Opinion ID: 2997119
Heading Depth: 2
Heading Rank: 2

Heading: Breach of ERISA and Common Law (Bilateral)

Text: Contract (Count IV) The district court unsurprisingly had difficulty distinguishing this purported contract claim from the plaintiffs’ claim that they were wrongfully denied ERISA benefits.10 As with denial of benefits claims, claims that a contract vested retirement benefits require that the vesting be done in writing, not orally. See Frahm, 137 F.3d at 958 (“Although . . . a written plan may be combined with an oral promise, such as an undertaking to give a worker twice the benefits so established—the utility of reducing retirement promises to writing and avoiding arguments about who said what to whom are so fundamental to both ERISA and contract law that an extension of the writing requirement to all long-term commitments is an inescapable ingredient of the federal common law slowly accumulating in ERISA’s shadow.”). As we have noted, the HCA benefit at issue was not vested in writing, so no bilateral contract was created that vested the HCA benefit. Although we need not discuss CNA’s argument that the plaintiffs’ bilateral contract claim is duplicative of its denial of benefits claim under ERISA, we note that claims by a beneficiary for wrongful denial of benefits (no matter how they are styled) have been held by the Supreme Court to “fall[ ] directly under § 502(a)(1)(B) of ERISA, which 10 We note in this regard that the plaintiffs merely incorporated their arguments made in support of their wrongful denial of ERISA benefits claim and did not add any separate legal or factual arguments. (Appellants’ Br. at 36-37.) Moreover, the plaintiffs characterize their wrongful denial of benefits claim in Count II as an “ERISA Contractual Claim,” id. at 27, quote from a decision involving interpretation of a written ERISA contract, id. at 28-29, and discuss the issue using contractual language such as “bargained . . . in consideration for,” id. at 27, and “offered and accepted,” id. at 32. 26 No. 03-2090 provides an exclusive federal cause of action for resolution of such disputes.” Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 62-63 (1987). Recent decisions of both this circuit and the Supreme Court have held that state law claims, such as the plaintiffs’ breach of common law contract claim here, are pre-empted by ERISA. See Aetna Health Inc. v. Davila, 2004 WL 1373230, at  (U.S. June 21, 2004) (“Congress’ intent to make the ERISA civil enforcement mechanism exclusive would be undermined if state causes of action that supplement the ERISA § 502(a) remedies were permitted, even if the elements of the state cause of action did not precisely duplicate the elements of an ERISA claim.”); Klassy v. Physicians Plus Ins. Co., 2004 WL 1326717, at  (7th Cir. June 15, 2004) (“ERISA provides a remedy for plan participants wrongfully denied benefits. However, such claims must be brought under ERISA and creatively pleading a denial of benefits claim as a state law claim does not defeat the broad preemptive force of ERISA.”). Thus, even if we had found that a written agreement vested the HCA benefit, the breach of common law contract claim would be pre-empted by ERISA § 502(a), while the breach of ERISA contract claim is duplicative of Count II, as is evident from the plaintiffs’ briefs on appeal. It is appropriate to disallow a breach of common law contract claim here because plaintiffs should not be allowed to bring a denial of ERISA benefits claim in the guise of a common law breach of contract, thereby ensuring de novo review and no limitations on the record even if (as here) the plan administrator had the discretion to determine that no contract vested benefits and that benefits could therefore legally be terminated.