The Carpenter Tech. Corp. v. Weida, 2018 U.S. Dist. LEXIS 5559, 2018 WL 398297 case provides a great analysis as to the specifically identifiable fund requirement of the Sereboff line of cases; and when that fund is destroyed by “dissipation” under the Montanile case.
This case is a very well-written, and very specific, District Court decision. Consequently, I would recommend, before blindly distributing funds based on Montanile and this case, to consult your state’s ethics rules regarding notification to a third-party claim holder to a fund which you possess. Here, the plan was notified of intent to distribute, but it waited nine months to file the action.
Again, the specific findings of fact after discovery in this case require a detailed read. Note that the proceeds were deposited into the plaintiff’s joint checking account with his wife which had been opened years before the settlement.
The plan here apparently sought the tracing of the funds against the plaintiff’s home due to the fact that some of the proceeds from the settlement were utilized to pay the down the plaintiff and his wife’s mortgage, as well as a 401(k) plan loan that was paid back. The court determined that:
“After careful consideration, I find that when Mr. Weida’s settlement proceeds were deposited into the joint checking account, it was immediately converted from a “specifically identifiable fund” to the joint property of the married couple owned by tenancy by the entireties. The “specifically identifiable fund” changed from one which the plaintiff could seek reimbursement as an equitable remedy to one immune from process, petition, levy, execution, or sale. See Olson, 620 A.2d at 1147; see also Rajaratnam, 83 A.3d at 174.”