Case: 13-11738 Date Filed: 09/23/2014 Page: 1 of 39
[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
Nos. 13-11738 & 13-14912 ________________________
D.C. Docket No. 1:10-cv-03673-ODE
AIRTRAN AIRWAYS, INC.,
Plaintiff-Appellee,
versus
BRENDA ELEM, MARK D. LINK, and LINK & SMITH, P.C.,
Defendants-Appellants. ________________________
Appeals from the United States District Court for the Northern District of Georgia ________________________
(September 23, 2014)
Before WILLIAM PRYOR and MARTIN, Circuit Judges, and HONEYWELL, ∗ District Judge.
PRYOR, Circuit Judge:
This appeal requires us to decide whether an employee welfare benefit plan
∗ Honorable Charlene Edwards Honeywell, United States District Judge for the Middle District of Florida, sitting by designation. Case: 13-11738 Date Filed: 09/23/2014 Page: 2 of 39
may recover medical costs it spent on behalf of a beneficiary after she and her
attorney conspired to hide and disburse settlement funds she received after a car
accident. Brenda Elem participated, as an employee of AirTran, in a self-funded
employee welfare benefit plan. After Elem suffered injuries in a car accident and
the plan paid over $100,000 for her medical care, Elem sued the other driver and
settled for $500,000. AirTran sought reimbursement from Elem, but Elem’s
attorney, Mark Link, misrepresented that Elem had settled for only $25,000. Link’s
sin then found him out, see Numbers 32:23, when he accidentally sent the plan a
copy of a settlement check for $475,000. After AirTran sued Elem, Link, and Link
& Smith, P.C., for violations of the Employee Retirement Income Security Act of
1974, 29 U.S.C. § 1132(a)(3), the district court granted summary judgment and
awarded attorney’s fees and costs in favor of AirTran.
Elem, Link, and the law firm challenge three orders. They contest the
summary judgment on the ground that AirTran failed to satisfy the strict tracing
rules of equitable restitution, but these rules do not apply to the equitable lien by
agreement that the AirTran plan created. See Sereboff v. Mid Atlantic Med. Serv.,
Inc., 547 U.S. 356, 364–65, 126 S. Ct. 1869, 1875 (2006). Elem and Link argue
that the district court abused its discretion when it awarded AirTran attorney’s fees
and costs, but the district court had the authority to sanction them for their bad
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faith. Elem and Link also complain that the district court misapplied Federal Rule
of Civil Procedure 70 when the court ordered enforcement of the judgment, but
that issue became moot when Link and his law firm complied with the order. We
affirm the summary judgment and award of fees and costs and dismiss as moot the
appeal of the order to enforce the judgment.
I. BACKGROUND
In 2007, Brenda Elem sustained injuries in a car accident. Her employer,
AirTran, paid $131,704.28 for her medical care as a result of her participation in its
self-funded employee welfare benefit plan. The plan designated Elem as a
constructive trustee over any payments recovered from third parties and created an
equitable lien for the amount of benefits paid by the plan. Under the plan, when
Elem accepted her medical benefits from AirTran, she acknowledged that AirTran
had a first priority claim to all payments made by a third party, even if that third
party failed to pay the full amount of her damages. Months after the accident, the
plan administrator advised Elem that, if she sued the driver of the other vehicle,
Migel Rizo, the terms of the plan required Elem to reimburse AirTran with
proceeds from that suit. And the plan administrator also advised Rizo’s insurer,
AIG, of that right to reimbursement.
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In September 2007, when Elem contacted AIG to settle the claim against
Rizo within his liability policy limits of $25,000, she misrepresented that the plan
would have no lien against any funds she would recover from AIG. [Id.] She also
stated that she intended to sue Rizo for the full amount of her damages if AIG
refused to pay the $25,000. AIG responded that Rizo’s policy limit was $25,000
and that it would be willing to issue a settlement check for that amount to Elem if
her plan “waive[d] their subrogation lien” or to Elem and the plan if the plan did
not waive the lien.
Elem hired Mark Link of Link & Smith, P.C., as her attorney and sued Rizo
for the injuries she sustained in the accident. AIG advised Link that it had offered
$25,000 to Elem, but that AIG had notice of a lien and a duty to protect its insured.
In December 2007, the plan administrator for AirTran notified Link of the lien in
favor of AirTran.
Rizo and Elem later settled their lawsuit for $500,000. During the
negotiation of their settlement agreement, Link asked AIG to prepare two releases:
one reflecting payment of the policy limit of $25,000 and another for $475,000 in
settlement of Rizo’s claim of bad faith. Link also requested two separate checks
and demanded that the $25,000 release not mention Rizo’s release of his claim of
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bad faith. AIG responded that “it seems deceptive” to omit Rizo’s release of his
claim, but Link got his way.
Elem executed a release in favor of AIG for $25,000 and another release for
$475,000 signed also by Rizo. AIG issued two separate settlement checks to Elem,
Link, and Link & Smith, one for $25,000 and another for $475,000. Elem later
received $274,184.08; Link & Smith retained $190,000.00 for attorney’s fees and
$10,815.92 for expenses; and Link & Smith kept the remaining funds of $4,500.00
in an escrow account.
When Link informed the plan administrator about the settlement, he stated
that Elem had settled her claim against Rizo for the policy limit of $25,000 and
“has abandoned any hope of recovering” more than that amount. Although Link
intended to enclose a copy of the $25,000 check as proof of that settlement, he
inadvertently enclosed a copy of the $475,000 check. The plan administrator
noticed the error and demanded reimbursement from “[a]ll [s]ettlements and
[j]udgments.”
When Elem refused to reimburse the plan, AirTran filed suit against Elem,
Link, and Link & Smith. The parties filed cross motions for summary judgment,
and the district court granted summary judgment in favor of AirTran. The court
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then awarded AirTran attorney’s fees in the amount of $145,723.28 and costs in
the amount of $3,692.52.
When Link still refused to pay, AirTran filed a motion to enforce the
judgment under Federal Rule of Civil Procedure 70. Elem and Link responded that
Rule 70 was inapplicable because the judgment against them was for money
damages enforceable only through a writ of execution. The district court granted
the motion and ordered Elem and Link to satisfy the full amount of the judgment or
post a bond. AirTran later moved to hold Elem and Link in contempt when they
refused to comply with the order, but AirTran withdrew the motion when Link and
Link & Smith eventually paid the full amount of the judgment and attorney’s fees
and costs. At oral argument, the parties stipulated that Link and his firm
conditioned this payment on the disposition of the appeal of the summary
judgment and the award of attorney’s fees and costs.
