October 2012

In Treas., Trustees of Drury Industries, Inc. Health Care Plan and Trust v. Goding, 692 F.3d 888 (8th Cir. 2012), Goding, a plan participant, received benefits under Drury’s health care plan after an accident; the Plan contained an express subrogation agreement. During the course of Goding’s litigation to collect damages for the accident, his attorneys repeatedly acknowledged the Plan’s subrogation rights. Goding settled his lawsuit, and his attorneys initially held in escrow funds necessary to reimburse the Plan, but then disbursed them to Goding. The Plan was unable to obtain reimbursement from Goding after he declared bankruptcy. The Plan then sued Goding’s attorneys, asserting various theories, including equitable lien, restitution and constructive trust.
Continue Reading Participant’s Attorneys Are Not Responsible For Subrogation Unless They Specifically Agree

In Schorsch v. Reliance Standard Life Ins. Co., — F.3d — ,  2012 WL 3667977 (7th Cir. Aug. 28, 2012), the court “considered here whether the content of a termination notice, specifically the absence of particular information, caused the beneficiary’s failure to exhaust and whether [he is]  estopped from taking advantage of that failure.” The court found that the district court did not abuse its discretion in concluding that “the beneficiary offered no evidence of reasonable reliance on the absent information and that even if the notice was deficient, the alleged deficiencies were not material.”
Continue Reading Failure to Exhaust Administrative Remedies Not Excused Even When Termination Notice Is Defective

In Lipker v. AK Steel Corp., 2012 WL 5346325 (6th Cir. Oct. 31, 2012), the plaintiff applied for surviving spouse benefits under the pension benefits plan administered by her husband’s former employer. The administrator approved her claim, but she disputed the amount of the benefit. The discrepancy between her expectation and the actual award hinged on “the interpretation of plan language that both parties argue is unambiguous, yet each party interprets differently.” Though the district court had held in favor of the plaintiff’s interpretation, the Sixth Circuit reversed,  finding that the administrator’s proposed interpretation of the plan language to be truer to its plain meaning when read with reference to the law it expressly refers to.
Continue Reading Social Security Statute Aids Interpretation of Ambiguous Plan Offset Provision