ERISA Claim Accrues Upon Clear Repudiation of Claim, Even if There is No Formal Denial Letter

In Witt v. Metro. Life Ins. Co., 772 F.3d 1269 (11th Cir. 2014), the court answered the question: “what happens when the defendant says it issued a formal denial letter and the plaintiff says he never received the letter, but it is undisputed the defendant terminated benefits and did not pay the plaintiff any benefits for 12 years?” Continue reading

Beneficiary Designation Forms Are not Plan Documents; Change of Beneficiary By Phone Was Sufficient

In Becker v. Williams, — F.3d –, 2015 WL 348872 (9th Cir. Jan. 28, 2015), the plan participant called the plan administrator to change the beneficiary of his pension plans from his ex-wife to his son. His employer sent him beneficiary change forms, but he never completed them in the years before he died. After his death, both the son and ex-wife claimed the benefits, and the employer interpleaded. Continue reading

Ninth Circuit Replaces Gabriel Decision On Equitable Remedies; Modifies Interpretation of Amara

We previously reported on Gabriel v. Alaska Electrical Pension Fund, 755 F.3d 647 (9th Cir. 2014), which addressed limits on make-whole relief under 1132(a)(3), and affirmed judgment for the plan fiduciary. That decision was a divided one, with a partial dissent by Judge Berzon. In December, the panel withdrew its earlier decision, and replaced it with a new decision, Gabriel v. Alaska Electrical Pension Fund, — F.3d –, 2014 WL 7139686 (9th Cir. Dec. 16, 2014). The new decision affirmed summary judgment on two of the three measures of damages, and remanded to the district court on the third. Continue reading

Eighth Circuit Enforces Choice of Law Clause; Discusses Test for Evaluating Reasonableness of Plan In-terpretation

In Brake v. Hutchinson Tech. Inc. Grp. Disability Income Ins. Plan, 774 F.3d 1193 (8th Cir. 2014), the court determined that, where a policy insuring a South Dakota resident was issued in Minnesota to a Minnesota employer, and provided that it was governed by Minnesota law, then a South Dakota regulation precluding discretionary clauses could not apply.

The court then turned to the primary issue, which is whether the administrator reasonably interpreted the plan’s pre-existing condition clause. Along the way to deciding that the interpretation was reasonable, the court summarized the elements to be considered: “Our analysis of the reasonability of Hartford’s plan interpretation is informed by the following factors: whether the decision is consistent with plan goals; whether it renders plan terms meaningless or is internally inconsistent; whether the decision complies with ERISA; whether the plan has previously interpreted the terms at issue consistently; and whether the interpretation was contrary to the clear language of the plan.” Here, the court held that the interpretation was compelled by the clear language of the plan.

Eighth Circuit Leaves Open Possibility That Procedural Irregularities Can Preclude Discretionary Review

In Johnson v. United of Omaha Life Ins. Co., 775 F.3d 983 (8th Cir. 2014), the court determined that the district court erroneously reviewed the administrator’s determination under the de novo standard, instead of the arbitrary and capricious standard. It ruled that it did not need to decide whether procedural irregularities still could result in a change of the standard of review. Continue reading

Insurer Reasonably Denied AD&D Claim Following “Suicide By Cop”

In Rice v. ReliaStar Life Ins. Co., 770 F.3d 1122 (5th Cir. 2014), the police responded to a 911 call about the decedent, Rice, sitting in his car, in his garage, with a gun to his head, threatening suicide. After various failed efforts by the police to get him to surrender, he walked toward the police, refused to drop his gun, said “I want to commit suicide,” and was shot and killed. Continue reading

Court Provides Narrow Interpretation for Mental Illness Limitation

In George v. Reliance Standard Life Ins. Co., 776 F.3d 349 (5th Cir. 2015), a case of first impression, a divided Fifth Circuit panel decided when a disability is “caused by or contributed to by” a mental illness. The plaintiff was a helicopter pilot who was disabled due to pain suffered at the site of a leg that had been amputated before he started the job in question. He also suffered from depression and PTSD. The insurer determined that he could perform sedentary work, but that his mental illnesses would prevent him from working. Thus, the insurer concluded that the mental illness “’contributed to’ his overall impairment status,” resulting in the application of the mental illness limitation in the policy. Continue reading

Coordination-of-Benefits Claim Is Not Equitable

In Central States, Southeast & Southwest Areas Health & Welfare Fund v. Gerber Life Ins. Co., 771 F.3d 150 (2d Cir 2014), the Second Circuit joined the Fifth Circuit in ruling that an ERISA health plan generally has no equitable remedy against another insurer in a coordination of benefits dispute. Continue reading

Second Circuit Affirms Reformation Judgment in Amara v. Cigna; Reformation Governed by Contract Rules, Not Trust Rules

In 2011, the Supreme Court issued a major ERISA decision, Cigna Corp. v. Amara, 131 S.Ct. 1866 (2011), holding that courts could not reform an ERISA plan as part of a claim for benefits under 29 U.S.C. 1132(a)(1)(B), but could do so as an equitable remedy under 29 U.S.C. 1132(a)(3). The case involved a situation in which the district court had ruled that Cigna had misrepresented the terms of a new pension plan when asking employees with vested rights in an outgoing plan to accept transfer. The district court had reformed the plan under 1132(a)(1)(B) to provide the benefits Cigna had promised; the Supreme Court held that the district court had used the wrong section of ERISA as the basis for its ruling.The Supreme Court then remanded for further consideration under the rules and limitations it had announced.

Amara v. CIGNA Corp., 775 F.3d 510, 513 (2d Cir. 2014), presumably is the final decision in this long-running dispute. Continue reading

Rochow Part 3: En Banc Panel Vacates Disgorgement Award

In 2013, the 6th Circuit made waves in the ERISA world when it held that LINA could be ordered to disgorge almost $3 million in profits it allegedly made on benefits it had improperly withheld, on top of payment of the benefits themselves. A few months later, the court granted LINA’s petition for en banc review, and vacated the 2013 decision .

Last week a divided 6th Circuit vacated the disgorgement of profits in a ruling that restores sanity to ERISA benefits litigation. Continue reading