Opinion ID: 2755185
Heading Depth: 2
Heading Rank: 1

Heading: The Plan Documents

Text: The parties filed three relevant documents relating to the Plan. The first document, the Restated Agreement and Declaration of Trust (the “Trust Agreement”), establishes the Plan for the benefit of members of the International Union of Elevator Constructors (the “Union”).1 The Trust Agreement also 1 The record neither specifies Montanile’s employer, nor expressly states that Montanile was a member of the Union. Nonetheless, the parties agree that Montanile was covered by the Plan at all relevant times. 2 Case: 14-11678 Date Filed: 11/25/2014 Page: 3 of 18 provides for the management of the Plan, governs Plan contributions, and creates general rules for claim management. The Trust Agreement, however, does not provide the details regarding the health coverage and the benefits provided by the Plan and does not specify the procedures by which participants may seek benefits. Rather, the Trust Agreement gives the Board “full discretionary authority to adopt a Plan of Welfare Benefits, which sets forth eligibility requirements, type, amount, and duration of benefits that are to be provided to eligible employees . . . .” The Trust Agreement also provides that the “detailed basis on which payment of benefits is to be made pursuant to this Trust Agreement shall be set forth in the Plan of Welfare Benefits.” “Such Plan of Welfare Benefits shall be subject to amendment by the Trustees from time to time as they may, in their discretion, determine . . . .” The Trust Agreement thus expressly contemplates that the participants’ health coverage and benefits shall be set forth in a separate plan document from the Trust Agreement. The second document, the National Elevator Bargaining Association Agreement with International Union of Elevator Constructors (the “Bargaining Agreement”), was effective from July 9, 2007, through July 8, 2012. The Bargaining Agreement specified that there would be a “Health Benefit Plan” and that any changes to the Plan would be part of the bargaining agreement, as follows: 3 Case: 14-11678 Date Filed: 11/25/2014 Page: 4 of 18 The Health Benefit Plan covering life insurance, sickness and accident benefits, and hospitalization insurance, or any changes thereto that are in accordance with the National Elevator Industry Health Benefit Plan and Declaration of Trust, shall be a part of this Agreement and adopted by all parties signatory thereto. The Bargaining Agreement also provided that “the decision(s) to increase or decrease the benefits provided by the Health Benefit Plan are matters committed to the discretion of the Trustees . . . .” The Bargaining Agreement did not specify any rights or obligations regarding the benefits that would be set forth in the Plan. The third document, the 2005 version of the National Elevator Industry Health Benefit Plan Summary Plan Description (the “NEI Summary Plan Description”), was effective through, at least, May 2011. The 2005 version of the NEI Summary Plan Description was “written to reflect the changes in the Health Benefit Plan since the last version was printed.” The document “provide[d] the required information about [Plan beneficiaries’] rights and protection under the law in order to comply with the Employee Retirement Income Security Act of 1974.” The NEI Summary Plan Description was 87 pages long and contained, inter alia, detailed information regarding eligibility for health benefits, the extent of specific types of benefits, and claim-filing procedures. The NEI Summary Plan Description also included provisions regarding the benefits provided by the Plan when the losses were caused by a third party and the Plan’s rights to recovery and reimbursement. The NEI Summary Plan Description set forth the Plan’s rights to 4 Case: 14-11678 Date Filed: 11/25/2014 Page: 5 of 18 subrogation and first-recovery reimbursement out of any amounts recovered by the Plan participants from another party as follows: The Plan’s Right of Recovery The Plan has the right to recover benefits advanced by the Plan to a covered person for expenses or losses caused by another party. . . . Amounts that have been recovered by a covered person from another party are assets of the Plan by virtue of the Plan’s subrogation interest and are not distributable to any person or entity without the Plan’s written release of its subrogation interest. . . . The Plan’s right of recovery also applies if benefits are advanced by the Plan to an individual on behalf of an injured covered person or to the covered person’s assignee. The Plan’s Right of Reimbursement The Plan has a right to first reimbursement out of any recovery. Acceptance of benefits from the Plan for an injury or illness by a covered person, without any further action by the Plan and/or the covered person, constitutes an agreement that any amounts recovered from another party by award, judgment, settlement or otherwise, and regardless of how the proceeds are characterized, will promptly be applied first to reimburse the Plan in full for benefits advanced by the Plan due to the injury or illness and without reduction for attorneys’ fees, costs, expenses or damages claimed by the covered person, and regardless of whether the covered person is made whole or recovers only part of his/her damages. (Emphasis added). While the NEI Summary Plan Description had this reimbursement provision, the Trust Agreement and the Bargaining Agreement did not have a similar provision. 