You know that to apply an exclusion in a policy, the claims administrator must show that the claimant received the policy.
But what happens when the claimant submits a declaration disputing your proof that she received the policy? Doesn’t that “dispute of fact” defeat summary judgment?
Here’s the case of Sliwa v. Lincoln National/Allied Home Mortgage Capital Corporation, 2017 WL 536827 (D. Nev. February 8, 2017)(“[A]n ERISA claims administrator ‘is not a court [and] is not bound by the rules of evidence.’” Lincoln National wins because it submitted proof of policy delivery into the administrative record and, accordingly, the court applied the “abuse of discretion” standard, rather than the Rule 56 “genuine dispute of fact” standard, which would have required the court to construe disputes of facts in favor of the nonmoving party).
FACTS: Sliwa enrolled in an ERISA-governed Long Term Disability Plan with a pre-existing condition exclusion. The plan conferred discretion with Lincoln National, the claims administrator. Lincoln National determined Sliwa’s disability was excluded by the pre-existing condition exclusion.
Sliwa filed suit and claimed the pre-existing exclusion should not apply because she never received a copy of the “official disability policy.” Cross-motions for summary judgment were filed.
ISSUE: Whether the pre-existing exclusion applies where Claimant alleges she never received a copy of the “official disability policy”?
DISTRICT COURT HELD: Summary Judgment Granted for ERISA Plan.
- The Ninth Circuit applies the “reasonable expectations” doctrine. Courts “require claims administrators to either ensure policyholders received a copy of the policy or are otherwise put on notice of its provisions before claims administrators can apply an exclusion.” Op. at 6.
- Lincoln National properly exercised discretion in concluding Sliwa had received the policy (and notice of the exclusion).
- To prove delivery of the policy (from four years earlier), Lincoln National included in the administrative record a declaration outlining the delivery practices for this type of policy. Op. at 6-7 and fn 2.
- Sliwa claimed Lincoln National failed to offer a sworn declaration proving delivery. But the Court explained that “an ERISA claims administrator ‘is not a court [and] is not bound by the rules of evidence.’” Op. at 7.
- Including the declaration in the administrative record was a winning strategy because the court applied the “abuse of discretion” standard, rather than a Rule 56 “genuine dispute of fact” standard, where dispute of facts would have to be construed in favor of the nonmoving party. Op. at 6-7, fn 2.
- Lincoln National did not “abuse its discretion” in viewing Sliwa’s statement as “self-serving and unverifiable.” Op. at 7.