Holmes v. Colorado Coalition for the Homeless Long Term Disability Plan
762 F.3d 1195
10th Cir.2014Background
- Holmes, a former Colorado Coalition for the Homeless employee, had long-term disability coverage under Union Security’s policy (Group Policy 4048742) and ERISA governs the plan.
- Holmes’ March 10, 2005 disability claim was denied May 27, 2005 for failure to prove disability under the policy.
- Holmes pursued a first-level internal review, which Union Security denied on April 7, 2006 after 137 days, with a copy of the Denial Review Procedure attached.
- The Denial Review Procedure described a two-level internal review and noted a civil action right after the second level if denied.
- Holmes did not pursue the second-level review and then filed an ERISA civil action in 2008 in state court (later removed to federal court); the district court granted summary judgment to the defendant.
- The district court held Holmes forfeited ERISA deadlines, found the SPD inadequate to inform of two-level review, and found Union Security complied with ERISA notice requirements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a second-level internal review was required under the plan terms | SPD does not describe two-level review, so no mandatory second level. | Plan documents authorize and notify of further appeal rights via Denial Review Procedure. | Holmes must exhaust; two-level review is enforceable under the plan. |
| Whether exhaustion was triggered by timing/tolling under ERISA regulations | Union Security failed to decide timely, so deemed exhausted. | Timing extensions tolled properly; decision timely after receipt of records. | Union Security timely decision; not deemed exhausted on timing grounds. |
| Whether SPD deficiencies justify deeming exhaustion under the deemed-exhausted provision | SPD fails to describe second-level review, so deemed exhausted. | SPD incorporation is insufficient to cure; plan terms govern. | SPD flaws did not prejudice Holmes; not deemed exhausted. |
| Whether failure to include second-level review in the SPD violated notice/disclosure requirements | SPD omissions negate proper notice, excusing exhaustion. | Denial letters adequately informed of review rights; prejudice absent. | SPD deficiencies existed but did not prejudice Holmes; exhaustion not excused. |
Key Cases Cited
- Amara v. Cigna Corp., 131 S. Ct. 1866 (2011) (SPDs don't themselves constitute plan terms; consistency required)
- Eugene S. v. Horizon Blue Cross Blue Shield of New Jersey, 663 F.3d 1124 (10th Cir. 2011) (terms not on face of plan may be enforceable if authorized by plan)
- Kennedy v. Plan Adm’r for DuPont Savings & Inv. Plan, 555 U.S. 285 (2009) (enforcing terms contained in beneficiary designation forms as part of the plan)
- Heimeshoff v. Hartford Life & Accident Co., 134 S. Ct. 604 (2013) (ERISA timing and exhaustion considerations under the plan-specific rules)