October 26, 2014

Tenth Circuit: Failure to Exhaust Administrative Remedies Resulted in Dismissal of ERISA Claim

The Tenth Circuit Court of Appeals issued its opinion in Holmes v. Colorado Coalition for the Homeless Long Term Disability Plan on Tuesday, August 12, 2014.

Lucrecia Carpio Holmes was employed by Colorado Coalition for the Homeless and suffered from a number of debilitating medical conditions. She applied for disability benefits through the Coalition’s employee benefit plan disability policy through Union Security Insurance Company. Union Security denied her claim, and Holmes appealed the denial on November 21, 2005. Union Security had 45 days within which to either overturn or uphold the denial, excluding certain tolling periods. Union Security issued its denial on April 7, 2006, 137 days after Holmes appealed. Included in each of Union Security’s denials was a document detailing the appeal procedure, which consisted of two levels of administrative appeal with Union Security prior to filing a civil action in district court.

Instead of filing a second appeal with Union Security, Holmes filed a civil action against the Coalition’s Long Term Disability Plan in the district court on April 28, 2008. The defendant was not aware of the appeal, and default judgment entered against it. Upon learning of the suit, Defendant removed the action to federal court and moved to have the default judgment set aside. The district court granted Defendant’s motion, ruling it had not been properly noticed in the lower court proceeding. Both parties filed cross-motions for summary judgment. While those motions were pending, Holmes filed a motion to stay decision, reopen discovery, and proceed to trial if necessary. The district court denied her motion and granted summary judgment to Defendant, holding that Holmes’s claim was barred because she failed to exhaust her administrative remedies. It found that although Union Security issued its second denial after 137 days, 67 of those days were attributable to Holmes, and Holmes had forfeited her right to enforce ERISA deadlines. The district court also held Union Security had complied with applicable ERISA notice and disclosure requirements. Holmes appealed.

The Tenth Circuit first evaluated Holmes’s argument that the district court erred by ruling she failed to exhaust her administrative remedies. Holmes argued that her Summary Plan Description failed to define the two-level review process, and alternatively she should be deemed to have exhausted her administrative remedies because Union Security failed to comply with ERISA’s timing and notice requirements. The Tenth Circuit addressed the language regarding administrative remedies contained in the plan and the Summary Plan Description, and determined that the administrative appeal process was contained in the plan by reference. Because Holmes failed to complete the administrative appeal process, district court review was barred.

The Tenth Circuit agreed with Holmes that Union Security failed to comply with ERISA’s timing and notice requirements; however, it found Holmes was not prejudiced by that failure. Although the Summary Plan Description failed to inform claimants of the review process, it incorporated by reference the letter detailing the review process that Union Security included with each denial.

The Tenth Circuit affirmed the district court’s dismissal.

Tenth Circuit: ERISA Preemption Necessitated Removal to Federal Court

The Tenth Circuit Court of Appeals issued its opinion in Salzer v. SSM Health Care of Oklahoma, Inc. on Wednesday, August 6, 2014.

Richard Salzer received medical care at an SSM facility following an accident. At the time, he was covered by a health insurance plan, and he entered into a contract with SSM in which he authorized his health insurance company to pay for his care. SSM had a provider agreement with Salzer’s health insurance company in which it agreed to accept payment from the insurance company at a discounted rate. Although the provider agreement prohibited SSM from seeking payment for covered charges from the insured, SSM billed Salzer for the non-discounted amount.

Salzer filed suit against SSM in Oklahoma state court, alleging breach of contract, violation of the Oklahoma Consumer Protection Act, deceit, and tortious interference with contract. He purported to represent a putative class of Oklahoma residents who received treatment at SSM facilities and were similarly billed in violation of provider agreements with insurance companies. Salzer sought damages and specific performance of the provider agreement. SSM removed the case to federal district court. In its notice of removal, SSM alleged that Salzer was a beneficiary of his wife’s employer-provided health plan operated by Aetna and governed by ERISA. SSM further alleged Salzer’s claims were preempted because they can be characterized as seeking to enforce rights under ERISA. Salzer moved to remove the case back to state court, but the district court denied his motion, ruling that his claims were completely preempted by ERISA.

Salzer then filed an amended complaint that reasserted his original claims and added other state law claims. SSM moved to dismiss for failure to state any ERISA claims. The district court dismissed Salzer’s complaint with prejudice, concluding that Salzer disregarded the court’s prior orders by failing to allege any ERISA claims and by continuing to argue that ERISA did not preempt the lawsuit. Salzer appealed to the Tenth Circuit.

