James Sumpter v. Metropolitan Life Insurance Co
683 F. App'x 519
| 7th Cir. | 2017Background
- James Sumpter worked at GM (later Delphi) and became disabled before reaching 10 years' service; he sought an "early-payout" life-insurance benefit he claimed existed under GM's 1992 plan.
- GM eliminated the early-payout option in 1994; Delphi’s 2000 plan documents likewise omitted that benefit. Sumpter alleges he never received notice of these changes.
- Sumpter applied for the early-payout benefit while covered by Delphi’s plan; MetLife (claims administrator and insurer) denied the claim in 2009 because the 2000 Delphi plan did not include the benefit. MetLife denied his administrative appeal in 2010.
- Sumpter separately filed a claim in Delphi’s Chapter 11 bankruptcy; that claim was disallowed and bankruptcy courts enjoined suits against Delphi/its plan but allowed suits against MetLife to proceed.
- Sumpter sued MetLife under ERISA, alleging wrongful denial of benefits and fiduciary breaches (failure to notify of plan change, delay in appeals processing, and causing a $15 doctor fee). The district court granted summary judgment for MetLife; the Seventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to early-payout benefit | Sumpter: GM’s 1992 plan (which he relied on) provided the early payout and should govern his claim | MetLife: Relevant plan is Delphi’s 2000 plan (in effect when he became disabled), which contains no early-payout | No benefit due; courts enforce plan terms as written — Delphi’s 2000 plan has no early-payout |
| Availability of ERISA equitable relief for plan reformation | Sumpter: Seeks equitable relief to obtain benefit he asserts should exist | MetLife: Section 1132(a)(1)(B) is the proper remedy for benefit denials; (a)(3) relief not available to add benefits | Denial: cannot reform plan or add benefits under equitable-relief provision when relief for benefits exists |
| Fiduciary breach for failure to notify of plan changes | Sumpter: MetLife should have alerted him that GM eliminated the benefit | MetLife: Employer (GM/Delphi), not MetLife, had duty to distribute plan documents; MetLife not responsible for employer’s nondistribution | No breach: administrator/insurer not liable for employer’s failure to distribute updated plan documents |
| Remedy for delayed appeals and alleged fee obstruction | Sumpter: Delay and a $15 doctor charge hindered claims process; seeks damages/equitable relief | MetLife: Tardy processing yields immediate court review remedy; no evidence MetLife caused or knew of the $15 fee or refused reimbursement | No damages: delay entitles claimant to prompt judicial review not damages; no proof MetLife unduly inhibited claims process |
Key Cases Cited
- Cigna Corp. v. Amara, 563 U.S. 421 (reform/equitable remedies limitations; courts cannot rewrite plan to add benefits)
- Varity Corp. v. Howe, 516 U.S. 489 (equitable relief under ERISA limited where statutory remedies exist)
- Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (insurer serving dual role can be sued under ERISA §1132(a)(1)(B))
- Larson v. United Healthcare Ins. Co., 723 F.3d 905 (7th Cir.) (participant may sue insurer/claims administrator under §1132(a)(1)(B))
- Schorsch v. Reliance Standard Life Ins. Co., 693 F.3d 734 (7th Cir.) (insurer not responsible for employer’s failure to distribute plan documents)
- Admin. Comm. of Wal-Mart Stores, Inc. Assoc’s Health & Welfare Plan v. Varco, 338 F.3d 680 (7th Cir.) (courts confine benefits to plan terms)
- Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 604 (delay in claims processing yields immediate judicial review, not damages)
- Rochow v. Life Ins. Co. of N. Am., 780 F.3d 364 (6th Cir.) (cannot recast wrongful-denial claim as fiduciary-breach claim to obtain equitable relief)