This month’s Friday Five explores recent decisions that reflect the precise nature of rules and definitions in the context of ERISA claims. For example, effective dates of CFR code provisions and contractually defined limitation periods can draw specific points on the timeline of a case. Similarly, defined terms such as “beneficiary,” “sickness” and “injury” can have significant implications to the outcome of a case, or even the jurisdiction of a court to hear a case in the first instance. Further, one court explains in a lengthy opinion the analysis underlying a Rule 52 “trial on the papers.”

1. Did an insurer provide a full and fair review where it developed additional information when considering plaintiff’s appeal of the termination of his benefits but did not provide that information to the insured? Yes, but only because new code provisions requiring the insurer to provide that information and give the insured an opportunity to respond had not yet taken effect. Radle was experiencing dizziness, difficulty focusing, a “buzzed” or drunk feeling and sensitivity to light, and after a stay in the hospital was diagnosed with the mental condition of conversion disorder. Radle was awarded LTD benefits, but they were terminated after the 24-month limit for mental illnesses. Radle appealed, and argued that his symptoms were not related to a mental illness, but were related to a concussion he had suffered from a trip and fall while running. Radle’s treating physicians opined that conversion disorder was an improper diagnosis, and that there was a physical cause to his disability, instead of a behavioral issue. In considering Radle’s appeal, the insurer obtained additional information about Radle, but did not disclose it to him or give him an opportunity to respond, and ultimately upheld the termination. Radle filed suit, arguing that under 29 CFR § 2560.503-1(h)(4)(i) & (ii) the insurer was required to provide him with any new information related to his claim and give him an opportunity to respond. The insurer moved for summary judgment, arguing that the referenced code provisions did not apply because they took effect after Radle filed his claim for benefits. The court determined that Radle filed his claim for benefits in November 2017, and that the new code provisions took effect in April 2018, so they did not apply to Radle’s claim. The court reviewed the plaintiff’s claim and determined that he had received a full and fair review, and therefore dismissed his claim against the insurer for breach of fiduciary duty. Radle v. Unum Life Ins. Co. of Am., No. 1:21-cv-1039 HEA, 2023 WL 2474509 (E.D. Mo. Mar. 13, 2023)
2. Will a court reclassify an insured’s basis for LTD benefits from “sickness” to “injury” thereby providing full LTD benefits to the insured? Yes, where the insured can demonstrate that the initial description did not take into account that his issues were attributable to repetitive trauma. Stein’s thirty-year career as a radiologist was cut short in 2018 by spinal stenosis, lumbar osteoarthritis and lumbar spondylosis. Stein submitted an LTD claim stating that he had a “sickness” and received full LTD benefits of $6,000 per month, which grew to $6,480 per month with cost of living adjustments. Because the claim was based on a “sickness,” after thirty months the insurer invoked a policy provision reducing the benefit to ten percent, or $648 per month. Stein appealed, arguing that his claim was really based on an “injury” such that he should continue to receive the full amount of the LTD benefits. After the insurer denied Stein’s appeal, Stein filed a lawsuit alleging improper denial of benefits. Stein and the insurer filed competing motions for summary judgment, which the court reviewed under the de novo standard. Despite the fact that Stein initially described his disability as related to “sickness,” the court concluded that it was appropriately categorized as related to “injury” because Stein’s years of wearing a lead apron as part of his occupation as a radiologist created the repetitive trauma that led to issues with his back. The court granted Stein’s motion for summary judgment, ruling that his disability was to be reclassified as due to “injury” and he was therefore entitled to receive commensurate LTD benefits. The court denied the insured’s request for counsel fees, finding that there was no bad faith or culpable conduct on behalf of the insurer. Stein v. Paul Revere Life Ins. Co., No. 21-3546, 2023 WL 2539004 (E.D. Pa. Mar. 16, 2023).
