Published
This month’s Friday Five discusses cases concerning the standards for discovery outside of the administrative record, an insurer’s successful motion for judgment on the pleadings, equitable estoppel, equitable tolling, and a split ruling on summary judgment, finding that the benefit calculation was unreasonable while upholding the denial of benefits.
The Saul Ewing ERISA Litigation Team
- Will a motion to compel discovery from an insurer beyond the administrative record be denied when the plaintiff fails to establish a reasonable suspicion of misconduct necessary to meet the conflict of interest exception? The District of New Jersey says yes. In Choi v. Unum Life Ins. Co., the plaintiff moved to compel discovery from Unum regarding what the plaintiff alleged to be a “perpetual conflict of interest” in that Unum acts as both the decision maker and payor of benefits under the applicable long-term disability benefit plan at issue. Among other things, the discovery requests at issue sought to explore Unum's compensation and performance evaluations of benefits specialists, directors, and other individuals involved in the plaintiff’s LTD benefits claim review; financial metrics, recovery and claim closing targets, and other claims administration data Unum maintains; and information concerning the file-reviewing physicians’ other work for Unum. The plaintiff also sought to depose the disability benefit specialist who denied her claim for LTD benefits, the director who oversaw the denial, and Unum’s physician expert. The plaintiff attempted to frame her motion to compel as fitting within the limited “conflict of interest” exception to the general rule that judicial review in an ERISA action is “limited to the administrative record,” but failed to do so. Specifically, the plaintiff failed to establish “a reasonable suspicion of misconduct,” instead relying on the “wildly speculative” allegations about the plan’s structure, allegations of an attenuated connection between Unum’s claims metrics and a purported financial motivation to deny the plaintiff’s claim, and unsupported assertions that Unum should disregard its treating physician’s opinion in the claim review process. Finally, the court rejected the plaintiff’s argument that flaws in Unum’s physician’s report warranted discovery because such argument went to the merits of the plaintiff’s claim rather than the handling of her claim. Ultimately, the court concluded that the plaintiff’s discovery requests were not only “unjustified” under the conflict of interest exception, but also not proportional to the needs of the case. Choi v. Unum Life Ins. Co., No. 24-06338-JKS-AME, 2025 WL 2234903 (D. N.J. Aug. 6, 2025).
- Will a court grant an insurer’s judgment on the pleadings if a plan provides the insurer final authority to construe and interpret a plan and the insurer’s interpretation is not arbitrary and capricious? The Wester District of Pennsylvania says yes. In McGuire v. United of Omaha Life Ins. Co., United paid the plaintiff’s LTD benefits for approximately two years. The plan, however, provided for a cessation of benefits when the beneficiary has been incarcerated or imprisoned for 31 days or longer and also granted the administrator the final authority to construe and interpret the plan. In May of 2024, the plaintiff was subject to pretrial detention in connection with charges of stalking, harassment and terroristic threats and, after being unable to afford bail, remained confined for a period in excess of 31 days. The plaintiff ended up not being tried or convicted of the charges, which were then dismissed. Nevertheless, United denied the plaintiff's claim for disability benefits because of his jail confinement. After exhausting administrative remedies, the plaintiff filed suit and United moved for a judgment on the pleadings. The court held that United’s interpretation of “incarceration” to mean confinement, without regard to conviction, was not arbitrary and capricious – the applicable standard of review given the plan’s grant of discretionary authority to United to both construe and determine eligibility of benefits under the plan. McGuire v. United of Omaha Life Ins. Co., Civil Action No. No. 25-201, 2025 WL 2162440 (W.D. Pa. July 30, 2025).