II. STANDARDS OF REVIEW
Two standards of review govern us. First, we review de novo a summary
judgment and draw all inferences and review all evidence in the light most
favorable to the nonmoving party. Hamilton v. Southland Christian Sch., Inc., 680
F.3d 1316, 1318 (11th Cir. 2012). Summary judgment should be granted only
when the movant establishes that there is no genuine issue of material fact and that
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the movant is entitled to judgment as a matter of law. Id. We also review the
mootness of an appeal de novo. Tanner Adver. Grp., L.L.C. v. Fayette Cnty., Ga.,
451 F.3d 777, 784 (11th Cir. 2006). Second, we review for abuse of discretion an
award of attorney’s fees and costs. Byars v. Coca-Cola Co., 517 F.3d 1256, 1263
(11th Cir. 2008).
III. DISCUSSION
Elem and Link contest the summary judgment in favor of AirTran, the award
of fees and costs, and the issuance of the Rule 70 order to enforce the judgment,
but their arguments fail. We discuss each order of the district court in turn.
A. The District Court Correctly Granted Summary Judgment in Favor of AirTran.
We divide this section in two parts. We first discuss Elem and Link’s
challenge to the summary judgment in favor of AirTran on the ground that AirTran
failed to seek equitable relief. We second discuss Elem and Link’s attempts to
avoid liability based on four technicalities, none of which justify the breach of their
fiduciary duty.
1. AirTran seeks appropriate equitable redress.
The Act permits AirTran to file a civil action “to obtain . . . appropriate
equitable relief . . . to redress” the misdeeds of Elem, Link, and Link & Smith. 29
U.S.C. § 1132(a)(3) (B). “[A]ppropriate equitable relief” includes only “those
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categories of relief that were typically available in equity,” Great-West Life &
Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210, 122 S. Ct. 708, 712 (2002). Elem
and Link argue that AirTran cannot recover Elem’s medical costs because AirTran
seeks money damages, a legal remedy, but AirTran contends that the plan created
an equitable lien by agreement over the settlement funds. AirTran argues that it
seeks to recover “specifically identifiable funds” in “the possession and control” of
Elem and Link, that the plan created an equitable lien by agreement, and that its
claim, therefore, falls within “appropriate equitable relief” allowed under the Act.
Sereboff, 547 U.S. at 362–63, 126 S. Ct. at 1874 (internal quotation marks
omitted).
This case sounds in equity. When AirTran filed suit against Elem and Link,
it did so to enforce the equitable lien by agreement created by the plan. In “the
days of the divided bench,” this suit would have been equitable in nature. See id. at
363–65, 126 S. Ct. at 1874–76. Like the plan in Sereboff, the unambiguous terms
of the AirTran plan created an equitable lien against any settlement funds that
Elem received as a result of her accident. As soon as AIG gave Elem the settlement
funds, AirTran “could follow it into the hands of [Elem and Link].” Barnes v.
Alexander, 232 U.S. 117, 123, 34 S. Ct. 276, 278 (1914).
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We must also ensure that the nature of the remedy AirTran seeks is
equitable. Compare Sereboff, 547 U.S. at 361–63, 126 S. Ct. at 1873–74, with
Knudson, 534 U.S. at 212–14, 122 S. Ct. at 714–15. Elem and Link are correct that
the remedy of money damages is quintessentially a remedy at law. For that reason,
a plan may not file suit against a beneficiary for reimbursement and seek recovery
from “assets generally” of that beneficiary, because that suit would seek legal, not
equitable, restitution. Sereboff, 547 U.S. at 363, 126 S. Ct. at 1874 (distinguishing
Knudson). But when a plan seeks “specifically identifiable funds” in “the
possession and control” of a beneficiary, such restitution of the funds is equitable
in nature. Id. at 362–63, 126 S. Ct. at 1874 (internal quotation marks omitted).
AirTran seeks an equitable remedy. AirTran filed suit to enforce its
equitable lien over “specifically identifiable funds” that Elem had in her
“possession.” See Sereboff, 547 U.S. at 362–63, 126 S. Ct. at 1874 (internal
quotation marks omitted). According to the plain terms of the plan, the settlement
that AIG paid to Elem constitutes the specifically identifiable funds over which
AirTran had a lien. Elem and Link attempt to liken those settlement funds to the
funds in Knudson, but, unlike the beneficiary in Knudson, Elem possessed the
funds. Id. (distinguishing Knudson on the ground that the beneficiary never
possessed the settlement fund); see also Thurber v. Aetna Life Ins. Co., 712 F.3d
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654, 664 (2d Cir. 2013) (“[A]ll that matters is that the beneficiary did, at some
point, have possession and control of the specific portion of the particular fund
sought by the insurer.”). Once she possessed those funds, the equitable lien by
agreement attached to them, making them “specifically identifiable.” Sereboff, 547
U.S. at 362–63, 126 S. Ct. at 1874.
We disagree with our dissenting colleague, who adopts the position of the
Ninth Circuit and concludes that AirTran cannot collect what it is owed because it
has not traced the settlement funds after Elem divided them with her attorney.
(Dissenting Op. at 30–33). See Bilyeu v. Morgan Stanley Long Term Disability
Plan, 683 F.3d 1083, 1095 (9th Cir. 2012) (“Nothing in Sereboff suggests that a
fiduciary can enforce an equitable lien against a beneficiary’s general assets when
specifically identified funds are no longer in a beneficiary’s possession.”). It
matters not whether the settlement funds have since been disbursed or commingled
with other funds. In Sereboff, the Supreme Court made clear that AirTran need not
trace the settlement fund back to AirTran to enforce its equitable lien by
agreement. Id. at 364–65, 126 S. Ct. at 1875–76. As soon as the settlement fund
was identified, the plan imposed an equitable lien over that fund even though it
was in the hands of the beneficiaries. Id. at 363–64, 126 S. Ct. at 1875. And in the
wake of Sereboff, our sister circuits have concluded that “[p]roperty to which the
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lien attached may be converted into other property without affecting the efficacy of
the lien.” Funk v. CIGNA Grp. Ins., 648 F.3d 182, 194 (3d Cir. 2011); see Cent.
