In March of 2005, Poyner was injured when an automobile struck her while she was riding her bicycle and received nearly $ 200,000.00 in medical benefits. Subsequently she recovered $ 10,000.00 from the insurer of the automobile which struck her and $100,000.00 from her own under insured motorist coverage. The Plan attempted to persuade Poyner to abide by the terms of the benefit plan, which required her to pay the Plan the $110,000.00 she collected from the two insurance policies. Poyner asserted that ERISA prohibits anything other than an equitable remedy in such a situation and the Trust’s claim was one for money, not an equitable remedy.

Poyner relied almost exclusively on the Supreme Court’s decision in Great-West Life & Annuity Ins. Co. v. Knudson, as support for her position. If the Supreme Court had not revisited the subject last year, the court would likely have agreed with Poyner’s contention that Great-West controlled. However, the landscape was altered by Sereboff when the Supreme Court held that Great-West did not apply to situations where third-party proceeds were segregated and specifically identifiable.

The Court said that where there was an equitable lien by agreement, there was no necessity that the funds even be specifically traced. According to the Court, the effort to recover such an agreed to preexisting lien is equitable in nature. Therefore, Poyner’s reliance on Great-West was misplaced and the Trust’s assertion that Sereboff controls was allowed.

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This entry was posted by Adam V. Russo on Wednesday, April 4th, 2007 at 4:42 pm and is filed under ERISA, Litigation, Provider Reimbursement, Standings. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.