July 28, 2026  ·  Complaint filed July 10, 2026  ·  ilnd, No. 1:26-cv-08167

Newman News, By David Brunk

Read the filing

Central States Southeast v. Webb Seeks Reimbursement Of $109,105.99 For Medical Expenses Paid

The Central States, Southeast and Southwest Areas Health and Welfare Fund and trustee Charles A. Whobrey filed suit against Richard M. Webb, Tammie D. Webb, attorney Daniel Hughes, and his firm Duggan & Hughes, LLC, alleging the defendants failed to honor a $109,105.99 subrogation lien under the Employee Retirement Income Security Act. The complaint alleges the Fund paid a total of $109,105.99 in medical expenses for injuries sustained by Richard M. Webb and Tammie D. Webb in a September 19, 2019 motor vehicle accident, consisting of $107,049.04 for Mr. Webb and $2,056.95 for Mrs. Webb (Compl. ¶¶27-28). The Fund’s plan terms establish its right to reimbursement from any third-party recovery the Webbs obtain (Compl. ¶¶13, 22, 27-28, 31). The complaint alleges that the Webbs, along with their attorney Daniel Hughes and his law firm Duggan & Hughes, LLC, settled their claims for at least $70,000.00 but failed to reimburse the Fund for its subrogation lien of $109,105.99.

Subrogation mechanism under the Fund’s ERISA plan step by step

The complaint alleges that the Central States, Southeast and Southwest Areas Health and Welfare Fund’s ERISA-governed plan establishes an immediate and absolute subrogation right to any recovery obtained by covered individuals for medical expenses the Fund paid. Under the plan terms, the Fund “is immediately subrogated and vested with subrogation rights… to all present and future rights of recovery” arising from a third party’s liability for injuries treated under the plan (Compl. ¶13). The plan specifically provides in § 11.14(d) that the Fund’s subrogation rights must be honored from any settlement proceeds, and the complaint alleges that the Defendants may have distributed the settlement proceeds in violation of this provision (Compl. ¶35).

The plan requires covered individuals to “fully cooperate with the Fund… and shall refrain from any act or omission that would… prejudice or impair the Fund’s Subrogation Rights” (Compl. ¶14). Payment of benefits by the Fund is “deemed to constitute the Covered Individual’s direction to his/her attorneys… to reimburse the full amount of the Fund’s Subrogation Rights” from any settlement or judgment, a provision the complaint quotes directly: "said payment by the Fund... shall be deemed to constitute the Covered Individual’s direction to his/her attorneys... to reimburse the full amount of the Fund’s Subrogation Rights..." (Compl. ¶15). The plan further provides that “no Covered Individual… is authorized to act on behalf of the Fund with respect to the Fund’s Subrogation Rights,” and that the Fund’s “entitlement to full payment and reimbursement of its Subrogation Rights is absolute and unqualified” (Compl. ¶¶16, 22).

According to the complaint, the Fund paid $107,049.04 for Richard M. Webb’s medical expenses and $2,056.95 for Tammie D. Webb’s expenses related to a September 19, 2019 motor vehicle accident, totaling $109,105.99 (Compl. ¶¶27-28). The Fund asserts it asserted a subrogation lien of $109,105.99 against any settlement proceeds the Webbs might recover (Compl. ¶31). The complaint alleges that, upon information and belief, the Webbs and their attorney, Daniel Hughes of Duggan & Hughes, LLC, settled their claims for at least $70,000.00 (Compl. ¶32). The complaint further alleges that the Fund demanded reimbursement for the subrogation lien but received no response from the Defendants (Compl. ¶39).

