This morning, I came across a brief and interesting decision issued by the United States District Court for the Eastern District of Louisiana addressing the scope of equitable remedies available to participants in ERISA cases. In Lauga v. Applied-Cleveland Holdings, Case No. 16-14022 SECTION: “H”(3), 2016 U.S. Dist. LEXIS 173464 (E.D. La. December 15, 2016), the Court denied a motion to dismiss filed by MetLife in which it sought to apply a suicide exclusion in a claim seeking life insurance benefits. The reason for the Court’s decision may make this a case to watch if it proceeds through litigation.
The Lauga plaintiff seeks to collect the proceeds of an optional life insurance policy covering her deceased husband, which was offered through an ERISA-regulated employee benefit plan offered by his employer. The plaintiff is the designated primary beneficiary under the plan. MetLife insures the plan’s benefits.
At the time that he was hired in 2009, the plaintiff’s late husband did not elect optional life insurance benefits. In March 2013, he decided to obtain $200,000 in optional lie insurance benefits through his employer. He was required to complete a form describing his health and submit to a medical exam. He submitted the form on March 14, 2013. About a week later, the plan administrator returned the form and claimed it was incomplete. The decedent resubmitted the form by April 5. The administrator conducted a medical exam on July 5, 2013 (the opinion appears to contain a typo and identified the year as 2016) and the requested coverage was approved on July 11. The additional coverage went into effect on August 1, 2013.
The plaintiff’s husband committed suicide on July 9, 2015, less than two years after the effective date of the policy. The plan contains a suicide exclusion that provides that policy proceeds are not payable if the insured commits suicide two years from the date the coverage takes effect. MetLife denied the plaintiff’s claim for benefits, invoking the suicide exclusion.
What makes the case interesting is the Plaintiff’s argument as to why she should receive the benefits. She contends that the defendants breached their fiduciary duties to her and the decedent by failing to promptly process the decedent’s application for optional life insurance coverage. She contends that the defendants’ untimely processing of his application gave the policy a later effective date, causing the decedent’s death to fall just inside the 2-year suicide provision. She seeks reformation of the policy under section 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3).
The Court denied MetLife’s motion to dismiss and held that the plaintiff had properly pled a claim for relief under Section 502(a)(3) and cited the Supreme Court’s decision in CIGNA Corp. v. Amara, 563 U.S. 421, 440 (2011), which clarified and expanded the types of equitable relief available in ERISA cases. The Lauga plaintiff’s claim would have been very difficult, if not impossible, prior to Amara. Since Amara, there have been some interesting cases that provide plan participants with better tools to recover their wrongly withheld benefits. See, e.g., McCravy v. Metro. Life Ins. Co., 690 F.3d 176 (4th Cir. 2012) (remanding a case to the District Court to determine whether the plaintiff had made out a claim for equitable relief based on a theory of estoppel with surcharge of the fiduciary as the equitable remedy).
It will be interesting to see how this matter plays out and if it will add to the developing body of law determining the scope of equitable remedies available under Section 502(a)(3) in light of Amara.
Adam helped me with my LTD case. His knowledge and thoroughness was outstanding. He communicated every aspect of the process and case in an extremely detailed and timely manner. He also took the time to answer any questions I had as a person going through it for the first time. I could not recommend him more for anyone in a similar situation.
Adam and his team are great. They did an excellent job helping my family when we were really losing hope. Adam is very professional and has excellent knowledge to protect your rights. If you choose Adam you will talk directly with him. It was a truly pleasant experience. I’m extremely thankful that I chose the Garner firm. I highly recommend them.
Adam Garner provided excellent courteous and considerate service in helping me resolve a long term disability claim. He was accessible, knowledgeable and exercised the good judgement necessary for us to be successful. I heartily recommend his expertise and services
This review is long over-due!
If you’re looking for professional and sound legal advice, The Garner Firm is where you want to start!
Throughout my relationship with The Garner Firm, there was never a time that I felt uninformed where my case stood. Attorney Adam Garner focuses on making sure his clients are well informed throughout their legal battle. I can reassure any prospective clients that Adam will maximize all his resources and fight to the MAX in order you’re reasonably compensated.
I invite you to take the opportunity to contact The Garner Firm – YOU WILL NOT REGRET IT!
How did we do?
Note: Your review may be shared publicly.