Employee Benefits

Dist. Ct. erred in granting defendants-plan administrator’s and group health insurance plan’s motion for summary judgment in ERISA action alleging that plaintiff-plan beneficiary incurred $80,000 in uncovered medical expenses caused by defendants’ breach of fiduciary duty, when they failed to inform plaintiff that her proposed hospital where treatment for emergency cancer surgery was to occur was not included in plan’s network of providers in group health plan. Record contained triable issue as to whether fiduciary breach occurred where: (1) plaintiff never had access to list of providers in network, but was instead directed to call defendants’ representative to seek such information; (2) representative could not confirm during first telephone call that plaintiff’s proposed hospital was within plan’s network, but told plaintiff’s husband to “go ahead with whatever had to be done;” and (3) husband placed second telephone call to defendants’ representative to obtain “preadmission” certification and received “okay” response when husband informed representative that plaintiff would be admitted into proposed hospital. Fact that husband never specifically asked whether proposed hospital was in plan’s network did not require different result since record contained some evidence that defendant’s representatives were aware of husband’s “status and situation” when seeking information from defendants, and fact-finder could conclude that plaintiff would have selected different hospital had she known that proposed hospital was not within network. (Dissent filed.)

Record contained sufficient evidence to support ALJ’s finding that claimant was totally disabled by pneumoconiosis arising out of his coal mining employment based on his second application for Black Lung Disease benefits, after his first application had been denied by reason of abandonment. Employer conceded that claimant had demonstrated change in his condition of entitlement in that he was now totally disabled, and ALJ could properly find that claimant had labored for at least 15 years in surface mining conditions, which included work in presence of coal and rock dust, that was substantially similar to underground mining conditions, and that employer had failed to rebut resultant 15-year presumption that claimant was totally disabled due to pneumoconiosis. Fact that claimant had extensive history of cigarette smoking, or that record contained medical evidence that was in equipoise on issue regarding presence of totally disabling respiratory impairment did not require different result.

Dist. Ct. did not err in upholding ALJ’s denial of claimant’s application for Social Security disability benefits based on claim that claimant’s scoliosis and degenerative disc disease prevented him from working, after ALJ found that claimant was able to perform light work. While ALJ failed to explain why he accepted one doctor’s assessment over others, record supported said doctor’s assessment indicating that claimant’s condition did not impose any restriction with respect to sitting, standing or walking necessary to perform light work. Moreover, ALJ adequately explained why he rejected claimant’s testimony regarding nature and extent of his condition. Ct. further noted that although there were other aspects of ALJ’s credibility determinations that lacked adequate explanation, claimant waived any arguments with respect to these arguments due to claimant’s failure to address them in Dist. Ct.

Dist. Ct. did not err in granting defendants’ motion for summary judgment, after finding that plaintiff’s ERISA action, alleging that defendants terminated profit-sharing plan without distributing any benefits to plaintiffs, was time-barred. Record showed that said plan was dissolved in December of 1997, and plaintiffs waited until June of 2009 to file instant lawsuit, which was beyond applicable 6-year limitation period for filing instant action. While plaintiffs argued that limitation period should be excused because defendants had concealed from them fact that plan had been dissolved, plaintiffs failed to present evidence that defendants took any affirmative steps to conceal pension plan information from plaintiffs.

Dist. Ct. did not err in granting plaintiffs’ motion for summary judgment in class action alleging that defendant-pension plan violated ERISA by using projection rate in instant cash balance plan that was too low when class members took lump sum payment of pension benefit. Record showed that defendant used 30-year Treasury bond rate, which was lower than greater of either 4% rate or rate measured by 75% of defendant’s plan investment returns, that were mentioned in plan. Moreover, Dist. Ct. could use 8.2% projection rate, which was based on expert testimony, and defendant could not retroactively amend terms of plan to effectively lower projection rate. However, defendant could assert 6-year statute of limitations defense for those class members, who took lump sum payments more than 6 years prior to filing date of instant lawsuit.

In action seeking declaration under ERISA that plaintiff could properly withhold severance benefits to defendant-employee, where defendant failed to sign restrictive covenant not to compete as condition for receipt of said benefits, Dist. Ct. erred in finding that defendant was entitled to said benefits because formal plan lacked language conditioning severance pay on plaintiff signing restrictive covenant, where Dist. Ct. rejected theory of case that defendant had actually advanced and decided case in defendant’s favor on theory of case that defendant had expressly rejected, without giving plaintiff notice that it was contemplating resolution of case under these circumstances. Moreover, with respect to defendant’s claim that he was entitled to severance benefits pursuant to merger agreement involving his company, as well as terms of subsequent “plan” that implemented said agreement, Dist. Ct. should on remand give parties required notice and then entertain arguments based on language of any post-acquisition plan.

Dist. Ct. did not err in dismissing for failure to state cause of action plaintiff’s class action alleging that insurance companies’ practice of charging co-payments for chiropractic care violated Wisc. insurance code (that prohibited health insurers from excluding coverage for chiropractic services if their policies covered diagnosis and treatment of same condition by physician), as well as ERISA provisions regarding recovery of benefits and breach of fiduciary duty. While plaintiffs could properly sue instant insurance companies, as opposed to heath plans, for recovery of benefits, where insurance companies made relevant decisions on award and payment of benefits, defendant’s decisions on whether to charge co-payments pertains to contents of insurance policies, which do not constitute fiduciary acts covered by ERISA. Moreover, Ct. found that instant practice of charging co-payments for chiropractic care did not violate Wisc. insurance code since said code did not expressly prohibit chiropractic co-payments.