Medical Expenses and Subrogation Lien Amounts

The complaint alleges that the Central States, Southeast and Southwest Areas Health and Welfare Fund paid a total of $109,105.99 in medical expenses for injuries sustained by Richard M. Webb and Tammie D. Webb in a September 19, 2019 motor vehicle accident. The Fund asserts a subrogation lien of $109,105.99 against any settlement proceeds the Webbs receive from third parties, reflecting the full amount of medical benefits paid. Specifically, the Fund paid $107,049.04 for Mr. Webb’s medical expenses from October 18, 2019 through February 19, 2024, and $2,056.95 for Mrs. Webb’s medical expenses from September 19, 2019 through the ongoing period (Compl. ¶¶27-28). The complaint alleges that the Webbs, along with their attorney Daniel Hughes and his law firm Duggan & Hughes, LLC, settled their claims for at least $70,000.00 but failed to reimburse the Fund for its subrogation lien of $109,105.99 (Compl. ¶¶31-32).

The $109,105.99 figure is the basis for multiple claims in the complaint, including the Fund’s demand for an equitable lien and a constructive trust. The complaint alleges that the Defendants "possess $109,105.99 that is subject to the Fund’s subrogation lien" and that this amount is "held in constructive trust for the Fund" (Compl. ¶¶42-44). The complaint further states: "The Fund has established an equitable lien in the specifically identifiable amount of $109,105.99 against Mr. Hughes and the Law Firm..." (Compl. ¶43). The Fund seeks to enforce its subrogation rights and recover the full amount of its lien, plus interest, attorneys’ fees, and costs (Compl. ¶¶43-44, 53). The complaint alleges that the Defendants "have refused to reimburse the Fund any of those assets constructively held by them" (Compl. ¶53).

Parties and their roles in the alleged subrogation violation

The complaint names two plaintiffs and four defendants, each assigned distinct roles in the alleged impairment of the Fund’s subrogation rights.

Plaintiff Central States, Southeast and Southwest Areas Health and Welfare Fund is an employee welfare benefit plan that paid $109,105.99 in medical expenses for injuries Richard M. Webb and Tammie D. Webb sustained in a September 19, 2019 motor-vehicle accident, consisting of $107,049.04 for Mr. Webb and $2,056.95 for Mrs. Webb (Compl. ¶¶27-28). The Fund’s governing plan document, the complaint alleges, grants it subrogation rights to any recovery the Webbs obtain from third parties, including a prohibition on any act that would “prejudice or impair the Fund’s Subrogation Rights” (Compl. ¶¶13, 22). Charles A. Whobrey, the second plaintiff, is identified as a trustee and fiduciary of the Fund.

Defendants Richard M. Webb and Tammie D. Webb are the covered employee and dependent, respectively, who received the medical benefits. The complaint alleges that they settled their third-party claims for at least $70,000.00 (Compl. ¶¶31-32). The complaint alleges that the Webbs, along with their attorney Daniel Hughes and his law firm Duggan & Hughes, LLC, failed to reimburse the Fund for its subrogation lien of $109,105.99.

The remaining defendants are the Webbs’ attorney and his law firm. Daniel Hughes, Esq. and Duggan & Hughes, LLC are alleged to have violated South Carolina Rules of Professional Conduct 1.15(a), (d), and (e)(1) by not safeguarding the Fund’s third-party property interest in the settlement proceeds. The complaint quotes the rules directly: “A lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property,” and “[u]pon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person” (Compl. ¶¶36-37). It further alleges that the law firm may hold settlement funds in trust or escrow sufficient to satisfy the Fund’s claim, yet has not segregated or disbursed those funds to the Fund (Compl. ¶¶34-35). The complaint states: "The Fund has established an equitable lien in the specifically identifiable amount of $109,105.99 against Mr. Hughes and the Law Firm..." (Compl. ¶43).

Counts I-III: ERISA subrogation, equitable lien, and constructive trust (29 U.S.C. § 1132(a)(3))

The complaint asserts multiple claims under ERISA § 502(a)(3) to recover $109,105.99 in medical expenses the Fund paid for injuries sustained by Richard M. Webb and Tammie D. Webb in a September 19, 2019 motor vehicle accident. Each claim targets the same settlement proceeds the Webbs and their attorney, Daniel Hughes, received from third-party claims.

