Justia Insurance Law Opinion Summaries

This case stemmed from the collective bargaining agreement (CBA) between Volvo Group North America, LLC (Volvo) and the union representing workers at Volvo's New River Valley assembly plant (NRV). At issue was whether the CBA permitted Volvo to make unilateral changes to the health benefits of retirees from its NRV assembly plant after the agreement expired. The court held that Volvo was not permitted to make unilateral modifications to the retirees' health benefits after the expiration of the CBA unless it followed the mechanism agreed to by both parties in that agreement. Therefore, the court affirmed the judgment of the district court where Volvo could not employ that mechanism in this case.

After being diagnosed with fibromyalgia, chronic pain, anxiety, and depression, plaintiff was awarded long-term disability benefits under an employee benefit plan issued and administered by defendant. Benefits were discontinued about 24 months later, when defendant determined that plaintiff had received all to which she was entitled under the planâs self-reported symptoms limitation. Because plaintiff had retroactively received social security benefits, defendant also sought to recoup equivalent overpayments as provided by the plan. The district court dismissed. The Seventh Circuit reversed in part and remanded for reinstatement. The self-reported symptom limitation violates ERISA, 29 U.S.C., 1022; the policy sets out that long-term benefits will be discontinued after 24 months if disability is due to mental illness or substance abuse, but does not mention that the time limitation applies if a participantâs disability is based primarily on self-reported symptoms. The Social Security Act does not bar recovery of overpayments occasioned by receipt of social security benefits.

Appellees brought this declaratory judgment action seeking a determination that there was no coverage for an accident involving a company car driven by Daniel Brandt and injuring Donald Bunch. At issue was whether liability coverage extended to Brandt and whether Donald Bunch was entitled to uninsured and underinsured motorist coverage because the policy at issue was ambiguous. The court concluded that the Bunches conceded that Brandt did not have express or implied permission from his employer to drive the car and that Patricia Bunch lacked the authority to give Brandt permission to use the vehicle as either a named insured or as a second permitee. Therefore, the district court did not err in concluding that liability coverage did not extend to Brandt. The court also concluded that there was no indication that the term "vehicle" was ambiguous or that a person reading the policy would not understand that the vehicle referred to in the exclusion would have included the car involved in the accident. Therefore, the district court did not err in determining that Donald Bunch did not qualify for uninsured or underinsured motorist coverage.

Carlin Jewett was employed as a welder by Real Tuff where Jewett often worked on his knees. In 2006, Jewett suffered a right knee injury. Jewett received arthroscopic surgery, during which the surgeon found pre-existing bilateral osteoarthritis in Jewett's knee. Jewett subsequently filed a petition with the state Department of Labor, seeking workers' compensation for a right knee replacement. Two years later, Jewett suffered a second work-related injury to his left knee. Jewett added a workers' compensation claim for diagnostic treatment of his left knee. The Department and the circuit court ruled that Jewell failed to sustain his burden of proof on the alternate theories that (1) work-related injuries to both knees were a major contributing cause of the need for medical treatment, and (2) the cumulative effect of Jewett's work-related activities was a major contributing cause of the osteoarthritis. On appeal, the Supreme Court affirmed, holding the Department and circuit court did not err in finding (1) Jewett's first injury was not a major contributing cause of Jewett's need for a right knee replacement, and (2) Jewett did not prove that working on his knees was a major contributing cause of his osteoarthritis.

Plaintiff filed an action against defendants (collectively, the Plan) for refusing to pay certain long-term disability benefits. At issue was whether the district court erred in granting summary judgment for defendants and dismissed plaintiff's claims without prejudice due to his failure to exhaust available administrative remedies under the Plan. The court held that the district court adopted the Plan's reading of ERISA, 29 C.F.R. 250.503-1(i) without the benefit of the Secretary of Labor's interpretation of that provision. Therefore, deferring to the Secretary's plausible approach, the court held that where a claimant sought review of his or her disability claims, the quarterly meeting rule was restricted to multiemployer plans. Accordingly, the Plan was required to render a decision within 90 days of plaintiff's administrative appeal and failed to do so. Consequently, plaintiff's claims must be deemed exhausted and the judgment was reversed and remanded.

