When Hartford Says “Remedies Exhausted” — and Then Claims You Didn’t Exhaust Them

Plaintiff Sakwa spent over a decade fighting Hartford Life and Accident Insurance Company over the calculation of his long-term disability benefits. On March 25, 2026, Judge Sharon Johnson Coleman of the Northern District of Illinois issued a mixed ruling in Sakwa v. Hartford Life and Accident Insurance Company, No. 1:25-CV-04546, 2026 WL 822460 (N.D. Ill. Mar. 25, 2026), granting Hartford’s motion to dismiss the breach of fiduciary duty count but allowing Sakwa’s claim for benefits to proceed.

Background

Sakwa, a former equity partner at Arnstein & Lehr LLP (now Saul Ewing LLP), became disabled in January 2013 and began receiving long-term disability benefits under an ERISA-governed group policy administered by Hartford. His monthly benefit was calculated using two variables: his Pre-Disability Earnings (“PDE”) — his average monthly compensation before disability — and his Current Monthly Earnings (“CME”) — his part-time income while disabled. The benefit equaled 60% of the difference between the two. The policy excluded 401(k) and Keogh retirement plan contributions from the definition of “earnings.”

From 2013 through mid-2018, Hartford calculated both PDE and CME including those retirement contributions — contrary to the policy’s exclusion — and memorialized that methodology in writing in 2014. In July 2018, Hartford abruptly reversed course, claiming retroactively that Sakwa had been overpaid because his CME should have excluded the 401(k) contributions. Critically, while Hartford revised CME retroactively to claim an overpayment, it simultaneously continued calculating Sakwa’s ongoing monthly benefits using the original inclusive methodology — applying different definitions of “earnings” to the same policy term at the same time.

What followed was a years-long administrative odyssey. Hartford’s own Appeal Unit twice found the revised CME calculations inconsistent with prior methodology, yet the claims office never corrected them. In October 2019, Hartford’s Appeal Unit issued a determination that agreed the 2016 and 2017 CME calculations were wrong — but simultaneously revised both PDE and CME in a way that introduced the same earnings-definition inconsistency, without giving Sakwa any opportunity to respond. Hartford declared that decision final and set a civil action deadline of October 11, 2022.

Sakwa filed a timely appeal of the October 2019 determination in April 2020. Hartford refused to consider it. Through a 2021–2022 CPA review process — which Sakwa actively participated in — Hartford again issued a final determination on April 25, 2022, stating in writing that administrative remedies had been exhausted and extending the civil action deadline to April 25, 2025. In December 2022, Hartford voluntarily issued a corrected calculation and paid Sakwa approximately $66,000 for an identified underpayment.

Sakwa filed suit on April 25, 2025.

Count I: Breach of Fiduciary Duty — Dismissed

Sakwa’s first count alleged that Hartford’s April 22, 2020 refusal to consider his appeal constituted a breach of ERISA fiduciary duty, seeking equitable relief under 29 U.S.C. § 1132(a)(3). The court dismissed this count on two independent grounds.

First, the court found the claim time-barred. Under ERISA § 1113, breach of fiduciary duty claims must be filed within the earlier of six years from the last act of breach or three years from the plaintiff’s earliest date of actual knowledge of the breach. Because Sakwa himself alleged the breach occurred on April 22, 2020 — the date Hartford refused his appeal — the three-year limitations period expired on April 22, 2023, two years before he filed suit. The court also noted that Sakwa failed to address Hartford’s statute of limitations argument in his opposition brief, constituting waiver under Seventh Circuit precedent.

Second, the court held that even if the claim were timely, Count I was an impermissible repackaging of his benefits claim under § 1132(a)(3). Section 1132(a)(3) functions only as a “safety net” for injuries not adequately remedied elsewhere under ERISA. Sakwa’s own concession in briefing that both counts led to “the same destination” confirmed that adequate relief was available under § 1132(a)(1)(B), foreclosing resort to the catchall equitable provision.

Count II: Benefits Claim — Survives

Hartford moved to dismiss Sakwa’s benefits claim under § 1132(a)(1)(B), arguing he failed to exhaust administrative remedies by not appealing Hartford’s December 2022 arithmetic correction within the plan’s 180-day window.

The court rejected this argument on two grounds. First, and most significantly, the court held that Hartford’s own April 25, 2022 letter — which expressly stated that “administrative remedies available under the Policy have been exhausted” and set the civil action deadline — precluded Hartford from arguing in litigation that Sakwa had not exhausted those remedies. An insurer cannot represent to a claimant that the administrative process is complete and then reverse that position in court.

Second, the court found that even if the December 2022 correction letter were treated as a new final decision requiring a separate appeal, any such appeal would have been futile. After nine years of unresolved disputes over the same PDE–CME earnings-definition inconsistency, it was sufficiently certain that yet another appeal would have been denied or ignored.

Why This Decision Matters

Sakwa is a reminder that Hartford’s own administrative communications can and will be held against it. When an insurer tells a claimant in writing that administrative remedies are exhausted, it cannot resurrect that argument as a litigation defense. The case also illustrates the tension between ERISA’s § 1132(a)(3) catchall and § 1132(a)(1)(B) benefits claims — the court’s dismissal of Count I on both limitations and duplicativeness grounds underscores the importance of pleading those claims carefully and timely.

For disability claimants, the decision is a cautionary tale about the statute of limitations for fiduciary duty claims: the three-year clock under § 1113 runs from actual knowledge of the breach, and a claimant’s own allegations can establish that date.