ERISA: How Do You Spell (Equitable) Relief?

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In an ERISA case, what does it take to assert a claim for equitable relief? If the complaint does not assert an alleged breach of fiduciary duty, the claim for equitable relief should be dismissed…

Here’s the case of Owens v. Liberty Life Assurance Co., 2016 WL4746212 (W.D. KY. September 12, 2016)(In an ERISA case, to bring a claim for equitable relief “the Court would expect allegations in the complaint to refer to an alleged breach of fiduciary duty and subsequent facts presented at the summary judgment to suggest a genuine dispute as to whether Defendant breached its duty.”)

FACTS: Plaintiff, a Walmart employee, sought ERISA-governed disability benefits under a plan funded by Liberty Life. After initially providing benefits, Liberty Life discontinued benefits, concluding Plaintiff was not totally disabled. Plaintiff brought claims for wrongful denial of benefits and at the summary judgment stage asserted for the first time a claim for equitable relief. The plan conferred discretion.

ISSUE: Whether Plaintiff can belatedly assert a claim for equitable relief (at the summary judgment stage) when the complaint does not assert any purported breach of fiduciary duty.

DISTRICT COURT HELD: Liberty Life’s Motion for Summary Judgment GRANTED – Equitable Relief Claim Dismissed.

  1. “The Supreme Court has recognized the possibility of an equitable remedy, such as a surcharge, under ERISA for breaches of fiduciary obligations by plan administrators.” Op. at 2.
  2. A claimant can pursue a breach-of-fiduciary-duty claim only “where the Section 1132(a)(3) claim is based on an injury separate and distinct from the denial of benefits or where the remedy afforded by Congress under Section 1132(a)(1)(B) is otherwise shown to be inadequate.” Op. at 2.
  3. Plaintiff alleges she did not have to specifically “assert a breach of fiduciary claim to be entitled to equitable relief under Section 1132(a)(3)….[but] the Court would expect allegations in the complaint to refer to an alleged breach of fiduciary duty and subsequent facts presented at the summary judgment to suggest a genuine dispute as to whether Defendant breached its duty.” Op. at 2.
  4. Plaintiff also failed to set forth evidence of “an injury separate and distinct from the denial of benefits.” Op. at 2.

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.

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