Good morning, ERISA Watchers!  It was quite the busy week for ERISA decisions, but I’m pleased to report that this week’s notable decision is a short and sweet statute of limitations decision in Foster v. Adams & Assocs., Inc., No. 18-CV-02723-JSC, __F.Supp.3d__, 2019 WL 943846 (N.D. Cal. Feb. 26, 2019).  Plaintiffs are participants and beneficiaries of the Adams and Associates Employee Stock Ownership Plan (“ESOP”).  They allege that Defendants violated their fiduciary duties under § 1106 by engaging in prohibited transactions when they sold all the stock in Adams and Associates, Inc. to the ESOP for above market value.  Plaintiffs also allege that certain defendants breached their fiduciary duties under § 1104 when they hired Alan Weissman as Trustee for the ESOP and when they failed to take any corrective action regarding his conduct related to a stock transaction.  (Click here to read more about the case allegations and Mr. Weissman’s indictment). Continue Reading Court Rules that Suit Over Employee Stock Deal Led by Now-Felon Is Not Barred by Statute of Limitations

This week’s notable decision is Fortier v. Hartford Life & Accident Ins. Co., No. 18-1752, __F.3d__, 2019 WL 697989 (1st Cir. Feb. 20, 2019), where the First Circuit dealt a blow to ERISA plan participants when it comes to exhausting administrative remedies.  The bottom line:  An insurer may strictly enforce the 180-day appeal deadline against a plan participant.

The facts:  Fortier received long-term disability benefits under a group disability plan insured by Hartford Life & Accident Insurance Company (“the Plan”).  The Plan only pays 24 months of benefits for disabilities caused by mental illnesses.  Hartford approved and paid Fortier’s LTD benefits before sending her notice on September 13, 2011 that her benefits would terminate in the future on November 1, 2011 due to the Plan’s Mental Illness Limitation.  The letter informed Fortier of her right to appeal within 180 days of the date that she received the letter.  Fortier retained an attorney who submitted a timely appeal and was able to get her benefits reinstated.  Shortly after reinstating her claim, Hartford explained that since it did not give Fortier prior notice of the application of the Mental Illness Limitation, it was starting the 24-month period as of September 13, 2011 and no benefits will be payable beyond September 12, 2013.   Continue Reading First Circuit Holds that Substantial Compliance Doctrine Does Not Save Participant’s Untimely ERISA Administrative Appeal

Happy Presidents’ Day, ERISA Watchers!  Many of us technically have the day off today, which just means catching up on the backlog of work while the stream of emails is lighter (unless you’re my opposing counsel).  And, hopefully this is your favorite Monday morning email.  

This week’s notable decision is a short unpublished decision from the Sixth Circuit, Zino, et al. v. Whirlpool Corp., et al., No. 17-3851, __F.App’x__, 2019 WL 644883 (6th Cir. Feb. 15, 2019). The Sixth Circuit reversed the district court’s (N.D. Ohio) determination that the CBAs at issue vested the Hoover Company retirees with unalterable lifetime healthcare benefits.  The majority found that the CBA’s general durational clauses that state when the agreements end also control when healthcare benefits end. Continue Reading Another Loss for Retirees: Sixth Circuit Holds No Lifetime Healthcare Coverage