The Tenth Circuit examined first the district court’s denial of Salzer’s motion to remand based on ERISA preemption. The Tenth Circuit looked at each of Salzer’s six claims and decided that the first five claims did not implicate ERISA and could have been remanded to state court. However, the sixth claim was indeed an ERISA claim, and the district court correctly refused to remand to the state court for determination of the ERISA claim. The Tenth Circuit found federal jurisdiction over one claim is sufficient to support removal. Because Salzer did not argue on appeal that the district court incorrectly dismissed his claims with prejudice, the Tenth Circuit affirmed the district court.

Tenth Circuit: In Divorce Case, Husband’s Pension Trust Did Not Qualify as Employee Benefit Plan Under ERISA; GAL Entitled to Quasi-Judicial Immunity on Wiretapping Claims

The Tenth Circuit Court of Appeals published its opinion in Dahl v. Dahl on Thursday, February 20, 2014.

Dr. Charles Dahl and Ms. Kim Dahl were divorced on July 20, 2010. After the divorce, Ms. Dahl filed suit in the United States District Court for the District of Utah, alleging federal-law and state law claims (1) that Dr. Dahl improperly administered the pension trust of his medical practice to deny her funds and an accounting and (2) that her telephone conversations with the Dahls’ minor children were unlawfully monitored, recorded, and disclosed by Dr. Dahl, his attorney, and the children’s guardian ad litem (GAL) in the divorce proceedings. The district court dismissed the federal-law pension claims for lack of subject-matter jurisdiction and granted summary judgment against Ms. Dahl on the federal-law wiretapping claims. It then declined to exercise jurisdiction on the state-law claims. Ms. Dahl appealed.

The Tenth Circuit affirmed the district court’s dismissal of Ms. Dahl’s pension claims under ERISA on the ground that the pension trust did not qualify as an employee benefit plan under ERISA, although the dismissal should have been on the merits rather than for lack of jurisdiction. Ms. Dahl did not show that the pension trust qualified as an employee benefit plan under ERISA. Given that ruling, the court also held that the court properly declined to exercise jurisdiction over the related state-law claims.

The court also affirmed the district court’s summary judgment for the GAL because he was entitled to quasi-judicial immunity for his actions. The claim against the GAL (Mr. Peterson) rested on his use of the recording of a conversation between Ms. Dahl and her child C.D. on October 12, 2009. He used the recording twice: first, when he played part of it during an interview with C.D.; and second, when he discussed it during his verbal report to the court. Because the court directed the GAL to meet with the children and report on how they were responding to the change in Ms. Dahl’s visitation privileges, both uses were within the functions that generally warrant immunity for guardians ad litem. Because Mr. Peterson used the recording in furtherance of his GAL duties and in response to the court’s order to report on the well-being of the children, he was entitled to quasi-judicial immunity on the federal wiretapping claim.

The court also affirmed the summary judgment on the federal wiretapping claim against Dr. Dahl based on the monitoring of a telephone call on October 12, 2009, because at that time it was objectively reasonable for Dr. Dahl to rely on a court order that had authorized monitoring. The federal wiretap statute makes it unlawful to intentionally intercept any wire, oral, or electronic communication or to intentionally use or disclose the contents of any communications known to be illegally obtained. The statute, however, provides an exception when one party to the communication has given prior consent to the interception, and recognizes a defense for good-faith reliance on a court order. The Tenth Circuit held that it was objectively reasonable for Dr. Dahl to believe that the monitoring of the October 12 conversation was authorized by the court’s previous order.

But the court remanded for further proceedings on the alleged monitoring of calls after November 3, 2009, because there was a genuine dispute of fact about whether such monitoring occurred.

In sum, the judgment of the district court on the ERISA claims was AFFIRMED, except that the court instructed the district court to dismiss the claims on the merits with prejudice.

The district court’s decision not to exercise supplemental jurisdiction over the state-law pension claims was AFFIRMED.

The grant of summary judgment to Mr. Peterson on the federal wiretapping claims was AFFIRMED.

The summary judgment to Dr. Dahl and Ms. Blakelock on the federal wiretapping claims based on the October 12, 2009, telephone monitoring was AFFIRMED.

The court REMANDED to the district court for further consideration of Ms. Dahl’s claims against Dr. Dahl and Ms. Blakelock based on alleged monitoring of telephone conversations after November 3, 2009, and for further consideration of whether to exercise its discretion not to assume jurisdiction over the state-law wiretapping claims.

