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Claim for Equitable Relief and Claim for Recovery of Benefits: N.D. Ala.

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  • Claim for Equitable Relief and Claim for Recovery of Benefits: N.D. Ala.

    In a recently decided case, the court deals with the familiar issue of a plaintiff seeking equitable relief and a recovery of benefits simultaneously. Here, the Plaintiff asserts three causes of action under ERISA: (1) recovery of benefits, pursuant to ERISA § 502(a)(1)(B) (“Count One”); (2) breach of fiduciary duty, pursuant to ERISA § 502(a)(3) (“Count Two”); and (3) reinstatement of her waiver of premium benefits, pursuant to ERISA § 502(a)(1)(B). The court reasons as follows:

    The Supreme Court has explained that § 501(a)(3) is a “catchall” provision that offers “appropriate equitable relief for injuries caused by violations that § 502 does not elsewhere adequately remedy.” Varity, 516 U.S. at 512. The Eleventh Circuit has interpreted Varity to mean that the only question in determining whether a plaintiff may bring a § 502(a)(3) claim for equitable relief is “whether the allegations supporting the Section 502(a)(3) claim [are] also sufficient to state a cause of action under Section 502(a)(1)(B), regardless of the relief sought.” Jones v. Am. Gen. Life & Acc. Ins. Co., 370 F.3d 1065, 1073 (11th Cir. 2004).
    If the claims are based on different factual allegations, a plaintiff may raise both a § 502(a)(1)(B) claim for recovery of benefits and a § 502(a)(3) claim for equitable relief, as long as no other section of ERISA provides an adequate remedy for the facts supporting the § 502(a)(3) claim. See id. at 1073–74. But a plaintiff may not raise both a § 502(a)(1)(B) and a § 502(a)(3) claim based on the same factual allegations, even as alternatives to each other.
    The Plaintiff contends that Counts One and Three are based on different factual allegations than Count Two, arguing that One and Three stem from the Defendant's erroneous interpretation of the plans and policies, while Two stems from the Defendant's manner of processing claims. However, the court finds this argument unpersuasive.

    At their base, all of Ms. Stewart’s claim stem from the same factual allegations—that she qualifies for benefits that Hartford wrongfully denied. Whether the wrongful denial was based on an erroneous interpretation of Hartford’s policies or improper claims handling makes no difference in determining whether § 502(a)(1)(B) provides an adequate remedy for those denials.
    Ms. Stewart also argues that, because she seeks different forms of relief under each count (recovery of benefits in Count One, monetary damages in Count Two, and reinstatement of waiver of premiums in Count Three), § 502(a)(1)(B) fails to provide an adequate remedy for Count Two. (Doc. 17 at 16–27). The Eleventh Circuit has rejected the argument that, for ERISA purposes, “relief” corresponds to “remedy.” See Jones, 370 F.3d at 1073.
    In Jones, the Eleventh Circuit stated that “the relevant concern . . . was whether the plaintiffs also had a cause of action, based on the same allegations, under Section 502(a)(1)(B) or ERISA’s other more specific remedial provisions. . . . The relief that the plaintiffs sought in their complaint was not relevant to this inquiry.” Jones, 370 F.3d at 1073. Because the factual allegations supporting Count Two are sufficient to state a cause of action under § 502(a)(1)(B) for recovery of benefits—and Count One, in fact, seeks recovery of the waiver of premium benefits—that Ms. Stewart seeks monetary damages instead of recovery of benefits is irrelevant.
    Finally, Ms. Stewart contends that the Supreme Court’s decision in CIGNA Corporation v. Amara means that a plaintiff may bring a § 502(a)(3) claim based on the same facts, if the injuries alleged and remedies sought are different. (Doc. 17 at 30–31). She misreads Amara.
    Ultimately, the court granted the motion to dismiss Count Two and denied the Plaintiff's motion to amend her complaint. The opinion is attached below.
    Attached Files