Steve Bruzonsky - Arizona\'s get well, get on with life attorney Peer Review Rated Steve Bruzonsky - Arizona\'s get well, get on with life attorney

Steven J. Bruzonsky

Attorney At Law

Law Office of
Steven J. Bruzonsky
917 E. San Angelo Ave.
Gilbert, AZ 85234

Call 480-969-3003


Please note that Attorney Bruzonsky has been doing this regular “Liens Corner” column since April 2006. His last “Liens Corner” article was for the November/December 2017 issue of The Advocate, having stepped down from this regular column, as he now works part-time (and is part-time retired) exclusively handling large subrogation/lien claims in very large personal injury and medical malpractice cases for other attorneys. However, attorney Bruzonsky may add notes to this website under the subject lien article headers from time to time. (Please keep in mind that this site contains general information for educational purposes only. It is not intended to provide legal advise, which can only come from a qualified attorney who is familiair with all the facts and circumstances of your specific case and relevant law.) 



2012-07/08: ERISA Liens The Ninth Circuit in CGI v. Rose Applies Equity

June 25th, 2016 11:53:59 am

This article has been published in “The Advocate”, a bimonthly publication of the Arizona Association for Justice/Arizona Trial Lawyers Association, July/August 2012 issue, @2012 by Steven J. Bruzonsky, Esq.



ERISA Liens – The Ninth Circuit in CGI v. Rose Applies Equity to ERISA Liens



CGI Technologies and Solutions, Inc. v. Rhonda Rose; Nelson Langer Engle PLLC, Case

11-35127 (9th Cir., 6-20-2012) is a landmark case in our fight for justice with ERISA lien claimants.


Rhonda Rose was severely injured in a car accident in 2003 with a drunk driver. The parties stipulated that her personal injury claim was worth at least $1,757,943. 08. She recovered a combined total of $376,906.84 from liability and underinsured motorist coverage. The parties stipulated that this recovery represents only 21.44% of her total damages. Rose’s employer, CGI, paid about $32,000 in accident-related medical expenses for her during 2007-2010. CGI’s ERISA plan required full reimbursement to CGI regardless of whether Rose was made whole and disclaimed the application of the common fund doctrine to require CGI to contribute to attorney’s fees incurred in recovering funds from a third party tortfeasor. After her recovery of her personal injury damages, the CGI ERISA plan asserted a first priority of payment (as set forth in the Plan) and demanded full reimbursement of the medical benefits paid by the Plan. Rose, through counsel, declined to reimburse the plan, with her counsel, NLE, placing the full disputed amount in Trust. 


The district court granted partial summary judgment in favor of CGI, concluding that under

ERISA § 502(a)(3), per the express terms of the Plan, CGI was entitled to recover the full amount it had paid in medical expenses on Rose’s behalf; and despite the Plan’s language to the contrary, the district court also ruled that a proportional amount of the costs and attorney’s fees incurred by NLE would deducted from CGI’s recovery from Rose. Also, the district court granted partial summary judgment in favor of NLE, concluding that the Plan’s reimbursement provisions could not be enforced against NLE.


The Ninth Circuit vacated the district court’s partial summary judgment in favor of CGI and which required that CGI deduct attorney’s fees and costs from the reimbursement amount, as the Ninth Circuit states that as the district court fashioned  “appropriate equitable relief) for CGI, there was no indication that the district court did more than interpret the plain terms of the reimbursement provision, and no indication that the district court considered traditional equitable principles in assigning responsibility to CGI for attorney’s fees and costs.

The Ninth Circuit remanded to the district court


     “for such proceedings as are appropriate for the district court to determine what is   

     ‘appropriate equitable relief’ in context here. In doing so the district court should

     apply traditional equitable principles including consideration of traditional equitable

     defenses. The amount to which CGI is entitled to recover under § 502(a)(3) and the

     proportional amount of attorney’s fees and costs for which CGI is responsible under

     § 502(a)(3) must be consistent with principles of equity and not merely contract.”  


The Ninth Circuit stated that the ERISA plan may not by contract deprive the district court of its power to act as a court in equity under ERISA § 502(a)(3); that contract terms should be considered by the court in assessing what is the proper scope of equitable relief; that notwithstanding the express terms of the plan disclaiming the application of the make-whole doctrine and the common fund doctrine, it is within the district court’s broad equitable powers under § 502(a)(3) not to give those provisions controlling weight in fashioning “appropriate equitable relief”. The Ninth Circuit expressed no opinion on what result the district court, in exercising these powers, should reach; stating that the district court isn’t restricted from holding further hearings and taking further evidence relevant to how the phrase “appropriate equitable relief” should be interpreted in § 502(a)(3) and applied to the claim of CGI against Rose.


The Ninth Circuit noted that they do not read the U.S. Supreme Court’s precedents to have clarified if in giving “appropriate equitable relief” a court must take into account all or some traditional equitable defenses and considerations, and that this question of ERISA interpretation had not been decided previously by the Ninth Circuit. The Ninth Circuit cites Cigna Corp. v. Amara, 131 S. Ct. 1866, 1880 (2011) as affirming that § “502(a)(3) invokes the equitable powers of the District Court,” including the power to reform plan terms).


The Ninth Circuit discussed Barnes v. Independent Auto Dealers’ Assoc., 64 F.3d 1389 (9th Cir., 1995). In Barnes, the Ninth Circuit stated that it would not apply the interpretive make-whole rule as a gap-filler if the Plan’s subrogation clause specifically allowed the Plan the right of first reimbursement out of any personal injury recover even if Barnes was not made whole. But in Barnes, the relief sought was purely legal in nature, as Barnes challenged the Plan’s denial of benefits, and the parties could contract out of the application of the make-whole doctrine. The district court is not bound by restrictive contract terms I its formulation of equitable relief.


Also, theNinth Circuit affirmed the district court’s grant of summary judgment in favor of NLE, dismissing NLE from the action.The Ninth Circuit held that CGI cannot maintain an action against Rose’s attorneys, NLE, under ERISA § 502(a)(3), where NLE placed the entire amount of the disputed funds in Trust pending resolution of the reimbursement (subrogation) claim by the court. However, the Court strongly suggests, citing Harris Trust and Savings Bank v. Salomon Smith Barney, 530 U.S. 238 (2000), that if the injured party’s attorney doesn’t place the entire amount of disputed funds in Trust, whether the attorney disburses funds to the client or to the attorney for attorney’s fees, then the ERISA plan would be able to maintain an action under ERISA § 502(a)(3) against the injured party’s attorneys.

Return to Articles

© Copyright 2006, Steven J. Bruzonsky, Attorney
Terms of Use: This site contains general information for educational purposes only. It is not intended to provide legal advise, which can only come from a qualified attorney who is familiar with all the facts and circumstances of your specific case and relevant law. If you use this site, or send information or e-mail the attorney, such action does not create an attorney-client relationship. For legal advise please personally consult with an experienced attorney like Steven J. Bruzonsky.