Board of Trustees of the National Elevator Industry Health Benefit Plan v. Robert Montanile
593 F. App'x 903
11th Cir.2014Background
- The Board administers the National Elevator Industry Health Benefit Plan (an ERISA plan); the Plan paid $121,044.02 for medical care after Montanile’s 2008 auto injury.
- Montanile settled with the third-party tortfeasor for $500,000, paid $200,000 in attorney’s fees and $63,788.48 in expenses, and retained the remainder.
- The Plan’s 2005 Summary Plan Description (SPD) contained a subrogation/first-recovery reimbursement clause requiring participants to reimburse the Plan from third-party recoveries without reduction for fees.
- The Trust Agreement and Bargaining Agreement did not contain similar reimbursement language; the Trust Agreement contemplated that a separate Plan of Welfare Benefits would set payment rules.
- The Board sued under ERISA seeking equitable relief (constructive trust/equitable lien) to recover the medical payments; the district court found the SPD to be an enforceable governing plan document and granted summary judgment for the Board for $121,044.02.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the SPD is an enforceable governing plan document under ERISA | SPD is the Plan of Welfare Benefits referenced in the Trust Agreement and thus is an enforceable written plan document | SPD cannot serve as the governing plan document; only the Trust Agreement governs plan terms | Court held SPD is an enforceable written instrument setting plan terms because no other document specifies payment rules and the Trust Agreement contemplated a separate benefits document |
| Whether the Plan’s subrogation/first-recovery clause creates a first-priority equitable lien on Montanile’s settlement | Plan’s unambiguous SPD language gives Plan a first-priority claim to third-party recoveries, so equitable lien attaches | Montanile argued settlement funds were dissipated so equitable relief is inappropriate | Court (following AirTran) held an equitable lien attached when funds were identifiable, and dissipation does not defeat a previously attached lien |
| Whether equitable relief under 29 U.S.C. § 1132(a)(3)(B) can be used to enforce SPD terms | Board may seek equitable restitution/enforcement under § 1132(a)(3) if SPD constitutes plan terms | Montanile relied on CIGNA v. Amara to argue SPDs cannot be enforced as plan terms | Court distinguished Amara (which barred imposing plan terms via SPD when conflicting documents exist) and allowed equitable enforcement because no other governing document defined payment rules |
| Whether Montanile’s dissipation of settlement proceeds defeats the Plan’s recovery | Board relied on law holding lien attaches to specifically identifiable funds even if later dissipated | Montanile argued dissipation prevents equitable lien or restitution | Court held dissipation does not defeat lien where lien attached before dissipation (AirTran controlling) |
Key Cases Cited
- AirTran Airways, Inc. v. Elem, 767 F.3d 1192 (11th Cir.) (plan with first-priority claim gives equitable lien that attaches to identifiable settlement funds even if later dissipated)
- CIGNA Corp. v. Amara, 563 U.S. 421 (2011) (court may not rewrite plan terms by enforcing SPD as plan terms where governing plan documents exist; SPD not necessarily the plan)
- Alday v. Container Corp. of Am., 906 F.2d 660 (11th Cir. 1990) (an SPD can, in some circumstances, function as the governing plan document)
- Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73 (1995) (congressional intent that plan documents allow employees to determine rights and obligations under the plan)