States, Se. & Sw. Areas Health & Welfare Fund v. Lewis, 745 F.3d 283, 285 (7th
Cir. 2014) (“The defendants argued . . . that because the settlement funds have
been dissipated, this really is a suit for damages . . . . But the defendants are
wrong.”); Thurber, 712 F.3d at 663–64 (“[T]he beneficiary’s literal segregation of
funds is irrelevant when the terms of the . . . plan put the beneficiary on notice that
she would be required to reimburse the insurer for an amount equal to what she
might get from third-party sources.” (alterations and internal quotation marks
omitted)); Cusson v. Liberty Life Assurance Co. of Boston, 592 F.3d 215, 231 (1st
Cir. 2010); Longaberger Co. v. Kolt, 586 F.3d 459, 466–67 (6th Cir. 2009); see
also Popowski v. Parrott, 461 F.3d 1367, 1374 n.8 (11th Cir. 2006) (“[T]he fact
that the third-party recovery triggering the [p]lan’s reimbursement provision was
comingled, even absent tracing, would not have disqualified an equitable lien had
that equitable lien been by agreement . . . .”). We join those circuit courts and
conclude that, even though Elem willfully refused to abide by the terms of the
AirTran plan, her dereliction as a constructive trustee could not destroy the lien
that attached before Elem divided the funds with her attorney. See Barnes, 232
U.S. at 122, 34 S. Ct. at 278 (explaining that the lien often attaches before the
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specific funds exist). Elem and Link argue that AirTran may take only the
remaining $4,500 of settlement funds left in the escrow account, but they
misunderstand that the plan imposed a lien for the entire $131,704.28 of medical
benefits paid, which attached when Elem obtained the settlement funds. Contrary
to Elem and Link’s argument, these “specifically identifiable funds” did not
disappear when they divided the money.
By the terms of the plan, AirTran paid for Elem’s medical care and, as a
result, could enforce it the moment Elem possessed the settlement checks from
AIG. Even though Elem and Link distributed the funds, the res remained the same:
the amount of the medical benefits paid to Elem. See Barnes, 232 U.S. at 122, 34
S. Ct. at 278. Elem and Link cannot defeat the first priority lien of AirTran, and
Elem cannot abandon her duties as trustee under the constructive trust by
commingling the res with other funds. See Gutta v. Standard Select Trust Ins.
Plans, 530 F.3d 614, 621 (7th Cir. 2008) (“[The insurer] may bring its
counterclaim [for reimbursement] even if the benefits it paid Gutta are not
specifically traceable to Gutta’s current assets because of commingling or
dissipation.”). Their dishonesty and manipulation of the settlement funds cannot
destroy the lien of AirTran over the “specifically identifiable” monies.
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2. Elem and Link’s remaining arguments about the summary judgment are meritless.
Elem and Link raise four additional arguments, none of which we find
persuasive. First, Link and Link & Smith argue that AirTran cannot recover from
them as third-party attorneys. Second, Elem and Link argue that, when AIG funded
the $475,000 portion of the settlement, AIG no longer qualified as a “responsible
party” under the plan. Third, they argue that AirTran cannot force Elem to
reimburse it because AirTran never disclosed to her the plan terms. Fourth, Elem
seeks to avoid liability by arguing that, because the plan administrator provided
healthcare services, AirTran cannot sue to enforce its right to reimbursement. We
address each of these arguments in turn.
Link and Link & Smith argue that they are not proper defendants because
AirTran cannot seek reimbursement from a third-party attorney, but that argument
fails. A plan may recover from a nonfiduciary party in interest, even if that party
has not violated a duty expressly imposed by the Act. Harris Trust & Sav. Bank v.
Saloman Smith Barney, Inc., 530 U.S. 238, 245, 120 S. Ct. 2180, 2186–87 (2000).
Because Elem breached her fiduciary duty as trustee and transferred the trust
property to Link and Link & Smith, the attorneys took the property subject to the
trust, unless they purchased the property for value and without notice of the
fiduciary’s breach of duty. Id. at 250, 120 S. Ct. at 2189. Even if Link and Link & 13 Case: 13-11738 Date Filed: 09/23/2014 Page: 14 of 39
Smith were not the original wrongdoers, they are not insulated from liability for
restitution. Id. at 251, 120 S. Ct. at 2189; see also Bombardier Aerospace
Employee Welfare Benefits Plan v. Ferrer, Poirot & Wansbrough, 354 F.3d 348,
357–58 (5th Cir. 2003), abrogated on other grounds, ACS Recovery Serv., Inc. v.
Griffin, 723 F.3d 518 (5th Cir. 2013) (en banc). And Link and Link & Smith are
hardly innocent parties. Link and his firm tried to hide the full amount of the
settlement agreement from AirTran. Link represented that the $25,000 would take
care of any liens on the settlement asserted by AirTran, but paid himself and his
firm $200,815.92. Even if they had not known of the first priority lien of AirTran,
they could not defeat the lien, but the record makes clear that the plan
administrator had repeatedly notified Link and Link & Smith that AirTran had an
equitable lien and intended to enforce it.
Link and his firm knew that they took fees and costs subject to the lien held
by AirTran, and they cannot now avoid liability by asserting that they did not agree
to the terms of the plan. The lien arose before they entered into a contingency fee
arrangement with Elem, and Elem agreed to the terms of the plan long ago. She
agreed that “[t]he Plan is not required to participate in or pay court costs or
attorney fees to any attorney hired by [Elem] to pursue [Elem]’s damage claim.”
These obligations, which “precluded [Elem] from contracting away to the law firm
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that which [she] did not own [herself], namely, the right to all or any portion of the
[sum] that rightfully belonged to the Plan,” predated her attorney-client
relationship with Link and his firm. Bombardier, 354 F.3d at 357. That Link and
his firm disregarded the first priority lien of AirTran and commingled the
settlement funds does not defeat the claim for equitable relief by AirTran because,
“under Sereboff, [AirTran] was free to follow a portion of the settlement funds into
[Link and Link & Smith’s] hands.” Longaberger Co., 586 F.3d at 469.
Elem and Link argue too that Elem could not have wrongfully transferred
the settlement funds because Elem never had “possession” of those funds. They
explain that AIG transferred the funds to Link and his firm. They argue that,
because Elem never possessed the funds, her duty to reimburse AirTran was never
triggered.
Nonsense. Even if AIG wrote and delivered the checks to Link and his firm,
Elem “had at least constructive possession and control of the fund[s] to facilitate
the settlement.” Griffin, 723 F.3d at 529 (“Griffin’s attempt to divorce himself
from the origin of the fund and its disposition is no more persuasive than if he had
directed the money to a close relative. . . . [H]e could not give away that which he
did not possess.”). And here, Elem likely had “actual possession” because her
attorney, as her agent, received and deposited the checks.
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Elem and Link also argue that AirTran cannot seek reimbursement because
AIG is not a “responsible party” under the terms of the plan. They argue that, when
AIG paid the $475,000 check, AIG no longer qualified as a “responsible party” for
the purposes of reimbursement because AIG was no longer providing “liability
coverage” for Rizo, but this argument contravenes the plain terms of the plan.
