Our client’s spouse was a doctor. When he began work at NCHMD, Inc., he received $150,000 of employer-paid life insurance and elected for $350,000 in supplemental life insurance benefits. For 3 years, NCHMD, Inc. deducted premiums from his paychecks. The company even provided him with a benefits summary stating he had $500,000 in life insurance coverage.
All the while, the life insurance company was missing a form from the employer, and the doctor was not receiving the life insurance benefits he was paying for.
The mistake only came to light when our client’s spouse died.
Employer’s Oversight Leads to Legal Action
Our client could not recover the life insurance benefits his spouse paid for because NCHMD, Inc. violated its fiduciary duties by failing to provide the appropriate paperwork. As a result, our client sued NCHMD, Inc. for equitable relief in district court. Unfortunately, our client cited the wrong statute in his initial claim. He asked the court for permission to revise his filing, and the district court denied his request, stating his complaint would be futile – even with the revision.
The Appeals Court’s Decision
Dabdoub Law Firm helped our client appeal, and the United States Court of Appeals for the Eleventh Circuit reversed the district court’s decision. In its official opinion, the Eleventh Circuit Court stated that our client was entitled to sue for “appropriate equitable relief” under ERISA statutes.
Although our client is unable to recover compensatory damages or the life insurance benefits he is owed, he still has the right to hold NCHMD, Inc. accountable for its wrongdoing as a fiduciary and recover monetary relief that equals the amount he lost ($350,000).
According to the Eleventh Circuit Court:
“a beneficiary of an ERISA plan can bring a lawsuit under Section 1132(a)(3) against a fiduciary to recover benefits that were lost due to the fiduciary’s breach of its duties.”
During the appeals process, NCHMD, Inc. claimed it was not a fiduciary, but the Eleventh Circuit Court countered this claim, explaining that because the company helped our client’s spouse with the paperwork and provided him a receipt of coverage, it was, in fact, acting as a fiduciary.
Ultimately, the higher court reversed and remanded the lower court to allow our client to bring a claim for breach of fiduciary duty under the appropriate section.
This is a major win for insurance claimants nationwide because it holds fiduciaries and plan administrators accountable for the information they provide to employees and policyholders.
Dabdoub Law Firm has always focused only on disability insurance law.
Because we specialize in long-term disability and life insurance claims, our clients get the benefit of:
- Having an attorney who is an expert in ERISA claims and appeals.
- Having an attorney who has experience with every major disability insurance company.
- Being backed by a law firm with a proven track record of winning tough disability lawsuits, like this one.
Choose Dabdoub Law Firm to get experienced disability lawyers on your side.
We can help with:
- Submitting and managing disability insurance and life insurance claims.
- Appealing long-term disability denials and lower court decisions.
- Negotiating lump-sum settlements and life insurance payouts.
- Filing a lawsuit against your employer and/or disability insurance company.
We proudly represent clients nationwide with insurance claims governed by federal law, so we can help even if we are not located in your state.
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