In Brown, III v. United of Omaha Life Insurance Company, No. 15-4293 (6th Cir. 2016) (Unpublished), plaintiff Lloyd Brown III (“Brown III”) alleged that defendants United of Omaha Life Insurance Company (“United”) and West Side Transport, Inc. (“West Side”) wrongfully denied him life insurance benefits. Brown III asserted contractual and equitable state law claims and, in the alternative, causes of action under ERISA §§ 502(a)(1) (claim for benefits) and 502(a)(3) (claim for equitable relief).
The district court concluded that Brown III’s state law claims against United and West Side were preempted by ERISA, granted summary judgment to Brown III on the merits of his ERISA § 502(a)(1) claim against United, and found that Brown III was not entitled to relief under ERISA § 502(a)(3) because § 502(a)(1)(B) fully provides a means for the relief sought. The district court then awarded Brown III $181,666.67 in damages for benefits due him under United’s life insurance policy, prejudgment interest, and $27,040.00 in attorneys’ fees. United appeals the judgment and remedies awarded.
Upon review, the Sixth Circuit Court of Appeals (the “Court”) affirmed the district court’s grant of summary judgment to Brown III on the merits of his § 502(a)(1) claim for benefits, since United’s reason for denying the benefits-failure to submit certain evidence of insurability-was arbitrary and capricious and could not be upheld. The Court also affirmed the district court’s awards of prejudgment interest and attorneys’ fees. However, the Court reversed the district court’s summary judgment to United on Brown III’s § 502(a)(3) claim. The Court said that, while a plaintiff cannot “repackage” a claim for benefits under 502(a)(1) into a claim for equitable relief under 502(a)(3) and thus recover twice, here, the plaintiff can pursue the claim for equitable relief if it is based on an injury that is separate and distinct from the denial of benefits, or if the claim for benefits is inadequate to make the plaintiff whole. The Court then remanded the case back to the district court to determine whether equitable relief is available.