The terms of the plan entitle AirTran to reimbursement from “any payment”
from “any Responsible Party as a result of an injury, illness, or condition.” The
plan defines “Responsible Party” as “any party actually, possibly, or potentially
responsible for making any payment to a Covered Person due to a Covered
Person’s injury, illness or condition[, which] includes the liability insurer of such
party or any insurance coverage.” Because AIG settled the lawsuit for $500,000, it
meets the definition of a “responsible party.” It matters not at all that Rizo’s policy
limits were only $25,000 because the terms of the plan allow AirTran to recover
“any payment” to Elem “due to” her injury. AirTran now may seek its “specifically
identifiable” amount from the $500,000 for medical expenses paid on behalf of
Elem.
Elem and Link also attempt to evade liability by arguing that AirTran cannot
force Elem to reimburse AirTran because she never saw the plan documents, but
Elem accepted the benefits and is bound by the terms of the plan unless AirTran
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prejudiced Elem by its failure to disclose them. Our Court has said that “the
quantity of an employer’s procedural violations,” such as failure to abide by
disclosure requirements, “may work a substantive harm.” Harris v. Pullman
Standard, Inc., 809 F.2d 1495, 1499 (11th Cir. 1987). But an employee must
establish that she was prejudiced by an infraction committed by the plan. See Hein
v. TechAmerica Grp., Inc., 17 F.3d 1278, 1280–81 (10th Cir. 1994); see Kreutzer
v. A.O. Smith Corp., 951 F.2d 739, 743 (7th Cir. 1991) (requiring bad faith, active
concealment, or inducement to rely on a faulty plan summary by an administrator
before a court will award recovery for procedural violations).
Elem has not alleged that AirTran committed a multitude of procedural
violations or that she was prejudiced by any nondisclosure. Nor can she. The plan
administrator repeatedly sent letters expressing its intent to pursue reimbursement.
And Elem allowed AirTran to pay over $130,000 of her medical bills. Elem knew
of the lien before disbursing the funds to herself and to her attorney, and she
cannot avoid liability on a technicality. See Weinreb v. Hosp. for Joint Diseases
Orthopaedic Inst., 404 F.3d 167, 171–72 (2d Cir. 2005) (“Where a plan
administrator fails to fulfill its statutory duty . . . , but where the evidence shows
that the claimant had actual knowledge of the requirement at issue, the error is
necessarily harmless.”).
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Finally, Elem and Link argue that AirTran lacks standing to seek
reimbursement of Elem’s medical costs that the plan administrator paid, but they
misunderstand the nature of the self-funded employee benefit plan offered by
AirTran. Under the terms of the plan, AirTran provided various benefit options to
its employees and contracted with the plan administrator to provide various
services, including network access, subrogation, and patient management services.
In the district court, Elem relied on language in the Benefits Enrollment Guide,
which refers to healthcare services provided by the plan administrator, but the
provision of those administrative services does not give the plan administrator the
right to seek reimbursement from Elem. Instead, AirTran still paid for all expenses
incurred by its participants, including Elem. We reject Elem and Link’s argument
that AirTran cannot now recover its costs because it contracted with the plan
administrator.
B. The District Court Did Not Abuse Its Discretion by Awarding Attorney’s Fees and Costs to AirTran. A district court, “in its discretion,” may award attorney’s fees to a party, 29
U.S.C. § 1132(g)(1), if that party achieved “some degree of success on the merits,”
Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 255, 130 S. Ct. 2149, 2158
(2010). We require district courts to consider five factors when deciding whether to
award fees to a prevailing party: 18 Case: 13-11738 Date Filed: 09/23/2014 Page: 19 of 39
(1) the degree of the opposing parties’ culpability or bad faith; (2) the ability of the opposing parties to satisfy an award of attorney’s fees; (3) whether an award of attorney’s fees against the opposing parties would deter other persons acting under similar circumstances; (4) whether the parties requesting attorney’s fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA itself; [and] (5) the relative merits of the parties’ positions.
Freeman v. Continental Ins. Co., 996 F.2d 1116, 1119 (11th Cir. 1993). We have
explained that “[n]o one of these factors is necessarily decisive, . . . but together
they are the nuclei of concerns that a court should address.” Iron Workers Local
No. 272 v. Bowen, 624 F.2d 1255, 1266 (5th Cir. 1980).
Elem and Link argue that the district court unjustly awarded AirTran
attorney’s fees, but the five Freeman factors support the award. First, we rarely see
such a textbook example of “bad faith.” Link intentionally attempted to deceive the
plan administrator when he sent the letter stating that $25,000 represented the
entire settlement amount. And he coerced AIG to draft two separate releases to
effectuate his deception. Fortunately for AirTran, his scheme came crashing down
when he sent a copy of the $475,000 check to the plan administrator. His actions
no doubt evince bad faith. Second, Link and Link & Smith have already satisfied
the award, although conditionally. Third, an award of attorney’s fees in this
circumstance would help deter others from cheating their employee benefit plan.
Fourth, the award protects plan assets, which benefit all plan participants. And 19 Case: 13-11738 Date Filed: 09/23/2014 Page: 20 of 39
fifth, the defense mounted by AirTran was highly meritorious. The district court
did not abuse its discretion when it awarded attorney’s fees to AirTran.
C. The Payment of the Award of Fees and Costs Moots Any Argument About the Entry of the Rule 70 Order by the District Court.
Elem and Link argue that the district court misinterpreted Federal Rule of
Civil Procedure 70 when it ordered them to pay the full amount of the judgment
and fees and costs. Rule 70 provides, “If a judgment requires a party to convey
land, to deliver a deed or other document, or to perform any other specific act and
the party fails to comply within the time specified, the court may order the act to be
done—at the disobedient party’s expense—by another person appointed by the
court.” Rule 70 “gives the district court a discrete and limited power to deal with
parties who thwart final judgments by refusing to comply with orders to perform
specific acts.” Analytical Eng’g, Inc. v. Baldwin Filters, Inc., 425 F.3d 443, 449
(7th Cir. 2005). Elem and Link contend that the district court erroneously
converted a final money judgment at law into an injunction and that the judgment
was enforceable only through a writ of execution.
This issue is no longer justiciable because the appeal of the order is now
moot. Instead of posting a supersedeas bond, Link and his firm paid the full
amount due to AirTran to avoid being held in contempt. Even if we agreed that the
district court erred when it issued that order, we could not grant any meaningful 20 Case: 13-11738 Date Filed: 09/23/2014 Page: 21 of 39
relief because the defendants have already complied with it. See Bradford Marine,
Inc. v. M/V Sea Falcon, 64 F.3d 585, 587 n.1 (11th Cir. 1995); Fidelcor Mortg.
