Cardoza v. United of Omaha Life Insurance
708 F.3d 1196
10th Cir.2013Background
- Cardoza filed an ERISA action challenging United of Omaha Life Insurance Co.'s LTD and STD benefit calculations.
- STD benefits were initially based on 2007 actual earnings of $61,881.47; United of Omaha received this data from the employer in 2008.
- LTD benefits were calculated using a 2007 earnings figure of $24,273.60, supported by premiums United of Omaha received and the employer’s classification as an hourly employee earning under $40,000.
- Cardoza presented actual 2007 earnings (tonnage pay) not fully reflected in United of Omaha's LTD calculation and challenged the treatment as 'extra compensation'.
- The district court held LTD calculation reasonable but STD recalculation arbitrary and capricious, and the court denied some related requests; the court granted Cardoza summary judgment on the STD issue and reversed on LTD while remanding for fees.
- On appeal, the Tenth Circuit reversed the district court on the LTD issue (not arbitrary or capricious) and affirmed on the STD issue (recalculation not reasonable), and remanded for attorney’s fees considerations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| LTD calculation: validity of using premiums verified earnings | Cardoza argues LTD should reflect actual earnings, including tonnage pay; not limited to premium-verified figures. | United of Omaha contends LTD must be based on earnings verified by premium as of 2007 per the policy. | LTD calculation based on $24,273.60 verified by premium was reasonable and made in good faith. |
| STD calculation: validity of relying on premium-verified earnings | Cardoza argues STD should be based on actual 2007 earnings, not the premium-verified figure. | United of Omaha maintains STD can rely on information furnished by the policyholder and insured, i.e., the premium-based figure. | STD recalculation based on $24,273.60 was not reasonable; STD should be based on actual 2007 earnings ($61,881.47). |
Key Cases Cited
- Mort v. United of Omaha Life Ins. Co., 444 F. App’x 208 (9th Cir. 2011) (policy may allow using income docs but lacks absolute bar to accurate statements)
- Miller v. Monumental Life Ins. Co., 502 F.3d 1245 (10th Cir. 2007) (interpreting 'verified by premium' language)
- Allison v. Bank One-Denver, 289 F.3d 1223 (10th Cir. 2002) (we reject deviations from express plan terms)
- Graham v. Hartford Life & Accident Ins. Co., 589 F.3d 1345 (10th Cir. 2009) (conflict of interest considered as a factor in abuse-of-discretion review)
- Glenn v. Metropolitan Life Ins. Co., 544 U.S. 105 (Supreme Court 2008) (conflict of interest in ERISA review)
- Hickman v. GEM Ins. Co., 299 F.3d 1208 (10th Cir. 2002) (plan terms control unless ambiguous)