ERISA And Misrepresentation

ERISA lawyers need to read the 2015 opinion from the U.S. District Court, Houston Division. It is styled, Michael Nall, et al, v. BNSF Railway Company, et al.
Nall was an employee of BNSF Railway. He alleged that based on his employment he was entitled to receive certain benefits under the plan provided by BNSF. This benefit plan was an ERISA benefit plan.
Nall was diagnosed with Parkinson’s disease and was having many problems that are discussed in the opinion. The relevant issue in this case is that while Nall was out on disability in 2013, he received his annual enrollment package regarding his 2014 coverage. According to this enrollment package, Nall did not need to submit anything in order to continue coverage for 2014. Nall relied on this notification and assumed that his benefits would continue on just as in the past. After getting some further treatment, Nall received a bill from one of his doctors and then learned that his benefits had ended.
Nall sued claiming that based on his being told that he did not need to submit anything in order to continue coverage for 2014 that BNSF was estopped from denying benefits.
The elements under an ERISA estoppel claim are: (1) a material misrepresentation; (2)
reasonable and detrimental reliance upon the representation; and (3) extraordinary circumstances. Material misrepresentations require a substantial likelihood that a reasonable employee would be misled about making adequately informed decisions by employer’s benefits statements’ errors.
In regard to material misrepresentation, Nall alleged, “BNSF represented to Plaintiffs
(directly or indirectly based on information it provided to Plaintiffs’ insurance provider), prior to January 1, 2014, that their welfare benefits would continue as is into 2014. Plaintiffs relied on these representations. These representations turned out to be false.”
In late 2013, Plaintiffs received their annual enrollment package regarding their coverage for 2014 . . . According to this enrollment package, Plaintiffs did not need to submit anything in order to continue their coverage for 2014.” Nall also alleged, “It appears BNSF may have either instructed Plaintiffs’ insurance provider to no longer continue Plaintiffs’ benefits or provided false information to their insurance provider that it relied upon to adversely affect Plaintiffs’ benefits.” Here, Nall did not allege facts that would show how BNSF’s statement regarding coverage in the plan brochure was a material misrepresentation made or sent by BNSF in the enrollment package.
In regard to reliance, Nall alleged the enrollment package represented that “Plaintiffs did not need to submit anything in order to continue their coverage for 2014. Plaintiffs relied on this notification to assume that their welfare benefits would continue on just as in the past.” Nall did not allege additional facts suggesting their welfare benefits would continue.
In regard to extraordinary circumstances, Nall failed to allege “egregious circumstances amounting to bad faith, active concealment, or fraud.”
In regard to extraordinary circumstances, Nall merely recited an allegation that “BNSF acted in bad faith and/or misled plaintiffs.”
For the cited reasons, this Court dismissed Nall’s claim.