By Jennifer Carsen, JD, Legal Editor
In a new decision termed “bizarre” by dissenting Justice Ruth Bader Ginsburg, the U.S. Supreme Court has denied an ERISA plan’s bid for reimbursement on a seemingly archaic definition of what constitutes “equitable” relief.
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In 2008, Robert Montanile was severely injured by a drunk driver who ran a stop sign.
At the time of the accident, Montanile was a participant in an ERISA-governed health plan administered by the National Elevator Industry Board of Trustees. The plan terms provided for reimbursement when a participant recovered money from a third party for medical expenses.
Montanile’s medical bills were extensive, and the plan paid $121,044.02 for his initial medical care. Montanile then made a claim for uninsured motorist benefits under his car insurance and also sued the drunk driver for negligence.
Eventually, he obtained a $500,000 settlement. After paying his, Montanile was left with about $240,000. Most of this money was held in a client trust account.
The Board of Trustees then sought reimbursement from Montanile on behalf of the plan, but Montanile’s attorney argued that the plan was not entitled to any recovery.