Supreme Court Watch: Montanile v. Board of Trustees

In the coming months, the United States Supreme Court will hear oral argument on a critical subrogation issue under the Employee Retirement and Income Security Act of 1974 (“ERISA”). The case is Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, Case No. 14-723, and is set for argument before the Court on November 9. Proponents on both sides argue that a ruling for either party will have serious implications for insurance plan participants.

In granting certiorari, the Supreme Court noted “[e]ight of the thirteen circuits have squarely and openly disagreed over the question presented[,]” which has resulted in “a widely acknowledged 6-2 circuit split.”  The issue to be decided is whether the Petitioner, Robert Montanile, must reimburse his insurance company for medical expenses it paid before he received a settlement from the drunk driver who injured him. 

Mr. Montanile suffered severe injuries to his neck and back following a car accident with a drunk driver who ran a stop sign. His insurer, The National Elevator Industry Health Benefit Plan (the “Plan”), paid $121,044.02 for his initial medical expenses. Mr. Montanile filed a lawsuit against the drunk driver and ultimately obtained a $500,000 settlement, which was reduced by his payment of attorney’s fees and other expenses. Following the settlement, the Plan asserted its right to be reimbursed out of the settlement proceeds for the medical expenses it had paid on Mr. Montanile’s behalf.

Mr. Montanile and the Plan were unable to negotiate a resolution, and the Plan filed an ERISA lawsuit against Mr. Montanile to enforce the Plan’s reimbursement provision. The trial court granted summary judgment in favor of the insurer and the 11th Circuit affirmed on appeal. In doing so, the 11th Circuit followed five other circuit courts, ruling that the Plan could impose an equitable lien on Mr. Montanile’s settlement even if the funds had already been disbursed.

A minority of other courts, including the Eighth and Ninth Circuits, have reached the opposite conclusion, ruling that insurers are not entitled to reimbursement of funds from participants who had used the money to pay medical bills and other living expenses.

Interestingly, in a separate but similar case, the U.S. Solicitor General previously filed an amicus brief endorsing the minority position on this issue. By agreeing to hear Montanile, the Supreme Court will dive head first into these choppy waters in its October 2015 session.

If you would like assistance in addressing your insurance questions, or in reviewing your current insurance coverages, feel free to contact Alex J. Brown, Esq. a partner at Shapiro Sher Guinot & Sandler, P.A. and Chairman of the firm’s Insurance Practice Group, at 410-385-4220, or by email at