 

Tenth Circuit: Failure to Provide Sufficient ERISA Notice Not Egregious

The Tenth Circuit Court of Appeals published its opinion in Jensen v. Solvay Chems., Inc. on Tuesday, July 2, 2013.

Solvay Chemicals changed how it provided retirement benefits by converting its defined benefit plan into a so-called “cash balance” plan that in essence required only a defined contribution from the company. This change eliminated early retirement subsidies.

ERISA required, under § 204(h), that Solvay provide employees with detailed notice of the changes to the plan. In a prior appeal, the Tenth Circuit held Solvay’s notice was sufficient except for describing the preexisting the company’s preexisting early retirement subsidies. The court remanded for a determination of what, if any, relief was appropriate for this violation.

The employees sought return of their early retirement benefits as a remedy for the defective notice. This was not an available remedy unless Solvay’s failure was egregious. The Tenth Circuit affirmed the district court’s decision that Solvay’s failure did not qualify as egregious under 29 U.S.C. § 1054(h)(6)(A) and also held the employees were not eligible for any other form of equitable relief.

Colorado Court of Appeals: Collection of Arrearages of Child Support and Maintenance from ERISA Account Proper Under Qualified Domestic Relations Order

The Colorado Court of Appeals issued its opinion in In re Marriage of Drexler and Bruce, Jr. on Thursday, March 28, 2013.

Dissolution of Marriage—Retirement Funds—Employee Retirement Income Security Act—Qualified Domestic Relations Order—Noncompliance Order.

Husband appealed the trial court’s judgment holding that his retirement funds were not exempt from assignment under a qualified domestic relations order (QDRO) to satisfy domestic support arrearages, and sanctioning husband for noncompliance with the QRDO transfer. The judgment was affirmed.

The parties’ marriage ended in 2010 and husband was ordered to pay wife $5,000 per month in child support and $12,000 per month in maintenance for four years, followed by $8,000 per month for two years. Husband, a tax attorney and partner at a large law firm, did not comply, resulting in the accumulation of $101,486 in support arrearages and the suspension of his law license. Wife then moved for a QDRO to collect the arrearages from the funds held in husband’s Employee Retirement Income Security Act (ERISA) retirement plan at the law firm.

Husband objected, arguing that Colorado and federal law prohibited assigning his retirement funds to wife to pay the arrearages. The trial court disagreed and ordered the transfer. Husband did not comply, so the court ordered that the QDRO transfer be completed without his signature, that he reimburse wife for her attorney fees, and that the suspension of his previous contempt sentence for violating other court orders be lifted. He appealed.

ERISA generally prohibits assignment or alienation of retirement plan funds. However, both ERISA and the Internal Revenue Code (IRC) provide that the anti-alienation provisions do not apply to funds assigned to a former spouse under a QDRO. A QDRO is a “domestic relations order” that assigns to an alternate payee the right to receive all or a portion of the benefits payable to a participant. Such an order is defined as made pursuant to a state domestic relations law that concerns the provision of child or spousal support, or marital property rights of a former spouse of a plan participant. Here, the QDRO was entered to satisfy husband’s unpaid obligations relating to the dissolution, and therefore originated under Colorado domestic relations law, and not, as argued by husband, under Colorado collections law.

A QDRO also may be used under ERISA to enforce maintenance and child support obligations imposed under a divorce decree. Thus, the trial court did not violate the anti-alienation provisions of ERISA and the IRC by issuing the QDRO to enforce husband’s unpaid support obligations.

Husband argued that regardless of the QDRO exception to ERISA’s anti-alienation clause, his retirement benefits are exempt under Colorado law because CRS § 13-54-102(1)(s) exempts pension or retirement fund plans, including those subject to ERISA “from levy and sale under writ of attachment or writ of execution.” The Court of Appeals agreed with wife that the statute is preempted by ERISA because it imposes limitations not imposed by ERISA. It found that CRS § 13-54-101(1)(s) conflicts with ERISA and therefore is preempted by ERISA in accordance with conflict preemption to the extent it imposes additional limitations not imposed by ERISA on a spouse’s right to receive retirement plan funds under a QDRO.

Husband also contended that the trial court erred by entering the noncompliance order without a hearing after he did not cooperate with the QDRO transfer. The Court disagreed. Husband did not request such a hearing, so there was no error in the trial court not holding one.

