As a participant in his employer’s ERISA plan, Israel selected term life insurance to cover his wife. Under the terms of the plan, a spouse who was a “qualified dependent” would lose coverage in the event of a divorce from the participating employee.
In an affidavit that was not part of the administrative record, Israel alleged that after he and his wife separated in September 2009, he called his employer’s benefits department and was told he could continue his wife’s group life insurance during the separation and after the divorce. Because the defendants had no record of the call, they vigorously denied the alleged conversation.
Israel’s divorce was final in April 2010, and his ex-wife died in July 2010. Prudential accepted premiums during the separation and after the divorce. When Israel submitted a claim for life insurance benefits shortly after his ex-wife’s death, Prudential denied the claim because, as a result of the divorce, Israel’s ex-wife was no longer a qualified dependent eligible for coverage.
Israel filed a complaint in state court, asserting claims for benefits and attorney’s fees under ERISA, and state law claims for negligence, gross negligence, and negligent misrepresentation. After the case was removed to federal court, Israel sought to amend his complaint to dismiss the state law causes of action, to add claims for a return of premiums and for breach of fiduciary duty, and to seek the equitable remedies of reformation, estoppel, and a return of premiums under 29 U.S.C. § 1132(a)(3).
The district court permitted Israel to amend his complaint to seek additional equitable remedies under ERISA. The court concluded that the Supreme Court’s decision in Cigna Corporation v. Amara, 131 S.Ct. 1866, 179 L. Ed. 2d 843 (2011), and the Fourth Circuit’s decision in McCravy v. Metropolitan Life Insurance Co., 2012 U.S. App. LEXIS 13683 (4th Cir. July 5, 2012), made clear that equitable relief is available to a plaintiff pursuing a claim under § 1132(a)(3), and that they constituted new controlling case law that had issued after Israel’s complaint was filed.
The court also permitted Israel’s affidavit concerning the November 2009 conversation during which he allegedly was told he could continue group life insurance coverage for his ex-wife through the separation and after the divorce. Relying on Quesinberry v. Life Insurance Co. of North America, 987 F.2d 1017 (4th Cir. 1993), the court found that the facts alleged in the affidavit went to the heart of the equitable relief issues and therefore constituted additional evidence necessary to determine the outcome of the case.
Finally, although the court granted the defendants’ motion for summary judgment on Israel’s claim for a return of premiums (they had long since been returned) and his claim for death benefits under the policy, the court denied the defendants’ motion for summary judgment on the remaining equitable claims.
The court held that Israel’s claims for equitable relief under § 1132(a)(3) required “intensive factual determinations… ,” including whether the alleged November 2009 telephone call took place, whether Israel was reliably informed that his ex-wife’s coverage would continue after their divorce, and whether Israel received a copy of the summary plan document or the policy language that would have put him on notice as to the policy terms. The court’s order indicates that conflicting evidence was presented about these questions, thus making summary judgment improper on the claims for equitable relief.
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