38 F.4th 910
11th Cir.2022Background
- Justin Polga, employed by NCHMD (a subsidiary of NCH Healthcare), completed benefits enrollment with HR assistance but was not given an evidence-of-insurability form needed for $350,000 supplemental life insurance.
- NCHMD deducted premiums and provided a benefits summary showing $500,000 total coverage for three years despite the missing form.
- Polga died; the insurer denied the $350,000 supplemental benefit because it never received the required form.
- Gimeno (beneficiary) sued NCHMD and NCH Healthcare under ERISA §1132(a)(1)(B) for plan benefits; conceded that (a)(1)(B) did not provide relief and sought to amend to plead a claim under §1132(a)(3) for equitable relief (monetary recovery for lost benefits due to fiduciary breach).
- The district court dismissed and denied leave to amend as futile, holding monetary relief unavailable under §1132(a)(3); Eleventh Circuit reviewed de novo and reversed, allowing an (a)(3) claim for equitable surcharge against fiduciaries.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1132(a)(3) authorizes recovery of monetary benefits lost from a fiduciary's breach (equitable surcharge) | Gimeno: §1132(a)(3) permits equitable monetary relief (surcharge) against fiduciaries for losses caused by breach (relying on Amara and equitable‑remedy history) | Defs: Monetary recovery is legal damages not available under (a)(3); relief for benefits is governed by (a)(1)(B), not against these defendants | Court: Yes. Equitable surcharge is a traditional equitable remedy; (a)(3) permits recovery from fiduciaries for lost benefits when pled as equitable surcharge. Reversed denial to amend. |
| Whether pleading alternative claims under §1132(a)(1)(B) and §1132(a)(3) was improper | Gimeno: May plead alternatives; (a)(1)(B) offers no remedy here so (a)(3) is proper | Defs: Plaintiff improperly sought both remedies; (a)(3) unavailable if (a)(1)(B) adequate | Court: Pleading alternatives is allowed; (a)(3) may proceed because Gimeno concedes (a)(1)(B) provides no remedy for the alleged injury. |
Key Cases Cited
- Mertens v. Hewitt Assocs., 508 U.S. 248 (1993) (holding compensatory damages are generally not equitable remedies under §1132(a)(3))
- Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002) (limits on equitable monetary relief and restitution principles)
- Sereboff v. Mid Atl. Med. Servs., Inc., 547 U.S. 356 (2006) (restitutionary relief in equity where defendant holds particular funds)
- Varity Corp. v. Howe, 516 U.S. 489 (1996) (§1132(a)(3) is a catchall for equitable relief not otherwise provided by ERISA)
- LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248 (2008) (ERISA fiduciary liability principles and interpretive guidance)
- CIGNA Corp. v. Amara, 563 U.S. 421 (2011) (recognizing equitable surcharge as available under §1132(a)(3) against fiduciaries)
- Ogden v. Blue Bell Creameries U.S.A., Inc., 348 F.3d 1284 (11th Cir. 2003) (if (a)(1)(B) provides adequate relief, plaintiff cannot rely on (a)(3))
- Jones v. Am. Gen. Life & Acc. Ins. Co., 370 F.3d 1065 (11th Cir. 2004) (withholding plan information can constitute fiduciary breach; distinguishes available remedies)
- Hamilton v. Allen‑Bradley Co., 244 F.3d 819 (11th Cir. 2001) (factual administration can establish fiduciary status under ERISA)