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Action to Recover LTD Benefits Dismissed for Failure to Exhaust Administrative Remedies

Action to Recover LTD Benefits Dismissed for Failure to Exhaust Administrative Remedies

ERISA and Life Insurance News
(May 11, 2012)

Venning suffered a head injury that caused chronic headaches, speech impairment, mental disorientation, and deficiencies in concentration. He received short-term disability benefits under an employee welfare benefit plan administered by MetLife. Long-term disability benefits had been paid for one year before MetLife denied his claim. Without appealing the adverse claim decision, Venning filed a legal action to recover long-term disability benefits under the plan.

MetLife moved for summary judgment, arguing that Venning’s claim was barred because he failed to exhaust his administrative remedies before initiating a lawsuit. Venning argued that his failure to exhaust should be excused, based on the following policy language: "If you have a claim for benefits which is denied or ignored, in whole or part, you may file suit in state or Federal Court." Venning contended that this language meant the appeal process was optional, and that he was not provided with sufficient notice of the exhaustion requirement.

Venning relied on Watts v. BellSouth Telecommunications, Inc., 316 F.3d 1203 (11th Cir. 2003), which stated that ERISA’s exhaustion requirement may be waived if a plaintiff can show (1) that the relevant plan documents, objectively speaking, could reasonably be interpreted as permitting him to file a lawsuit without exhausting his administrative remedies, (2) that he so interpreted them, and (3) that, as a result of that misinterpretation, he failed to exhaust the administrative process.

The court held – assuming the plan was susceptible to the interpretation that there was no exhaustion requirement – that Venning failed to meet the second and third requirements of Watts. Although he asserted that he "reasonably interpreted the plan as permitting him to file suit without appealing," Venning failed to point to any record evidence supporting this claim.

Venning also asserted that MetLife denied him access to a full and fair review required by ERISA, because the company failed to provide him access to all documents used in the claim determination. The court found this assertion to be completely unsupported by the record, however, because Venning did not identify a single document that was submitted to MetLife in support of his claim and that was omitted from the claim file.

The court granted summary judgment to MetLife.

Click Here to view the full May 2012 Edition of the ERISA and Life Insurance News.

H. Sanders Carter
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Kenton J. Coppage
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