Source: https://www.lifeanddisabilitylaw.com/erisa-watch-november-30-2015/
Timestamp: 2019-04-19 11:01:52+00:00

Document:
Happy Monday! Hope everyone had a fantastic Thanksgiving celebration. Fortunately for you ERISA Watchers, neither the tryptophan nor men in tights chasing cowhide (…yawn) could beat the strong allure of reading ERISA decisions. In addition to the sole reported appellate decision in Cent. Illinois Carpenters Health & Welfare Trust Fund v. Con-Tech Carpentry, LLC, No. 15-1269, __F.3d___, 2015 WL 7434500 (7th Cir. Nov. 24, 2015), I threw in some other goodies to keep it interesting. You’re welcome!
Below is Springer & Roberts LLP’s summary of this past week’s notable ERISA decisions.
District court did not abuse its discretion in denying delinquent employer relief from default judgment under Fed.R.Civ.P. 60(b). Cent. Illinois Carpenters Health & Welfare Trust Fund v. Con-Tech Carpentry, LLC, No. 15-1269, __F.3d___, 2015 WL 7434500 (7th Cir. Nov. 24, 2015) (WOOD, Chief Judge, and POSNER and EASTERBROOK, Circuit Judges). In this matter seeking delinquent contributions, the Seventh Circuit affirmed the district court’s denial of Con-Tech’s Fed.R.Civ.P. 60(b) motion after it failed to answer the Complaint or file a Rule 55(c) motion to set aside a default judgment. Here, suit was filed on September 25, 2014 and Con-Tech was served on October 14. Following expiration of the 21-day deadline to answer, Plaintiffs filed and served a motion asking the district court to find Con-Tech in default. Con-Tech did not respond to that motion nor attend the hearing. On January 13, 2015, the court entered a judgment in the funds’ favor, awarding them about $70,000 in past-due contributions, $14,000 in interest, $7,000 in liquidated damages, $3,000 in audit costs, and $4,000 in attorneys’ fees. Two weeks earlier, counsel for Con-Tech filed an appearance and a motion for an extension of time to answer the complaint but it needed to file a Rule 55(c) motion to vacate the default. Plaintiffs informed Con-Tech of this requirement in a document filed on January 5 but instead of filing a Rule 55(c) motion, Con-Tech filed a motion for a stay in favor of arbitration. When the district court entered its judgment, the time to seek relief for “good cause” under Rule 55(c) expired and defendant was required to file a motion under Fed.R.Civ.P. 60(b). Con-Tech filed a Rule 60(b) motion on January 15 and informed the district judge that it had not ignored the suit but had instead started negotiating with Plaintiffs’ lawyers. The district court rejected Con-Tech’s motion, finding that it deliberately ignored the litigation. In affirming the district court, Judge Easterbrook explained that a defendant can both file an answer and try to negotiate a settlement; doing the latter does not eliminate the need to do the former. Further, Con-Tech could have filed an answer and asked the district court to stay the litigation while the parties negotiated. The court rejected Defendant’s argument that if it had filed an answer or any other substantive paper, it would have waived its right to arbitrate under the Federal Arbitration Act (which it mistakenly invoked, although 29 U.S.C. § 1401(a)(1), part of the Multiemployer Pension Plan Amendment Act, is the governing statute). The court explained that nothing prevents a defendant from filing an answer that demands arbitration and offers other reasons why plaintiffs should not receive judicial relief.
Caban v. Employee Security Fund of the Electrical Products Industries Pension Plan, et al., No. 10-CV-389 (SMG), 2015 WL 7454601 (E.D.N.Y. Nov. 23, 2015) (Magistrate Judge Steven M. Gold). The court awarded Plaintiff attorneys’ fees, finding that he achieved the requisite success on the merits where his disability pension was awarded after taking a deposition and filing an amended complaint. The court awarded attorneys’ fees in the amount of $126,400 and denied Plaintiff’s motion for an award of pre-judgment interest. Plaintiff’s attorney, a solo practitioner with over 30 years of experience representing individuals in discrimination, criminal, and ERISA cases. Plaintiff requested $675/hour but the court awarded fees at a reduced rate of $400/hour. Plaintiff also sought fees for 782.10 hours of attorney time but the court found that time spent on the case after July 24, 2012, the date Plaintiff was awarded a disability pension, did not achieve any success for plaintiff whatsoever. The court further cut time based on vague and excessive time. The court awarded fees for only 258 hours of work but also awarded 58 hours of time spent on the fee petition. The court denied prejudgment interest because Plaintiff did not timely move for it.
