McCravy v. Metropolitan Life Ins. Co. (Lawyers Weekly No. 12-01-0723, 14 pp.) (Wynn, J.) No. 10-1074, July 5, 2012; USDC at Charleston, S.C. (Duffy, J.) 4th Cir. Full-text opinion.
Holding: A bank employee who paid for life insurance for her daughter through her employee benefit plan, but who was denied insurance benefits when her 25-year-old daughter died, has her claim for “equitable relief” for the insurance carrier’s breach of fiduciary duty reconsidered by the 4th Circuit, in light of CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011).
Plaintiff purchased life insurance for her daughter through her company’s plan, and paid premiums from before her daughter’s 19th birthday until the daughter was murdered in 2007 at age 25. Following her daughter’s death, plaintiff filed a claim for benefits. Defendant MetLife denied the claim, contending the daughter did not qualify for coverage under the plan’s “eligible dependent children” provision. According to MetLife, the daughter no longer qualified under the plan because she was 25 at the age of her death. Plaintiff declined to accept MetLife’s refund of her premium checks and sued for breach of fiduciary duty under 29 U.S.C. § 1104. She sought recovery under 29 U.S.C. §§ 1132(a)(2) or (a)(3), pleading entitlement to recovery under waiver, estoppel, “make whole,” and other equitable theories.
The district court held plaintiff could only recover life insurance premiums wrongfully withheld by MetLife for coverage plaintiff never actually had on the life of her daughter. This court affirmed on May 16, 2011. That same day, the U.S. Supreme Court decided Amara.
Before Amara, various lower courts, including this one, had (mis)construed Supreme Court precedent to limit severely the remedies available to plaintiffs suing fiduciaries under § 1132(a)(3). With Amara, the Supreme Court expanded the relief and remedies available to plaintiffs asserting breach of fiduciary duty under § 1132(a)(3). Remedies traditionally available in courts of equity, expressly including estoppel and surcharge, are indeed available to plaintiffs suing fiduciaries under § 1132(a)(3).
We agree with plaintiff that her potential recovery in this case is not limited, as a matter of law, to a premium refund. We reverse the district court determination to the contrary. We further agree that the remedy of equitable estoppel is also available under § 1132(a)(3).
We reverse the district court’s determination in its dismissal order that plaintiff’s remedy under § 1132(a)(3) is limited to a refund of premiums paid, i.e., that equitable remedies including surcharge and estoppel are unavailable as a matter of law. We vacate the summary judgment order awarding plaintiff a return of her premiums only and remand for further proceedings.