Donald Van Loo v. Cajun Operating Co.
703 F. App'x 388
| 6th Cir. | 2017Background
- Donna Van Loo, a Church’s in-house attorney, elected and paid supplemental group life insurance through Church’s from 2007 until her death in 2013; her total elected coverage reached about $614,000 (5x salary).
- The group policy guaranteed issue up to $300,000; coverage above that required submission of an evidence-of-insurability form (EIF) to Reliance for medical underwriting.
- Church’s administered enrollment and payroll deductions, but did not provide Reliance with an EIF for Van Loo when she crossed the $300,000 threshold in 2008; Reliance later paid only the $300,000 guaranteed amount after her death, claiming it never received a completed EIF.
- Plaintiffs (Van Loo’s parents, beneficiaries) sued Church’s under ERISA §502(a)(3) for breach of fiduciary duty, alleging Church’s made material misrepresentations about coverage and Van Loo reasonably relied to her detriment.
- At summary judgment the district court awarded plaintiffs $314,000 (the amount above the guaranteed issue). Church’s conceded fiduciary status and misrepresentation but argued Van Loo could not show detrimental reliance because her medical history (Hepatitis C, prior conditions) would have made her uninsurable.
- The Sixth Circuit affirmed, holding plaintiffs made the required prima facie showing of detrimental reliance and Church’s failed to rebut it with evidence that Van Loo was generally uninsurable in the market.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Church’s breached ERISA fiduciary duties by misrepresenting Van Loo’s coverage | Church’s misrepresentations caused Van Loo to believe she had the elected coverage; she paid premiums and thus relied | Church’s conceded misrepresentations but contended no detrimental effect because Van Loo would have been denied coverage due to health | Breach established; Church’s fiduciary duty and misrepresentations admitted and undisputed |
| Whether Van Loo detrimentally relied on Church’s misrepresentations | Electing and paying premiums, and not seeking alternative coverage, is sufficient to infer detrimental reliance | Plaintiffs must show Van Loo was or could have been insured elsewhere; her medical history made her uninsurable | Reliance shown: electing/paying premiums suffices as prima facie detrimental reliance; defendant failed to rebut with market-wide uninsurability evidence |
| Whether reliance was reasonable | Van Loo reasonably relied on employer communications, confirmations, and her premium payments | Church’s argued she had (constructive or actual) notice of underwriting requirements and, as an attorney, should have known to check policy | Reliance was reasonable; no evidence Van Loo had actual access or special expertise about the plan or policy |
| Burden at summary judgment on insurability rebuttal | Once plaintiffs show reliance, burden shifts to Church’s to produce evidence creating a genuine issue | Church’s must show market-wide uninsurability (expert/industry evidence), not just Reliance’s denial | Church’s failed to meet rebuttal burden: Reliance-only evidence insufficient to create a genuine factual dispute |
Key Cases Cited
- Gillis v. Miller, 845 F.3d 677 (6th Cir.) (standard of review for summary judgment)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (movant’s initial burden at summary judgment shifts to nonmovant to show genuine dispute)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (view facts in light most favorable to nonmovant)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (scintilla of evidence insufficient to defeat summary judgment)
- CIGNA Corp. v. Amara, 563 U.S. 421 (2011) (ERISA harm includes detrimental reliance and loss of ERISA-protected rights)
- James v. Pirelli Armstrong Tire Corp., 305 F.3d 439 (6th Cir.) (elements for ERISA fiduciary-breach claim)
- Moore v. Lafayette Life Ins. Co., 458 F.3d 416 (6th Cir.) (reliance must be reasonable)
- Deschamps v. Bridgestone Americas, Inc. Salaried Emps. Ret. Plan, 840 F.3d 267 (6th Cir.) (detriment can be loss of opportunity)
- Krohn v. Huron Mem. Hosp., 173 F.3d 542 (6th Cir.) (fiduciary liability where misrepresentations cause inadequate information to pursue benefits)
- Brown v. Owens Corning Inv. Rev. Comm., 622 F.3d 564 (6th Cir.) (constructive or actual knowledge when plan documents are accessible)