fund to seek reimbursement. No such document was ever created or signed by Dergance. The Court didn’t buy it as the fact that the patient accepted benefits under the Plan and then objected to the reimbursement provisions seemed off to the Court.
The Court focused on the clear language of the Plan stating that the benefits are conditioned upon the execution of the agreement. The section does not indicate that reimbursement is conditioned upon the execution of the agreement.
