Although most cases go unnoticed and unreported by the public media, there are some catastrophic cases which have been brought to light.
Wal-Mart v. Shank: I was involved in the widely publicized litigation in which Wal-Mart successfully sued Deborah Shank, a permanently disabled and incapacitated victim for all of her tort recovery. Although Wal-Mart prevailed in all court proceedings, including the U.S. Supreme Court, the public outcry was so great that Wal-Mart reconsidered and allowed Mrs. Shank to keep her entire recovery and also changed the provision of its plan documents in connection with future victims of catastrophic loss. (download Marilyn Trefz Article on my role in the Shank case) On July 25, 2008, Wal Mart notified Mrs. Shank’s attorney of the changes to be implemented concerning its reimbursement efforts for other victim. (download the Wal Mart letter indicating changes) Video clips about this case — from CNN and Keith Olbermann — are available for viewing at the “Audio/Video” page on this web site.
Motorcyle accident victim loses entire tort recovery. Janet Hofer, while riding as a passenger on a motorcycle, suffered serious injuries, incurring medical bills of over $400,000. She was able to recover $250,000 from a liablity insurer, but was sued for the entire amount by her ERISA insurer. On July 24, 2007, the federal district court in the Western Division of South Dakota ruled in favor of the ERISA plan, awarding it the entire $250,000 settlement. The court’s opinion may be viewed by clicking here. This decision was the subject of a law review article — Delia Druley,SOUTH DAKOTA STATE MEDICAL HOLDING COMPANY, INC. V. HOFER: A DEFERENTIAL STANDARD OF REVIEW PERMITS ERISA ADMINISTRATORS TO CONTRAVENE THEIR FIDUCIARY OBLIGATIONS, 54 S.D. L. Rev. 266 (2009). A portion of Delia’s law review article may be viewed by clicking here.
Passenger in motorcycle accident loses tort recovery. Billy Scott became a seriously disabled adult as a result of injuries sustained in an accident where he was riding as a passenger on a motorcycle. His actual damages exceeded $ 3 million. He was able to recover the limit of the tortfeasor’s liability policy, netting his estate $89,000. His health plan paid $200,000 in medical bills and brought a cliam against the estate for the entire net recovery. The trial court’s ruling in favor of the health plan was affirmed in In Re Estate of Scott, 567 N.E.2d 605 (Ill.App.Ct. 1991), leaving no recovery whatsoever for Billy Scott. The court’s opinion may be viewed by clicking here. This decision was the subject of a law review article — Keith E. Edeus, Jr., SUBROGATION OF PERSONAL INJURY CLAIMS: TOWARD ENDING AN INEQUITABLE PRACTICE, 17 N.ILL.U.L.REV. 509 (1997). This law review article may be viewed by clicking here.
ERISA Plan secures tort recovery intended for “disabled, destitute adult child” without regard to the “make whole” doctrine and without obligation to pay any share of attorney fees. Shawn Paris was seriously injured in a motorcycle accident rendered a “disabled, destitute adult” child of the age of 24 years. He recovered $100,000 in a tort settlement, an amount which was less than the ERISA Plan’s subrogation claim. The Federal District Court for Maryland ruled, in In re Paris, 44 F.Supp.2d 747 (D.Md. 1999) that the ERISA Plan was entitled to summary judgment for the enforcement of its lien. This decision holds that the “make whole” doctrine is not available to protect Shawn Pairs. Furthermore, this court upholds the ERISA Plan is not required to pay any portion of the attorneys’ fees related incurred in securing the settlement. The court’s opinion may be viewed by clicking here.
Smart Money Magazine: I was interviewed and quoted in an article entitled, “Adding Insult to Injury” published in Smart Money Magazine in July, 2000. The scope of this article is broader than just ERISA cases and it presents a discussion of some of the sad cases where reimbursement has been sought against seriously injured victims. (download pdf file for Smart Money Magazine article)
Minnesota Bridge Compensation Fund: This article discusses the ramifications of ERISA preemption in regard to diverting money intended by the Minnesota legislature to compensate the victims of the I-35 bridge collapse. The first part of this article discussed the tragic case of Jim Riddler who suffered a catastrophic injury on a motorcycle only to have his ERISA plan sue him for 90% of his tort recovery. (download word document of Minneapolis Star Tribune Article)
Vioxx Settlement: This article discusses the implications of ERISA reimbursement claims as affecting the “net recovery” which will be available to those who were injured by using Vioxx. (download Wall Street Journal article on Vioxx settlements)