Justia Insurance Law Opinion Summaries

Appellant appealed the district court's adverse grant of summary judgment in favor of Standard Insurance in this Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., benefits case. The court held that the Plan administrator did not abuse its considerable discretion in this case where substantial evidence supported the administrator's decision.

Respondent, an insurer/managed care organization, contracted with an endoscopy center and gastroenterology center (collectively, the Clinic) to provide health care services to its insureds. After the Nevada Health District found that the Clinic engaged in a number of unsafe medical practices, Respondent terminated its contract with the Clinic. Janice Munda was insured by Respondent through her employer's health plan, which was governed by ERISA. Munda was diagnosed with hepatitis C, which the Health District determined she contracted as a result of being treated at the Clinic. Janise and her husband (collectively, Appellants) sued Respondent for negligence, negligence per se, breach of implied covenant of good faith and fair dealing, and loss of consortium. The district court granted Respondent's motion to dismiss, finding that Appellants' claims were preempted by ERISA. The Supreme Court reversed, holding that under the facts, there was no preemption because Respondent's alleged actions were independent of the administration of the ERISA plan.

Plaintiff, an RN, stopped working at the hospital and went on disability only a few months after starting work. Her symptoms were attributed to chronic pancreatitis, chronic pain syndrome or fibromyalgia; she took "impressive amounts of narcotics" to manage her pain, which caused negative side effects. After about five years, the company terminated benefits, finding that she was not totally disabled, as defined by the policy. The district court upheld the termination in a suit under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a)(1)(B). The First Circuit remanded for further review, reasoning that plaintiff's activities, shown on surveillance tapes, and the lack of clinical documentation were overstated.

After defendant was in a serious automobile accident, a benefit plan administered by plaintiff paid $66,866 for his medical expenses. Defendant then recovered $110,000 from third parties, with the assistance of counsel. Plaintiff, which had not sought to enforce its subrogation rights, demanded reimbursement of the entire $66,866 it had paid without allowance for legal costs, which had reduced defendant's net recovery to less than the amount it demanded. Plaintiff sued for "appropriate equitable relief" pursuant to the Employee Retirement Income Security Act, 29 U.S.C. 1132(a)(3) B). The district court ordered plaintiff to pay the entire. $66,866. The Third Circuit vacated, holding that defendant may assert equitable limitations, such as unjust enrichment, on plaintiff's equitable claim.

Plaintiff-Appellant Eugene S. appealed a district court's denial of his motion to strike and its entry of summary judgment in favor of Defendant-Appellee Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ). Plaintiff sought coverage for his son A.S.'s residential treatment costs from his employer's ERISA benefits insurer. Horizon's delegated plan administrator originally denied the claim. Having exhausted his administrative appeals, Plaintiff filed suit in district court challenging the denial of benefits. The parties filed cross-motions for summary judgment, but Horizon also filed a declaration that included the terms of Horizon's delegation of authority to the plan administrator to administer mental health claims in a Vendor Services Agreement. Plaintiff moved to strike that declaration as procedurally barred. The district court denied the motion and granted Horizon summary judgment, finding that neither Horizon nor its plan administrator acted in an arbitrary or capricious manner in denying the contested claim. Upon review, the Tenth Circuit found substantial evidence in the record that A.S. did not meet the criteria for residential treatment benefits under the plan, and as such, the plan administrator did not act in an arbitrary or capricious manner in denying Plaintiff's claim. The Court affirmed the district court's judgment.

Plaintiff's lawsuit arose from defendant's refusal to pay some or all of plaintiff's claims for reimbursement for medical-device procurement and financing services provided in connection with over 2,000 patients insured under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., plans administered by defendant. Plaintiff subsequently appealed a summary judgment for defendant. At issue was whether plaintiff's state-law claims of promissory estoppel, quantum meruit, unjust enrichment, negligent misrepresentation, and violations of the Texas Insurance Code, 541.051(A) & (B) and 541.061(1) & (2), were preempted by ERISA. The court reversed with respect to plaintiff's promissory estoppel, negligent misrepresentation, and Texas Insurance Code claims because these claims were premised on allegations and evidence that plaintiff provided the services in reliance on defendant's representations that it would pay reasonable charges for plaintiff's services. The court affirmed with respect to plaintiff's quantum meruit and unjust enrichment claims because these claims depended on plaintiff's assertion that without its services the patients' ERISA plans would have obligated defendant to reimburse a different provider for the same services.

Appellant Margerita Cervantes allegedly contracted hepatitis C as a result of treatment she received at the Endoscopy Center of Southern Nevada (ECSN). Appellant obtained treatment at ECSN as part of the health care benefits she received through her culinary union. The union operated a self-funded ERISA health care plan and retained Respondents, Health Plan of Nevada and other health and life insurance entities, as its agents to assist in establishing a network of the plan's chosen medical provider. Appellant filed a lawsuit alleging that Respondents were responsible for her injuries because they failed to ensure the quality of care provided by ECSN and referred her to a blatantly unsafe medical provider. The district court concluded that Cervantes' claims were preempted by ERISA section 514(a). The Supreme Court affirmed, holding that state law claims of negligence and negligence per se against a managed care organization contracted by an ERISA plan to facilitate the development of the ERISA plan's network of health care providers were precluded by ERISA section 514.

A employee made a series of attempts to obtain benefits under the company's long-term disability policy. A copy of the plan, which he obtained during internal appeals, contained no limitation on filing suit to challenge denials, but did reserve the right to make alterations to the plan. The plan was later amended to include a one-year limitation on bringing suit. Employee did not receive notice of the change. In 2005 the plan issued a final written rejection. In 2008 the employee filed suit under the Employee Retirement Income Security Act, 29 U.S.C. 1109 and 1132. The district court dismissed. The First Circuit reversed. While the plan did not engage in deceptive conduct that would implicate equitable estoppel, equitable tolling applies based on the failure to give notice of the change. The employee was reasonably diligent.

Plaintiffs appealed from a decision granting defendants' motion to dismiss plaintiffs' complaints for failure to state a claim upon which relief could be granted. Plaintiffs, participants in two retirement plans offered by defendants, brought suit alleging breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. Plaintiff alleged that defendants acted imprudently by including employer stock as an investment option in the retirement plans and that defendants failed to provide adequate and truthful information to participants regarding the status of employer stock. The court held that the facts alleged by plaintiffs were, even if proven, insufficient to establish that defendants abused their discretion by continuing to offer plan participants the opportunity to invest in McGraw-Hill stock. The court also held that plaintiffs have not alleged facts sufficient to prove that defendants made any statements, while acting in a fiduciary capacity, that they knew to be false. Accordingly, the judgment was affirmed.

Plaintiffs, participants in retirement plans offered by defendants and covered by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., appealed from a judgment dismissing their ERISA class action complaint. Plan documents required that a stock fund consisting primarily of Citigroup common stock be offered among the plan's investment options. Plaintiffs argued that because Citigroup stock became an imprudent investment, defendants should have limited plan participants' ability to invest in it. The court held that plan fiduciaries' decision to continue offering participants the opportunity to invest in Citigroup stock should be reviewed for an abuse of discretion and the court found that they did not abuse their discretion here. The court also held that defendants did not have an affirmative duty to disclose to plan participants nonpublic information regarding the expected performance of Citigroup stock and that the complaint did not sufficiently allege that defendants, in their fiduciary capacities, made any knowing misstatements regarding Citigroup stock. Accordingly, the court affirmed the judgment.