Summary and full case available here.

Tenth Circuit: ERISA Case on Calculation of Long-Term and Short-Term Disability Benefits

The Tenth Circuit issued its opinion in Cardoza v. United of Omaha Life Insurance Company on Wednesday, February 27, 2013.

Jose Cardoza brought this lawsuit pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 to § 1461 (“ERISA”), challenging United of Omaha Life Insurance Company’s (“United of Omaha”) calculation of his long-term disability benefits (“LTD benefits”). United of Omaha answered, asserting its calculation was appropriate, and counterclaimed, demanding that Cardoza reimburse it for payments of short-term disability benefits (“STD benefits”), which it claimed were miscalculated. On cross-motions, the district court granted Cardoza’s motion for summary judgment and denied United of Omaha’s motion, concluding United of Omaha’s decision to calculate Cardoza’s LTD benefits and recalculate his STD benefits as it did was arbitrary and capricious. This appeal followed.

LTD Benefits Calculations

The terms of the LTD policy and the evidence in the administrative record showed United of Omaha’s calculation of Cardoza’s LTD benefits was reasonable and made in good faith. Courts review ERISA claims as they “would any other contract claim by looking to the terms of the plan and other evidence of the parties’ intent. If plan documents are reviewed and found not to be ambiguous, then they may be construed as a matter of law.” Hickman v. GEM Ins. Co., 299 F.3d 1208, 1212 (10th Cir. 2002).

The Tenth Circuit held that the district court erred in granting Cardoza’s motion for summary judgment with respect to United of Omaha’s LTD benefits calculation. The plain language of the long-term disability benefits policy (“LTD policy”) instructed United of Omaha to base its calculation of Cardoza’s LTD benefits on his earnings as verified by the premium it received, so United of Omaha’s calculation was reasonable and made in good faith.

STD Benefits Calculations

The district court did not err, however, in granting Cardoza’s motion for summary judgment with respect to United of Omaha’s recalculation of his STD benefits and demand for reimbursement. The plain language of the short-term disability benefits policy (“STD policy”) instructed United of Omaha to base its calculation of Cardoza’s STD benefits on his earnings. Thus, United of Omaha’s decision to recalculate Cardoza’s STD benefits based on his earnings verified by premium rather than his actual earnings was not reasonable.

REVERSED in part, AFFIRMED in part, and REMANDED to the district court with instructions to conduct further proceedings consistent with this opinion.

Tenth Circuit: No Forfeiture Under ERISA’s Nonforfeitable Provision Where Third Party Fraudulently Took Benefits

The Tenth Circuit Court of Appeals published its opinion in Foster v. PPG Industries, Inc. on Wednesday, September 5, 2012.

Plaintiff William Foster had an ERISA-governed 401(k) account (Plan) with his former employer, PPG. Foster and his wife were getting divorced so Foster moved out of his home. He did not notify the Plan of his change of address for over a year. In the meantime, his ex-wife fraudulently changed his Plan user ID and password and changed the address of the Plan to her P.O. box. She then withdrew the entire amount of the account. When Foster became aware of this by receiving a 1099-R form showing the withdrawals, he demanded PPG return the money as he had not authorized the withdrawals. PPG consulted with outside legal counsel and investigated Foster’s account. Foster told the Plan his ex-wife had made the withdrawals. PPG informed Foster they would not be replacing the money as they were not liable.

Foster sued the Plan under ERISA. After an administrative record was developed in the district court, the court remanded the case to the Plan Administrator, who denied Foster’s request for repayment. Foster went back to district court, arguing because the money had been paid to another, the money had been forfeited under 29 U.S.C. § 1053(a), which provides that retirement benefits are nonforfeitable when the participant reaches normal retirement age. The district court upheld the Plan administrator’s decision under an arbitrary and capricious standard of review.

The Tenth Circuit reviewed the Plan administrator’s decision under an arbitrary and capricious standard because the Plan had complete authority to determine benefits. Because the Plan administrator had a conflict of interest, the court considered that as a factor, but found no abuse of discretion. The court found no forfeiture occurred. 29 U.S.C. § 1002(19) defines “nonforfeitable.” The court stated that “[w]e read ‘unconditional’ in § 1002(19) to mean that any and all conditions precedent to the participant’s asserting a claim to his benefits have been met. We do not read it to mean that a participant is entitled to a fixed amount of benefits regardless of any and all later-occurring conditions, such as the theft of savings plan funds by a participant’s ex-spouse. . . .”