Cannon v. Aetna Life Insurance Company, et al., No. CV 12-10512-DJC, 2015 WL 7566674 (D. Mass. Nov. 23, 2015) (Judge Denise J. Casper). The court granted Aetna’s motion for summary judgment on Plaintiff’s claim for short-term disability benefits, finding that Plaintiff did not meet his burden of establishing his eligibility for those benefits. Although his treating doctor’s Attending Physician Statement and the Social Security Administration’s determination letter provide some supporting evidence, Aetna need not defer to the treating doctor or the SSA.
Safdi v. Covered Employer’s Long Term Disability Plan Under the Union Cent. Employee Sec. Ben. Trust, No. 14-3598, __Fed.Appx.___, 2015 WL 7434695 (6th Cir. Nov. 24, 2015) (GUY, BATCHELDER, and GIBBONS, Circuit Judges). The Sixth Circuit affirmed the district court’s holding that under the terms of the disability plan, a plan participant must return to work full time for the Recurrent Disability provision to become operative. The court found that Plaintiff did not satisfy the Recurrent Disability provision because he cannot show two distinct periods of Residual Disability separated by a return to work on a full-time basis.
Sonia Cruz-Baca, v Edison Int’l Long Term Disability Plan, No. CV147887JFWMANX, 2015 WL 7573624 (C.D. Cal. Nov. 25, 2015) (Judge John F. Walter). The court found that the Plan did not abuse its discretion when it terminated Plaintiff’s disability benefits and entered judgment in favor of the Plan.
Davis v. Hartford Life & Accident Insurance Company, No. 3:14-CV-00507-TBR, 2015 WL 7571905 (W.D. Ky. Nov. 24, 2015) (Judge Thomas B. Russell). In matter involving disability claim, Plaintiff served Hartford with a set of interrogatories and requests to produce documents as well as requests to depose several of Hartford’s employees. The court granted in part and denied in part Plaintiff’s motion to compel discovery.
Perry v. Toyota Motor Engineering & Manufacturing Health and Welfare Benefit Plan, No. 315CV00072RLYWGH, 2015 WL 7454669 (S.D. Ind. Nov. 23, 2015) (Judge Richard L. Young). The court found that Defendant’s decision denying Plaintiff medical benefits for the period of January 1, 2012 to November 20, 2014 was not an abuse of discretion. Plaintiff’s long-term disability benefit claim was terminated in July 2009 and reinstated November 2014. At the time his benefits were terminated, Plaintiff and his dependents had been entitled to continued medical benefits by virtue of his eligibilityfor disability benefits. The medical benefit plan was amended in 2012 to exclude medical benefit coverage for when LTD benefits are awarded retroactively. The court found that it is undisputed that Plaintiff was not eligible for medical benefit coverage at the time the 2012 Plan was published and that he was awarded LTD Benefits retroactively. Thus, under the plain language of the 2012 Plan, Plaintiff is not entitled to medical benefits for the period January 1, 2012 to November 20, 2014 and his medical benefits did not vest during that time period.
Fred Michael Reed, Plaintiff, v. Int’l Painters And Allied Trades Indus. Pension Plan, Defendant., No. 2:12-CV-72, 2015 WL 7450891 (S.D. Ohio Nov. 24, 2015) (Judge James L. Graham). In this matter, the issue was whether Plaintiff’s pension vested before he left the employ of union painting companies and became an over-the-road truck driver. The court denied Defendant’s motion for summary judgment on Plaintiff’s benefit claim, finding that its determination was arbitrary and capricious, but remanded the claim to the administrator for further findings. The court granted summary judgment in favor of Defendant onPlaintiff’s equitable estoppel claim.
Hailoo v. Disability RMS, First Unum Life Insurance Company, No. 14-CV-1992(ADS)(ARL), 2015 WL 7575906 (E.D.N.Y. Nov. 25, 2015) (Judge Arthur D. Spatt). ERISA does not apply to policy where insured is self-employed, the sole owner of her dental practice, and none of her employees are entitled to disability benefits under the Policy.
