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9th Cir. – Unpublished – Overpayment Counterclaim

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  • 9th Cir. – Unpublished – Overpayment Counterclaim

    Here’s a new case out of the Ninth Circuit, unpublished, entitled Leah A. Bilyeu v. Morgan Stanley Long Term Disability Plan; Morgan Stanley Long Term Disability Plan Administrator; First Unum Life Insurance Company. Most of the opinion is an affirmation of the District Court’s ruling against the plaintiff and all of the various arguments are pretty standard and nothing interesting stands out. However, the last point that the court makes is that the District Court properly entered judgment against Unum on Unum’s counterclaim. I’m assuming that this is their counterclaim that I often see for an overpayment of benefits. The court rules against them on this claiming that they are pleading legal relief rather than equitable.

    6. The district court properly entered judgment in favor of Bilyeu on Unum’s counterclaim. First, with respect to Unum’s “ill-gotten gains” theory of recovery, the district court did not clearly err by finding Bilyeu did not deliberately mislead Unum about her ability to work. The court emphasized that: (1) Bilyeu did not withhold any medical records or information from Unum but instead supplied Unum with all of her medical records; (2) Unum reviewed Bilyeu’s medical records for itself and found her disabled; (3) Bilyeu did not provide any false information to Unum; and (4) Unum neither alleged nor showed that Bilyeu was not disabled or misrepresented that she was disabled; in fact, Unum, Bilyeu’s employer and the SSA all agreed she was disabled. We find no clear error in the court’s findings.

    Second, with respect to Unum’s “money had and received” theory of recovery, the district court properly concluded this claim sought legal rather than equitable relief. A claim for “money had and received” is a claim for restitution, and a claim for restitution can be either legal or equitable. “If restitution to the claimant is accomplished exclusively by a judgment for money, without resort to any of the ancillary remedial devices traditionally available in equity but not at law, the remedy is presumptively legal.” Restatement (Third) of Restitution and Unjust Enrichment § 4 cmt. d (2011). That is, “[t]he standard legal remedy for a liability based on unjust enrichment is a judgment for money, to be satisfied from the assets of the defendant by the ordinary procedures of execution.” Id. By contrast, “the hallmark of equitable remedies in restitution cases is that they give relief to the claimant via rights in identifiable assets.” Id. Here, Unum has not shown that its claim for money had and received falls on the equitable side of restitution. The district court therefore properly concluded this claim did not seek equitable relief under 29 U.S.C. § 1132(a)(3).
    The opinion is attached below.
    Attached Files
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