Identifiable Fund May Have Been Dissipated, So Equitable Relief Under ERISA May Be Unavailable
As has been noted here (with this post) and elsewhere, the United States Supreme Court has not only required that ERISA reimbursement claims be equitable, but that in order to meet that equitable requirement the reimbursement must be against a specifically identifiable fund.
Some courts have looked at whether a fund was once identifiable and if the monies from it are traceable. Others have applied the standards from the Supreme Court (as set forth in Sereboff v. Mid-Atlantic Medical Services, 547 U.S. 356 (2006), and Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204) (2002)) somewhat differently.
In Epolito v. Prudential Ins. Co. v. America, No. 3:09-cv-334-J-34MCR (M.D. Fla. Sept. 2, 2010), the court said that Prudential was entitled, under its plan, to recover an overpayment, but that Prudential would have to submit evidence “that those overpaid benefits still remain in Epolito’s possession such that the Court could impose an equitable lien on those particular funds.” Thus, the court granted Prudential summary judgment on its restitution counterclaim in part and denied it in part – while also pointing out that Prudential may have at least one other avenue for recovery.
Notably, the Epolito court pointed out that while some courts had said that it was unnecessary to be able to trace monies to a specific fund, Sereboff – when read in conjunction with Knudson and other precedents – does not eliminate “the requirement that the insurer identify an intact, identifiable res, in the possession of the insured, on which it seeks to impose the equitable lien.”
Some have said it is hard to square the various decisions concerning equitable relief under ERISA with each other. This latest decision offers additional analysis, as well as support for the idea that opinions on these issues warrant careful review before being relied upon.