Donna Rhea v. Alan Ritchey, Inc Welfare Bnft, et a
858 F.3d 340
| 5th Cir. | 2017Background
- Donna Rhea, an ERISA plan beneficiary, received $71,644.77 in medical benefits from the Alan Ritchey, Inc. Welfare Benefit Plan after alleged medical malpractice and later settled her malpractice claim for an amount exceeding the Plan’s payments.
- The only document provided to Rhea was a Summary Plan Description (SPD) titled as such; the SPD contained reimbursement/subrogation and attorneys’ fees provisions requiring reimbursement of third‑party recoveries.
- The SPD referenced an “official Plan Document” that was not produced; when requested, the sponsor produced an affidavit stating the SPD itself was the governing plan document.
- Rhea sued for a declaratory judgment that she need not reimburse the Plan, arguing the Plan lacked an ERISA‑compliant written instrument and that defendants made misrepresentations; defendants counterclaimed for equitable relief and sought attorneys’ fees.
- The magistrate judge and district court granted summary judgment for the Plan, ordered reimbursement, and awarded attorneys’ fees and costs; Rhea appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an SPD can serve as the plan’s required written instrument under ERISA §1102(a)(1) | Rhea: Amara requires SPD and written instrument to be separate; SPD cannot be the plan document | Plan: An SPD may serve as the written instrument when no other plan document exists | Held: SPD can function as the written instrument when it is the only document containing plan terms |
| Whether the SPD satisfies §1102(b)’s required contents (funding, amendment, administration) | Rhea: SPD lacks sufficient detail on funding source and amendment procedures | Plan: SPD contains basic funding and amendment information adequate under ERISA and precedent | Held: SPD’s discussions of funding and amendment procedures are sufficient to meet §1102(b) |
| Whether a disclaimer referencing a non‑existent “official Plan Document” (or delayed disclosure) invalidates the SPD or constitutes a material fiduciary misrepresentation | Rhea: The disclaimer and purported misrepresentations render the SPD unenforceable and breach fiduciary duty | Plan: The disclaimer is sloppy but not materially deceptive; no evidence of intentional misrepresentation | Held: Disclaimer does not render SPD unenforceable; no material misrepresentation shown |
| Entitlement to reimbursement and attorneys’ fees under ERISA | Rhea: No enforceable plan document, so no reimbursement obligation | Plan: Equitable lien by agreement and contractual provisions entitle Plan to reimbursement and fees; fee award appropriate under §1132(g)(1) | Held: Defendants entitled to reimbursement; fee award affirmed (district court did not abuse discretion) |
Key Cases Cited
- CIGNA Corp. v. Amara, 563 U.S. 421 (2011) (SPDs are not automatically enforceable as plan terms; written instrument governs when there is a separate plan document)
- Curtiss‑Wright Corp. v. Schoonejongen, 514 U.S. 73 (1995) (approved relatively minimal amendment procedures as sufficient under ERISA)
- Feifer v. Prudential Ins. Co. of Am., 306 F.3d 1202 (2d Cir. 2002) (SPD can serve as the plan document when no other written instrument exists)
- Varity Corp. v. Howe, 516 U.S. 489 (1996) (fiduciary duty includes prohibition on misleading statements to participants)
- ACS Recovery Servs., Inc. v. Griffin, 723 F.3d 518 (5th Cir. 2013) (equitable lien created by agreement upon third‑party recovery)
- Iron Workers Local No. 272 v. Bowen, 624 F.2d 1255 (5th Cir. 1980) (factors for awarding attorneys’ fees under ERISA)