Articles Posted in ERISA

A 2017, Southern District, Houston Division opinion needs to be read by ERISA lawyers.  The opinion is styled, Samuel Heron, III v. ExxonMobil Disability Plan.

This ERISA case challenges a plan administrator’s denial of benefits.  Heron alleges that the decision to end his long-term disability benefits after an initial two year period violated 29 U.S.C. Section 1132(a)(1)(B).  Exxon filed a motion for summary judgment which was granted by the Court.

Heron is a 60 year old man who suffers from a variety of illnesses.  He worked in the procurement department at Exxon where he negotiated and managed worldwide material and services agreements.  The Plan covering him divided benefits into two periods, the first is the period that begins on the last day the person was actively at work, and ends two years later.  In this first period, an individual is incapacitated “if the person is wholly and continuously unable, by reason of physical or mental health impairment, to perform any work suitable to the person’s capabilities, training and experience, that the person’s employer has available during the initial period, and such inability to perform work is expected to continue for … at least six months form the date the person’s ability to perform work is determined.”  After the initial two year period, an individual is incapacitated “if the person is wholly and continuously unable, by reason of a physical or mental health impairment, to perform any work for compensation or profit for which the person is or may become reasonably fitted by education, training or experience, and such inability to perform work is expected to continue for  … at least six months from the date the person’s ability to perform work is determined.”  In the initial period, the definition of incapacitated looks only to the ability to perform any work that the person can do or reasonably could do with training.

Quick time limitations in ERISA policies are not unusual.  Failure to follow the limitations can be fatal to a claim.  This is illustrated in a Houston Division, Southern District opinion styled, RedOak Hospital LLC, v. GAP Inc., and GAP Health and Life Insurance Plan.

RedOak sued GAP under ERISA, Section 502(a).  GAP filed a motion for summary judgment which was granted by the court.

RedOak treated patient, SK, as an out-of-network provider.  Before treatment, RedOak verified SK had out-of-network benefits under the ERISA Plan.  SK signed an assignment of benefits plan.  RedOak submitted billing of $68,517.00 and GAP eventually paid $0.

As any ERISA attorney can tell you, the rules surrounding ERISA are tough.  This is illustrated in a Fifth Circuit opinion styled, Kimberly D. Hendrix v. Prudential Insurance Company of America, et al.

Hendrix appeals the summary judgment granted against her on her ERISA claims arising out of a life insurance policy issued to her husband Randy, by Prudential and the dismissal of her claims against her former employer, Wal-Mart.

Randy was employed by Wal-Mart until July 11, 2012.  Prudential presented evidence that it sent a letter on July 23, 2012 , notifying Randy of his right to convert his Wal-Mart policy to an individual life insurance policy.  Randy had until August 11, 2012, thirty-one days after he ceased to be insured under the Wal-Mart plan, to indicate whether he would convert to an individual policy.  Randy passed on August 27, 2012.  On September 4, 2012, because Prudential received no response to the notice of conversion and because Randy passed outside the thirty-one day conversion period, the claim for life insurance benefits was denied and Kimberly was so notified.

Employee Retirement Income Security Act (ERISA).  These types of plans are loved by insurers and not so much by the insured.  The reason is that so often, the decisions of plan administrators are final in that the courts uphold their decisions.  A Southern District, Galveston Division opinion is good reading to illustrate this favoring of the ERISA plan administrators.   The opinion is styled, Kristin Walker v. Regency Blue Cross Blue Shield of Oregon.

After citing some lengthy and convoluted facts the court’s opinion read thus:

This Court had previously found the plan to be covered by ERISA.  A claimant must exhaust all available administrative remedies before filing suit.  An exception to this rule found in 29 C.F.R., Section 2560.503-1(g) wherein there is non-compliance with requirements.

Here is an ERISA case from the United States Fifth Circuit Court of Appeals.  It is styled, Lashondra Davis v. Aetna Life Insurance Company.  It is an appeal from a summary judgment in favor of Aetna.

The facts can be read from the case.  The important issue in this case, is how the Court analyzed the allegation that the plan administrator abused his discretion and there was a conflict of interest with the plan administrator being both who evaluates the claims for benefits and pays benefits claims.

The Court stated that in determining whether there was an abuse of discretion, we also consider whether the plan administrator had a conflict of interest.  A plan administrator has a conflict of interest if it “both evaluates claims for benefits and pays benefits claims.”  However, a conflict of interest is but one factor among many that a reviewing judge must take into account.  A conflict of interest should prove more important where circumstances suggest a higher likelihood that it affected the benefits decision.  A reviewing court may give more weight to a conflict of interest where the circumstances surrounding the plan administrator’s decision suggest procedural unreasonableness — that is, where the method by which the plan administrator made the decision was unreasonable.

