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Court’s ‘Inevitable Conclusion’: Recipient Of Medical Payments Must Reimburse ERISA Fund

Blogs, Erisa

After Rafeeq Bilal was injured, the Local 705 International Brotherhood of Teamsters Health and Welfare Fund made medical payments on his behalf. Bilal did not reimburse the Fund, and the Fund filed a complaint under ERISA, alleging that Bilal violated the benefit plan’s reimbursement and subrogation agreement. The Fund moved for summary judgment, seeking the imposition of a constructive trust on the funds Bilal received in settlement of his workers’ compensation claim. In Local 705 Intern. Broth. of Teamsters Health & Welfare Fund v. Bilal, No. 08 C 5027, 2010 WL 1996497 (N.D. Ill. May 18, 2010), the court granted the fund’s request for imposition of a constructive trust.

The court noted that Bilal “does not dispute (1) that the reimbursement and subrogation agreement requires him to reimburse the . . . Fund, from any third-party settlement he receives, for any benefits paid as a result of his . . . accident; or (2) that his . . . workers’-compensation settlement arises from that very injury.” Addressing the only argument that the court identified as made in opposition to the Fund’s summary judgment motion, the court said that “Bilal attempts to fend off the inevitable conclusion that he must reimburse the . . . Fund with the observation that neither the . . . accident nor the reimbursement and subrogation agreement have anything to do with the settlement of his unrelated [employment discrimination] case.” The court said that that was ” true but irrelevant” since the fact that he received an unrelated settlement “obviously does not exempt his workers’compensation settlement from a valid subrogation agreement.” The court, therefore, granted the Fund’s motion for summary judgment and imposed a constructive trust on Bilal’s workers’-compensation settlement in the amount of the benefits it paid to him or on his behalf as a result of the accident.