Plaintiff challenged the denial of his claims for long-term disability benefits by defendant, who served as both the administrator of claims and the payor of benefits in the long-term disability plan in which defendant participated. At issue was whether there was a conflict of interest where defendant was both administrator and payor of benefits of the plan governed by ERISA, 29 U.S.C. 1001-1461. The court found that defendant considered the medical information submitted by plaintiff's doctors and relied upon the advice of several independent medical professionals to conclude that plaintiff failed to make a sufficient showing of disability under the plan and, even where plaintiff's own doctors offered different medical opinions than defendant's independent doctors, the plan administrator could give different weight to those opinions without acting arbitrarily or capriciously. Therefore, the court held that a reasonable basis supported defendant's benefits decisions and that the conflict of interest did not render the decisions arbitrary or capricious.

Plaintiff Scott Hackett aggravated a pre-existing low back injury while working as a long distance truck driver for Western Express. After Hackett was terminated for reasons unconnected to his injury, Hackett filed a petition for award to the Workers' Compensation Board and was awarded ongoing partial incapacity benefits for a gradual injury to his lower back. When calculating Hackett's weekly wage, the hearing officer (1) excluded the nine cents per mile Hackett received as per diem pay, concluding that it was paid to cover special expenses, and (2) concluded that the per diem payments were not a fringe benefit that could be included to a limited extent in average weekly wage. Hackett appealed. The Supreme Court affirmed the hearing officer's decision but remanded for a recalculation of Hackett's fringe benefits pursuant to Me. W.C.B. R. ch. 1, 5(1).

Appellant, who had been on a medical leave of absence from appellee for nearly four months, sued appellee alleging violations of the Family and Medical Leave Act ("FMLA"), 29 U.S.C. 2612(a)(1), and the benefits-termination notice provisions of the Consolidated Omnibus Budget Reconciliation Act ("COBRA"), 29 U.S.C. 1166(a)(4)(A), when appellee fired him for job abandonment. Appellant appealed the district court's grant of summary judgment in favor of appellee on each of his claims. The court held that the district court properly granted summary judgment to appellee on appellant's interference claim under the FMLA where appellant failed to demonstrate any prejudice as a result of his firing on May 1, 2007. The court also held that the district court properly granted summary judgment to appellee on appellant's claim that appellee failed to provide him with notice of the termination of his benefits as required by COBRA where appellant failed to show that a genuine factual dispute existed regarding the means used by appellee to send the notice and where the undisputed facts showed that appellee used a notice method "reasonably calculated to reach" appellant.

Defendant appealed from the district court's grant of summary judgment in favor of plaintiff, compelling arbitration of a dispute related to healthcare benefits under an expired collective bargaining agreement. At issue was whether the district court erred in granting plaintiff's motion for summary judgment and issuing an order compelling the arbitration. The court reversed and held that the district court erred in granting summary judgment and compelling arbitration where both parties vigorously disputed issues of both law and fact, including whether the 1994 agreement was ambiguous and whether the summary plan descriptions constituted an intrinsic or extrinsic evidence of the parties' intent. The parties also point to various other extrinsic evidence and vehemently disagree as to whether the bargained for fully-paid health insurance premiums for life or just for the term of the agreement. Under these circumstances, the court held that the question of whether the right to fully-paid premiums vested under the 1994 agreement was best decided in the first instance by the district court and therefore, remanded for further proceedings.

Plaintiffs sued defendants, former directors of a retirees association of former unionized transportation workers, alleging, among other things, that defendants breached their fiduciary duty to the retirees association and its members by buying and maintaining a health insurance policy with premiums that far outstripped the benefits received by members. When defendants prevailed on all counts, defendants appealed the district court's denial of their fees motion. At issue was whether the district court erred in denying the fees motion in light of the recent Supreme Court decision, Hardt v. Reliance Standard Life Insurance Co. The court affirmed and held that the district court did not abuse its discretion in denying fees where, although the district court did not have the benefit of Hardt in reaching its decision, nothing in the district court's opinion contradicted Hardt or suggested that the district court would have decided the matter differently in light of Hardt. Accordingly, Hardt did not require the court to reverse or remand. The court also held that, when determining whether attorney's fees should be awarded to defendants, the court focused on whether plaintiffs brought the complaint in good faith.