AC Houston Lumber Co. Employee Health Plan v. Berg
Opinion of the Court
MEMORANDUM
Defendants William Berg and Berg Injury Lawyers appeal the district court’s grant of summary judgment in favor of plaintiff AC Houston Lumber Company Employee Health Plan. AC Houston, an ERISA
Hotel Employees & Rest. Employees Int’l Union Welfare Fund v. Gentner, 50 F.3d 719 (9th Cir. 1995), controls. Gentner held that an ERISA plan’s lien cannot be enforced against an attorney who did not sign the reimbursement agreement or expressly agree to honor the plan’s lien. Id. at 721-22.
The plaintiff here argues that Sereboff v. Mid Atlantic Med. Serv., Inc., 547 U.S. 356, 126 S.Ct. 1869, 164 L.Ed.2d 612 (2006), overrules Gentner. We disagree. Serebojf concerned claims against plan beneficiaries, parties who were bound by the plan terms. Id. at 359-60, 126 S.Ct. 1869. Sereboff did not undermine the logic of Gentner, which dealt with lawyers who are not parties to the plan.
REVERSED.
This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.
. Employee Retirement Income Security Act, 29 U.S.C. §§ 1001-1461.
. Because we reverse on this ground, we do not consider the alternative arguments asserted by the defendants.
Dissenting Opinion
dissenting:
I respectfully dissent. To the extent our decision in Hotel Employees & Restaurant Employees Int’l Union Welfare Fund v. Gentner, 50 F.3d 719 (9th Cir. 1995), prevents an ERISA plan from recovering against an attorney who possesses a portion of the settlement funds with knowledge of the subrogation agreement between his client and the ERISA plan, it has been overruled by Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356, 126 S.Ct. 1869, 164 L.Ed.2d 612 (2006).
Any difference between this case and Serebojf is illusory, because as the Sereboff Court explained, the claim for equitable restitution attached “ ‘as soon as the settlement fund was identified.’ ” See 547 U.S. at 364, 126 S.Ct. 1869 (citation omitted). At that point, in the present case, the funds were in Freed’s “constructive possession,” and the Berg law firm was acting as Freed’s agent when it disbursed the funds to itself as attorneys’ fees. See Bombardier Aerospace Emp. Welfare Benefits Plan v. Ferrer, Poirot & Wansbrough, 354 F.3d 348, 356 (5th Cir. 2003). No further tracing or maintenance of a fund is necessary for equity to allow repayment.
As two of our sister circuits recently concluded, once an ERISA § 502(a)(3) claim attaches, there is no practical difference if the money is then disbursed to the
Here, because the funds to which AC Houston was “entitled” under the subrogation agreement were “specifically identifiable” and in the Berg law firm’s “possession and control,” the district court properly imposed an equitable lien over them pursuant to § 502(a)(3). See Sereboff, 547 U.S. at 362-64, 126 S.Ct. 1869. The fact that the law firm never signed the subrogation agreement is irrelevant, because the firm knew of the agreement when it decided to represent Freed and before it disbursed a portion of the funds to itself as attorneys’ fees. Accordingly, I would affirm.
Reference
- Full Case Name
- AC HOUSTON LUMBER COMPANY EMPLOYEE HEALTH PLAN, Plaintiff-Appellee, v. William L. BERG; Berg Injury Lawyers, Defendants-Appellants
- Status
- Unpublished