Date: 04-12-2022

Case Style:

Ruth Mae Chelf v. Prudential Insurance Company of America

Case Number: 20-6097

Judge: Jane B. Stranch

Court: United States Court of Appeals for the Sixth Circuit on appeal from the Western District of Kentucky (Jefferson County)

Plaintiff's Attorney: Andrew Grabhorn

Defendant's Attorney: J. Gordon Howard

Description: Louisville, Kentucky insurance lawyer represented Plaintiff, who sued defendant on a breach of fiduciary duty theory.

Elmer Chelf, a former employee of Wal-Mart, was
on long-term disability leave when he passed away. His widow, Ruth Mae Chelf, was denied
benefits under his work-based optional term life insurance policy. She brought claims against
Wal-Mart and the Plan Administrator (collectively, Wal-Mart) for breach of fiduciary duty
pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001–1461
(ERISA).1 Her suit alleges that Wal-Mart breached its fiduciary duty to Mr. Chelf in several
ways, including by assessing certain premiums in error; by failing to inform him that his
premiums were assessed in error; by failing to remit premiums to Prudential to cover his optional
life insurance policy resulting in that policy’s termination; by failing to inform Mr. Chelf that his
accrued paid time off (PTO) could cover his life insurance premiums; and by failing to notify
him of his right to convert his term life insurance policy. Wal-Mart filed a motion to dismiss,
which the district court granted, dismissing Ms. Chelf’s fiduciary breach claims with prejudice.

* * *

In addition to suing to recover benefits, a beneficiary of an ERISA-governed benefit plan
may sue the plan “to obtain other appropriate equitable relief” to redress violations of ERISA or
the terms of the plan. 29 U.S.C. § 1132(a)(3). Such violations can include breaches of fiduciary
duty: a fiduciary under ERISA is required to “discharge his duties with respect to a plan solely
in the interest of the participants and beneficiaries.” 29 U.S.C. § 1104(a)(1). A claim for breach
of fiduciary duty under ERISA requires the plaintiff to prove: (1) the defendant is a plan
fiduciary; (2) the defendant breached its fiduciary duty; and (3) the breach resulted in harm to the
plaintiff. See James v. Pirelli Armstrong Tire Corp., 305 F.3d 439, 449, 454 (6th Cir. 2002).
Taking each element separately, ERISA defines a fiduciary as:
[A] person is a fiduciary with respect to a plan to the extent . . . he exercises any
discretionary authority or discretionary control respecting management of such
plan or exercises any authority or control respecting management or disposition of
its assets . . . [or] he has any discretionary authority or discretionary responsibility
in the administration of such plan.
29 U.S.C. § 1002(21)(A).

“Though ERISA fiduciary status is broadly triggered with any control over plan assets,
the inquiry in each case is granular, ‘ask[ing] whether [an entity] is a fiduciary with respect to the
particular act in question.’” Pipefitters Local 636 Ins. Fund v. Blue Cross & Blue Shield of
Mich., 722 F.3d 861, 866 (6th Cir. 2013) (quoting Briscoe v. Fine, 444 F.3d 478, 486 (6th Cir.
2006)). “[A]n entity that exercises any authority or control over [the] disposition of a plan’s
assets becomes a fiduciary.” Guyan Int’l Inc. v. Prof’l Benefits Adm’rs, Inc., 689 F.3d 793, 798
(6th Cir. 2012) (citing Briscoe, 444 F.3d at 490–91) (emphasis in original). Discretionary
determinations “about whether a claimant is entitled to benefits under the terms of the plan
documents” are exercises of fiduciary duty. Varity Corp. v. Howe, 516 U.S. 489, 511 (1996).

Outcome: We AFFIRM in part, REVERSE in part, and REMAND for further proceedings consistent with
this opinion.

Plaintiff's Experts:

Defendant's Experts:

Comments: