ERISA-Sixth Circuit Rules That Defendants Breached Fiduciary Duty By Providing A Summary Plan Description Which Led Plaintiff To Believe He Is Entitled To A Benefit Increase

In Stiso v. International Steel Group, No. 13-3503 (6th Circuit 2015) (Unpublished Opinion), Plaintiff Michael Stiso, an employee of defendant International Steel Group and a beneficiary under its long-term disability insurance plan, brought this action, under sections 502(a)(1)(B) (claim for benefits) and 502(a)(3) (claim based on estoppel and breach of fiduciary duty), to enforce a 7% per year cost-of-living increase to his long-term disability benefits. He sought the increase in benefits based on language from the long-term disability plan and from the summary plan description. The language in both the disability plan and in the summary of the disability plan distributed to employees refers to a 7% increase in predisability earnings. The district court ruled against Stiso, and he appealed.

In analyzing the case, the Sixth Circuit Court of Appeals (the “Court”) said that by providing plaintiff with a summary plan description that led plaintiff reasonably to understand that he would receive a 7% yearly increase in benefits and then denying his claim despite the explicit language in the summary plan description, both International Steel and defendant Metropolitan Life Insurance Company breached their fiduciary responsibilities to plaintiff. Therefore, the Court reversed the district court’s judgment and remanded the case with instructions to grant an increase in benefits to Stiso. The Court said further that, on remand, Stiso may seek the appropriate equitable remedy, including make-whole relief in the form of money damages referred to by the Supreme Court in its Amara decision.

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