Tenth Circuit: Denial of Benefits under ERISA Was Reasonable, Made in Good Faith, and Supported by Substantial Evidence

The Tenth Circuit Court of Appeals issued its opinion in Eugene S. v. Horizon Blue Cross Blue Shield of New Jersey on Tuesday, November 15, 2011.

The Tenth Circuit affirmed the district court’s decision. Petitioner sought coverage for his son’s residential treatment costs from his employer’s ERISA benefits insurer. Respondent’s delegated third-party plan administrator, Magellan, originally denied the claim and explained that Petitioner’s son qualified for intensive outpatient treatment, but not for residential treatment. Magellan affirmed its initial denial of residential treatment benefits through several appeals by both Petitioner and the residential treatment center. Having exhausted his administrative appeals, Petitioner filed this action challenging Respondent’s denial of benefits under ERISA. On appeal, Petitioner alleges 1) that the district court erred by denying his motion to strike and allowing the VSA into evidence, 2) that the district court erred in reviewing Respondent’s denials of benefits under an arbitrary and capricious, rather than a de novo, standard, and 3)  that Respondent improperly denied him benefits under the terms of his ERISA benefits plan.

The Court disagreed with all of Petitioner’s contentions. The Court refused to overturn the district court’s ruling because that court permissibly exercised its discretion and Respondent’s failure to disclose was harmless or justified. The Court also found that, to the extent it must independently assess the deference to which Magellan is entitled, Magellan was entitled to deferential review and that review should be under an arbitrary and capricious standard. And, under this standard, the administrator’s decision was reasonable, made in good faith, and supported by substantial evidence.

Tenth Circuit: Petitioner Established Issue of Material Fact Present in ADA Violation Claim; Summary Judgment Not Appropriate

The Tenth Circuit Court of Appeals issued its opinion in Carter v. Pathfinder Energy Services, Inc. on Thursday, November 3, 2011.

The Tenth Circuit affirmed in part and reversed in part the district court’s decision. Petitioner began working as a directional driller for Respondent employer in 2004. Two years later, after his declining health had caused a reduction in his workload, Respondent fired Petitioner for “’gross misconduct’ based primarily on an altercation that he had had with a coworker and his language and attitude during a conversation with his supervisor.” Petitioner then sued Respondent, alleging that his employer had violated his rights under the Americans with Disabilities Act (ADA) and the Employee Retirement Income Security Act (ERISA). He also alleged that Respondent had breached his implied-in-fact employment contract. The district court granted summary judgment in favor of Respondent on all three claims.

The Court agreed with the district court’s grant of summary judgment on all issues except for the alleged ADA violation. For the ADA claim, Petitioner “must show that, at the time he was fired, (1) he was a disabled person as defined by the ADA; (2) he was qualified, with or without reasonable accommodation, to perform the essential functions of his job; and (3) he was fired because of his disability.” The Court was convinced that Petitioner has established that a genuine dispute of material fact exists as to all three elements to allow the claim to survive a motion for summary judgment.

Tenth Circuit: ERISA Does Not Require Notification of Wear-Away Periods During Pension Transition So Long As Employees are Informed of Plan Changes

The Tenth Circuit Court of Appeals issued its opinion in Tomlinson vs. El Paso Corp. on Wednesday, August 10, 2011.

The Tenth Circuit affirmed the district court’s decision. The case is a putative class action in which Petitioners appeal the dismissal of their claims against Respondent and the El Paso Pension Plan brought under the Age Discrimination in Employment Act (ADEA) and the Employee Retirement Income Security Act (ERISA). Petitioners’ claims concern “wear-away periods” that occurred during Respondent’s transition to a new pension plan; they contend that the wear-away periods violate the ADEA’s prohibition on age discrimination and the anti-backloading and notice provisions of ERISA.

However, the Court disagreed and found that Respondent’s transition favored, rather than discriminated against, older employees. Also, the plan was frontloaded, rather than backloaded. The Court held that ERISA does not require notification of wear-away periods so long as employees are informed and forewarned of plan changes. Because Respondent provided sufficient notice and warning to Petitioners, the district court’s decision was upheld.

Colorado Court of Appeals: “Retirement Plan” Has a Usual and Ordinary Meaning and Is Not Limited to Plans Possessing Attributes of ERISA-Qualified or Tax-Qualified Plans

The Colorado Court of Appeals issued its opinion in Dillabaugh v. Ellerton on June 23, 2011.

