We hope that everyone enjoyed a wonderful Mother’s Day weekend! Of note this past week is the Tenth Circuit’s decision in Speer v. Prudential Ins. Co. of America, 2016 WL 1660046 (10th Cir. Apr. 27, 2016), a life insurance benefit case involving allegations of check cashing fraud. In this case, Prudential issued two checks made payable to each son of the insured. Both checks were cashed but Speer, one of the beneficiaries, was incarcerated at the time of his father’s death and did not learn of the proceeds until much later. Although Prudential attempted to assist the son in filing a fraud claim with the bank where his check was cashed, delays in communicating with the son while he was in prison caused the statute of limitations to expire on the claim. Speer filed suit against Prudential in state court, which Prudential removed to federal court. The Tenth Circuit affirmed the district court’s determination that Speer’s claim, seeking to recover ERISA plan benefits, is preempted by ERISA.
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Below is Roberts Disability Law summary of this past week’s notable ERISA decisions.
Select Slip Copy & Not Reported Decisions
Breach of Fiduciary Duty
•· Plaintiff Secretary of Labor brought suit against defendants First Bankers Trust Services, Inc. (“FBTS”), and Frank Firor, alleging defendants were fiduciaries to an employee stock ownership plan and caused the plan to purchase shares in the company at a price in excess of the shares’ fair market value. The Secretary and Firor – but not FBTS – reached a settlement, conditioned on the entry of a bar order that prevents the non-settling defendant FBTS from seeking indemnification or contribution from Firor. The court denied Firor’s motion for entry of a bar order and granted FBTS’s cross-motion for entry of a bar. Perez v. First Bankers Trust Servs., Inc., No. 12 CV 8649 (VB), 2016 WL 2343889 (S.D.N.Y. May 3, 2016) (Judge Briccetti).
•· In putative class action lawsuit against Standard Insurance Company alleging that Standard unlawfully offset workers’ compensation benefits against disability benefits under an ERISA-governed welfare plan, granting Standard’s Motion for Partial Summary Judgment and Plaintiff’s Motion for Class Certification. Leon v. Standard Ins. Co., No. 215CV07419ODWJC, 2016 WL 2595999 (C.D. Cal. May 5, 2016) (Judge Otis D. Wright, II).
Disability Benefit Claims
•· Granting U.S. Life’s motion for entry of judgment on the administrative record on Plaintiff’s long term disability claim. Temponeras v. United States Life Ins. Co. of Am., No. 1:14-CV-700, 2016 WL 2594846 (S.D. Ohio May 5, 2016) (Judge Sandra S. Beckwith).
•· Plaintiff’s purported state law negligence per se claim, construed as one brought pursuant to ERISA, has not set forth a viable claim for relief against AllMed Healthcare Management, Inc.; granting motion to dismiss. Hackney v. Allmed Healthcare Management, Inc., No. 3:15-CV-00075-GFVT, 2016 WL 1726098 (E.D. Ky. Apr. 28, 2016), judgment entered, No. 3:15-CV-00075-GFVT, 2016 WL 1728963 (E.D. Ky. Apr. 28, 2016) (Judge Gregory F. Van Tatenhove).
•· On Plaintiff’s claim for severance benefits and a retention bonus, finding that Plaintiff’s claim seeks benefits under an independent contract (not a plan governed by ERISA), and granting Plaintiff’s motion to remand. Arvind Thapar v. Moody’s Analytics Solutions, Llc, And Moody’s Analytics, Inc., No. 8:15CV324, 2016 WL 1755817 (D. Neb. May 3, 2016) (Judge Joseph F. Bataillon).
•· Rejecting argument that Plaintiff’s claims – (4) violation of CFRA for retaliation in the form of termination of paid health insurance benefits on behalf of Reynolds against Entity Defendants, and (7) intentional infliction of emotional distress on behalf of Reynolds against Defendants – are preempted by ERISA; granting motion to remand. Reynolds v. Diamond Pet Food Processors of California, LLC, No. 2:15-CV-02118-JAM-AC, 2016 WL 1711671 (E.D. Cal. Apr. 29, 2016) (Judge John A. Mendez).
Life Insurance & AD&D Benefit Claims
•· In lawsuit seeking to recover insurance benefits and alleging that Prudential wrongfully turned over his share of his father’s life insurance proceeds to his brother, and that his brother forged the check and converted the proceeds for his own use, affirming district court’s grant of summary judgment in favor of Prudential and denial of Plaintiff’s motions to remand and for additional discovery. Speer v. Prudential Ins. Co. of Am., No. 15-6183, 2016 WL 1660046 (10th Cir. Apr. 27, 2016) (Before KELLY, O’BRIEN, and GORSUCH, Circuit Judges).
