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IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF INDIANA

CONNECTICUT GENERAL LIFE INSURANCE 

COMPANY, CIGNA HEALTH AND LIFE 

INSURANCE COMPANY

PLAINTIFFS,

V.

NORTHWEST REGIONAL SURGERY CENTER, LLC, 

ADVANCED REGIONAL SURGERY CENTER LLC, 

CARMEL SPECIALTY SURGERY CENTER LLC, 

COLUMBUS SPECIALTY SURGERY CENTER LLC, 

INDIANA SPECIALTY SURGERY CENTER LLC, 

METRO SPECIALTY SURGERY CENTER LLC, 

MIDWEST SPECIALTY SURGERY CENTER LLC, 

MUNSTER SPECIALTY SURGERY CENTER LLC, 

RIVERVIEW SURGERY CENTER LLC, SOUTH 

BEND SPECIALTY SURGERY CENTER LLC, 

SYCAMORE SPRINGS SURGERY CENTER LLC, 

SURGICAL CENTER DEVELOPMENT, INC. D/B/A 

SURGCENTER DEVELOPMENT, SURGICAL 

CENTER DEVELOPMENT #3 LLC

DEFENDANTS.

Civil Action No.: 2:15-cv-253-JD-PRC

CIGNA’S SUR-REPLY TO DEFENDANTS’

REPLY BRIEF IN SUPPORT OF MOTION TO DISMISS

Count VIII of Cigna’s Complaint seeks relief under ERISA § 502(a)(3) for (among other 

things) recovery of Cigna’s overpayments to Defendants, which Cigna alleges are subject to an 

equitable lien. (Dkt. 37 ¶¶ 171-82.) Relying on Montanile v. Bd. of Trustees of the Nat’l Elev. 

Indus. Health Benefit Plan, No. 14-723 (U.S. Jan. 20, 2016) (attached as Ex. 1) and Sereboff v. 

Mid Atl. Med. Servs., Inc., 547 U.S. 356 (2006), Defendants argue that Cigna’s plans do not 

create an equitable lien because Cigna’s plan terms do not “mention ‘equitable liens,’ 

‘constructive trusts,’ or ‘reimbursement.’” (Reply at 6-7.) But the plan in Sereboff did not 

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expressly reference liens either.1 Yet as Montanile recognized, “the basis for the plan’s claim [in 

Sereboff] was equitable because the plan sought to enforce an equitable lien by agreement[.]” 

(Ex. 1 at 6 (emphasis added).) In Montanile, the relevant plan terms likewise did not expressly 

reference liens or trusts,2 but the Court still held that “[t]he Board had an equitable lien by 

agreement that attached to Montanile’s settlement fund when he obtained title to that fund.” (Id.

at 7; see also id. (the Board could have enforced its lien “had it immediately sued to enforce the 

lien against the settlement fund then in Montanile’s possession.”).) So too does Cigna have an 

equitable lien for its overpayments to Defendants.

Defendants also argue that Cigna’s equitable lien claim fails because under Montanile, 

“plaintiff could not attach the defendant’s general assets.” (Reply at 8.) But Cigna does not seek 

to recover from Defendants’ general assets. Rather, Cigna has alleged that the “overpayments 

are within the possession and control of the ASCs, and are specifically identifiable.” (FAC 

¶ 179.) Moreover, this issue should not be resolved at the Rule 12(b)(6) stage in any event. In 

Montanile, the district court had not “determine[d] whether Montanile kept his settlement fund 

separate from his general assets or dissipated the entire fund on nontraceable assets” (Ex. 1 

at 14), so the Supreme Court remanded for the court to make those findings. Here, this Court 

cannot determine on the pleadings whether all eleven Defendant-ASCs have already fully 

dissipated all of Cigna’s overpayments on nontraceable assets. This question is not ripe and 

should be decided on a full factual record instead.

 1 See 547 U.S. at 359 (the relevant plan provision in Sereboff “applies when [a beneficiary is] sick or injured as a 

result of the act or omission of another person or party, and requires a beneficiary who ‘receives benefits’ under the 

plan for such injuries to ‘reimburse [Mid Atlantic]’ for those benefits from ‘[a]ll recoveries from a third party 

(whether by lawsuit, settlement, or otherwise).”) (alterations in original).

2 Montanile, Ex. 1 at 2 (“The plan states: ‘Amounts that have been recovered by a [participant] from another party 

are assets of the Plan . . . and are not distributable to any person or entity without the Plan’s written release of its 

subrogation interest.’ The plan also provides that ‘any amounts’ that a participant ‘recover[s] from another party by 

award, judgment, settlement or otherwise . . . will promptly be applied first to reimburse the Plan in full for benefits 

advanced by the Plan . . . and without reduction for attorneys’ fees, costs, expenses or damages claimed by the 

covered person.’”) (alterations and ellipses in original).

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DATED this 9th day of February, 2016 Respectfully submitted,

HINSHAW & CULBERTSON LLP

/s/ Daniel K. Ryan

Daniel K. Ryan

Joshua B. Simon

Warren Haskel

Dmitriy Tishyevich

 (All admitted pro hac vice)

KIRKLAND & ELLIS LLP

601 Lexington Avenue

New York, NY 10016

jsimon@kirkland.com

whaskel@kirkland.com

dmitriy.tishyevich@kirkland.com

Tel: 212-446-4800

Fax 212-446-4900

Counsel for Plaintiffs

Daniel K. Ryan

HINSHAW & CULBERTSON LLP

222 North LaSalle Street, Suite 300

Chicago, IL 60601-1081

Telephone: 312-704-3000

Facsimile: 312-704-3001

dryan@hinshawlaw.com

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CERTIFICATE OF SERVICE

I hereby certify that on this 9th day of February, 2016, I electronically filed the foregoing 

document with the Clerk of Court using the CM/ECF system, which shall send notification of 

such filing to all counsel of record.

/s/ Daniel K. Ryan

Daniel K. Ryan

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