This article has been published in “The Advocate”, a monthly publication of the Arizona Association for Justice/Arizona Trial Lawyers Association, May – June 2014 issue, @2014 by Steven J. Bruzonsky, Esq.
May/June 2014 Lien Updates
ERISA Liens – How Not To Deal with ERISA Liens:
Cent. States, SE & SW Areas Health & Welfare Fund v. Lewis, No. 13-2214 (7th Circ. 3-12-2014). In this case, Lewis’ Georgia personal injury attorney obtained a $500,000 auto tort settlement, and the attorney knew the ERISA plan had a subrogation lien, but split the settlement proceeds between himself and Lewis, claiming the plan was owed nothing. The plan filed suit under ERISA to enforce the lien, 29 U.S.C. 1132(a)(3).The district judge ordered the defendants to place $180,000, the full amount of the ERISA l ien, in the attorney’s trust account pending judgment. The defendants did not comply, and a year later, the judge held them in civil contempt, ordered them to produce records that would establish their financial situations, and the matter was referred to the State Bar for consideration of disciplinary proceedings against the attorney. The Seventh Circuit dismissed the appeal of the contempt order, characterizing the appeal as frivolous and the defendants’ conduct as outrageous.