2014 U.S. Dist. LEXIS 137451
D. Minn.2014Background
- Lanpher, Merrill Lynch employee, auto-enrolled in Basic LTD; eligible for Supplemental LTD after earning >$60k.
- Lanpher enrolled in Supplemental in 2001 via Statement of Health; MetLife approved, Merrill Lynch notified to deduct premiums.
- Lanpher later suffered depression and disability in 2007; Basic LTD benefits awarded, Supplemental denial issued.
- Discovery shows MetLife approved Lanpher for Supplemental in 2001 but Merrill Lynch not notified; evidence of communication gaps and discarded weekly status reports.
- Lanpher sued under ERISA for denial of benefits (§1132(a)(1)(B)) and breach of fiduciary duty (§1104(a)) against MetLife and Merrill Lynch; Merrill Lynch moved for summary judgment; Lanpher sought relief against MetLife.
- Court found MetLife abused discretionary interpretation of plan language regarding coverage and premiums, granted Lanpher summary judgment on benefits claim and equitable relief, granted Merrill Lynch summary judgment on fiduciary duty claim; MetLife denied; issues narrowed to MetLife’s denial and fiduciary duties.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard of review for MetLife’s denial | Lanpher argues de novo review not applicable due to discretion | MetLife argues abuse of discretion due to plan discretion | Abuse-of-discretion standard with conflict considered |
| MetLife’s denial as to 2007 eligibility | Lanpher was enrolled and paid or owed premiums; denial unsupportable | MetLife relied on lack of enrollment and premium nonpayment | MetLife denial not supported by clear plan language; Lanpher entitlement granted under §1132(a)(1)(B) |
| Fiduciary duty breach by MetLife for failing to notify Merrill Lynch | MetLife breached duty by not informing Merrill Lynch of approval | Argues ministerial notification is not fiduciary duty | MetLife breached fiduciary duty; equitable relief appropriate |
| Availability of equitable relief under §1132(a)(3) | Relief should reinstate enrollment and allow premium payments | Relief limited and not monetary | Equitable relief appropriate; reinstatement-like remedy allowed as to coverage and premiums |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (U.S. 1989) (standard of review for denials of benefits under ERISA)
- Varity Corp. v. Howe, 516 U.S. 489 (U.S. 1996) (establishes reinstatement and equitable relief concepts in fiduciary breaches)
- Silva v. Metro. Life Ins. Co., 762 F.3d 711 (8th Cir. 2014) (conflicts of interest weigh on abuse-of-discretion review; no duplicative recovery under Varity/Antolik)
- Manning v. Am. Republic Ins. Co., 604 F.3d 1030 (8th Cir. 2010) (Finley factors for reasonableness of plan interpretation)
- Amara v. Chevron Corp., 131 S. Ct. 1866 (U.S. 2011) (equitable relief possibilities under ERISA affected by plan corrections)
- Kerns v. Benefit Trust Life Ins. Co., 992 F.2d 214 (8th Cir. 1993) (insurer claims fiduciary status and duties in claims handling)
- Kalda v. Sioux Valley Physician Partners, Inc., 481 F.3d 639 (8th Cir. 2007) (definition of fiduciary when exercising discretion)