Fitch v. Unum Life Insurance Co. of America
913 F. Supp. 2d 1253
N.D. Ala.2012Background
- Adesta maintained a group life insurance plan (ERISA-governed) purchased from Unum; Unum administers claims while Adesta is plan administrator.
- Robert Fitch, employed by Adesta for 13 years, was diagnosed with cancer in 2008 and terminated April 24, 2009; he died June 10, 2009.
- Robert never submitted a conversion application within 31 days after termination, though an option to convert to an individual policy existed.
- Plan terms end coverage at the last active employment date unless exceptions apply; conversion requires timely application and premium payment.
- Unum denied Fitch’s claim for benefits, asserting Robert’s coverage ended on April 24, 2009 and that no timely conversion occurred; Fitch sued Adesta and Unum.
- The court eventually grants summary judgment on Fitch’s benefits claim and dismisses the remaining ERISA-equitable claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Unum’s denial of benefits was arbitrary and capricious under ERISA | Fitch seeks benefits under Plan terms; denial unjustly departs from plan language | Unum properly applied plan terms; benefits denied due to end of coverage and lack of timely conversion | Unum's denial upheld; summary judgment for Unum |
| Whether contract reformation is appropriate | Equitable reformation should align plan with actual agreement | No evidence of mutual/inequitable mistake; plan terms govern | Counts III DISMISSED |
| Whether equitable tolling or estoppel defeats timely conversion | Equitable tolling due to incapacity; estoppel due to Unum's conduct | No incapacity evidence; Unum had no conversion duty; no misrepresentation | Counts IV (tolling) and IV (estoppel) DISMISSED |
| Whether the plan is ambiguous and warrants relief, including conversion rights | Ambiguity should be construed against Unum; conversion rights may be recognized | No ambiguity; conversion rights are governed by explicit deadlines | Count V and Count VI DISMISSED |
| Whether Fitch states a joint fiduciary liability claim against Unum | Unum and Adesta jointly liable for fiduciary breach | Unum had no knowledge of Adesta’s breach; no basis for §1105 claims | Count VII DISMISSED |
Key Cases Cited
- Blankenship v. Metro. Life Ins. Co., 644 F.3d 1350 (11th Cir. 2011) (ERISA framework and standard of review for benefits decisions)
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (Supreme Court, 1989) (delegates standard of review for ERISA benefits decisions)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (Supreme Court, 1986) (genuine issue of material fact for summary judgment standard)
- Twombly, 550 U.S. 544 (Supreme Court, 2007) (pleading standard requiring plausibility)
- Iqbal v. Ashcroft, 556 U.S. 662 (Supreme Court, 2009) (plausibility standard in pleading; factual allegations must support claims)
- Branch v. Bernd Co., 955 F.2d 1574 (11th Cir. 1992) (equitable tolling in specific incapacity scenarios)
- Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (Supreme Court, 2008) (conflict of interest as a factor in arbitrary-and-capricious review)
- Riordan v. Commonwealth Edison Co., 128 F.3d 549 (7th Cir. 1997) (enforcement of plan terms under ERISA)
- CIGNA Corp. v. Amara, 131 S. Ct. 1866 (Supreme Court, 2011) (equitable relief under ERISA includes contract reformation in appropriate contexts)