5 Case: 14-11678 Date Filed: 11/25/2014 Page: 6 of 18 B. Montanile’s Injury and the Reimbursement Dispute On December 1, 2008, Montanile was injured in a car accident involving a drunk driver. Montanile suffered injuries to his neck and lower back, requiring lumbar spinal fusion surgery and other medical treatment to reduce his pain and loss of function. The Plan paid Montanile’s initial medical expenses of $121,044.02. Montanile retained counsel and initiated a civil lawsuit against the driver of the other car for negligence. Montanile eventually obtained a $500,000 settlement from the other driver. Out of the settlement funds, Montanile paid his attorneys a $200,000 contingency fee and $63,788.48 to reimburse out-of-pocket expenses. After defendant Montanile accepted the settlement, the plaintiff Board, as fiduciary for the Plan, asserted that the Plan had the right to be reimbursed out of the settlement proceeds for the medical expenses paid on Montanile’s behalf. The Board and Montanile, through counsel, attempted to negotiate a resolution from June 2011 through January 2012. After settlement discussions reached an impasse, the Board filed a single-count ERISA lawsuit to enforce the Plan’s reimbursement provision. C. District Court Proceedings In its complaint, the plaintiff Board alleged that “the National Elevator Industry Health Benefit Plan Summary Plan Description” met ERISA’s 6 Case: 14-11678 Date Filed: 11/25/2014 Page: 7 of 18 requirement of a written plan and summary plan description. The Board claimed that, pursuant to the NEI Summary Plan Description, Montanile was required to fully reimburse the Plan from the settlement payment he received. The plaintiff Board further alleged that “all or part of the settlement proceeds are within the actual or constructive possession of” Montanile and claimed that the Plan was “entitled to equitable restitution in the form of a constructive trust or equitable lien with respect to the disputed funds held in Defendant [Montanile’s] actual or constructive possession.” The Board therefore requested that defendant Montanile “be ordered to turn over to the Plan any settlement funds in his actual or constructive possession (up to the amount of the benefits advanced by the Plan on his behalf) in order to enforce the written terms of the Plan of Welfare Benefits and ERISA.” In his answer, defendant Montanile admitted that the Plan “described in paragraph 11 of the Complaint” is one of the governing documents for the ERISA group health benefits Plan at issue in this case.” However, Montanile later reversed course and moved for summary judgment, arguing, inter alia, that the Bargaining Agreement and the Trust Agreement were the only “governing plan documents.” Montanile contended that any subrogation or reimbursement rights the Plan asserted must accordingly be found in one of those two documents. 7 Case: 14-11678 Date Filed: 11/25/2014 Page: 8 of 18 The Board opposed Montanile’s summary-judgment motion. The Board contended that the NEI Summary Plan Description was a governing Plan document that could establish subrogation and reimbursement rights because the Bargaining Agreement and the Trust Agreement “reference a separate plan document that sets forth eligibility requirements, type, amount, and duration of benefits that are to be provided to covered persons.” According to the Board, the NEI Summary Plan Description was that document; no other document met the qualifications of a written plan of welfare benefits, and no other document defined a covered person’s right to benefits under the Plan. The Board also filed its own cross-motion for summary judgment. Montanile opposed the Board’s cross-motion for summary judgment, arguing that the reimbursement sought by the Board was not “appropriate equitable relief” under 29 U.S.C. § 1132(a)(3)(B) because the funds on which the Board wished to assert an equitable lien had been dissipated through payments Montanile had made since receiving the settlement. The district court found that the NEI Summary Plan Description was an enforceable, governing plan document required by ERISA. Specifically, the district court stated that “[t]here can be no doubt that the NEI Summary Plan Description functioned as both the governing Plan document and the summary plan description mandated by ERISA.” The district court also then found that 8 Case: 14-11678 Date Filed: 11/25/2014 Page: 9 of 18 reimbursement was appropriate equitable relief under § 1132(a)(3)(B) because “[t]he settlement proceeds represent an identifiable fund to which the Plan’s lien attached and such proceeds belong ‘in good conscience’ to the Plan to the extent of the medical expenses it paid on Defendant’s behalf.” Accordingly, the district court denied Montanile’s motion for summary judgment and granted summary judgment in favor of the Board in the amount of $121,044.02, which was what the Board had paid as Montanile’s medical expenses. Montanile timely appealed.