Carole Browdy v. Hartford Life & Acidnt Ins Co., e, 630 F. App'x 278

Background

Browdy was a CORE physician covered by a Hartford-administered STD/LTD plan; she stopped working for health reasons on Aug. 30, 2007 and CORE had earlier notified her last day would be Sept. 5, 2007.
Browdy applied for disability benefits effective Aug. 31, 2007. Hartford initially listed her last day worked as Aug. 30 and denied STD benefits (requesting repayment of preliminary payments), citing that she was not an active employee when disability began.
On appeal, Hartford confirmed with ATA that Browdy’s termination date was Aug. 31, 2007 (but ATA had no documentary proof), and Hartford reversed its denial and paid STD benefits.
Hartford later approved LTD benefits but sought to recoup payments as offset by pension withdrawals Browdy made in Aug. 2008; Browdy said she withdrew only because Hartford’s initial denial left her without income. Hartford denied her appeal of the offset.
Browdy sued under ERISA seeking relief for breach of fiduciary duty, bad faith, and unjust enrichment; both parties moved for summary judgment. The district court granted summary judgment for Hartford; Browdy appealed. The Fifth Circuit affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Hartford’s initial STD denial and later reversal constituted an actionable ERISA fiduciary breach (misrepresentation/duty of loyalty)	Browdy: Hartford misrepresented coverage, denied benefits to unjustly enrich itself, and caused her to withdraw pension funds — a breach of loyalty warranting equitable relief under § 502(a)(3)	Hartford: The claim is a disguised benefits claim under § 502(a)(1)(B); its conduct was reasonable (a factual dispute over termination date) and not a fiduciary misrepresentation	Affirmed for Hartford: No genuine factual dispute that Hartford’s conduct was a misrepresentation rising to a fiduciary breach; reversal on appeal shows reasonable administrative process.
Proper legal standard for fiduciary breach	Browdy: District court erred by applying a bad-faith standard (she argued denial alone suffices)	Hartford: Breach of loyalty requires more than negligence/bare denial; bad faith or intentional misrepresentation is relevant	Court did not decide whether bad faith is required because Browdy provided no evidence of misrepresentation; summary judgment proper regardless.
Admissibility/weight of Browdy’s declaration about withdrawing pension funds due to initial denial	Browdy: Declaration shows causation and damages from early pension withdrawal	Hartford: Declaration is unsubstantiated and conclusory; procedural objections to recharacterizing claims	Fifth Circuit treated Hartford’s procedural objections as waived and considered the record; nevertheless found no genuine dispute that would change the result.
Lawfulness of offset and unjust enrichment claim for LTD reductions	Browdy: Pension withdrawals were caused by Hartford’s initial denial, so offset and recoupment are unjust	Hartford: Plan permits offsets; no evidence Hartford knew of the pension at initial denial; repayment and offsets followed plan terms	Affirmed for Hartford: Plan authorized offsets; no evidence Hartford acted to unjustly enrich itself or knew of pension when it denied STD.

Key Cases Cited

Varity Corp. v. Howe, 516 U.S. 489 (fiduciary misrepresentation and duty of loyalty under ERISA)
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (standard of review for ERISA benefits denial)
CIGNA Corp. v. Amara, 131 S. Ct. 1866 (role of misrepresentations and remedy framing under ERISA)
Martinez v. Schlumberger, Ltd., 338 F.3d 407 (ERISA fiduciary duties and trust-law standards)
Bodine v. Employers Cas. Co., 352 F.3d 245 (deceptive practices as fiduciary breach)
Schexnayder v. Hartford Life & Accident Ins. Co., 600 F.3d 465 (conflict-of-interest issues in benefits decisions)
Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burdens)
Cooper v. Hewlett-Packard Co., 592 F.3d 645 (standard of review for ERISA summary judgment)