00-3545 Johnson, et al. v. Ziegler

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“We reject Johnson’s strained reading of the language at issue. By asserting its priority claim to proceeds recovered by a plan beneficiary, and by expressly disclaiming application of the ‘Made-Whole Doctrine’ and the ‘Rimes Doctrine,’ we fail to see how the plan drafter could have more clearly communicated the plan’s ‘first-dollar’ subrogation rights….

“Johnson also contends that DEC’s claim for reimbursement of medical benefits it paid must fail because the settlement received from Ziegler’s insurer covered both his and his mother’s claims. Johnson points out that his mother was not a DEC plan participant, and thus, the plan’s subrogation provisions would not apply to her. According to Johnson, the plan therefore ‘has no authority to compel [him or his mother] to return any portion of the settlement proceeds to DEC.’ We agree with DEC, however, that the plan’s provision that it has ‘a right of reimbursement from the proceeds of any settlement, judgment or other payment obtained by the Covered Individual’ is sufficient to reach Johnson’s interest in any joint or aggregate settlement.”

Further, we hold that DEC was entitled to recover its entire amount of benefits paid without sharing in plaintiff’s attorneys’ fees or costs where the plan expressly precludes reductions for attorneys’ fees from the plan’s recovery of benefits.

“We conclude that permitting this express provision to override the ‘common fund’ doctrine comports with our treatment of provisions which expressly override the ‘made whole’ doctrine.”

Judgment affirmed.

Recommended for publication in the official reports.

Dist IV, Dane County, O’Brien, J., Deininger, J.

Attorneys:

For Appellant: Robert J. Kay, Madison; Robert A. Mich Jr., Madison

For Respondent: Andrew J. Clarkowski, Madison