Breach of Fiduciary Duty

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This week’s notable decision is Brundle v. Wilmington Tr., N.A., No. 17-1873, __F.3d__, 2019 WL 1287632 (4th Cir. Mar. 21, 2019), as amended (Mar. 22, 2019), where the Fourth Circuit Court of Appeals affirmed the district court’s findings that the ESOP trustee caused the ESOP to overpay for the corporation’s stock by $ 29,773,250.  The district court awarded attorneys’ fees to the participant’s counsel under 29 U.S.C. § 1132(g)(1) in the amount of $ 1,819,631.11 and an additional $1.5 million in fees from the damages award.

On appeal, Wilmington challenged the district court’s liability and damages determinations and its award of $1.5 million in non-statutory attorneys’ fees.  Brundle cross-appealed and challenged as inadequate the same portion of the attorneys’ fees award.
Continue Reading Fourth Circuit Affirms Multi-Million Judgment Against Trustee for Breach of Fiduciary Duty to Employee Stock Ownership Plan

Good morning, ERISA Watchers!  I just returned from the ABA Employee Benefits Committee Mid-Winter Meeting in Nashville, where I got to see many of you and add several new subscribers!  As a reminder, and for the new folks, all the cases discussed in this newsletter are hyperlinked to the full text of the decision if you want to read more.

The first of this week’s notable decisions is The Depot, Inc. v. Caring for Montanans, Inc., No. 17-35597, __F.3d__, 2019 WL 453485 (9th Cir. Feb. 6, 2019), a published decision from the Ninth Circuit addressing fiduciary actions, plan assets, remedies and preemption.
Continue Reading No Preemption! 9th Circuit Revives Employers’ State-Law Claims Against Health Insurance Companies for Hidden Surcharges and Kickbacks

Happy Monday, ERISA Watchers!  Today’s notable decision is a good one on equitable remedies, made possible by CIGNA Corp. v. Amara, 563 U.S. 421 (2011).  In Snitselaar v. Unum Life Insurance Company of America, 2019 WL 279995 (N.D. Iowa Jan. 22, 2019), Unum denied Snitselaar’s claim for dependent life insurance benefits on the life of her ex-husband, Gerard, who died about three months following the finalization of their divorce.  Unum found that Gerard was no longer an eligible dependent under the terms of the Plan as of the date of the divorce.  Snitselaar claimed that when she signed up for the life insurance benefits, she was informed that they could not lose the insurance for life changes after the two-year waiting period and they were never informed about divorce affecting the policy.  In addition, the life insurance premiums continued to be deducted from her paychecks after the divorce and even after Gerard’s death.  Snitselaar also claimed that neither she nor Gerard were informed of their right to convert to an individual life policy without evidence of insurability after the divorce was finalized.
Continue Reading Employer Must Pay Dependent Life Insurance Benefits to Employee Due to Failure to Provide Summary Plan Description