Alloco v. Metropolitan
Life Insurance Co., 2003 WL 1821522 (D.
Plaintiff was employed by American Express Travel Related Services, Inc.
(“AMEX”), and was a participant
in Defendant’s long-term disability (LTD) benefits under AMEX’s plan.
Plaintiff applied for LTD benefits due to her development of
fibromyalgia. Defendant denied her
claim in writing and notified her of her right to appeal within 60 days of
receiving the notice of denial. Plaintiff
never filed an appeal of denial, however she filed a suit in state court
alleging claims for breach of contract and bad faith under state law.
The case was removed to federal court.
Defendant moved for partial judgment alleging that Plaintiff’s failure
to appeal the denial of LTD benefits (and exhaust her administrative remedies)
precludes any claim based on LTD benefits.
Standard of Review: Summary
judgment must be granted to the moving party where the pleadings, depositions,
answers to interrogatories, admissions on file, and affidavits show that there
is no genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.
Held:
The court held that the subject plan was covered by ERISA.
The court held that the LTD benefit plan cannot be viewed in isolation
from the overall benefit plan provided by AMEX, which was clearly an ERISA plan.
Plaintiff argued that plan did not fall under ERISA because she paid her
own premiums and participation was voluntary.
However, Plaintiff failed to show that the plan did not meet the third
requirement of the safe harbor regulation, that the employer does not endorse
the program. It was clear that AMEX
participated in the administration of the LTD benefits to a material extent.
AMEX, designated as plan sponsor and plan administrator, did the
following with respect to the LYD plan: 1)
designated which employees were eligible to participate; 2)
had the responsibility of filing forms with the Department of Labor
required by ERISA; 3) created summary plan description for distribution to AMEX
employees.
Federal court have the authority to enforce the exhaustion of administrative
remedies requirement in suits under ERISA. Plaintiff
conceded that she did not exhaust her administrative remedies by pursuing an
appeal as advised. However, she
argued that such pursuits would have been futile.
Unfortunately, Plaintiff failed to provide any evidence that the appeal
would have been futile. Mere
assertions of futility are not sufficient to overcome the requirement of
exhausting administrative remedies.
Defendant’s motion for partial summary judgment as to Plaintiff’s LTD
claims granted.
District Court Judge Silver heard the motion and issued the order.