Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not *

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 08-50860

Summary Calendar

AT&T, INC., as Fiduciary of the SBC Medical and Group Life Insurance PlanCustomcare

Plaintiff-Appellee

v.

JAKE FLORES; MIDANI, HINKLE & COLE

Defendants-Appellants

Appeal from the United States District Court

for the Western District of Texas

USDC No. 5:07-CV-343

Before DAVIS, GARZA, and PRADO, Circuit Judges.

PER CURIAM:*

Defendant-Appellants Jake Flores and his attorneys Midani, Hinkle &

Cole (“Appellants”) appeal the district court’s grant of summary judgment to

Plaintiff-Appellee AT&T, Inc. (“AT&T”), as fiduciary of the SBC Medical and

United States Court of Appeals

Fifth Circuit

F I L E D

April 22, 2009

Charles R. Fulbruge III

Clerk
No. 08-50860

The Summary Plan Description provides:

1

SUBROGATION/RIGHT OF REIMBURSEMENT (THE PLAN’S RIGHT TO RECOVER

PAYMENT FROM A THIRD PARTY IF YOU ARE INJURED OR DISABLED):

If you are injured or disabled as a result of negligent or wrongful act or omission of a third party,

the Plan will pay benefits, but reserves the right to recover those payments from the person who

injured you or his or her insurance company. . . The plan shall have a lien on any amounts

recovered from any other source to the extent permitted by applicable law. The amount of

money to be subrogated shall not be reduced by any legal fees or costs.

2

Group Life Insurance Plan (“the Plan”). We AFFIRM the district court’s grant

of summary judgment, and DENY the Plan’s motion to strike new evidence

offered by Flores on appeal. 

Flores, a participant in the Plan, was injured in an automobile accident

and received $315,512.62 worth of medical coverage from the Plan. Flores later

settled with a third-party for $850,000 for claims arising out of the accident. The

money is held in the trust account of his attorneys, Midani, Hinkle and Cole.

Pursuant to a provision of the Plan that required reimbursement for medical

benefits paid, AT&T sought reimbursement from Flores from funds from the 1

settlement. Flores refused and AT&T filed suit in district court, pursuant to 29

U.S.C. § 1132(a)(3), which authorizes civil suits to obtain “appropriate equitable

relief” to enforce an ERISA plan’s terms. AT&T sought specific relief in the

form of: (1) the imposition of a constructive trust and equitable lien; (2) a

declaration that the Plan was the true owner of the settlement funds up to the

amount it paid; and (3) an order directing Flores and his attorneys to turn over

the disputed funds. 

AT&T filed for summary judgment, and no response was filed by

Appellants. The district court granted summary judgment to AT&T. Appellants

filed for a Motion for a New Trial, in which they raised new arguments; the

district court treated the motion as a Motion for Reconsideration and denied it.

This Court reviews the grant of summary judgment in an ERISA case de

novo, applying the same standards used by the district court. Wade v.
No. 08-50860

§1132(a)(3) holds that a civil action may be brought: “[B]y a participant, beneficiary, or

2

fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms

of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to

enforce any provisions of this subchapter or the terms of the plan.”

3

Hewlett-Packard Development Co. LP Short Term Disability Plan, 493 F.3d 533,

537 (5th Cir. 2007). Summary judgment is proper when pleadings, depositions,

discovery answers, and affidavits reveal no genuine issue of material fact and

show the movant is entitled to judgment as a matter of law. Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 247–48 (1986). 

 The issues addressed by the district court were whether AT&T’s request

for (1) a constructive trust and (2) an equitable lien are justified in law; and (3)

whether AT&T’s basis for its claim is equitable. 

1. Constructive trust

In Bombardier Aerospace Employee Welfare Benefits Plan v. Ferrer, Poirot

and Wansbrough, 354 F.3d 348 (5th Cir. 2003), an ERISA plan brought suit

against a plan participant and law firm to obtain a constructive trust over

settlement funds, for the purposes of reimbursement of medical benefits. In that

case, we established that a constructive trust was “appropriate equitable relief”

properly sought under 29 U.S.C. § 1132(a)(3). The Bombardier court set out a 2

three-part test to determine whether a claim qualified as relief pursuant to §

1132(a)(3), asking: does the Plan seek to recover funds (1) that are specifically

identifiable, (2) that belong in good conscience to the Plan, and (3) that are

within the possession and control of the defendant beneficiary? Id. at 356. Here,

as in Bombardier, the funds are specifically identifiable, due to the settlement;

belong in good conscience to the Plan (due to the unambiguous subrogation

provision); and are within the possession and control of the defendant

beneficiary, as they are being held in trust by Flores’s attorneys. Thus, the
No. 08-50860

4

constructive trust remedy was an appropriate one for the district court to grant

to Allstate.

2. Equitable lien

The Supreme Court considered the use of equitable liens for the purpose

of the recovery of benefits paid out by an ERISA plan in Sereboff v. Mid-Atlantic

Medical Services, 547 U.S. 356 (2006). Under circumstances very similar to the

instant case, the Supreme Court held that an equitable lien placed on

“specifically identifiable” funds that were “in the possession of [the plaintiffs]”

was an “appropriate equitable remedy” under § 1132(a)(3). Sereboff, 547 U.S. at

362. As previously discussed, the funds in this case are specifically identifiable

and in possession of the Plaintiff-Appellants; the district court thus did not err

in granting an equitable lien to the Plan. 

3. Equity of enforcement and the “made-whole” doctrine

Though constructive trusts and equitable liens are appropriate remedies

§ 1132(a)(3), AT&T must still establish that the basis for its claim is equitable.

Sereboff, 547 U.S. at 363. Flores argues that it would be inequitable to enforce

the contract in this case, which is “harsh, unconscionable, [and] unfair.” Flores

additionally invokes the “made whole” doctrine, which holds that

subrogation/reimbursement provisions in insurance contracts should not be

enforced until the insured is first made whole, i.e. recovered all compensatory

damages to which he is entitled. 

The subrogation provision of the plan at issue clearly provides that the

Plan is entitled to reimbursement out of payments made by an injuring party,

and similar provisions have been enforced by the this Court. In Sunbeam-Oster

Company, Inc. v. Whitehurst, 102 F.3d 1368, 1376 (5th Cir. 1996), which was

relied on by the district court, we rejected the “made whole” doctrine where it
No. 08-50860

5

was not expressly included in the language of the plan, and held that a clear and

unambiguous subrogation/reimbursement provision entitled the Plan to the full

amount of medical benefits paid on the insured’s behalf. We follow SunbeamOster and find that the subrogation/reimbursement provision in this case is

equitable and not subject to the “made whole” doctrine.

4. Motion to strike new evidence

AT&T argues that Flores introduces evidence into the record on appeal

that was not presented before the district court, and urges that the Court strike

the proffered evidence. Much of what AT&T argues constitutes “new evidence”

are actually just arguments (including conclusory assertions) made by Flores in

his brief; Flores does not offer any actual evidence into the record on appeal.

Thus, we DENY the motion to strike new evidence.

For the foregoing reasons, we DENY the motion to strike new evidence,

and AFFIRM the district court’s grant of summary judgment.