District Court in Fourth Circuit Rejects Extension of Amara-like Remedies to Benefit Cases

The Honorable Martin Reidinger, sitting in the United States District Court for the Western District of North Carolina, declined Plaintiff’s invitation to extend the applicability of Cigna v. Amara, 131 S. Ct. 1866 (2011), to ERISA benefit cases.  In Esposito v. Wal-Mart Stores, Inc. and Hartford Life andAccident Insurance Company, Plaintiff, who was receiving LTD benefits under Wal-Mart’s employee benefit plan, filed a lawsuit after Hartford, the insurer and claims administrator, terminated further benefits.  In Plaintiff’s first two causes of action, he sought recovery of his benefits under ERISA § 502(a)(1)(B).  But Plaintiff did not stop there; he added four more causes of action, all premised upon ERISA § 502(a)(3) and sounding in equity, including reformation, equitable estoppel and restitution. These claims were based, in part, upon alleged representations by Hartford to Plaintiff during its administrative review of Plaintiff’s LTD claim.  
Relying upon the teachings of Varity v. Howe, 516 U.S. 489, 116 S. Ct. 1065 (1996), which the Fourth Circuit followed in Korotynska v. Metropolitan Life Ins. Co., 474 F. 3d 101 (4th Cir. 2006), Judge Reidinger granted both defendants’ Motions to Dismiss as to these causes of action:  “In short, Plaintiff has ‘repackaged’ his denial of benefits claim,” which, as Varity held, is not an “appropriate” use of ERISA § 502(a)(3).  Plaintiff had argued that his causes of action were supported by McCravy v. Metropolitan Life Ins.Co., 690 F. 3d 176 (4th Cir.  2012), which was the Fourth Circuit case that followed on the heels of Cigna v. Amara, applying it to find potentially available equitable remedies under ERISA § 502(a)(3) in a case involving lack of plan coverage. (See our previous post, Fourth Circuit Takes Expansive View of Equitable Relief. (July 9, 2012)).  Judge Reidinger found that Plaintiff’s reliance on McCravy was “entirely misplaced,” because here, Plaintiff was seeking recovery under the terms of the Plan, something that was unavailable to the plaintiffs in either Amara or McCravy.  
Judge Reidinger concluded with an admonition that a “straight-forward benefit case” should not be pleaded “in this manner,” a final nod to Varity’s long-standing rule (unbroken by Amara) that an ERISA § 502(a)(3) claim is not “appropriate” when a claim under ERISA § 502(a)(1)(B) claim will do the trick.  

Disclaimer: Womble Carlyle represented a defendant in this case.

 

Topics:  CIGNA v Amara, Disability, Disability Benefits, Employee Benefits, ERISA

Published In: Civil Procedure Updates, Civil Remedies Updates, Finance & Banking Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Womble Carlyle Sandridge & Rice, LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »