A Georgia lawyer won a $500,000 settlement for his client, whose health plan had already provided $180,000 in medical treatment. The insurance policy had a subrogation clause but the health plan was not reimbursed out of the settlement proceeds. The plan sued and eventually won in the federal district court. The lawyer appealed to the 7th circuit, and a panel released its opinion this week. Judge Richard Posner rejected the lawyers claim that the plan was owed nothing because the settlement had been intended solely to compensate Lewis for the driver’s “post‐accident tortious conduct” against her:
That’s nonsense; the settlement agreement states that it “encompass[es] all claims and demands whatsoever that were or could have been asserted ... [for] damages, loss, or injury ... which may be traced either directly or indirectly to the occurrences set forth in the aforesaid civil action [the personal injury suit arising from the accident] ... no matter how remotely they may be related to the aforesaid occurrences.” Even the check that [the lawyer] wrote to [his client] for her share of the proceeds says it’s “for settlement of all 10/08/08 claims”—and October 8, 2008 was the date of the accident.
The lawyer did not help himself on appeal:
The defendants’ appeal brief is a gaunt, pathetic document (there is no reply brief). Minus formal matter, it is only eight and a half pages long. Brevity is the soul of wit, and all that, but still: the first seven and a half pages are simply a recitation of the history of the Georgia lawsuit, the settlement negotiations, and the present suit, along with questionable and irrelevant facts; and the tiny argument section of the brief—118 words, including cita‐ tions—states merely, without detail or elaboration, that the defendants do not possess the settlement funds and therefore can’t restore them. ...
We are issuing an order to the defendants to show cause why they should not be sanctioned under Rule 38 for filing a frivolous appeal. Their response is due within 30 days from the date of this decision. ...
The defendants’ conduct has been outrageous. After resolving the merits of the underlying suit, the district court should give serious consideration to transmitting copies of this opinion and the record to the Department of Justice and to the General Counsel of the Georgia Bar. In the meantime, we direct the district court to determine whether the defendants should be jailed (a standard remedy for civil contempt, see, e.g., Turner v. Rogers, 131 S. Ct. 2507, 2512–13 (2011); In re Grand Jury Proceedings, 280 F.3d 1103, 1107–08 (7th Cir. 2002)), until they comply with the order to deposit the settlement proceeds in a trust account.