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Roger Baron
11/17/2008 01:47 PM
I appreciate this good analysis, Brian. Thank you. I ran across a federal court opinion out of Florida the other day -- United Health Group Inc. v. Dowdy, 2007 WL 3202473, (Oct. 29, 2007 -- and this case permits the ERISA plan to undertake discovery against a beneficiary in order to allow the Plan the opportunity to make its case for reimbursement. Considering the position taken by ERISA Plans which is that there should be no discovery in actions against an administrator (and how the courts have generally upheld this position of not permitting discovery), I thought about the double standard being seen in the discovery arena, too.
Don Levit
11/17/2008 01:47 PM
Brian:
Thanks for providing this case.
In the opinion, it stated that "A defendant's posession of the disputed res is central to a remedy, conceived not to assuage a plaintiff's loss but to eliminate a defendant's gain."
If the defendant was Aetna, instead of his employer, might the result have been different?
Don Levit
Brian S. King
11/17/2008 01:47 PM
Man Don, you have a good eye. It's an excellent question. In other words, I hear you asking whether the plaintiff in Amschwand simply named the wrong defendant. If she had named Aetna, would the result be different?
I doubt it. If you look at the court's discussion of ERISA's remedies immediately following your quoted language, on p. 10 of the slip opinion, you can see the court makes clear that the nature of the remedy sought by Amschwand, recovery of money damages, that the court believes falls outside the scope of "appropriate equitable relief." The court's reliance on Callery, a case out of the Tenth Circuit in which I represented the unsuccessful claimant, suggests the result would be the same even if the insurer had been named as a defendant. In Callery, a case with very similar facts, we got shut out despite naming the life insurer as a defendant.
Don Levit
11/17/2008 01:47 PM
Brian:
Thanks for the compliment.
I agree that damages would not be equitable relief.
However, if the insurer in the Callery case was bound by the contract terms to pay the claim, it would not have been damages.
Unfortunately, by the contract's terms, the spouse could not purchase insurance on a former husband.
The damages were the premiums, not the benefits, so the case was decided correctly, in my opinion.
The insurer did not breach a legal duty.
Neither did Star Buffet realize an ill-gotten gain.
It seems to me that Ms. Callery could have received an ill-gotten gain, if the insurer had paid the proceeds.
Yes, the administrator was negligent in forwarding the premiums to the insurer, and should have discussed potential conversion options instead. But, if any damages were to be collected, it would seem to be due from the administrator, not the insurer.
Don Levit
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