- Will a court allow extracontractual and equitable estoppel claims relating to a group life insurance policy to proceed past a motion to dismiss if an insurer represented to a policyholder that the policy remained in effect but subsequently claimed there was no coverage? In the Eastern District of Pennsylvania, yes. In Fleming v. Minnesota Life Ins. Co. et al., the plaintiffs, as personal representatives and an estate, brought several causes of action against various defendants arising out of a life insurance policy. Ms. DiNicola initially obtained disability status in 2019 and then converted her policy to an individual policy shortly thereafter. In 2020, DiNicola resigned due to her illness. Despite the policy’s terms that coverage was only available to employees “actively at work” or to certain retirement classes, Minnesota Life sent DiNicola a letter confirming issuance of the individual policy after her resignation. Then, almost a year later, Minnesota Life had numerous communications with DiNicola indicating that the group policy was in effect. After DiNicola passed away in 2021, Minnesota Life denied the plaintiffs’ claim under the group policy, contending that the plaintiff only had coverage under the individual policy. Although the court dismissed certain of the plaintiffs’ ERISA claims, it allowed the claim for breach of fiduciary duty under ERISA to proceed given Minnesota Life’s “significant and continuous communications indicating valid coverage” under the group policy. The court considered several factors in its ruling, including that the plaintiff, and subsequently her heirs, detrimentally relied on Minnesota Life’s representations that the group policy was still in effect, including by making several financial decisions in reliance on that information. For similar reasons, the court also allowed a claim for equitable estoppel to proceed against Minnesota Life, concluding that the plaintiffs established “extraordinary circumstances” by way of “a network of misrepresentations over an extended course of dealing.” Fleming v. Minnesota Life Ins. Co. et al., Civil No. 23-2558, 2025 WL 2165947 (E.D. Pa. July 29, 2025).
- Can the deadline to convert a group life insurance policy to an individual policy under a plan's terms be equitably tolled? The Northern District of Indiana says no. In Presnal et al. v. Dearborn Nat’l Life Ins. Co. et al., the group life insurance policy at issue would typically terminate if the participant was no longer actively at work, but the participant could convert coverage to an individual policy within 31 days after the life insurance under the policy ceased. This period was extended by an additional 60 days if the terminated employee did not receive notice of her right to convert. In this case, Ms. Presnal’s health started to decline and she was terminated from her position. Because she was not provided notice of her conversion rights, she was given an additional 60 fays to convert her coverage to an individual policy but did not do so and ultimately passed away. Thereafter, her husband submitted a claim but was notified that Ms. Presnal failed to timely convert her policy. Ms. Presnal’s estate sued Dearborn to recover life insurance benefits arguing that the time for Ms. Presnal to pay her premiums and convert her basic life coverage to an individual policy was equitably tolled due to her incapacity. The court rejected the plaintiffs’ argument and held that equitable tolling could not extend the deadline for Ms. Presnal to convert the group policy to an individual policy under the plan's terms and, as a result, the plaintiffs could not assert a claim for benefits under the plan. Presnal et al. v. Dearborn Nat’l Life Ins. Co. et al., Case No. 3:23-CV-290-CCB, 2025 WL 2390485 (N.D. Ind. August 15, 2025).
- Will a court enter a split ruling on summary judgment when certain actions by an insurer are deemed unreasonable and an abuse of discretion, but other actions are supported by substantial evidence? The District of Massachusetts is willing to do so. In Santilli v. Hartford Life & Accident Ins. Co., et al., Hartford upheld its determination that the plaintiff did not meet the definition of disabled under the “Any Occupation” standard set forth in the applicable LTD plan. The plaintiff alleged that Hartford (1) improperly calculated his monthly LTD benefits by excluding bonuses he earned while employed; (2) denied his benefits without sufficient evidentiary support and without addressing medical findings that were favorable to him; and (3) committed procedural violations by failing to describe what additional information the plaintiff needed to submit to perfect his claim. The court agreed with the plaintiff that Hartford’s decision to exclude the plaintiff’s bonuses from his benefit calculation was “unreasonable and an abuse of discretion,” finding Hartford’s interpretation of the plan to be “troubling” given its role as both the benefits decisionmaker and payor. The court held, however, that Hartford’s decision to terminate benefits was supported by substantial evidence and was not arbitrary and capricious, notably emphasizing that Hartford had hired six physicians, all who independently found that the plaintiff’s restrictions and limitations decreased at a certain point in time. Finally, the court found that Hartford’s directions in its denial letter to the plaintiff were sufficient to allow the plaintiff to perfect his claim, particularly because the plaintiff failed to show that a more precise form of notice would have altered the outcome. Santilli v. Hartford Life & Accident Ins. Co., et al., Civil Action No. 23-cv-13251-PBS, 2025 WL 2346895 (D. Mass. Aug. 13, 2025).
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