Central States, Southeast and Southwest Areas Health and Welfare Fund v. Lewis

Dist. Ct. did not err in holding defendants in civil contempt for failing to place $180,000 in settlement proceeds in defendant-lawyer’s client account pending final judgment in ERISA action filed by plaintiff-health plan seeking recovery of said proceeds for payment of medical bills that plaintiff had made on behalf of another defendant for injuries that formed basis of $500,000 settlement that said defendant had received in underlying personal injury action. Plaintiff’s claim to disputed proceeds was in essence subrogation lien, and defendants could not claim that plaintiff was not entitled to said proceeds, even though defendants contended that $500,000 settlement was payment solely for “post-accident tortious conduct,” where settlement agreement indicated that settlement covered all claims that could have been asserted in underlying action. Moreover, defendant could not avoid contempt order by merely stating that neither had disputed settlement funds, and record otherwise showed that neither defendant had provided current information on all of their assets/client accounts.