Count I (Breach of ERISA Plan Terms – Subrogation Rights): The Fund seeks to enforce its subrogation rights under the plan terms, alleging the Defendants failed to reimburse the Fund for the $109,105.99 lien (Compl. ¶¶49-50).

Count II (Equitable Lien by Subrogation): The Fund seeks to impose an equitable lien by subrogation on the settlement proceeds, asserting that the Defendants possess funds subject to the Fund’s lien (Compl. ¶43).

Count III (Constructive Trust): The Fund seeks the imposition of a constructive trust on the settlement proceeds, alleging that the Defendants hold $109,105.99 in trust for the Fund (Compl. ¶44).

The complaint cites the plan’s subrogation clause, which states, “the Fund... is immediately subrogated and vested with subrogation rights... to all present and future rights of recovery,” and further provides that “the Fund’s entitlement to full payment and reimbursement of its Subrogation Rights is absolute and unqualified” (Compl. ¶¶13, 22). The Fund contends the Webbs and their counsel settled their claims for at least $70,000.00 (Compl. ¶32). The complaint alleges that the Fund’s payment of benefits “shall be deemed to constitute the Covered Individual’s direction to his/her attorneys... to reimburse the full amount of the Fund’s Subrogation Rights,” quoting directly: "said payment by the Fund... shall be deemed to constitute the Covered Individual’s direction to his/her attorneys... to reimburse the full amount of the Fund’s Subrogation Rights..." (Compl. ¶15).

The complaint further alleges that Mr. Hughes and Duggan & Hughes, LLC violated South Carolina Rules of Professional Conduct 1.15(a), (d), and (e)(1) by failing to safeguard the Fund’s property, including by not holding disputed funds separate until the subrogation claim was resolved (Compl. ¶¶36-38). The complaint states that the $109,105.99 “is held in constructive trust for the Fund” (Compl. ¶44). The Fund alleges that the Defendants “have refused to reimburse the Fund any of those assets constructively held by them” (Compl. ¶53). The claims seek an injunction against further disposition of the funds, an accounting of the settlement proceeds, and attorneys’ fees and costs (Compl. ¶¶43-44, 53).

Counts IV-VI and III (duplicate): Accounting, injunctive relief, fees, and breach of fiduciary duty (29 U.S.C. §§ 1104, 1109, 1132(a)(2))

The complaint seeks an accounting of the settlement proceeds from all defendants, alleging that the Fund has not received any documentation showing how the settlement funds were disbursed (Compl. ¶35).

Count IV (Accounting): The Fund requests an accounting of the settlement proceeds to determine how the funds were distributed (Compl. ¶¶34-35).

Count V (Injunctive Relief): The Fund seeks to enjoin the Defendants from further impairing the Fund’s subrogation rights, including any distribution of the settlement proceeds that would violate Plan § 11.14(d) (Compl. ¶35).

Count VI (Attorneys’ Fees and Costs): The Fund requests attorneys’ fees, costs, and expenses under ERISA § 502(g) (Compl. ¶¶43, 53).

Count III (Breach of Fiduciary Duty): The complaint contends that the defendants breached their duties to the Fund as fiduciaries or parties acting in a fiduciary capacity under ERISA §§ 404, 409, and 502(a)(2). The Fund alleges that the defendants violated the plan’s subrogation terms, which created an obligation to preserve and remit the Fund’s share of the settlement proceeds (Compl. ¶52-54). The Fund seeks equitable relief, including reimbursement of the $109,105.99 plus interest, attorneys’ fees, and retention of jurisdiction. The complaint alleges that the Defendants breached their fiduciary duties by refusing to reimburse the Fund (Compl. ¶52-54).

