Court Opinion

ID: 6973752
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:07:16.544715+00
Date Added: 2024-06-11T16:08:53.404205
License: Public Domain

MANION, Circuit Judge,
dissenting.
I respectfully dissent from the court’s decision to remand this case to the district court. After one trial it is doubtful further proceedings will enlighten the district court on how to enhance a judgment this court believes could be more “fair” and “equitable.” Equity does not necessarily include forcing an employer to pay on a $260,000 life insurance policy (or some portion thereof) to the adult children of a deceased worker, Glen Schleib-aum, simply because the company may have mailed cursory letters denying his claim of “total disability.” In fact, as the court concedes, Kmart’s very first letter to Schleib-aum notified him of his right to appeal and subsequent letters explained that Kmart did not view him as disabled because he could perform some kinds of work if not all kinds. We need not decide whether Kmart’s series of letters “substantially complied” with the Act, thus satisfying all of its obligations under ERISA. Even if Kmart’s communications fell short of statutory technicalities, the plaintiffs’ case fails to establish the basic element of causation-here, that Kmart’s letters (rather than other circumstances) prevented their father from securing company-sponsored life insurance for their benefit before he died.
Consider the possibilities, already adjudicated before the district court. Faced with the prospect of continuing his life insurance through an individual policy (and the monthly premiums that he would have to personally pay), Schleibaum might well have decided that the costs exceeded the benefits; his children, after all, were fully grown. He may well have decided that he could better use his money for immediate needs or desires for himself or others rather than pouring it into life insurance. In that case, he might have made a conscious decision not to continue the life insurance while at the same time pursuing the chance that the company might reconsider its decision that he was not “permanently and totally disabled.”
But giving the adult children the benefit of all doubts, suppose their father decided against the individual policy because neither he nor his children could afford it, but still wanted to provide for them after his death. In that case his only chance to obtain coverage was to convince Kmart that — despite the evidence to the contrary (his doctor’s letter stating he could perform sedentary work)— he was indeed permanently and totally disabled under the terms of the plan. He died before he could convince Kmart of this. The court focuses on Kmart’s letters rather than the lack of medical documentation supporting Schleibaum’s claim. We will never know whether more complete communication between Kmart and Schleibaum would have resulted in Kmart accepting his claim of disability (the evidence suggests that the problem was Schleibaum’s medical substantiation, not his misunderstanding of the documentation Kmart required).
Rather than rooting its opinion in arguable notions of what “equity” demands, the court should stick close to the law. Everyone involved with this case concedes that at most Kmart violated § 1133 of the Act, meaning it violated the technical notice requirements outlined by Congress. Nowhere does the court acknowledge that in these cases “[w]e have repeatedly held that technical violations of ERISA’s notification requirements, without a showing of bad faith, active concealment or detrimental reliance, do not state a cause of action.” Andersen v. Chrysler Corp., 99 F.3d 846, 859 (7th Cir.1996) (citations omitted). The plaintiffs do not contend that Kmart is guilty of bad faith or active concealment of any material information, and nothing uncovered during the trial suggested it. That leaves the plaintiffs’ last chance to recover under their father’s life insurance policy — they must prove that Kmart falsely summarized the plan and induced their father to rely on those representations. But *506the plaintiffs did not pursue this theory in the district court, and in all events the record evidence establishes that while Kmart’s letters were somewhat cursory, they were not misleading in any way. In fact, Sehleibaum’s own letters reveal his understanding that his claim had been rejected because the company did not view him as disabled under the terms of the plan.
The court concedes that we will never know whether Mr. Schleibaum was in fact permanently and totally disabled and entitled to a continuation of his policy. We will never know whether more complete notices mailed by Kmart would have prompted Schleibaum to provide more convincing medical evidence, or whether he shared everything he had with Kmart before he died. We will never know why he decided not to continue his life insurance by converting to an individual policy, whether he intended his adult children to benefit from a policy, or whether he pursued his disability claim only because he had nothing to lose. After taking much evidence, we still do not know much; a remand will not cast new light on the same facts. We are not deciding whether there is a genuine issue about these things; the plaintiffs already had their day in court and failed to convince the district court that the letters were to blame. Fairly, equitably, and most important, legally, that failure should put an end to their case. For these reasons, I dissent.