Sereboff v. Mid Atlantic Medical Services, Inc. 547 US 356 (2006), is a case decided by the United States Supreme Court involving the ability of the Employees of Income Security Guaranty Act (ERISA) to plan a fiduciary to recover the medical expenses of the heirs who have been reimbursed for injury by a third party. The Court ruled unanimously that ERISA allowed fiduciary to recover the costs of settlement of beneficiary results received in a personal injury lawsuit.
Video Sereboff v. Mid Atlantic Medical Services, Inc.
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ERISA plans, injuries, and settlement
Marlene Sereboff and her husband Joel are beneficiaries of a health insurance plan run by Mid Atlantic Medical Services, Inc., and are covered by ERISA. The plan contains the provisions of "Acts of Third Parties", which apply if a third party is liable for any illness or injury, and requires the beneficiary to replace the Mid-Atlantic for the benefit of any plan of recovery from such third party. The further provision states that the Mid-Atlantic portion of the recovery will not be reduced because the recipient does not receive the claimed full damage.
Sereboff was injured in a car accident in California, and plans to pay the couple's medical expenses. They file lawsuits in state courts against some third parties, seeking redress for their injuries. Beginning as soon as the lawsuit began, Mid Atlantic sent Sereboff and their lawyers several letters in which it asserted the liens on the anticipated outcome of the lawsuit to pay the final medical expenses amounted to $ 74,869.37. The Sereboffs finally settled their lawsuit for $ 750,000, but did not distribute anything to the Mid Atlantic.
Collections settings
Mid-Atlantic filed a lawsuit in US District Court for the District of Maryland, claiming the right to collect from Sereboff under Ã, § 502 (a) (3) ERISA. Since Sereboffs' lawyers have distributed the proceeds to them, the Mid Atlantic has sought a temporary restraining order and an initial court order requiring the couple to maintain and set aside at least $ 74,869.37 of proceeds. The District Court agrees to the provisions in which Sereboff agrees to keep the claimed amount in the investment account until after the case is decided upon merit and all calls are exhausted.
The District Court ruled for Mid Atlantic and ordered Sereboff to pay $ 74,869.37, plus interest, with a deduction for the Mid Atlantic portion of the attorneys' fees and court costs that Sereboff had incurred in state courts. On appeal, the US Court of Appeals for the Fourth Circuit confirms in the relevant section. although observed that the circuit is divided on the question of whether Ã, § 502 (a) (3) an official restoration in such a situation.
Maps Sereboff v. Mid Atlantic Medical Services, Inc.
Court Opinion
The Court unanimously affirmed the Fourth Circuit in the opinion presented by Chief Justice John G. Roberts.
Under Ã, § 502 (a) (3) ERISA, Fiduciary may bring a civil action "(A) to prohibit any action or practice in violation of any [11] provision of this sub-chapter or the provision of the plan; or (B) to obtain other appropriate equitable assistance (i) to correct such violations or (ii) to enforce any provision of this sub-chapter or the terms of the plan. "The court believes the only question remaining in the case this is whether the Mid Atlantic favor sought from the "fair" District Court under Ã, § 502 (a) (3) (B). The court analyzed this issue taking into account both the Mid Atlantic drug properties sought, and the basis for its claim against Sereboffs.
Proper exemption properties sought
The Court has previously interpreted section 502 (a) (3) (B) of ERISA to only authorize "the repairs normally available in equity." This is described in Great-West Life & amp; Annuity Ins. Co. v. Knudson , 534 U.S. 204 (2002), in which the Court rejected the fictitious claims of ERISA for restitution. Knudson has involved similar facts, and the Court has ruled that the restitution sought is unfair because the fund actually does not belong to the beneficiaries. The responsibility sought is therefore personal and legal. Conversely, fair restitution seeks to impose a constructive trust or equal right to a particular fund or property in the possession of the defendant.
The Court believes that the Mid Atlantic claim is one for fair restitution, since the ownership of Sereboffs from the settlement fund meets the missing requirements at Knudson. The mid-Atlantic does not only seek recovery from Sereboff's assets in general, but rather to recover through constructive trust or fair lien on identified special funds. That this act involves breaches of contractual claims does not mean that the aid is unfair, as it would make ERISA provisions that expressly provide equal assistance to enforce the terms of the plan "an empty promise."
A fair basis for claims
Regarding the grounds of the Mid Atlantic claim, the Court considers Barnes v. Alexander 232 US 117 (1914) became instructive, in which lawyers sued their superiors to recover one-third of the promised contingency fees in cases where they worked. The court has ruled that the lien attached to the fee and follows it into the hands of the supervisor, based on "the familiar equity rule that the contract to deliver a particular object even before it is obtained will make the contractor a guardian immediately when he gets a title for it." The court considered the provision " Acts of Third Parties "in the Seriritoffs' ERISA plan are analogous to the claims of contingency fees, since the provision specifically identifies certain funds and certain portions of the funds entitled to the Mid Atlantic. Under the equity rules set forth in Barnes, Mid Atlantic can "follow a portion of the restoration into the hands of Sereboffs as soon as settlement funds are identified, and impose on that part a constructive or equitable belief."
See also
- Ark. Dep't Human Servs. v. Ahlborn , 547 U.S. 268 (2006), a case decides the same term with regard to the ability of state agents to recover Medicaid expenses from personal injury settlement results
- Professor Roger Baron, an ERISA expert who consulted the Sereboff case and has written extensively about the court's decision at Sereboff.
Note
References
- supremecourt.gov, Full text of Court decision (.pdf)
Source of the article : Wikipedia
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