Post-Judgment Collection— Employee Retirement Income Security Act (ERISA)—Exemptions From Attachment or Garnishment of a Retirement Plan.

In this post-judgment collection proceeding, plaintiff Gary Dillabaugh appealed the trial court’s order determining that an obligation of Sefton Resources, Inc. (Sefton) to defendant John Ellerton, Sefton’s Chief Executive Officer, was exempt from attachment or garnishment as property or funds payable from a retirement plan. The judgment was affirmed.

Dillabaugh obtained a judgment against Ellerton and attempted to garnish Sefton’s obligation to him. Sefton responded that it owed Ellerton a “future retirement obligation” totaling $839,832. Ellerton argued this was exempt from garnishment or attachment under CRS §13-54-102(1)(s) because it arose from a retirement plan. The exemption issue was briefed and the court ruled without a hearing that Sefton’s obligation to Ellerton was exempt as property held in or payable from a retirement plan.

On appeal, Dillabaugh argued that the trial court erred because a retirement plan must share the attributes of an ERISA-qualified plan or a tax-qualified plan, and Sefton’s obligation did not. The Court of Appeals disagreed with the narrow interpretation of the exemption, noting that the meaning of “retirement plan” under CRS §13-54-102(1)(s) has not been addressed by Colorado appellate courts. The Court found that “retirement plan” has a usual and ordinary meaning discernible by a court and is not limited to plans that possess attributes of ERISA-qualified or tax-qualified plans. The Court also held that the record supports the trial court’s conclusion that Sefton’s obligation to Ellerton was properly held in or payable from a retirement plan.

This summary is published here courtesy of The Colorado Lawyer. Other summaries for the Colorado Court of Appeals on June 23, 2011, can be found here.

Colorado Court of Appeals: Both State and Federal Courts Have Concurrent Jurisdiction to Adjudicate and Enforce ERISA Claims

The Colorado Court of Appeals issued its opinion in Strunk v. Goldberg on May 26, 2011.

Insurance—Bad Faith—Disability—Preemption—ERISA—Claim Preclusion—Jurisdiction—Ripeness.

In this insurance bad-faith insurance case, plaintiff Sherry M. Timm appealed the order of the trial court dismissing her complaint against defendant Prudential Insurance Company of America (Prudential). The order was affirmed in part and reversed in part, and the case was remanded for further proceedings.

Prudential denied Timm’s claim for disability benefits. After exhausting her administrative remedies, Timm filed a civil action in federal court. The federal court entered a declaratory judgment vacating Prudential’s decision and declaring Timm disabled. The federal court remanded the case to Prudential for a determination of benefits due under the plan. Timm later filed this action because Prudential failed to determine Timm’s entitlement of benefits. Prudential moved to dismiss this action pursuant to C.R.C.P. 12(b)(5), contending that Timm’s complaint failed to state a claim for which relief can be granted. The trial court agreed and dismissed the complaint. This appeal followed.

Timm contended that the trial court erred by determining that her claim for bad faith under CRS § 10-3-1116(1) is preempted by ERISA. Because § 10-3-1116(1) allows a double recovery of benefits, it supplements and conflicts with ERISA’s remedies and therefore is preempted. Accordingly, because ERISA preempts § 10-3-1116(1), the trial court did not err in dismissing Timm’s statutory bad-faith claim.

Timm also contended that the trial court erred by dismissing her ERISA claim for benefits under principles of claim preclusion. Claims that would or could have been based on Prudential’s conduct in the administrative process up to the date the federal court issued its declaratory judgment are precluded. However, Timm’s ERISA claim is not based on conduct occurring before the federal court’s declaratory judgment. Further, ERISA provides for concurrent jurisdiction of both state and federal courts to adjudicate and enforce ERISA claims. Accordingly, to the extent the trial court held that Timm may bring her ERISA claim only in federal court, it erred.

Timm further argued that the trial court erred by dismissing her claim for lack of ripeness. The complaint states that Timm “reasonably sought the payment of benefits” from Prudential after the federal court’s decision and that Prudential refused to decide the matter for more than twenty-one months. Because of the delay by Prudential, Timm asserts it would have been clearly useless for her either to have waited longer for a decision in the first instance from Prudential, or to have appealed through administrative channels to the appeals board of Prudential. Accordingly, Timm’s claim was ripe for judicial review and the trial court erred by dismissing Timm’s claim on that basis.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on May 26, 2011, can be found here.