3. Can an insured obtain reinstatement of LTD benefits through a Rule 52 “trial on the papers”? Yes, if the insured is able to establish disability as defined by the plan by a preponderance of the evidence. Snapper had a history of back pain dating to 2008 when he suffered a herniated disc. He had continuing issues with back pain and numerous attempts at intervention, until in April 2018 he took a three-month FMLA leave of absence from his job as a litigation attorney at a law firm due to the pain. He took a second leave of absence beginning February 19, 2019 and never returned to work in any capacity since then. On July 29, 2019 he applied for LTD benefits, which the insurer granted but periodically sought information as to continued eligibility. After a review, the insurer concluded on July 17, 2020 that Snapper was able to perform the duties of his occupation and terminated benefits as of that date. Snapper appealed, and by letter dated March 23, 2021 the insurer upheld the termination. After Snapper filed suit, the district court conducted a Rule 52 “trial on the papers.” The court noted that it was to apply a de novo standard of review, which in the context of a Rule 52 “trial” meant that the court was to “decide the ultimate question of whether Snapper is entitled to the benefits he seeks under the Plan.” After a lengthy discussion of the evidence, the court concluded that Snapper presented “powerful evidence that [he] is disabled within the meaning of the Plan.” The court then considered the insurer’s contrary evidence to determine if it outweighed Snapper’s evidence. After a discussion of the insurer’s evidence, the court concluded that it was “not entirely without merit” but was “ultimately … unpersuasive.” After concluding that Snapper satisfied his burden by a preponderance of the evidence, the court considered the appropriate remedy. The court determined that Snapper’s benefits should be reinstated from the date of termination to present, leaving open the possibility that the insurer would reexamine Snapper’s condition periodically going forward. The court also left open the opportunity for Snapper to file a motion seeking attorney’s fees. Snapper v. Unum Life Ins. Co. of Am., 1:21-cv-02116, 2023 WL 2539242 (N.D. Ill. Mar. 16, 2023).
4. Will a federal court remand to state court a dispute as to the appropriate named beneficiaries under an employer sponsored life insurance program where the plaintiffs should have been named as beneficiaries but were not? Yes, where the underlying state court order does not specifically identify the plan at issue. The plaintiff brought an action in Georgia state court alleging that several of her dependents should have been beneficiaries under her ex-husband’s employer’s life insurance program, but that he failed to so name them. The insurer removed the matter to federal court, alleging the court had federal question jurisdiction because the plaintiff was seeking relief under ERISA. After discovery and the filing of cross-motions for summary judgment, the federal court issued a show cause order inquiring into the basis for federal question jurisdiction. The plaintiff argued that her dependents had standing under ERISA because their father was required to name them as beneficiaries, but he failed to do so. The federal court analyzed whether the underlying court order that required the father to name the dependents as beneficiaries was a qualified domestic relations order (QDRO), but determined that it was not because it did not identify the specific plan at issue. Based on that conclusion, the federal court concluded that it did not have jurisdiction, and remanded the matter to state court. Jackson v. Pressley, No. 5:22-cv-00311-TES, 2023 WL 2695099 (M.D. Ga. Mar. 29, 2023).
5. Will a court enforce a contractual limitations period for an insured to file a lawsuit contesting a termination of LTD benefits? Yes, where the insured cannot demonstrate a reason that prevented the timely filing of a complaint. Following a diagnosis of spondylolisthesis and radiculopathy, the plaintiff received LTD benefits for approximately two years. The insurer conducted a periodic review of the insured’s eligibility for benefits, and after obtaining opinions from a medical expert and vocational specialist determined that she was no longer eligible and terminated her benefits. The insured appealed, but the insurer issued a letter on April 20, 2022 upholding its decision and advising the insured that under her employer’s plan she had three months, until July 20, 2022, to bring a lawsuit. The insured and insurer exchanged correspondence about what was in her claims file, but she did not file a lawsuit alleging that she was improperly denied benefits until December 8, 2022, almost five months after the expiration of time within which to bring suit. The insurer moved to dismiss the claim as time-barred. The insured argued that the limitations period should not apply because she was not a party to the contract between her employer and the insurer, and that equitable tolling should apply because of the period where she was exchanging correspondence with the insurer about her claims file. The court ruled that nothing prevented the insured from filing a lawsuit within the limitations period, and therefore granted the insurer’s motion to dismiss. Prince v. Lincoln Life Assur. Co. of Boston, No. 2:22-cv-01759-CCW, 2023 WL 2713947 (W.D. Pa. Mar. 30, 2023).