Legal Summary: Dies v. Provident Life & Accident Insurance Company

No. 3:04-0113, 2006 WL 208878 (M.D. Tenn. Jan. 25, 2006)

We originally sued Provident (a Unum company) to get our client her LTD benefits and Nissan for the failure to provide plan documents. Dies v. Provident Life & Accident Ins. Co.¸ No. 3:04-0113, 2006 WL 208878, at *1 (M.D. Tenn. Jan. 25, 2006).  Despite Provident settling with our client along the way, we continued the case to get our client any additional money she was due for Nissan’s failure to provide plan documents, which is a violation of ERISA’s rules.

Our client’s employer, Nissan, violated ERISA by failing to turn over to us copies of her ERISA disability plans and insurance policies that we had requested.  Under ERISA, if a plan participant or beneficiary (like someone claiming LTD benefits) makes a written request for plan documents (like the LTD policy) from the plan administrator (usually the employer), the plan administrator has to provide those documents within 30 days.  If the plan administrator fails to do so, the employee (as a beneficiary or participant of the plan) can sue and be awarded $110 a day for each day it is late under ERISA § 502(c), 29 U.S.C. § 1132(c).

Our client worked for Nissan until she became disabled and could not work, so she filed a claim for LTD benefits plan’s claims administrator—Provident. Id. Provident initially approved the claim but later terminated her benefits when Provident determined she was no longer disabled. Id. After exhausting her appeals under the plan, we sued Provident seeking recovery of the long term disability benefits that Provident owed her. Id. Shortly thereafter, we reached a settlement agreement with Provident for the recovery of our client’s long term disability benefits. Id. at *2.

Though we had settled the claim for LTD benefits with Provident, the fight for our client’s best outcome did not end there. ERISA § 502(c) requires that the plan administrator or sponsor provide certain information about the employee benefits upon written request. When the administrator fails to provide the plan documents within 30 days of the written request, ERISA allows a plan participant like our client to seek penalties of up to $110 a day.

As her counsel, we had sent letters on our client’s behalf on four separate occasions seeking plan documents. Id. at *2. Despite our repeated requests, Nissan did not respond until after litigation commenced. Id.

Nissan advanced several creative arguments in an attempt to avoid liability for its actions. First, Nissan argued that we did not properly address the letters—the court did not buy this. Id. at *7. Second, Nissan attempted to shift the burden onto us by arguing that we “should have followed up . . . with a telephone call or an email.” Id. at *8.  The court pointed out that the statute clearly requires “written, not oral, requests for plan documents.” Id. Finally, Nissan argued that Nissan’s non-compliance did not prejudice our client, and thus damages were not in order. Id. The court agreed with us that prejudice to the plaintiff is not a requirement for damages under ERISA § 502(c)—it is “only one factor to be considered in determining whether to award penalties.” Id. at *9.

In addition to failing to provide the documents after our ealirer letters, the court also noted that we set out in our complaint that Nissan had failed to provide the documents.  The court found it baffling that Nissan waited 170 days after we filed our complaint to provide plan documents and an additional seven months to provide two other plan documents. Id. at *8. For this reason, the court imposed a penalty against Nissan for $25 per day for two documents for 160 days—a total of $8,000, and $25 per day for two other documents for 413 days—a total of $20,650. Id. at *9. Our client was awarded an $28,650 in addition to the amount she settled for with Provident for the LTD benefits. Id.