Blogging Employee Benefits

March 21, 2006

Standard of Review If Conflicting Plans Presented to the Court

Filed under: Disability, Litigation — Fuguerre @ 8:07 pm

Relying on the disability plan document filed in an affidavit containing a “complete and accurate copy of the claim file” instead of a different, unauthenticated plan document submitted in an attachment to the insurer’s legal brief, a divided 8th Circuit has ruled that termination of disability benefits should have been reviewed under a de novo standard. [Barham v. Reliance Standard Life Insurance Company, No. 05-2485]

When the claimant filed suit following termination of disability benefits under her employer’s ERISA plan, the district court called for the parties to submit a copy of the administrative record and to file briefs addressing the appropriate standard of review. The plan included in the insurer’s claim file affidavit included a copy of the group policy which did not grant the insurer discretion to interpret the plan or determine eligibility for benefits. The insurer’s subsequent brief included an attachment with a different copy of the plan, with no affidavit verifying authenticity or accuracy. Based on the brief’s version of the plan, which did grant discretion to the insurer, the district court reviewed the benefit determination using the abuse-of-discretion standard, under which the district court found the insurer’s denial of benefits supported by substantial evidence.

The appellate court pointed out that it did not condone that the claimant failed to note the discrepancy in the policies until filing the reply brief, but felt free to pursue the issue where the new argument supplemented an argument raised in the initial brief. Turning then to the “unorthodox manner” whereby a different policy had been introduced, the appellate court faulted the district court for considering the second version without seeking satisfactory explanation for the contradiction. Finding nothing in the record contradicting or explaining the claim file version, the appellate court relied on that plan to direct that the case be remanded to the district court for review of the benefit decision under the de novo standard.

Dissenting opinion agreed that the case should be remanded, but to determine the correct version of the plan, rather than to dictate a change in the standard of review based on reliance solely on the original filing. “After all, the quest of this court should be a search for the truth, not a search for error.”

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