Court will consider evidence in ERISA case that was not included in administrative record
Over the protests of Progress Energy and its employee group insurance administrator, a federal judge in South Carolina has agreed to consider an affidavit supporting a claim for unpaid benefits even though the evidence was never part of the original record.
“This allows my client to tell her side of the story,” the plaintiff’s attorney, Martin S. Driggers Sr. of Driggers & Moyd in Hartsville, said of the ruling. “A lot of lawyers need to realize that these additional rights exist and they probably don’t.”
His client, Kimberly B. Winburn, sought to submit the affidavit in support of her suit against her employer, Progress Energy, and its benefits administrator, Prudential Insurance of America, for equitable relief under the Employee Retirement Income Security Act.
She alleges that the defendants wrongly denied benefits on an optional accidental death and dismemberment plan she’d purchased for her husband, who died in a 2008 motorcycle crash while he was intoxicated.
In her affidavit, Winburn argued that the plan did not exclude alcohol-related accidents when she first enrolled her husband in 2001, and that she did not learn about the provision until she filed a claim. She also argued that Progress Energy told employees in 2005 that the terms of the plan had not changed.
That affidavit was not given to Prudential’s plan administrator during an initial review of the claim because such evidence typically is not filed in administrative actions, according to Driggers.
Progress Energy and Prudential contended that Winburn’s request to supplement the record was untimely and that the court could only consider the administrative record. They also said that if the court were to admit the affidavit, it would have to remand the case to let the claims administrator review the new evidence.
But Judge R. Bryan Harwell in Florence allowed the affidavit into evidence on the basis that it alleged facts which “go to the heart of the equitable relief issue” and “can help narrow the issues and establish when and if certain notices were sent or not sent to the plaintiff,” he wrote in his July 25 order.
Harwell also gave Progress Energy and Prudential the go-ahead to depose Winburn, concluding that doing so would “satisfy Defendants’ discovery needs” before the case is sent back to the plan administrator for reconsideration in light of the new evidence.
Attorneys for Progress Energy and Prudential either declined comment or did not respond to interview requests.
Greenville lawyer Robert E. Hoskins, an expert on the Employee Retirement Income Security Act, said the ruling is in line with a string of recent federal decisions on the issue, including the 4th U.S. Circuit Court of Appeals decision in Helton v. AT&T. That holding, issued in March, was not cited in Harwell’s order.
“The importance of this decision [Winburn] is that it demonstrates for non-ERISA practitioners that the court can allow discovery outside of the administrative record,” said Hoskins, who is not involved in Winburn’s suit.
“For those of us who handle ERISA cases on a regular basis, we would be familiar with the Helton decision,” he added. “However, since Helton is so recent it’s very possible the court was not made aware of it.”
The eight-page decision is Winburn v. Progress Energy Carolinas, Inc. Lawyers Weekly No. 002-121-13. A digest of the ruling can be found at sclawyersweekly.com.
OPINION BRIEF
Case name: Winburn v. Progress Energy Carolinas, Inc.
Court: U.S. District Court, Florence
Judge: R. Bryan Harwell
Plaintiff’s attorney: Martin S. Driggers Sr. (Hartsville)
Defendants’ attorneys: Patrick C. DiCarlo (Atlanta), John M. Milling (Darlington), Joshua W. Dixon and David W. Overstreet (Charleston)
Issue: Can a plaintiff present evidence in an affidavit that was not part of the administrative record to support her claim for equitable relief under the Employee Retirement Income Security Act?
Holding: Yes, because the facts alleged in the affidavit directly address the equitable relief issue at the center of the cause, satisfying the “exceptional circumstances” requirement for the admission of evidence that was not submitted during the administrative process.
Importance: The ruling shows that the court can consider evidence outside the administrative record.