Corp. v. Ins. Co. of N. Am., 820 F.2d 367, 370 (11th Cir. 1987) (“When it executed
the satisfaction of the judgment, it included no reservation allowing it to proceed
with an appeal on some issues; it satisfied the judgment in toto. Therefore, there is
nothing left from which it may appeal.”). No case or controversy about the merits
of the Rule 70 order remains after the payment. See RES-GA Cobblestone, LLC v.
Blake Constr. & Dev., LLC, 718 F.3d 1308, 1314 (11th Cir. 2013) (“Where no
legally cognizable interest is at stake between the parties, a case becomes moot. . . .
This is so no matter how vehemently the parties continue to dispute the issues that
animated the litigation.” (internal quotation marks and citation omitted)).
We are befuddled by our dissenting colleague’s contrary conclusion.
(Dissenting Op. at 36–39). At oral argument, when we asked counsel for Elem,
Link, and Link & Smith what injury they now suffered as a result of the Rule 70
order even though they had paid the judgment, he answered, “Any injury now,
perhaps not.” We reiterate that because Link and Link & Smith have complied
with the Rule 70 order by paying the judgment, we cannot afford them any
meaningful relief even if that order was in error.
21 Case: 13-11738 Date Filed: 09/23/2014 Page: 22 of 39
IV. CONCLUSION
We AFFIRM the summary judgment and award of attorney’s fees and costs
in favor of AirTran and DISMISS as moot the appeal of the order under Rule 70.
22 Case: 13-11738 Date Filed: 09/23/2014 Page: 23 of 39
MARTIN, Circuit Judge, dissenting:
AirTran Airways, Inc. (AirTran) says that its suit seeks equitable relief, but
it fails to make a critical showing for purposes of equity: that the defendants
remain in possession of the disputed property. For the reasons that follow, I have
come to understand that AirTran’s suit seeks a legal remedy which is not permitted
under the statute it relies on. Based on this understanding, I would reverse the
District Court’s grant of summary judgment in favor of AirTran, its order awarding
attorney’s fees and costs, and its later Rule 70 order enforcing the judgment.
I. THE DISTRICT COURT IMPROPERLY GRANTED SUMMARY JUDGMENT BY CLASSIFYING AIRTRAN’S CLAIMS AS EQUITABLE.
At issue is whether AirTran’s suit against Brenda Elem, her attorney Mark
Link, and his law firm Link & Smith, P.C. (Link & Smith) (collectively the
defendants) to recover settlement funds subject to an equitable lien by agreement is
permitted by the Employee Retirement Income Security Act of 1974 (ERISA), 29
U.S.C. § 1132(a)(3)(B). This statute gives courts the power to grant “other
appropriate equitable relief” only when enforcing a covered insurance plan.
Specifically, a plan fiduciary may bring a civil action under ERISA “to obtain
other appropriate equitable relief . . . to enforce . . . the terms of the plan.” 29
U.S.C. § 1132(a)(3)(B)(ii). The Supreme Court has construed this section to
23 Case: 13-11738 Date Filed: 09/23/2014 Page: 24 of 39
authorize only “those categories of relief that were typically available in equity.”
Mertens v. Hewitt Assocs., 508 U.S. 248, 256, 113 S. Ct. 2063, 2069 (1993).
Thus, the statute offers no relief for legal claims. Whether a remedy is “legal or
equitable depends on the basis for [the plaintiff’s] claim and the nature of the
underlying remedies sought.” Great-West Life & Annuity Ins. Co. v. Knudson,
534 U.S. 204, 213, 122 S. Ct. 708, 714 (2002) (alteration in original) (internal
quotation marks omitted).
I certainly recognize that AirTran’s claim here is one arising in equity. The
clear terms of the insurance plan created an equitable lien by agreement over the
money Ms. Elem got as a result of her third party suit from the moment she had
actual or constructive possession of that money. However, on the facts before us,
the only remedy available to AirTran is legal, not equitable, in nature. Money
damages are traditionally a remedy at law, but can be equitable if the plaintiff
seeks: (1) “specifically identifiable funds” in (2) the defendant’s “possession and
control.” Sereboff v. Mid Atl. Med. Servs., Inc., 547 U.S. 356, 362–63, 126 S. Ct.
1869, 1874 (2006) (internal quotation marks omitted). AirTran properly identified
specific funds, but failed to establish that the identifiable funds are “in the
possession and control” of the defendants. The remedy AirTran seeks is therefore
a legal one and is not permitted under 29 U.S.C. § 1132(a)(3)(B).
24 Case: 13-11738 Date Filed: 09/23/2014 Page: 25 of 39
A. A MONEY DAMAGE AWARD IS ONLY EQUITABLE IF THE DEFENDANT REMAINS IN POSSESSION.
Supreme Court precedent makes clear that a plaintiff proceeding in equity to
recover funds from a defendant must, at a minimum, show that those funds are
presently in the defendant’s possession. In Walker v. Brown, 165 U.S. 654, 17 S.
Ct. 453 (1897), the Supreme Court was asked to decide whether an equitable lien
by agreement remained attached to certain Memphis city bonds in the hands of the
widow of a businessman who pledged the bonds to plaintiff J. H. Walker & Co.
(Walker). That businessman, Mr. Brown, had actually pledged the bonds to
Walker for the benefit of a third party. As that third party got into financial
difficulties, Mr. Brown paid its creditors the value of the bonds, retook possession
of the bonds, and then gifted them to his wife before he passed away. The
Supreme Court held that the lien by agreement was not extinguished when Mr.
Brown bought them back, and that the “equitable lien will be enforced by a court
of equity against the bonds in the hands of [Mrs.] Brown or against third persons
who are volunteers or have notice.” 165 U.S. at 664, 17 S. Ct. at 457 (emphasis
added). The Supreme Court’s discussion of available equitable relief turned on the
current location and possession of the bonds. See also Ketchum v. St. Louis, 101
U.S. 306, 318 (1879) (“With that [equitable] lien the property itself was chargeable
by whomsoever it or the funds accruing therefrom are or may be held.”). 25 Case: 13-11738 Date Filed: 09/23/2014 Page: 26 of 39
More recent cases also support the expectation that a defendant must still be
in possession of the property subject to the lien to allow equitable recovery under
29 U.S.C. § 1132(a)(3)(B). The Supreme Court denied reimbursement in Knudson
because the insurance company was not seeking to recover “particular funds or
property in the defendant’s possession.” 534 U.S. at 213, 122 S. Ct. at 714. The
company sued Ms. Knudson, the beneficiary, instead of the trustee in charge of the
Special Needs Trust where the money was held pursuant to California law.
Because Ms. Knudson did not have the funds in her possession, the Court observed
that the plaintiff’s claim was “not that respondents hold particular funds that, in
good conscience, belong to petitioners, but that petitioners are contractually
entitled to some funds for benefits that they conferred.” Id. at 214, 122 S. Ct. at
715. The Court held “where ‘the property [sought to be recovered] or its proceeds
have been dissipated so that no product remains, [the plaintiff’s] claim is only that
of a general creditor,’ and the plaintiff ‘cannot enforce a constructive trust of or an
equitable lien upon other property of the [defendant].’” Id. at 213, 122 S. Ct. at
714 (alteration in original) (quoting Restatement of Restitution § 215, cmt. a, at
867); see also Restatement of Restitution § 215 cmt. b (“A person whose property
is wrongfully taken by another is not entitled to priority over other creditors unless
he proves that the wrongdoer not only once had the property or its proceeds, but
26 Case: 13-11738 Date Filed: 09/23/2014 Page: 27 of 39
still has the property or its proceeds or property in which the claimant’s property or
its proceeds have been mingled indistinguishably.”).
In Sereboff , the Supreme Court noted that the “impediment to
characterizing the relief in Knudson as equitable” was not present. Id. at 362, 126
S. Ct. at 1874. That is because, in contrast to Knudson, the plan administrator in
Sereboff sought “particular funds or property in the defendant’s possession,”
Knudson, 534 U.S. at 214, 122 S. Ct. at 708, where the identified fund was
“preserved [in the Sereboffs’] investment accounts.” Sereboff, 547 U.S. at 362–
63, 126 S. Ct. at 1874 (alteration in original) (quoting Mid Atl. Med. Servs., LLC
v. Sereboff, 407 F.3d 212, 214 (4th Cir. 2005), aff’d sub nom. Sereboff v. Mid Atl.
Med. Servs., Inc., 547 U.S. 356, 126 S. Ct. 1869 (2006)).
This Court and other Circuit Courts have followed the Supreme Court’s
guidance that a defendant’s current possession of the funds at issue is a necessary
element of an equitable claim. See, e.g., Popowski v. Parrott, 461 F.3d 1367, 1373
(11th Cir. 2006) (“Unlike in Knudson, a significant portion of the funds specified
went directly into the [insureds’] bank account and, thereby, was in their
possession for purposes of this case. Thus, at the time they filed their suit, [the
plan fiduciaries] sought ‘not to impose personal liability on [the beneficiary], but to
restore to the plaintiff[s] particular funds or property in [the beneficiary’s]
27 Case: 13-11738 Date Filed: 09/23/2014 Page: 28 of 39
possession.’” (fourth alteration in original) (emphasis added) (quoting Knudson,
534 U.S. at 214, 122 S. Ct. at 714–15)); Treasurer, Trs. Of Drury Indus. Health
Care Plan & Tr. v. Goding, 692 F.3d 888, 896 (8th Cir. 2012) (“In equity, there
was no cause for restitution where the trustee of property wrongfully disposed of
another’s property, but no longer held that property or its product. A party who
has been wrongfully divested of its property . . . could only recover it if it proved
not only that the other party once had property legally or equitably belonging to it,
but also that he still holds the property or properties which is in whole or part its
product.” (citation omitted) (internal quotation marks and alterations omitted));
Bilyeu v. Morgan Stanley Long Term Disability Plan, 683 F.3d 1083, 1095 (9th
Cir. 2012) (rejecting the argument that an equitable lien can be enforced against
general assets when the specifically identified property has been dissipated);
Loffredo v. Daimler AG, 500 F. App’x. 491, 499 (6th Cir. 2012) (“To plead claims
for equitable relief . . . the plaintiffs would have to allege either that the defendants
currently (and improperly) possess the assets dispersed from the trust or that they
retain profits generated from that property.”). In disagreeing with a case cited
favorably by the majority, the Solicitor General of the United States also concluded
that a plaintiff must establish the defendant’s possession of the disputed funds to
recover under this provision. See Brief for the United States as Amicus Curiae at
28 Case: 13-11738 Date Filed: 09/23/2014 Page: 29 of 39
9, Thurber v. Aetna Life Ins. Co., et al., ___ U.S. ___, 134 S. Ct. 2723 (2014) (No.
13-130), 2014 WL 1783200 at *9 (“In the government’s view, the court of appeals
in this case erred in concluding that a plan fiduciary can enforce an equitable lien
regardless of whether the funds at issue have been dissipated.”).
B. AIRTRAN DID NOT ESTABLISH THAT DEFENDANTS HAVE POSSESSION OF THE SETTLEMENT FUNDS.
As soon as the settlement funds were transferred to the benefit of Ms. Elem,
AirTran “could follow [those funds] into the hands” of the defendants. Panel Op.
at 8 (quoting Barnes v. Alexander, 232 U.S. 117, 123, 34 S. Ct. 276, 278 (1914)).
Once AirTran established who had the funds, its recovery against the person
holding the funds would rightfully be classified as “equitable” according to
Supreme Court and common law precedent. Yet what AirTran is entitled to do in
equity, and what it actually did here, are very different things.
AirTran’s complaint alleges “[u]pon information and belief, portion(s) of the
funds to which the Plan is entitled are in the possession of Defendant Elem,
Defendant Link and/or the Defendant Firm.” AirTran’s statement of material facts
submitted in connection with its motion for summary judgment fails to offer any
support for the allegation about possession made in its complaint. Though AirTran
had ample opportunity in discovery to inquire about the exact location of the
distributed settlement money, it did not. Neither did AirTran ask the District Court 29 Case: 13-11738 Date Filed: 09/23/2014 Page: 30 of 39
for a restraining order or injunction to make sure that the funds were easy to
identify once the case was resolved, as had happened in other reimbursement
cases. See, e.g., Sereboff, 547 U.S. at 360, 126 S. Ct. at 1873 (noting that the
Sereboffs agreed to preserve the disputed funds in an investment account until the
suit was resolved); Popowski, 461 F.3d at 1370 (“[T]hey filed this suit along with a
motion for a temporary restraining order and preliminary injunction to protect the
settlement proceeds.”). In its argument here, AirTran says that the “settlement
funds could be followed into the hands of Elem, Link, and Link & Smith, P.C.,”
but it does not point to the money’s current location. AirTran suggests that
defendants engaged in “chicanery” by “concealing and then quickly ‘spend[ing] all
money received,’” but points to nothing in the record to support that proposition.
