In Sereboff v. Mid Atlantic Medical Serv's LLC, the Unites States Supreme Court held that the health insurance plan was seeking an allowed equitable remedy (as opposed to a disallowed legal remedy) when it sought to enforce an agreed-upon lien.
The Court, while acknowledging that Mid Atlantic's sought-after relief must be equitable under section 502(a)(3) of ERISA to be enforceable (per Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002)), relied upon it's holding in Barnes v. Alexander, 232 U.S. 117, 121 (1914), and held that a "lien" that was agreed upon by the parties (and where the res was in the possession of the insured plaintiff, i.e., the res was identifiable per Knudson) was enforceable in equity. (The parties in Sereboff agreed that the amount in dispute (app. $75,000) would be set aside in a separate account until this matter could be resolved.) Thus, Mid America's claim, in this instance, was enforceable against the Sereboffs under ERISA because it was equitable in nature according to the Court's holding in Barnes (i.e., the "lien" was reached by an agreement of the relevant parties); and it was identifiable (per Knudson).
The opinion is available at:
http://www.supremecourtus.gov/opinions/05pdf/05-260.pdf
(You may need to copy this link and Google it to pull up the opinion.)
This opinion is a hard pill to swallow if you represent plaintiffs. It does, however, appear that the Made-Whole Doctrine is still viable (to the extent it was before), if the plan's claim is not based upon an agreed-upon "lien" between the plan and the insured plaintiff. (See page 11 of the opinion.)
The Court, while acknowledging that Mid Atlantic's sought-after relief must be equitable under section 502(a)(3) of ERISA to be enforceable (per Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002)), relied upon it's holding in Barnes v. Alexander, 232 U.S. 117, 121 (1914), and held that a "lien" that was agreed upon by the parties (and where the res was in the possession of the insured plaintiff, i.e., the res was identifiable per Knudson) was enforceable in equity. (The parties in Sereboff agreed that the amount in dispute (app. $75,000) would be set aside in a separate account until this matter could be resolved.) Thus, Mid America's claim, in this instance, was enforceable against the Sereboffs under ERISA because it was equitable in nature according to the Court's holding in Barnes (i.e., the "lien" was reached by an agreement of the relevant parties); and it was identifiable (per Knudson).
The opinion is available at:
http://www.supremecourtus.gov/opinions/05pdf/05-260.pdf
(You may need to copy this link and Google it to pull up the opinion.)
This opinion is a hard pill to swallow if you represent plaintiffs. It does, however, appear that the Made-Whole Doctrine is still viable (to the extent it was before), if the plan's claim is not based upon an agreed-upon "lien" between the plan and the insured plaintiff. (See page 11 of the opinion.)
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