Landry v. Metropolitan Life Insurance Company

Background

Thomas Landry brought a claim under Section 502(a)(1)(B) of the Employee Retirement Income Security Act, or ERISA, seeking judicial review of MetLife’s calculation of his long-term disability benefits under the Baker Hughes plan. MetLife served as the plan’s claims administrator. Landry had received long-term disability benefits since September 2015, but contended that the monthly amount was too low because his relevant predisability earnings were approximately $420,000 rather than the $130,062.40 figure used by MetLife.

Landry had buy-up coverage, under which the plan provided 60% of predisability earnings, subject to a maximum monthly benefit of $15,000. MetLife calculated a monthly benefit of $6,503.12, later reduced to $3,801.12 based on Social Security income. Landry did not file a written appeal immediately after MetLife approved his claim. After receiving a proposed lump-sum settlement, he requested claim and plan information. On February 6, 2019, his counsel sent MetLife a letter asking it to review the benefit amount, increase the ongoing payments, and pay back benefits, and included wage documents.

The parties filed cross-motions for summary judgment. MetLife argued that the claim was barred by the plan’s three-year suit limitation and that its calculation deserved deferential review. Landry argued that the limitation was not enforceable because he had not received the plan document and the summary plan description did not disclose the three-year provision. He also argued that MetLife had failed to follow ERISA’s claims-review procedures.

Timeliness

The court held that the plan’s three-year limitation did not bar the action because Landry had not been given notice of that provision. Although ERISA did not supply a limitations period for this claim, courts ordinarily apply the most analogous state limitations period; the court identified New York’s six-year contract period as the applicable period here. The court concluded that Landry filed within that period.

The court distinguished Supreme Court and Second Circuit decisions cited by MetLife. Those decisions addressed the general enforceability of written plan terms or when a miscalculation claim accrues, but did not resolve whether an undisclosed contractual limitation could be enforced against a claimant who lacked notice of it. The court therefore declined to enforce the undisclosed three-year limitation.

Review standard and appeal process

The plan granted Baker Hughes and MetLife discretionary authority to interpret the plan and decide benefit claims. Ordinarily, that authority would require deferential review, meaning the administrator’s decision could be overturned only if it was arbitrary and capricious.

The court rejected Landry’s argument that MetLife’s original approval notice violated ERISA’s notice requirements by failing to explain an appeal process. Those requirements apply when there is an adverse benefit determination, such as a denial, reduction, termination, or failure to pay a benefit. MetLife had approved Landry’s claim and had not denied or reduced the benefits in the original 2015 determination. The later reduction for Social Security income was not challenged in this case.

The court nevertheless found that MetLife failed to comply with ERISA’s requirements for a full and fair review. It treated Landry’s February 6, 2019 letter as an appeal of the alleged miscalculation. The court found that the plan documents did not clearly explain how a participant could appeal an approved benefit amount believed to be miscalculated, so the 180-day appeal deadline for benefit denials did not bar Landry’s appeal. The letter identified the relevant plan and decision, explained the alleged error, requested corrected payments, and included supporting wage records.

Under the governing regulation, Landry was entitled to reasonable access to relevant claim documents and to a decision on the appeal within 45 days, subject to a properly noticed extension. MetLife did not provide the requested plan and claim information or respond to the appeal by the deadline. Under the Second Circuit’s rule in Halo, the court held that MetLife was not entitled to the usual deferential review because it failed to follow the required claims procedures.

Remand and other relief

Because the administrative record was incomplete and the additional wage evidence raised questions about the correctness of MetLife’s calculation, the court remanded the matter to MetLife for a full and fair review of Landry’s appeal. The court did not determine whether Landry was actually entitled to the higher benefit amount he sought.

The court denied Landry’s request for attorneys’ fees, costs, and prejudgment interest without prejudice, because deciding those issues before the administrative review was completed would be premature. The conclusion states that both cross-motions for summary judgment were denied, remands the action to MetLife, stays the case pending exhaustion of the administrative review process, and requires Landry to report the result to the court. The opening portion of the opinion instead states that MetLife’s motion was denied and Landry’s motion was granted insofar as it sought a remand.

Disposition

The conclusion states: both summary-judgment motions were denied; the action was remanded to MetLife for consideration of Landry’s appeal; the case was stayed pending administrative review; and Landry’s fee application was denied without prejudice.