Board of Trustees of the National Elevator Industry Health Benefit Plan v. Robert Montanile

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 14-11678
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D.C. Docket No. 9:12-cv-80746-DLB
BOARD OF TRUSTEES OF THE NATIONAL ELEVATOR
INDUSTRY HEALTH BENEFIT PLAN,
Plaintiff-Appellee,
versus
ROBERT MONTANILE,
Defendant-Appellant.
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Appeal from the United States District Court
for the Southern District of Florida
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(March 4, 2016)
ON REMAND FROM THE
SUPREME COURT OF THE UNITED STATES
Before HULL, MARCUS and DUBINA, Circuit Judges.
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PER CURIAM:
In Board of Trustees of the National Elevator Industry Health Benefit Plan v.
Montanile (Montanile II), 593 F. App’x 903 (11th Cir. 2014), this Court affirmed
the district court’s grant of summary judgment in favor of the Board of Trustees of
the National Elevator Industry Health Benefit Plan (the “Board”) in its lawsuit
against Robert Montanile, in which the Board sought reimbursement for medical
expenses it had paid on Montanile’s behalf. The Supreme Court reversed our
judgment and remanded for further proceedings. Montanile v. Bd. of Trs. of the
Nat’l Elevator Indus. Health Benefit Plan (Montanile III), 577 U.S. ___, 136 S. Ct.
651 (2016). We now vacate our judgment that affirmed the district court’s grant of
summary judgment, and we remand with instructions.
The Board is the named fiduciary and administrator of the National Elevator
Industry Health Benefit Plan (the “Plan”), an employee welfare benefit plan as
defined by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29
U.S.C. § 1001 et seq. At all relevant times, Montanile was a covered employee
under the Plan. The Board sued defendant Montanile in the United States District
Court for the Southern District of Florida, seeking reimbursement in the amount of
$121,044.02 for medical expenses the Board paid on Montanile’s behalf after he
was injured in a car accident by a negligent third party. Bd. of Trustees of the
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Nat’l Elevator Indus. Health Benefit Plan v. Montanile (Montanile I), No. 9:12-cv-
80746-DLB, 2014 WL 8514011, *1, *3 (S.D. Fla., Apr. 18, 2014).
After the Plan covered Montanile’s medical expenses, Montanile sued the
negligent driver and obtained a $500,000 settlement. Id. at *3. Pursuant to the
Plan’s terms, the Board asserted a right to be reimbursed out of the settlement
proceeds for the medical expenses the Plan paid on Montanile’s behalf, who is a
member of the Plan. Id. at *2-3. The Board brought a suit under ERISA to
enforce the Plan’s reimbursement provision. Id. at *1.
In its complaint, the Board sought “equitable restitution in the form of a
constructive trust or equitable lien with respect to the disputed funds held in . . .
[Montanile’s] actual or constructive possession.” Montanile II, 593 F. App’x at
906 (quoting complaint) (alterations in original). The Board requested that
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.” Id.
The parties cross-moved for summary judgment. Montanile I, 2014 WL
8514011, *1. The district court granted the Board’s motion for summary judgment
and denied Montanile’s motion. Id. at *12.
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On appeal, this Court affirmed. Montanile II, 593 F. App’x at 904.
Montanile argued that “the district court erred in finding that the Board could
impose an equitable lien on the settlement funds because the funds had been spent
or dissipated.” Id. at 908. But we noted both parties’ agreement that Montanile’s
argument was foreclosed by our then-binding precedent established in AirTran
Airways, Inc. v. Elem, 767 F.3d 1192 (11th Cir. 2014), vacated, ___ U.S. ___, ___
S. Ct. ___, 2016 WL 280755 (2016). Montanile II, 593 F. App’x at 908. We
explained that the AirTran Court held that “an equitable lien immediately attached
to settlement funds where a plan provision’s unambiguous terms gave the plan a
first-priority claim to all payments made by a third party.” Id. (citing AirTran, 767
F.3d at 1198). In AirTran, the “settlement funds were ‘specifically identifiable,’
and a plan participant’s dissipation of the funds thus ‘could not destroy the lien that
attached before’ the dissipation.” Id. (citing AirTran, 767 F.3d at 1198). We
found that AirTran’s holding bound our decision, and we held that “the Board
[could] impose an equitable lien on Montanile’s settlement, even if dissipated, if
his health benefit Plan gave the Plan a first-priority claim to the settlement
payments Montanile received,” which we found it did. Id.
Montanile appealed to the U.S. Supreme Court, which reversed our
judgment and remanded the case for further proceedings consistent with its
opinion. Montanile III, 577 U.S. ___, 136 S. Ct. at 662. The Supreme Court
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considered “what happens when a participant [in an employee benefits plan under
ERISA] obtains a settlement fund from a third party, but spends the whole
settlement on nontraceable items” for purposes of a plan fiduciary’s suit to recover
the cost of medical expenses. Id. 577 U.S. at ___, 136 S. Ct. at 655. The Court
evaluated “whether a plan fiduciary can sue under [ERISA § 502(a)(3), 29 U.S.C.
§ 1132(a)(3)] to recover from the participant’s remaining assets the medical
expenses it paid on the participant’s behalf.” Id. It held that “when a participant
dissipates the whole settlement on nontraceable items, the fiduciary cannot bring a
suit to attach the participant’s general assets under § 502(a)(3) because the suit is
not one for ‘appropriate equitable relief.’” Id. The Court added: “In this case, it is
unclear whether the participant dissipated all of his settlement in this manner, so
we remand for further proceedings.” Id.
The Supreme Court ended its opinion with these instructions:
Because the lower courts erroneously held that the plan could
recover out of Montanile’s general assets, they did not determine
whether Montanile kept his settlement fund separate from his general
assets or dissipated the entire fund on nontraceable assets. At oral
argument, Montanile’s counsel acknowledged “a genuine issue of . . .
material fact on how much dissipation there was” and a lack of record
evidence as to whether Montanile mixed the settlement fund with his
general assets. A remand is necessary so that the District Court can
make that determination.
Id., 577 U.S. at ___, 136 S. Ct. at 662.
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Accordingly, we vacate our prior judgment and remand this case to the
district court for further proceedings consistent with the Supreme Court’s
instructions.
JUDGMENT VACATED AND CASE REMANDED TO THE
DISTRICT COURT.
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