Every month, the International Foundation releases the Legal and Legislative Reporter, a compilation of new employee benefits-related case summaries. Below is a summary we thought you’d be interested in. Content provided by Morgan, Lewis & Bockius LLP.

The U.S. District Court for the Southern District of Florida grants the defendant’s motion to dismiss because the plaintiff sought relief unavailable under ERISA and that conflicted with plan terms while also failing to exhaust her administrative remedies. 

The plaintiff is a former employee of a company that is a participant in the company’s long-term disability benefits plan based on her former employment. The defendant is an insurance company that insures and administers disability benefits under the plan. The plan is governed by the Employee Retirement Income Security Act of 1974 (ERISA).

The plaintiff is a recipient of benefits under the plan. The plaintiff began receiving benefits after incurring a traumatic brain injury following a car accident. The plaintiff is also a key witness in a separate proceeding involving the defendant’s payment of benefits under the plan. After the defendant learned that the plaintiff was a witness in the other proceeding, the plaintiff alleges that the defendant began threatening to terminate her benefits if she did not participate in a phone interview. The defendant later contacted the plaintiff demanding medical information, causing the plaintiff to suffer a nervous breakdown, and, as a result, a social security vocational expert determined that the plaintiff could not work with the defendant nor at the other jobs the plaintiff had held.

The plaintiff brought a claim under ERISA for benefits under the plan. The plaintiff argues that she is entitled to benefits for at least two years, a lump sum present value payment of future benefits, and an injunction to prevent the defendant’s continued harassment. In response to the plaintiff’s claims, the defendant argues that the complaint should be dismissed because ERISA does not authorize the relief sought by the plaintiff and the plaintiff failed to exhaust her administrative remedies under the plan. Under ERISA, a plaintiff may bring an action to recover benefits due to them under the terms of the plan, enforce their rights under the terms of the plan, or to clarify future benefits under the plan.

The court finds that the plaintiff is currently receiving benefits under the plan, and that according to her complaint, she is seeking the payment of future benefits in the form of a continuation of her benefits for at least two years and a lump sum present value. The court finds that these remedies are not available under ERISA—The court may not award payment for disability benefits beyond the date of the final judgment. According to the precedent, payment of benefits beyond the date of the final judgment is improper because the plan administrator has the ongoing right to evaluate and make decisions regarding eligibility for benefits under the plan.

The court also finds that the plaintiff’s request that the defendant not contact her for two years conflicts with the plan documents, which require the plaintiff’s cooperation with the defendant to ensure eligibility and proper payment of benefits. Furthermore, the court finds that the plan requires the plaintiff to provide the defendant with proof of disability before benefits will be paid. Consequently, the court finds that the plan requires the plaintiff’s continued contact with the defendant regarding her benefits. The court will not deviate from the terms of the plan because ERISA requires that benefits be administered according to the terms of the plan.

In addition, the court finds that prior to bringing an ERISA claim in court, the plaintiff must exhaust all administrative remedies. This exhaustion requirement is strictly enforced by the court. The court finds that that the plaintiff did not exhaust her administrative remedies because she did not allege any facts indicating that she followed plan procedures in attempting to obtain benefits or resolve this dispute, nor does she provide legal authority indicating that she satisfied the exhaustion requirement. Furthermore, the court finds that plaintiff did not follow the plan procedure when demanding benefits. Therefore, the court finds that the plaintiff made no showing for exhaustion nor that the court should excuse the exhaustion requirement.

Accordingly, the court finds that the plaintiff has not met ERISA’s requirements for her claims for plan benefits, so the court grants the defendant’s motion to dismiss.

Schneider v. Life Insurance Company of North America, No. 9:23-CV-80047-RLR (S.D. Fl., April 20, 2023).

Guest Contributor

Recommended Posts

Educating DC Plan Participants for the Long Hike to Retirement

Kathy Bergstrom, CEBS
 

Many years ago, I visited Grand Canyon National Park with my mom and aunt. It was unseasonably hot, but I wanted to walk down into the canyon on the Bright Angel Trail. My companions were not up for the hike, so I […]

Building and Designing for DEI: Creating Employee Benefits That Work for All

Guest Contributor
 

Benefits Magazine Extras articles provide you with bonus content on a mix of benefits topics as well as deep dives and analyses on the latest benefit trends and compliance issues. Foundation members can visit ifebp.org/benefitsmagazine to view the full bimonthly print edition of the magazine.  Global […]