Katz v. Comprehensive Group Insur., 197 F.3d 1084 (11th Cir. 1999)-This court affirmed the district court’s grant of defendant’s motion for summary judgment, denying a widow’s claim for an additional $202,000 in life insurance benefits. Barry Katz was an employee of TDS Health Care Systems Corporation (TDS) who died of AIDS in August 1995. TDS maintained an ERISA qualified employees benefit program (TDS Plan). In October of 1993, ALLTEL Corporation (ALLTEL) acquired TDS. ALLTEL maintained its own ERISA qualified employee benefits program (the ALLTEL plan). On January 1, 1995, ALLTEL would eliminate the TDS plan. The ALLTEL plan would become effective for all former TDS employees in active service on that date. The Plan defined "Active service" as performing the regular duties of your work on a full-time basis.
In the fall of 1994, ALLTEL told Mr. Katz that it would eliminate his position some time after January 1, 1995. Mr. Katz became sick in November of 1994, and began receiving TDS’ short-term disability benefits. Toward the end of 1994, however, Mr. Katz began negotiations with an ALLTEL representative regarding a severance package. ALLTEL paid Mr. Katz $262,500, in return for a general release. Mr. Katz made handwritten, initialed changes providing that he would continue to have ALLTEL group life insurance benefits after severance. However ALLTEL did not respond to these changes. Upon his death, August 9, 1995, CIGNA paid $418,000, plus accrued interest, in life insurance benefits to his beneficiary, Mrs. Katz. (On appeal, Mrs. Katz sought $620,000).
Mrs. Katz filed suit against ALLTEL and CIGNA for ERISA (Count I) and equitable relief (Counts II through IV). Specifically, in Count II, Mrs. Katz asked for restitution and other equitable relief for ALLTEL's alleged breach of fiduciary duties under 29 U.S.C. §1132(a)(3). In Count III she asserted that the Court should equitably estop ALLTEL and CIGNA from denying her entire claim for benefits, a difference of $202,000 in monetary damages. In Count IV she asserted that the actions of ALLTEL and CIGNA constituted waiver and sought damages of $202,000.
Citing Varity Corp. v. Howe, 516 U.S. 489 (1996), the district court correctly dismissed the three equitable counts on the basis that an ERISA plaintiff with an adequate remedy under 29 U.S.C. § 1132(a)(1)(B) cannot alternatively plead and proceed under 29 U.S.C. § 1132(a)(3). The district court order left Mrs. Katz free, however, to pursue her claim under Count I for 29 U.S.C. § 1132(a)(1)(B) benefits. It also specifically authorized the assertion of equitable estoppel principles as a theory for recovery under 29 U.S.C. § (a)(1)(B). However, the court also found that the terms of the plan regarding "active service" were unambiguous, and could not be contradicted by any alleged oral modifications. This court agreed, stating that the Eleventh Circuit has created a "very narrow common law doctrine under ERISA for equitable estoppel" in which the representation made constitute an oral interpretation of ambiguous provisions in a plan.
The district court also correctly dismissed Mrs. Katz' remaining claim against ALLTEL and CIGNA, made pursuant to 29 U.S. C. § 1132(a)(1)(B). The court found that Mr. Katz failed to return to work after November 3, 1994 and was never in "active service" with ALLTEL at any time after January 1, 1995, the date the ALLTEL plan and its CIGNA life insurance component became effective.