Alleged Violations of South Carolina Rules of Professional Conduct 1.15 by Daniel Hughes and Duggan & Hughes, LLC

The complaint alleges that Daniel Hughes and his law firm, Duggan & Hughes, LLC, violated South Carolina Rules of Professional Conduct 1.15(a), (d), and (e)(1) by failing to safeguard the Central States, Southeast and Southwest Areas Health and Welfare Fund’s third-party property interest in the settlement proceeds received by Richard M. Webb and Tammie D. Webb. According to the filing, the Fund’s subrogation rights under its ERISA plan created a legal interest in the settlement funds, which the defendants allegedly disregarded.

The complaint cites Rule 1.15(a), which provides that “[a] lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property.” The filing alleges that Mr. Hughes and his firm did not maintain the Fund’s $109,105.99 subrogation lien separately from their own assets or client funds, as required by the rule (Compl. ¶36). The complaint states: "The Fund has established an equitable lien in the specifically identifiable amount of $109,105.99 against Mr. Hughes and the Law Firm..." (Compl. ¶43).

Rule 1.15(d) further requires that “[u]pon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person.” The complaint alleges that the defendants failed to notify the Fund upon receiving the settlement proceeds, despite the Fund’s asserted subrogation rights (Compl. ¶37). The filing quotes the rule directly: "Upon receiving funds... in which a client or third person has an interest, a lawyer shall promptly notify the client or third person."

Finally, Rule 1.15(e)(1) mandates that “[t]he property shall be kept separate by the lawyer until the dispute is resolved.” The complaint alleges that the defendants did not preserve the disputed funds, instead potentially distributing the settlement proceeds (Compl. ¶38). The filing states, in its words, that "The property shall be kept separate by the lawyer until the dispute is resolved." The complaint alleges that the Fund demanded reimbursement for the $109,105.99 subrogation lien but received no payment from the Defendants (Compl. ¶39).

The Fund seeks to impose an equitable lien and constructive trust on the settlement proceeds, alleging that Mr. Hughes and Duggan & Hughes, LLC, “have refused to reimburse the Fund any of those assets constructively held by them” (Compl. ¶53).

Relief Sought and Procedural Posture

The complaint seeks to enforce the Central States, Southeast and Southwest Areas Health and Welfare Fund’s subrogation rights under ERISA and the Fund’s plan terms. The Fund demands an equitable lien by subrogation on the settlement proceeds received by Richard M. Webb, Tammie D. Webb, Daniel Hughes, and Duggan & Hughes, LLC, as well as the imposition of a constructive trust on those proceeds. The complaint alleges the Fund is entitled to $109,105.99, the full amount of its subrogation lien, plus interest, attorneys’ fees, and costs. The Fund asserts that the Webbs, along with their attorney Daniel Hughes and his law firm Duggan & Hughes, LLC, settled their claims for at least $70,000.00 but failed to reimburse the Fund for its subrogation lien of $109,105.99 (Compl. ¶¶31-32, 43, 49-50).

The complaint requests the court to impose an equitable lien and constructive trust on the settlement proceeds, enforce the lien, enjoin the defendants from disposing of the funds, retain jurisdiction, and award attorneys’ fees and costs. The complaint states, “The Fund has established an equitable lien in the specifically identifiable amount of $109,105.99 against Mr. Hughes and the Law Firm,” and seeks to prevent dissipation of those funds (Compl. ¶43). The complaint also seeks enforcement of the Fund’s subrogation rights under the plan and ERISA § 502(a)(3).

The complaint alleges breach of fiduciary duty under ERISA §§ 404, 409, and 502(a)(2), seeking equitable relief, reimbursement of the $109,105.99 plus interest, attorneys’ fees, and retention of jurisdiction. The complaint alleges the defendants “have refused to reimburse the Fund any of those assets constructively held by them” (Compl. ¶53). The complaint demands an accounting of the settlement proceeds and requests attorneys’ fees, costs, and expenses under ERISA § 502(g).

The complaint also requests “any other equitable relief the Court deems just and proper,” including retention of jurisdiction to enforce its orders. No defendant has yet responded to

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.