Martin v. Trend Personnel Services, No. 3:13-CV-3953-L, 2015 WL 7424757 (N.D. Tex. Nov. 23, 2015) (Judge Sam A. Lindsay). The court concluded that Plaintiffs are not entitled to recover on their breach of fiduciary duty claim under ERISA against Defendants because the Bonus Agreement at issue fails to satisfy all of the requirements for an ERISA plan. Facts relevant to the court’s decision was that Trend Personnel agreed to pay the annual premium on the policies, but it was not involved in the administration of the policies or submission of claims; did not employ a benefits administrator; and did not issue a booklet or provide information to employees regarding the life insurance benefits offered by Penn Mutual. Further, Defendants had no discretion under the Bonus Agreement to determine whether an employee was eligible for life insurance benefits.
Communications Workers of America v. Alcatel-Lucent USA Inc., et al., No. 15-CV-8143, 2015 WL 7573206 (D.N.J. Nov. 25, 2015) (Judge Claire C. Cecchi). The court denied Plaintiffs’ motion to enter a temporary restraining order against Defendants from making two separate transfers of participants, liabilities, and assets from the overfunded Lucent Technologies Pension Plan to the two other underfunded plans, the Alcatel Lucent Retirement Income Plan and the Lucent Technologies, Inc. Retirement Plan, effective December 1, 2015.
In re Anthem, Inc. Data Breach Litigation, No. 15-CV-04739-LHK, 2015 WL 7443779 (N.D. Cal. Nov. 24, 2015) (Judge Lucy H. Koh). Plaintiffs are citizens of New York who are Anthem health insurance customers and who claim that their PHI was compromised as a result of the Anthem data breach. The court found that Plaintiffs’ breach of contract and unjust enrichment claims are completely preempted by ERISA § 502(a), that the court has subject matter jurisdiction over this action under 28 U.S.C. § 1331, and that removal was proper under 28 U.S.C. § 1441(a).
Cardiovascular Specialty Care Center of Baton Rouge, LLC v. United Healthcare of Louisiana, Inc., No. 14-00235-BAJ-RLB, 2015 WL 7430034 (M.D. La. Nov. 20, 2015) (Judge Brian A. Jackson). Plaintiff asserted that according to a Participating Provider Agreement between it and First Health Group Corporation Services, Defendant owes it money for medical services rendered to Defendant’s insureds. Defendant moved to dismiss pursuant to Rule 12(b)(6). The court found that the Participating Provider Agreement and the Payor Agreement were not properly before the court so that Defendant’s request that Plaintiff’s five state law claims be dismissed based upon the language of these agreements is denied. The court also denied Defendant’s request that Plaintiff’s five state law claims be dismissed as completely and expressly preempted by ERISA. The court also found that Plaintiff’s ERISA § 502(a)(1)(B) claim is properly pled but that its ERISA § 502(a)(3) is barred by Plaintiff’s ERISA § 502(a)(1)(B) claim.
Johnson v. Wyndham Vacation Ownership, Inc., No. C15-0766RSL, 2015 WL 7431421 (W.D. Wash. Nov. 20, 2015) (Judge Robert S. Lasnik). After learning that Plaintiff would need 2-3 months of physical therapy, Defendant changed Plaintiff’s employment status to part-time such that he became ineligible for medical benefits. The court found that whether Defendant acted for the purpose of avoiding the payment of anticipated benefits or whether it was simply applying established corporate policy when it recharacterized plaintiff to part-time status and terminated his healthcare benefits cannot be determined in the context of this motion for summary judgment. Thus, the court denied Plaintiff’s motion.
Whitehouse v. Life Insurance Company of North America, No. 3:15-CV-00639-TBR, 2015 WL 7587361 (W.D. Ky. Nov. 25, 2015) (Judge Thomas B. Russell). Plaintiff filed suit in Kentucky but she resides in Illinois, LINA administered her claim in Texas, and the breach (if any) happened in Illinois. The court denied the motion to transfer venue filed under Federal Rule of Civil Procedure 12(b)(3), but pursuant to 28 U.S.C. § 1404(a), the court directed the clerk to transfer the action to the United States District Court for the Central District of Illinois, Peoria Division.

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