District Courts in the Fourth Circuit Run Full Speed Ahead with Equitable Estoppel Claims

by Womble Bond Dickinson

Executive Summary:  District Courts in Fourth Circuit allow ERISA claims to go forward premised on oral representations.
Prior to Cigna v. Amara, 131 S. Ct. 1866 (2011), the law was clearly established: An employee benefit plan participant had no claim of equitable estoppel against a plan fiduciary stemming from an oral representation if the representation was contrary to the written terms of a plan. See e.g., Coleman v. Nationwide Life Ins. Co., 969 F.2d 54 (4th Cir. Va. 1992). No longer. Following Amara and the Fourth Circuit decision in McCravy v. Metropolitan Life Ins. Co., 2012 U.S. App. Lexis 13683 (4th Cir. July 5, 2012), District Courts in the Fourth Circuit, in two recent decisions, permitted plan participant’s claims to move forward past summary judgment, premised upon oral representations made by plan fiduciaries that were inconsistent with the written plan terms.

In Israel v. Prudential Ins. Co. , 2012 U.S. Dist. Lexis 106107 (D.S.C. July 31, 2012), Plaintiff enrolled in life insurance coverage for his wife under the employee benefit plan offered by his employer, Lockheed Martin (“Lockheed”). Plaintiff and his wife subsequently divorced. Under the terms of the plan, eligibility for coverage for a spouse ceased after divorce. Plaintiff claimed that he called Lockheed’s benefits department, which allegedly told him that he could continue the life insurance coverage on his ex-wife. Thereafter, Lockheed continued to deduct premiums from Plaintiff’s paychecks for the life insurance coverage. A few months following the divorce, Plaintiff’s ex-spouse died. Plaintiff filed a claim for the life insurance benefits, which was denied on the grounds that his ex-spouse was no longer eligible for coverage. After Plaintiff brought suit, the District Court granted Defendant’s motion for summary judgment on Plaintiff’s benefit claim under ERISA § 502(a)(1)(B), finding that the plan’s terms unequivocally did not provide coverage. Nevertheless, following Amara and McCravy, the District Court denied Defendant’s motion for summary judgment with respect to Plaintiff’s claim for equitable relief under ERISA § 502(a)(3), finding genuine issues of material facts, including whether Defendant did in fact misinform Plaintiff in a phone call.

Similarly, in Strickland v. AT&T Umbrella Benefit Plan, 2012 U.S. Dist. LEXIS 14145 (W.D.N.C. Sept. 30, 2012), Plaintiff was a disabled participant of AT&T’s medical benefit plan. After Plaintiff became eligible to receive Medicare benefits, he claimed that he spoke with someone at Blue Cross Blue Shield (“BCBS”), the third-party administrator, and asked whether he needed to purchase both Parts A and B of Medicare coverage. He was allegedly told that he needed to purchase only Part A. He subsequently had extensive knee and shoulder surgery. BCBS initially processed and paid the medial expenses related to these surgeries, and according to its records, confirmed coverage in 23 phone calls from medical providers. Subsequently, BCBS reversed its approval and collected the payments from the providers, who then billed Plaintiff.

In the lawsuit, Plaintiff conceded that he did not have a claim for benefits under ERISA § 502(a)(1)(B); according to the clear terms of AT&T’s plan, Plaintiff was required to enroll in both Parts A and B when he became eligible for Medicare. Nevertheless, Plaintiff brought a claim for equitable relief under ERISA § 502(a)(3). Defendant moved for summary judgment, arguing that oral representations were unenforceable under ERISA to vary the written terms of the plan. The Court rejected this argument, citing Amara and McCravy, and allowed the case to move forward on the factual issues of: (1) whether the alleged phone call took place and the contents of the conversation; and (2) whether BCBS’s payment of the claims in error affected the reasonableness of Plaintiff’s reliance on BCBS’s alleged representation.


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 Bond Dickinson | Attorney Advertising

Written by:

Womble Bond Dickinson

Womble Bond Dickinson on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.