Landry v. Metropolitan Life Insurance Company
No. 19 CIV. 3385 (KPF), 2021 WL 848455 (S.D.N.Y. Mar. 5, 2021)
After working in the strenuous job of an oil field equipment mechanic, our client became disabled. He applied for and began receiving short term disability benefits from MetLife Insurance Company. However, these benefits were substantially less than the amount he believed he was owed.
MetLife offered to our client to settle his benefits for a lump sum, but he realized that what MetLife was offering was for a value significantly lower than what his financial records showed that he was owed. Our client realized MetLife had not been paying him as much each month as they should have. He pointed this out to MetLife and asked them to pay him the rest of his benefit and adjust his benefits.
MetLife refused to pay what our client believed to be the right amount, so he hired us to help him get the correct amount of his benefits paid.
We wrote to MetLife, explaining how our client had not been paid the correct amount, asked them to review their calculations, and ask MetLife to provide us a copy of the policy and documents they relied on, as our client is entitled to under ERISA’s rules. MetLife refused to provide that information, basically saying that since they were paying him something, our client was not entitled to ERISA’s appeal rights.
Because MetLife failed to correct our client’s benefit amount and failed to provide the information supporting their decision, we sued MetLife on behalf of our client.
After we sued MetLife, the insurance company argued that our client waited too long to sue to get the correct benefits. MetLife argued that the insurance policy requires that someone bringing any legal action regarding benefits under the plan against MetLife must do so within three years of initially receiving benefits. However, our client had not received a copy of MetLife’s plan prior to entering litigation and was, therefore, never aware of this information.
We argued to the court that previous court decisions ruled in favor of plaintiffs who were unaware of the limitations set by their insurers. Courts had held that the insurance company could not limit a claim if it had not informed the person of the time limit or provided the person a copy of their policy, we argued.
Because our client was unaware of this statute of limitations, we argued that New York’s six-year statute of limitations should apply instead. In lieu of an ERISA-specific limitations period, courts normally apply the limitations period specified “in the most nearly analogous state limitations statute,” in this case, New York. The court agreed.
MetLife also argued that our client had not submitted a proper appeal, because he did not submit a letter including the word “appeal.” The court disagreed. The court found that a letter asking the insurance company to “review” the amount of benefits was more than sufficient to put the insurance company on notice that our client disagreed with the benefit calculation.
The court then explained that because our client had submitted a proper appeal, MetLife was obligated under ERISA’s rules to provide a copy of his insurance policy and similar documents and any other documents the insurance company relied on to make the decision. Further, because this letter satisfied the requirements of an appeal, MetLife was required to make a decision within 45 days, (or ask for an extension during that time), which MetLife failed to provide.
MetLife also argued that, under the ERISA rules, someone who disagrees with a decision must appeal within 180 days of the decision. But the original decision to pay benefits by MetLife did not contain any of the information required in an adverse benefit determination, because MetLife apparently thought they were paying the correct amount. The court agreed that the burden was not on our client to bring an administrative appeal within 180 days due to the letter paying benefits not being an official denial and due to the lack of clarity in his plan as to whether his original miscalculation claim could be pursued through an appeal.
MetLife also argued that, if the court considers the claim as timely and properly appealed, the court should apply an arbitrary and capricious standard of review to the actual decision it made of the benefit amount, essentially giving MetLife deference or the strong benefit of the doubt that its calculation of the benefit amount was correct. MetLife claimed that it was entitled to that deferential standard of review due to language in the policy that allows that under ERISA rules.
The court disagreed. The court applied a special rule from ERISA case law in the Second Circuit that because MetLife failed to “strictly adhere to ERISA regulations” when administering our client’s claim, the court would apply the de novo standard of review. This means the court would consider arguments over the amount of benefits afresh, weighing both sides’ arguments equally. The court said this special rule applied because MetLife failed to issue a proper decision letter with sufficient information regarding potentially appealing the decision, what information he could submit when appealing, and the relevant deadlines for the appeal or a subsequent lawsuit.
After reviewing the information that had been submitted to MetLife, including our client’s financial records supporting the higher benefit amount, the court ruled in our client’s favor. The court questioned the “correctness” of MetLife’s original assessment of our client’s relevant income. The court determined that MetLife’s original decision was made from an “incomplete” administrative record.
The court remanded the claim back to MetLife with instructions for MetLife to provide a full and fair review of our client’s appeal, including properly considering the financial information used to calculate our client’s benefits.