C. SEREBOFF’S LIMITATION ON “STRICT TRACING” DOES NOT IMPACT THIS CASE.
The majority forgives AirTran’s failure to show defendants’ possession of
the settlement funds by stating that disbursal or commingling of the settlement
funds is irrelevant to whether the claim is properly characterized as equitable. Ms.
Elem, Mr. Link, and Link & Smith challenged the District Court’s grant of
summary judgment in part because AirTran did not establish that the funds it
requested were still in the possession of any defendant. The majority says,
mistakenly I believe, that the defendants’ challenge is one “on the ground that 30 Case: 13-11738 Date Filed: 09/23/2014 Page: 31 of 39
AirTran failed to satisfy the strict tracing rules of equitable restitution.” Panel Op.
at 2. The majority then relies on Sereboff to reject this appeal. 547 U.S. at 364,
126 S. Ct. at 1875 (discussing the “strict tracing rules” that applied to equitable
restitution at common law). But I do not read Sereboff in the same way as the
majority.
In Sereboff, the beneficiaries of an ERISA-covered health insurance plan
received payment from the plan to cover medical expenses resulting from a car
accident. The Sereboffs later settled a lawsuit they had filed regarding the car
accident, and the terms of the plan called for the money paid in settlement to go to
reimburse the administrator. The Sereboffs argued that recovery of settlement
funds paid by a third party—and not directly from the plan—was not “equitable
relief” under 29 U.S.C. § 1132(a)(3)(B) because “[t]he money in [the
beneficiaries’] investment account cannot be traced to [the plan administrator].”
Respondent Reply Brief at 9, Sereboff, 547 U.S. 356, 126 S. Ct. 1869 (No. 05-
260), 2006 WL 717048 at *9. The Supreme Court rejected the Sereboffs’
argument because “no tracing requirement of the sort asserted by the Sereboffs
applies to equitable liens by agreement or assignment.” Sereboff, 547 U.S. at 365,
126 S. Ct. at 1875. In support of its position, the Court turned to “case law from
the days of the divided bench”—meaning cases heard during the period when the
31 Case: 13-11738 Date Filed: 09/23/2014 Page: 32 of 39
United States had two parallel courts, one of equity and one of law—which did not
require the holder of an equitable lien by agreement to trace the res directly from
the defendant back to the plaintiff. Id. at 363–64, 126 S. Ct. at 1874–75
(discussing Barnes, 232 U.S. at 199–23, 34 S. Ct. at 277–78).
In its discussion of strict tracing, the Supreme Court made a distinction
between equitable liens sought as a matter of restitution and equitable liens by
agreement. For equitable liens sought as a matter of restitution, strict tracing is
required, but for equitable liens by agreement, it is not. Sereboff, 547 U.S. at 364–
65, 126 S. Ct. at 1875–76. Further, the Court cabined its discussion of strict
tracing to the type of tracing requirement “asserted by the Sereboffs.” Id. at 365,
126 S. Ct. at 1875. As described above, the Sereboffs argued that equitable tracing
required the plaintiff to trace the defendant’s funds back to the plaintiff himself,
and not to a third party. The Supreme Court rejected this argument, and held that
equitable relief was still available where the plaintiff could not “identify an asset
they originally possessed, which was improperly acquired and converted into
property the defendant held.” Id. (emphasis added). Later, this Court interpreted
Sereboff’s tracing language to eliminate only the requirement that disputed funds
originate with the plaintiff. See Admin. Comm. for Wal-Mart Stores, Inc. Assocs.’
Health & Welfare Plan v. Horton, 513 F.3d 1223, 1227 n.3 (11th Cir. 2008)
32 Case: 13-11738 Date Filed: 09/23/2014 Page: 33 of 39
(“[T]he Sereboff Court explained that strict tracing rules need not apply for an
equitable lien to properly attach to the settlement funds; that is, although the
disputed funds had never actually been in the possession of the plan, the plan could
seek to ‘recover’ property that belonged to it in good conscience under the plan
agreement.” (emphasis added)).
The majority relies on what I believe is a misapplication of Sereboff,
accepted by some of our sister circuits, to characterize the recovery of assets no
longer in the defendant’s possession as equitable relief. See, e.g., Cusson v.
Liberty Life Assurance Co. of Boston, 592 F.3d 215, 231 (1st Cir. 2010)
(determining that an insurer need not identify a “specific account in which the
funds are kept or prove[] that they are still in [the defendant’s] possession”). I do
not accept this interpretation because the defendants in Sereboff were still in
possession of the funds—the Sereboff parties had stipulated that the funds were
securely set aside in an investment account. See Sereboff, 547 U.S. at 360, 126 S.
Ct. at 1873. So in Sereboff the Supreme Court was never asked to decide whether
a defendant’s possession at the time of the suit was necessary for an action in
equity.
33 Case: 13-11738 Date Filed: 09/23/2014 Page: 34 of 39
D. EQUITABLE RELIEF IS NOT AVAILABLE AGAINST DEFENDANTS WHO DO NOT HAVE POSSESSION OF THE DISPUTED PROPERTY.
If the settlement had instead been issued to Ms. Elem in the form of a luxury
automobile, AirTran could exercise its equitable lien only by locating the
automobile or the proceeds of the sale of the automobile and suing the person who
had possession. It would make no sense to sue in equity to recover a car from
someone who does not have it. And, the result is the same when a plaintiff brings
a claim for “other equitable relief” without establishing who is in possession. At
core, a plaintiff’s ability to seek equitable relief over a res cannot be separated
from the ongoing existence and location of that res or its proceeds. More to the
point, we, as a court sitting in equity, cannot reverse engineer what happened to the
plaintiff’s property by assuming that one or more of the named defendants now has
it. Yet, that is what the majority does here.
The District Court’s grant of summary judgment entitled AirTran to recover
the $131,704.28 it paid for Ms. Elem’s medical expenses. The District Court later
clarified that its “[j]udgment requires reimbursement of AirTran by all Defendants
. . . because all three possess settlement funds that belong ‘in good conscience’ to
the Plan.’” The majority opinion repeats this idea that the funds AirTran seeks to
recover are “in ‘the possession and control’ of Elem and Link.” Panel Op. at 8.
34 Case: 13-11738 Date Filed: 09/23/2014 Page: 35 of 39
But nothing in the record supports either conclusion. To the contrary, only Ms.
Elem and Link & Smith received distributions from the settlement amount, and
AirTran made no assertions about whether the money remained in their possession
when it filed its motion for summary judgment. The record before us simply tells
us nothing about where the money is. It could be disbursed, it could be
commingled, or it could be tucked under Ms. Elem’s mattress. By the District
Court’s order, Mr. Link is liable in equity for a res that he does not possess.
