Enter Your Email Address to get Updates Emailed to You

Wednesday, January 21, 2015

Another Small Indication the Courts May Someday Award Complete Damages for Violations of ERISA

Richard Johnson has a great ERISA blog exploring legal issues from the employee/plan participant perspective.  Since my blog is aimed more towards claimants than to lawyers practicing in the ERISA area, his blog is a good supplement to mine. He has a  post about the recent case of D'Iorio v. Winebow, Inc. where the court stated that ERISA claimants might be able to obtain more generous remedies for violations of ERISA than have generally been allowed.   

As I've discussed in a recent post in this blog, the remedies available under ERISA when a plan wrongfully denies benefit are generally limited to payment of the benefits that should have been paid in the first place.  Punitive damages(to punish the company for an unreasonable denial), or consequential damages (to compensate for the consequences of a benefit denial such as emotional distress or losing a house) are generally not available.  As I discussed in the recent post, there have been a few indications that the courts were loosening up and might be willing to start ordering more comprehensive relief.  

As Richard Johnson explains, in 
 D'Iorio v. Winebow, Inc. a New York federal trial court case raises the possibility of that consequential damage and punitive damages may be available when a plan breaches its fiduciary duty to disclose plan terms to a plan participant.  But the court does note that the burden to show such damages is high, requiring fraud or actual malice (that is, a motivation to personally hurt the plaintiff), and that the plaintiff is unlikely to be able to show that such damages are recoverable in the case.  However, the court said it was too early in the case to decide that she could not recover such damages, and denied the motion to rule in the plan's favor at that point in the proceedings..  

The courts continue to take some steps towards in awarding adequate damages for plan's misconduct, but only baby steps so far.  It is encouraging to have the decision in a trial court in the Second Circuit, that also includes my state of Connecticut.  But, the D'Iorio case involved a different section of ERISA that is involved in benefit denial cases, so it is only tangentially related to denial of benefit claims.  Maybe someday, however, as a Connecticut LTD lawyer, I'll be able to recover reasonable damages in a disability benefit claim denial in a Connecticut federal court.    

No comments:

Post a Comment