Bowers v. Life Insurance Company of North America, 0:13-cv-00891

Background

Bowers, an employee of C.H. Robinson Worldwide, Inc., suffered a severe cardiac event in 2007 and underwent multiple surgeries; he later returned to work part-time with reduced hours and responsibilities.
The Life Policy offered a Waiver of Premium (WOP) benefit for those disabled, with eligibility tied to the employee class and a minimum weekly work requirement of 30 hours for Class 2 employees.
LINA approved Bowers’s long-term disability benefits in 2009 and denied the remainder of the WOP benefit after his return to work, citing an “any occupation” standard and insufficient hours.
Bowers appealed LINA’s decision twice; the first appeal relied on an employment summary indicating 25 hours per week, while the second appeal again relied on evidence including affidavits and supervisor testimony showing an average of around 30 hours per week.
This federal ERISA action seeks (i) a de novo determination of WOP eligibility and back benefits, (ii) return of premiums paid during a period of disability while the employee allegedly remained eligible, (iii) fiduciary breach, and (iv) attorney’s fees.
The court granted Bowers’s summary-judgment motion concerning the WOP eligibility and remanded certain issues, including the precise amount of coverage as of June 13, 2009 and the refund of supplemental-premium payments from June 27, 2008 to December 26, 2008.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the WOP benefit eligibility is reviewed de novo or for discretion.	Bowers claims de novo review applies; no explicit discretion.	LINA argues discretion under the plan or SPD controls.	De novo review applies; no explicit discretion found.
Whether Bowers was regularly working 30 hours per week to qualify as an eligible Class 2 employee when he left in 2009.	Records show 30+ hours per week; corroborated by affidavits and emails.	Espouses limited hours based on the employment summary and record.	Bowers regularly worked at least 30 hours per week; eligible for WOP.
Whether the Life Policy or SPD confers discretionary authority to LINA to determine eligibility.	No explicit discretionary language; SPD cannot enlarge administrator’s rights.	SPD could confer discretion if ambiguity exists.	No unambiguous discretion; SPD cannot confer discretion; de novo review applies.
What is the correct amount of life insurance coverage as of June 13, 2009.	Total coverage should be $993,000 based on cited pay data and bonuses.	Coverage should reflect May 1, 2009 figures with reduced bonuses, around $634,000.	Remanded to LINA to determine the proper amount of coverage as of June 13, 2009.
Whether LINA must return premiums paid for supplemental coverage during the period of disputed WOP eligibility.	Supplemental premiums paid during June 27, 2008 to December 26, 2008 should be refunded.	Premiums belong to the policy administered with the employer and should be reallocated.	LINA must return supplemental coverage premiums paid during June 27, 2008 to December 26, 2008.

Key Cases Cited

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) (establishes standard of review for ERISA benefits decisions)
Walke v. Group Long Term Disability Ins. Plan, 256 F.3d 835 (8th Cir. 2001) (ambiguity in discretion-granting language affects review standard)
Ringwald v. Prudential Ins. Co. of Am., 609 F.3d 946 (8th Cir. 2010) (SPD interpretation and discretion considerations in ERISA plans)
Bounds v. Bell Atl. Enterprises Flexible Long-Term Disability Plan, 32 F.3d 337 (8th Cir. 1994) (contract-interpretation approach to ERISA discretion)
Reid v. Conn. Gen. Life Ins. Co., 17 F.3d 1092 (8th Cir. 1994) (standard ERISA de novo review with deferential enforcement considerations)
Fink v. Union Cent. Life Ins. Co., 94 F.3d 489 (8th Cir. 1996) (evidence standard for determining disability and benefits eligibility)
Adams v. Continental Cas. Co., 364 F.3d 952 (8th Cir. 2004) (ERISA de novo review framework)