Whatever retribution is appropriate for Mr. Link’s “sin[s],” Panel Op. at 2, it
cannot lie in equity. If Ms. Elem and Link & Smith no longer have the funds, they
continue to be subject to legal claims, but the equitable claim has dissipated.
AirTran’s claims simply fall outside the relief permitted by 29 U.S.C. §
1132(a)(3)(B).
II. THE DISTRICT COURT IMPROPERLY GRANTED ATTORNEY’S FEES AND COSTS.
The defendants also challenge the District Court’s grant of attorney’s fees
and costs. Under 29 U.S.C. § 1132(g), attorney’s fees may be awarded at the
Court’s discretion to a party who achieves “some success on the merits.” Hardt v.
Reliance Standard Life Ins. Co., 560 U.S. 242, 255, 130 S. Ct. 2149, 2158 (2010).
Because I view summary judgment as having been improperly granted in favor of
AirTran, the District Court’s related award of attorney’s fees and costs should also 35 Case: 13-11738 Date Filed: 09/23/2014 Page: 36 of 39
be vacated. See Ogden v. Blue Bell Creameries U.S.A., Inc., 348 F.3d 1284, 1288
(11th Cir. 2003) (vacating award of attorney’s fees after holding that the District
Court improperly awarded equitable relief under ERISA).
III. DEFENDANTS’ APPEAL OF THE DISTRICT COURT’S RULE 70 ORDER IS NOT MOOT AND THE RULE 70 ORDER WAS GRANTED TO ENFORCE AN INCORRECT JUDGMENT. Finally, I turn to the defendants’ appeal of the District Court’s Rule 70 order
enforcing judgment. The majority opinion dismisses the appeal as moot because
defendants paid the required amount to AirTran, eliminating any “case or
controversy about the merits of the Rule 70 order.” Panel Op. at 21. I disagree
with this holding on both factual and legal bases.
The defendants’ payment to AirTran was conditioned in part on the outcome
of the Rule 70 order appeal. The majority opinion highlights a purported
stipulation by both parties at oral argument that the payments were subject to “the
disposition of the appeal of the summary judgment and the award of attorney’s fees
and costs.” Id. at 6. I heard no such stipulation at oral argument. AirTran’s
counsel admitted that the payment “was subjectively conditioned on repayment if
there was a final ruling in favor of [defendants],” Oral Arg. Recording at 13:36
(Feb. 28, 2014), while counsel for defendants stated that the money was “turned
over to other side to hold in trust” and that if “we win, we get it [back],” id. at
36 Case: 13-11738 Date Filed: 09/23/2014 Page: 37 of 39
00:52, 01:09. At no point did the parties mention that conditional repayment was
tied only to the appeal challenging summary judgment and award of attorney’s fees
and costs. This matters because defendants had two separate appeals before us:
one challenging the summary judgment grant and award of attorney’s fees and
costs, Case No. 13-11738-BB, and the other challenging the Rule 70 order, Case
No. 13-14912-BB. Everything I see indicates to me that defendants’ payment was
conditioned on the outcome of both appeals. For example, in their response to
AirTran’s motion for contempt, Mr. Link and Link & Smith state that they “are
paying the amounts claimed under protest and threat of civil and/or criminal
contempt while the appeal of both Orders are pending in the 11th Circuit.”
Without explicit documentation or statements to the contrary, I see no basis for
putting limitations on the defendants’ conditional payment in our evaluation of
mootness.
I do not read our prior case law to comport with the majority’s analysis.
While “payment of a judgment and an acknowledgement of satisfaction will moot
an appeal from the judgment,” RES-GA Cobblestone, LLC v. Blake Const. and
Dev., LLC (Cobblestone), 718 F.3d 1308, 1315 (11th Cir. 2013), it is also true that
“what matters is whether the parties’ actions objectively manifest an intent to
abandon the issues on appeal.” Id. at 1315. In Cobblestone, we observed that the
37 Case: 13-11738 Date Filed: 09/23/2014 Page: 38 of 39
appellant “never purported to reserve the right to continue to pursue [the] appeal,”
did not intend to “claw back the costs and fees he paid,” and signed a consent
agreement settling the suit to determine that the appeal was mooted. Id. at 1315–
16; see also Fidelcor Mortg. Corp. v. Ins. Co. of N. Am., 820 F.2d 367, 370 (11th
Cir. 1987) (mooting appeal where appellant made “no reservation allowing [him]
to proceed with an appeal”); cf. Alvarez-Perez v. Sanford-Orlando Kennel Club,
Inc., 518 F.3d 1302, 1305–08 (11th Cir. 2008) (declining to dismiss an appeal as
moot where the parties “acted in all respects as though the appeal and cross-appeal
were alive and that they were awaiting a decision” and “continued to litigate the
case in this Court as though nothing had changed”); Ass’n for Disabled Ams., Inc.
v. Integra Resort Mgmt., Inc., 387 F.3d 1241, 1243 (11th Cir. 2004) (holding that
an appeal was not moot where appellants “specifically reserved their right to
appeal” and there was no “evidence of some intent to end the litigation”). Like the
appellants in Alvarez-Perez, here the defendants’ “actions speak loudly enough to
drown out” any indication that they regarded the conditional payment to terminate
either of their appeals. 518 F.3d at 1307. Both parties briefed the Rule 70 order
appeal after the payment was made to AirTran, and neither brief claimed mootness.
The majority offers no evidence that the parties “objectively manifest[ed] an intent
to abandon the issues” as is necessary by this Court’s precedent.
38 Case: 13-11738 Date Filed: 09/23/2014 Page: 39 of 39
The defendants’ counsel made a statement at oral argument, only part of
which is quoted by the majority to oppose the position I have taken here. See
Panel Op. at 21. Though the attorney for Ms. Elem, Mr. Link and his law firm did
say there was “perhaps not” a current injury resulting from that order, he went on
to explain “but it could cause injury in the future such as having to come back up
here again and fight that issue.” Oral Arg. Recording at 02:58–03:06 (Feb. 28,
2014). Even accepting that counsel did not fully explain his clients’ ongoing
injury at that moment in the oral argument, the fact remains that, much like a
supersedeas bond, defendants have an ongoing injury in the form of their
conditional payment suspended in escrow.
The Rule 70 order appeal is not mooted by defendants’ conditional payment
made under threat of contempt. The District Court’s grant of summary judgment
improperly awarded non-equitable relief to AirTran in violation of 29 U.S.C. §
1132(a)(3)(B), thus an order enforcing that judgment cannot stand. Both the grant
of summary judgment and the Rule 70 order should be vacated.
For these reasons I respectfully dissent.