Here is a read for lawyers handling ERISA cases.  It is an opinion from the Southern District, Houston Division.  The opinion is styled, Keith v. Metropolitan Life Insurance Company.

For the facts in this case, read the opinion.  This writing is a discussion of the law as it relates to fiduciaries in ERISA cases.

The threshold question in an ERISA claim for breach of fiduciary duty is not whether the actions of some person employed to provide services under a plan adversely affected a plan beneficiary’s interest, but whether that person was acting as a fiduciary (that is, was performing a fiduciary function) when taking the action subject to complaint.  The issue of ERISA fiduciary status is a mixed question of fact and law.  Under ERISA, one is a fiduciary under 29 U.S.C., Section 1002(21)(A) to the extent that:

Here is an ERISA case from the Southern District, Galveston Division.  The case is styled, Unum Life Insurance Company of America v. Sandra Mohedano, et al.

Before the Court is Plaintiff’s Motion for Attorneys’ Fees and Brief in Support.  The Court had earlier granted Unum’s cross-motion for summary judgment while denying Defendants, cross motion in an ERISA action.  A Final Judgment followed, terminating the case.  Unum now seeks to recoup attorneys’ fees expended while litigating the following: (1) the interpleader of Life Benefits ($10,492.50); and (2) the appeal of its denial of Accidental Death and Dismemberment Benefits ($76,683.50).  It is undisputed that Unum is the successful party in this litigation.  Nevertheless, based on the applicable law, the motion for attorneys’ fees is Denied.  The reasons are as follows.

Under ERISA, 29 U.S.C. Section 1132(g)(1), a court in its discretion may allow a reasonable attorney’s fee and cost of action to either party.  This fee-shifting provision is a statutory exception to the “American Rule,” wherein the prevailing litigant is ordinarily not entitled to collect a reasonable attorneys’ fee from the loser.  The text of the statute confers broad discretion upon district courts as it provides no factors relevant to the decision.  The only prerequisite is that the party to which the fees and costs are allowed achieved some degree of success on the merits.  The Fifth Circuit has provided guidelines to assist district courts in exercising their discretion.  These factors include:

Here is another opinion for ERISA lawyers to read.  The opinion is styled, Ricardo Rodriguez and All Others Similarly Situated v. Hartford Life And Accident Insurance Companyhttp://www.txs.uscourts.gov/offices/houston-division.  It is from the Southern District, Houston Division.

This is a motion to dismiss filed by Hartford and granted by the Court.

Rodriguez initiated this suit to recover disability benefits under an ERISA plan with Rodriguez’s employer, Walmart.  Rodriguez seeks to enjoin Hartford from imposing a contractual limitations period on long-term disability claims shorter than that permitted by Arkansas law.  The Policy provisions states:

ERISA lawyers will fight whether a prescribed treatment is medically necessary on a routine basis.  The courts will interpret the policies in favor of the insurer.  This case is from the Northern District, Dallas Division.  It is styled, Charlize Marie Baker v. Aetna Life Insurance Co., et al.

Baker, who is undergoing the process of gender transition from male to female, sued Aetna to recover short-term disability (STD) benefits following breast augmentation surgery, under the employer’s ERISA plan.  The Court denied Baker’s claim for benefits.

In considering Baker’s claim, Aetna relied on her medical records, including records from her plastic surgeon, Dr. Harris.  The claim documentation forms asked Baker, “What is the primary medical condition that keeps you from working?”  Baker responded, “cosmetic procedure.”  Aetna denied Baker’s claim on the ground that her surgery was not caused by an illness, injury, or pregnancy-related condition, as required under the STD plan.  Baker appealed this decision.

The case discussed here is from the Houston Division, Southern District.  The style of the case is Connecticut General Life Insurance Company, et al v. Elite Center For Minimally Invasive Surgery LLC, et al.  This is a Motion for Clarification.

Connecticut (Cigna) sued under ERISA, Section 502(a)(3) to enforce and redress violations of the healthcare benefit plan terms at issue in this case.  The plans purportedly delegate Cigna to serve as the authorized claims fiduciary “to interpret and apply Plan terms,” including “the determination of whether a person is entitled to benefits under the plan and the computation of any and all benefit payments.”  The plans also authorize Cigna to collect overpayments made on behalf of the plans by recovering funds or offsetting the overpayment amount from future benefits claims payments.

The Court applied an abuse of discretion standard, asking first if Cigna’s interpretation of the plan was legally correct and then whether Cigna abused its discretion in interpreting the plan language as it did.  The Court found that Cigna’s interpretation of the plan was legally incorrect.  Despite this, the Court did not rule on Cigna’s ERISA claim because the abuse of discretion question is fact intensive and inappropriate to decide at the motion to dismiss stage.