Trust's Right to Reimbursement

The plan excludes benefits for an illness or injury caused by the act or omission of another person (known as the "third party"). The plan also excludes benefits for any illness or injury for which first-party coverage is available under an automobile, homeowners, renters, commercial premises or other liability policy insuring the retiree or dependent, regardless of who caused the illness or injury.

If a retiree or dependent has a potential right of recovery from a third party or the insurer, the plan, as a convenience to the retiree or dependent may advance benefits pending resolution of the third-party claim. However, the plan's payment of benefits is conditioned upon reimbursement from any judgment, settlement, disputed claim settlement, or other recovery, up to the full amount of all benefits provided by the plan, but not to exceed the amount of the recovery. The plan is entitled to reimbursement regardless of whether the retiree or dependent is made whole by the recovery, and regardless of the characterization of the recovery, except that the plan will deduct reasonable attorney fees and a pro rata share of the costs from the reimbursement amount, as described below, if the retiree or dependent complies with the terms of the plan and any agreement to reimburse.

In addition, the plan can require the retiree or dependent to execute an agreement acknowledging this reimbursement right, the name and address of the party at fault, the name of any insurance company through which coverage may be available, the name of any other lien holders involved and a factual description of the accident and/or injury.

When any recovery is obtained from a third party or insurer, an amount sufficient to satisfy the plan's reimbursement amount must be paid into a trust account or escrow and held there until the plan's claims are resolved by mutual agreement or court order. The obligation to place the reimbursement amount in trust is independent of the obligation to reimburse the plan. If the funds necessary to satisfy the plan's reimbursement amount are not placed in trust, the retiree, dependent or the individual named to hold the funds in trust shall be liable for any loss the plan suffers as a result.

If reasonable attorney fees are incurred in recovering from the third party or insurer, the plan agrees to pay a percentage of attorney fees on the amount reimbursed to the plan, not to exceed the percentage actually charged by the attorney to the retiree or dependent. If reasonable costs are incurred in recovering from the third party or insurer, the plan agrees to pay a pro rata share of the costs, based upon the plan's share of the gross recovery to the total gross recovery. Costs incurred solely for the benefit of the retiree or dependent shall be the responsibility of the retiree or dependent. Notwithstanding the foregoing, the plan's payment of attorney fees and costs is contingent on compliance with the plan's reimbursement provisions and/or the agreement to reimburse.

If the plan is forced to bring a legal action against the retiree or dependent to enforce the terms of this plan provision or an agreement to reimburse, it shall be entitled to its reasonable attorney fees, costs of collection and court costs.

The plan may cease advancing benefits if there is a reasonable basis to determine this provision is not enforceable, or if there is a reasonable basis to believe that the parties involved will not honor the terms of this provision or the reimbursement agreement, or the Board of Trustees modify this provision related to advancing benefits. The plan may also deny coverage for expenses incurred after recovery on the third-party claim, if such expenses are related to the third-party recovery.

If the plan is not reimbursed upon recovery on a claim, the plan may bring an action against the retiree or dependent to enforce its rights to reimbursement and/or the agreement to reimburse, or to seek a constructive trust, or in the alternative may elect to recoup the reimbursement amount by offsetting future benefit payments, including those of family members, or by recovery from the source to which benefits were paid.

Venue in any legal action under this provision may be brought in King County Superior Court or in the United States District Court for the Western District of Washington, at Seattle at the option of the Trust.