Articles Posted in ERISA

Attorneys who handle Employee Retirement Income Security Act (ERISA) cases need to be able to explain to potential clients how ERISA cases are handled / looked at, by the Courts.  This is explained in a 2020 opinion from the Western District, San Antonio Division, case.  The case is styled, Ramon Hernandez v. Life Insurance Company of North America, Schlumberger Group Welfare Benefits Plan.

The case needs to be read to grasp an understanding of the underlying facts.  Here, we are looking at the law the Court used in reaching its determination.

In this case, the Court granted summary judgment against Hernandez.  In reaching the decision, the Court restated law as it relates to ERISA cases.  The Court looks at these cases under an “abuse of discretion” standard, not a de novo standard.

Here is a 2020, case from the Southern District of Texas, Houston Division, that deals with life insurance wherein the life insurance plan is subject to the Employee Retirement Income Security Act (ERISA). The case is styled, Wagma Mina Huerta v. Metropolitan Life Insurance Company, et al.

This case, filed by Huerta , is an action pursuant to ERISA seeking equitable relief for alleged breaches of fiduciary duty by the Defendants related to the denial of life insurance coverage for the death of Huerta’s husband.

The opinion is lengthy but only a part will be discussed here.  The factual background can be read in the opinion.  In this case, MetLife had filed a motion to dismiss pursuant to Federal Rule 12(b)(6), which allows dismissal of an action whenever the complaint, on its face, fails to state a claim upon which relief can be granted.  United States, 5th Circuit case law states that when considering a motion to dismiss, the court may consider, in addition to the complaint itself, “any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint.”  This is discussed in the 2010, opinion, Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC.  When a defendant attaches such documents, it “merely assists the plaintiff in establishing the basis of the suit and the court in making the elementary determination of whether a claim has been stated.”

ERISA stands for Employee Retirement Income Security Act.  When making an insurance claim related to employment, it is important to know it the claim is subject to ERISA, which is governed by Federal Law, or not ERISA, in which case the claim is governed by State Law.

Plus, there are employee benefit plans that would be governed by ERISA however, elements of the employee benefit plan may fall outside of ERISA.  This is discussed in a 2020 opinion from the Western District of Texas, Austin Division.  The opinion is styled, Stephen Burrell v. Metropolitan Life Insurance Company and Deloitte LLP.

Burrell’s lawsuit was for short term disability (STD) benefits that had been denied and for long term benefits (LTD) that had been denied.  This discussion will focus on the STD benefits claim.

Employee Retirement Income Security Act (ERISA).  These cases are tough even under the best of circumstances.  Lawyers who handle ERISA cases do not spend time advertising their great results.  The reason is the ERISA law prohibits “great” results.  A win is just getting what you should have received in the first place.  But wins are few and far between, especially in the United States Fifth Circuit.

Here is a case from the Northern District of Texas, Wichita Falls Division.  It’s styled is, Edythe Koch v. Metropolitan Life Insurance Company.

In this case, the Court denied MetLife’s motion for summary judgment which is unusual in these cases, thus, at first blush one thinks a win is coming.  But when the Judge conducted it’s own review of the record, the Court upheld the plan administrator’s denial of accidental life insurance benefits.

Many employer based insurance plans fall under ERISA.  Understanding how the courts look at ERISA cases is important for life insurance lawyers to be able to discuss a case with a client.

The United States Court of Appeals for the Fifth Circuit recently ruled on a case that involved a life insurance policy that was governed by ERISA.  The styled of the case is Jason Freeman v. Securian Life Insurance Company.

Jason Freeman was the father of 17 year old Adrian.  Adrian died instantly when he pulled the trigger of a revolver, the barrel of which he had inserted in his mouth immediately after he had spun the gun’s cylinder and twirled the gun around his finger.  Soon after the death of Adrian, it was determined that the revolver had only one cartridge in the cylinder.  The conclusion by the Deputy Medical Examiner of Bexar County, Texas, was that Adrian’s death was the result of a suicide.

In an ERISA case, the plan administrator, upon request, is required to give a copy of the claims file to the insured.  The most common way this occurs is when a claim is denied, the plan administrator informs the insured of the denial in a written letter and in the letter the insured is informed of their right to an appeal and a copy of the claims file.  The insured should then request a copy of that file.

In a recent case out of the Southern District of Texas, Houston Division, the insured claimed they did not timely receive a copy of the claims file and thus, argued that the statute of limitations on their claim was tolled until such time that she received the claims file.  This case is styled, Cynthia Sternberg v. Metlife Insurance Company.

In this case, the insured has clearly let the statute of limitations pass for her appeal.  These limitations were made clear in the policy.  So, the insured made arguments regarding the tolling of the limitations period.

Statute of Limitations issues are not usually seen in ERISA cases, but here is one.  This is a 2019, opinion from the Southern District of Texas, Houston Division.  It is styled, Cynthia Sternberg v. Metlife Insurance Company.

This case is currently before the Court on a Rule 12(b)(6) Motion to Dismiss filed by Metlife.  The Court granted the motion.

Sternberg filed for short term disability (STD) benefits from her employers claims administrator.  The STD benefits were granted.  Metlife is the claim administrator and it issued the group policy that funds the benefits under the Plan.  Sternberg later, filed for long term disability (LTD) benefits.  The claim for LTD was denied.

ERISA has it’s own set of rules and regulations and is unlike normal insurance that is governed by State laws and the Texas Department of Insurance.

Here is a 2019, opinion from the Eastern District of Texas, Sherman Division, that deals with ERISA and a claim for Long Term Disability (LTD) benefits.  The opinion is styled, Xien Huang Napodano v. Ericsson Inc. Short Term Disability Plan.

On August 22, 2017, Napodano resigned from his job by leaving a note on the desk of his boss and a few days later applied for LTD benefits.  He was informed that he had to first apply for Short Term Disability (STD) benefits first, before being eligible for LTD benefits.  He then filed for STD benefits.

Here is yet another ERISA claim being denied by the Federal Courts.  This case is from the United States Fifth Circuit Court of Appeals and is styled, Deo G. Shanker v. United Omaha Life Insurance Company.

The District Court granted United’s summary judgment motion and this appeal followed.

Shanker was President of a company called Intracare and United was the insurer under an ERISA plan which provided for long-term-disability (LTD) benefits.  To qualify for LTD benefits, Shanker had to become “Disabled due to an Injury or Sickness, while insured under the Policy.”  Disabled is defined to mean: “Because of Injury or Sickness, a significant change in Your mental or physical functional capacity has occurred in which you are prevented from performing at least one of the Material Duties of Your Regular Occupation on a part-time or full-time basis ….”  Material Duties is defined as “the essential tasks, functions, and operations relating to an occupation that cannot reasonably omitted or modified” and includes “the ability to work for an employer on a full-time bases.”  Regular Occupation is defined as “the occupation You are routinely performing when Your Disability begins.”  The definition in the policy also notes:

ERISA lawyers are quick to tell potential clients the limitations of ERISA claims.  One of those limitations is that little to no legal discovery is allowed in ERISA claims.  This is discussed in an April 2019, opinion from the Northern District of Texas, Dallas Division.  The case is styled, Jose Chavez v. Standard Insurance Company.

In this lawsuit, Chavez is seeking long term disability (LTD) benefits from Standard.

Chavez filed suit against Standard in sought to compel discovery of contractual and financial arrangements under which Standard’s medical consultants played their respective roles regarding Chavez’s LTD claim.  Chavez also sought discovery of Standards internal claim procedures.

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