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Inconsistent Plan Terms: 6th Cir.

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  • Inconsistent Plan Terms: 6th Cir.

    In a recent case from the Sixth Circuit, the Plaintiff brought suit against the defendant under ERISA , alleging that the governing plan document provided no reduction of benefits at the age of 70, whereas the Defendant obviously argues the opposite. In relevant part:

    Though Moore argues otherwise, his challenge to the denial of disability installment benefits and the reduction of benefits at age seventy asserts, at its root, a claim that the Plan was improperly amended. Indeed, he ultimately wishes to have the prior version of the Plan enforced and to be awarded benefits that are no longer available. In support of his motion for judgment against MetLife, Moore argued that there was no evidence that any of the amendments to the Plan were “effectuated properly under the terms of the Master Policy.” And as one of the bases for his request for remand, he cited the lack of evidence showing that the amendments were “consistent with the terms of the plan.” Moore reasserts these arguments in his appellate brief, arguing that “the district court . . . largely ignored the evidence that the certificate was never properly amended.” He states, “The evidence reflects that the terms of the plan were not amended, and thus there is no amendment to invalidate.” But there is now no dispute that Certificate 20 was the applicable certificate at the time Moore became unable to work, and Certificate 20 did not include disability installment benefits.
    At no point in the complaint did Moore allege, as he does now, that the Plan was improperly amended. Moreover, a claim challenging the validity of a plan amendment is properly brought under 29 U.S.C. § 1132(a)(3), not § 1132(a)(1)(B). “[R]elief that seeks to change the terms of a plan is not relief that seeks ‘to enforce . . . rights under the terms of the plan,’ which is available under § 1132(a)(1)(B).” Plotnick v. Comput. Sci. Corp. Deferred Comp. Plan for Key Execs., 182 F. Supp. 3d 573, 592 (E.D. Va. 2016) (second alteration in original) (citing CIGNA Corp. v. Amara, 563 U.S. 421, 435-36, 438-39 (2011)). Given Moore’s acknowledgement that Certificate 20 was the applicable certificate and his demand for benefits under the previous version of the Plan, it is clear that he is seeking to change the terms of the current Plan. And the statutory vehicle for doing so is § 1132(a)(3). See id.; see also Ross v. Rail Car Am. Grp. Disability Income Plan, 285 F.3d 735, 741 (8th Cir. 2002); Schleben v. Carpenters Pension Tr. Fund—Detroit & Vicinity, No. 14-cv-11564-LJM, 2014 WL 4604000, at *4-5 (E.D. Mich. Sept. 15, 2014). Although Moore raised a claim under § 1132(a)(3), he did so only against American Water.
    The district court properly entered judgment in favor of MetLife.
    Moore than argues the following, which the court does not find persuasive:

    Federal Rule of Evidence 803(6)(b)—the business-records exception—does not require that the business entity offering the record be the one that actually prepared the record. See Fambrough v. Wal-Mart Stores, Inc., 611 F. App’x 322, 329 (6th Cir. 2015). Documents prepared by a third party can be incorporated into an entity’s business records. Id. However, a business entity can do so “only through foundation testimony of the record keeping practices that establish such incorporation and reliance.” Id. Unlike the affidavit in Perkins, Mazika’s affidavit provided this foundation. Mazika affirmed, inter alia, that the documents regarding A+ Letter Services’s mailing were “maintained or prepared by employees with knowledge of the facts underlying their contents” and “in the course of a regularly conducted activity of American Water” and that “[i]t is a regular part of American Water’s practice to keep and maintain [such] records.” The district court properly held that American Water’s evidence was sufficient to establish that it satisfied its obligations under 29 U.S.C. §§ 1022 and 1024 and 29 C.F.R. § 2520.104b-1 to distribute the 2011 SPD and that Moore’s assertion that he did not recall ever receiving the SPD failed to create a genuine issue of material fact. See Fed. R. Civ. P. 56(e).
    Moore next argues that, even if American Water did comply with its ERISA obligations by sending him the 2011 SPD, the SPD “was insufficient to reflect a consequential removal of disability benefits.” ERISA authorizes district courts “to remedy ‘false or misleading’ statements in summaries with ‘appropriate equitable relief’” under 29 U.S.C. § 1132(a)(3). Butler v. FCA US, LLC, 706 F. App’x 256, 258 (6th Cir. 2017) (quoting Amara, 563 U.S. at 438-42).
    Moore points to the fact that the 2011 SPD retained a section titled “Total Disability Benefits” and that the prior SPDs, which provided for disability installments benefits, included “Permanent and Total Disability” sections. Moore argues that “the continued use of nearly the same language in the 2011 SPD is not notice that those important benefits were being removed” and that “[t]he 2011 SPD was not written in a manner to inform a participant that disability installment benefits had been removed.” In Butler, the plaintiff presented a similar argument, asserting that certain parts of the SPD led him to believe that a total and permanent disability benefit, which had previously been part of the plan, remained part of the plan after it had been amended. Id. This court rejected the plaintiff’s assertion that the SPD was misleading, explaining, “The total-permanent-disability benefit is not mentioned, much less explained. That should have alerted participants that the benefit was no longer part of the policy.” Id. Like the SPD in Butler, the 2011 SPD did not include any language about disability installment benefits. And while it included a “Total Disability Benefits” section, that section clearly outlined the total disability benefit to which Moore was entitled and which he actually received. The absence of any language about disability installment benefits should have made it “reasonably clear that [American Water] removed the [installment] benefit[s] deliberately.” Id. at 259.
    The court ultimately affirmed the district court's decision. The full opinion is attached below.
    Attached Files