The United States Court of Appeals for the 6th Circuit has issued an important opinion in an ERISA case. In Longaberger Co. v. Kolt, No. 08-4432 Nov. 16, 2009. the court held an ERISA plan could enforce its reimbursement rights against an attorney who obtained a personal injury settlement on behalf of an insured.
The attorney negotiated a $135,000 settlement on behalf of a client who was involved in an automobile accident. Only $1,000 remained in his lawyer’s trust account after disbursing $86,000 to the client, and then taking $45,000 as an attorney fee and paying other lawyers involved in the case.
The client was an insured of the plaintiff, an employee welfare benefit plan. The plaintiff sued the attorney under ERISA, seeking reimbursement for $114,000 in medical bills paid on behalf of the client.
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