Sereboff v. Mid Atlantic Med. Servs

In Sereboff v. Mid Atlantic Med. Servs., 547 U.S. 356 (2006), the Supreme Court held that an ERISA plan may sue to enforce a right of reimbursement set forth in its plan pursuant to 29 U.S.C. 1132(a)(3)(B). The Sereboffs were injured in a car accident, received insurance benefits for medical expenses incurred, and later settled against third parties involved in the accident. Pursuant to 29 U.S.C. 1132(a)(3)(B), the insurer, Mid Atlantic, sought to enforce a plan provision which required "a beneficiary who receives benefits under the plan ... to reimburse Mid Atlantic for those benefits from all recoveries from a third party." (Id. at 359.) The Supreme Court found that the reimbursement provision in the Sereboffs' insurance plan gave rise to an equitable lien "by agreement", that is, a lien arising out of an agreement to convey ownership of specific property to one party as soon as the other party gets title to the property (Id. at 363-65). The court went on to hold that plan language specifying a right to reimbursement from "all recoveries from a third party (whether by lawsuit, settlement, or otherwise)" was sufficient to create an equitable lien by agreement that was actionable under 29 U.S.C. 1132 (a)(3)(B) (see Id. at 369).