Medical Benefit Claims
•· District Court did not abuse its discretion in denying class certification under Fed.R.Civ.P. 23 on Plaintiffs’ claims under ERISA, 29 U.S.C. § 1132(a)(l)(B) and under RICO, 18 U.S.C. § 1962(a) and (d); District Court did not err on the dispositive issue, namely, whether CIGNA’s use of Ingenix data to determine UCR violated CIGNA’s unambiguous plan terms, resulting in improperly reduced benefits under ERISA; District Court did not erroneously grant CIGNA summary judgment on the issue of whether CIGNA’s UCR determinations denied Plaintiffs’ benefits under ERISA; District Court did not err in denying Plaintiffs’ partial summary judgment that the Ingenix database did not and could not comply with CIGNA’s unambiguous plan terms; District Court did not err in granting CIGNA summary judgment on Plaintiffs’ RICO claims on the basis that Plaintiffs had to show they suffered a RICO injury demonstrated by out-of-pocket loss such as a payment of a balance bill from their medical provider; District Court did not err in granting CIGNA’s motion for summary judgment on the RICO issue of whether the alleged scheme involved any fraud and fraudulent intent by CIGNA; District Court did not err in granting CIGNA’s motion to dismiss on the ground that the Nelson Plaintiffs failed to plead RICO standing because they did not allege an out-of-pocket loss in the form of a payment of a balance bill to a provider for ONET service or receipt of such a balance bill from a provider; District Court did not abuse its discretion in granting CIGNA’s motion to strike Plaintiffs’ supplemental expert reports. Franco v. Connecticut Gen. Life Ins. Co., No. 14-3395, __F.App’x__, 2016 WL 1730730 (3d Cir. May 2, 2016) (Before RENDELL, HARDIMAN, and VANASKIE, Circuit Judges).
•· Provider adequately alleged exhaustion of administrative remedies to survive motion to dismiss. Chesterfield Spine Center, Llc, v. Healthlink Hmo, Inc., No. 4:15 CV 1169 RWS, 2016 WL 2594069 (E.D. Mo. May 5, 2016) (Judge Rodney W. Sippel).
Withdrawal Liability & Unpaid Contributions
•· Recommending the grant of Plaintiff’s motion for summary judgment, seeking to collect an outstanding withdrawal liability payment, as well as interest and liquidated damages, which they contend are due and owing in light of Defendants’ expulsion from the Fund. Nat’l Ret. Fund v. Caesars Entm’t Corp., No. 15CV2048LAKJLC, 2016 WL 2621068 (S.D.N.Y. May 5, 2016) (Magistrate Judge James L. Cott).
•· In suit brought by Multiemployer pension fund against employer, seeking declaration that employer was not entitled to refund of its contributions to pension account for an employee who the employer now alleged to be ineligible under collective bargaining agreement to participate in the fund, holding that employer was not entitled to refund, and approval by Pension Benefit Guaranty Corporation (PBGC), of new fee schedule for private arbitration of an employer’s liability for withdrawing from participation in underfunded multiemployer pension fund, is not required for the new fees to be charged. Cent. States, Se. & Sw. Areas Pension Fund v. Bulk Transp. Corp., No. 15-3208, __F.3d__, 2016 WL 1719335 (7th Cir. Apr. 29, 2016) (Before POSNER, EASTERBROOK, and KANNE, Circuit Judges).
•· Plaintiffs sued for contributions that Trayer owed as an employer, but allegedly did not pay, to the plans. Trayer counterclaimed for the refund of contributions that it allegedly paid by mistake. Court granted Plaintiff’s motion under Rule 12(b)(6) to dismiss Counterclaim 2, for common-law restitution, and Counterclaim 3, which has morphed from a claim for civil penalties under 29 U.S.C. § 1132(c)(1)(B) into a request for the attorney’s fees and costs (of bringing this particular counterclaim) as “equitable relief” under 29 U.S.C. § 1132(a)(11)(B). Sheet Metal Workers Pension Trust of N. California v. Trayer Eng’g Corp., No. 15-CV-04234-LB, 2016 WL 1745676 (N.D. Cal. May 3, 2016) (Magistrate Judge Laurel Beeler).
•· Withdrawal liability may be assessed against all entities in a construction-industry employer’s common-control group at time that withdrawal liability is triggered by continuation or resumption of covered work. Ceco Concrete Const., LLC v. Centennial State Carpenters Pension Trust, No. 15-1021, __F.3d__, 2016 WL 1743394 (10th Cir. May 3, 2016) (Before KELLY, MATHESON, and MORITZ, Circuit Judges).
* Please note that these are only case summaries of decisions as they are reported and do not constitute legal advice. These summaries are not updated to note any subsequent change in status, including whether a decision is reconsidered or vacated. The cases reported above were handled by other law firms but if you have questions about how the developing law impacts your ERISA benefit claim, the attorneys at Roberts Disability Law may be able to advise you so please contact us. Case summaries authored by Michelle L. Roberts, Partner, Roberts Disability Law, 1050 Marina Village Pkwy., Ste. 105, Alameda, CA 94501; Tel: 510-230-2090.
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