Offit Kurman Attorney Theodore Stein Secures Rare Summary Judgment for Defendant Employer in ERISA Case
Bethesda, MD | March 19, 2018 On March 13th, in a dispute between an employer and former employee over Employee Retirement Income Security Act (ERISA) benefits, a Maryland District Court issued a rare Memorandum Opinion granting summary judgment in favor of the defendant, the Institute for In Vitro Sciences, Inc. (IIVS), and dismissed a claim that the organization had breached its fiduciary duty under ERISA. The case is Damiano v. Institute for In Vitro Sciences, et al. Theodore Stein, a Principal attorney in Offit Kurman’s Bethesda office, represented IIVS.
The dispute dates back to September 9, 2015, when IIVS terminated an employee as part of an organizational restructuring. To show its appreciation for the employee’s past service, IIVS told the employee on her termination date that it would provide severance and other benefits, including post-termination coverage under its disability benefits plan. The organization’s Consolidated Omnibus Budget Reconciliation Act (COBRA) administrator approved this plan.
On October 3, the former employee was hospitalized and underwent emergency brain surgery. Thereafter, the employee received a COBRA notification letter that her insurance coverage under the employer’s health and welfare plan would end on October 31, 2015. The former employee contacted IIVS and was advised that in fact, she was not eligible for disability benefits.
The former employee, Damiano, filed suit on March 28, 2016, alleging claims against IIVS and the COBRA administrator, including a claim under ERISA for breach of fiduciary duty based on an alleged misrepresentation of coverage. By July 26, 2017, as the result of a Court Order and an agreement among the parties, the only claim that remained was Damiano’s ERISA breach of fiduciary duty claim against IIVS.
In granting summary judgment in IIVS’ favor, and dismissing the case, the Court held that although the misrepresentation as to disability insurance coverage was “material,” it had not caused Damiano actual harm.
“The Court’s decision, in this case, is of dramatic importance to employers,” said Mr. Stein, who chairs Offit Kurman’s ERISA/Employee Benefits Law Practice. “This decision should be a wake-up call to employers about the danger of misrepresenting the benefits under a welfare or pension plan—even if the misrepresentation is accidental. Employers need to exercise extreme care whenever they make a statement to an employee about group benefits, and any such statement should be vetted by an experienced ERISA and employment law attorney.”
In a career that spans more than 30 years, Mr. Stein has won a reputation as one of the top trial lawyers in Maryland and the Washington, DC area. His practice focuses on the defense of fiduciaries in a variety of contexts. In the employee benefits field, Mr. Stein defends employers who serve as Plan Administrators, individual Trustees of employer-sponsored pension and welfare plans, and service providers of group benefit plans. He frequently assists businesses, nonprofit organizations, and their sponsored pension and health/welfare plans with compliance issues and litigation problems arising under ERISA. He is also experienced in estates and trusts planning, administration, and litigation.
Mr. Stein’s legal blog, Ted’s Tips, can be found at offitkurman.com, where visitors can also learn more about the firm’s Labor and Employment and ERISA/Employee Benefits Practices. Those seeking to get in touch with Mr. Stein are welcome to contact him via his attorney page here.
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