It's Greek to Me, Inc. d/b/a GTM Sportswear v. Fisher
5:17-cv-04084
D. Kan.Dec 15, 2017Background
- Plaintiffs: It’s Greek to Me, Inc. dba GTM Sportswear and Hanesbrands, Inc. (plan administrator) paid $146,726.61 in medical benefits under an employee health plan for injuries Jeffrey S. Fisher sustained in a 10/5/2014 auto accident.
- Fisher recovered settlement proceeds in a personal-injury action handled by Bretz & Young, LLC (the Firm). The plan administrator asserts an equitable lien/constructive trust on those proceeds to recoup the plan’s subrogation interest.
- Plaintiffs moved for an ex parte temporary restraining order (TRO) requiring deposit or hold of $146,726.61 in settlement funds in the Firm’s IOLTA or with the court; the motion lacked a certificate of service and did not follow ex parte filing procedures.
- The movants failed to satisfy Rule 65(b)(1) prerequisites for an ex parte TRO: no verified showing of immediate irreparable harm nor written certification of efforts to give notice and reasons notice should be excused.
- The court found plaintiffs’ papers did not demonstrate that notice would render further prosecution fruitless or that exceptional circumstances justified an ex parte TRO, but recognized substantial allegations and Montanile-related concerns about identifying a specific fund.
- Ruling: TRO without notice denied without prejudice; court converted the submission into a preliminary-injunction schedule, ordering plaintiffs to re-serve and defendants to respond, and set a hearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an ex parte TRO is warranted to preserve settlement funds | Plaintiffs contend immediate relief is needed to prevent dissipation of settlement proceeds and to secure recovery of plan payments | Defendants (implicitly) were entitled to notice and an opportunity to be heard; no showing that notice would make pursuit futile | Denied: plaintiffs failed to meet Rule 65(b) standards for ex parte TRO; no adequate showing of immediate, irreparable harm or justification for withholding notice |
| Whether plaintiffs followed Rule 65(b) procedural requirements for ex parte relief | Plaintiffs filed a TRO motion seeking no-notice relief but did not provide required certifications or verified factual showing | Defendants not given adequate notice; movants also failed to file ex parte electronic filing as required | Denied without prejudice for failure to strictly comply with Rule 65(b) |
| Whether a specific fund in defendants’ possession has been identified (Montanile issue) | Plaintiffs assert settlement proceeds exist in defendants’ possession or constructive possession and seek constructive trust/equitable lien | Defendants contest that plaintiffs have not shown a readily traceable, specific fund subject to equitable lien under Montanile | Court noted Montanile concern and ordered a preliminary-injunction process to address tracing and possession issues |
| Relief pending final adjudication (deposit/hold of funds) | Plaintiffs request deposit of $146,726.61 with court or hold in Firm's IOLTA pending resolution | Defendants argue they must be given notice and opportunity to oppose; factual disputes over possession and traceability remain | Court converted TRO request to preliminary-injunction motion and set briefing and a hearing rather than grant immediate seizure |
Key Cases Cited
- Granny Goose Foods, Inc. v. Teamsters, 415 U.S. 423 (1974) (ex parte TROs are extraordinary and limited to preserving the status quo until a hearing)
- Reno Air Racing Ass'n, Inc. v. McCord, 452 F.3d 1126 (9th Cir. 2006) (notice should be excused only when it would render prosecution futile)
- Commercial Security Bank v. Walker Bank & Trust Co., 456 F.2d 1352 (10th Cir. 1972) (strict compliance with Rule 65 is required)
- Montanile v. Board of Trustees of Nat. Elevator Ind. Health Benefit Plan, 136 S. Ct. 651 (2016) (equitable lien/enforcement requires identification of a specific fund in defendant’s possession)