You already know that claimants with a denied claim must submit an appeal and exhaust administrative remedies before filing suit.

But are phone calls sufficient to trigger the appeal process?

And, can a claimant trump the exhaustion requirement by alleging the denial was in “bad faith” and, therefore was a “special circumstance?”

Here’s the case of Moss v. Unum Group et al., __ F.3d __ (5th Cir. February 3, 2016) (phone calls are not formal appeals; alleging bad faith is insufficient to constitute a “special circumstance” exception to the exhaustion of remedies requirement).

FACTS: Moss sought ERISA-governed disability benefits due to osteoarthritis. Unum denied the claim on June 5, 2009 and informed Moss he was required to submit a written appeal within 180 days. Moss called Unum June 30, 2009 and said he disagreed with the decision, and then mailed copies of paychecks to Unum. Unum issued a second letter, December 10, 2009, again denying the claim and informing Moss that “[u]nless there are special circumstances, the administrative appeal must be completed before you begin any legal action…”

Instead of filing an appeal, Moss filed suit. The  suit was dismissed due to failure to exhaust administrative remedies. Moss filed a second lawsuit on October 21, 2013, which was dismissed, too. On appeal he claims a “special circumstance” existed: Unum denied the claim in bad faith.


  1. Claim denial letters are not contracts. “We doubt a denial letter is analogous to an insurance contract that must be construed in Moss’s favor.” Op. at 4.
  2. Alleging bad faith by the insurer fails to constitute a “special circumstance” sufficient to waive the exhaustion of administrative remedies requirement. “[I]f a claimant could avoid the exhaustion requirement simply by alleging in his complaint that the plan administrator denied his claim in bad faith, then no claimant would ever be required to exhaust administrative remedies before filing suit.” Op. at 4.
  3. Phone calls are insufficient to constitute an “appeal.”  “’[A]lowing informal attempts to substitute for the formal claims procedure would frustrate the primary purposes of the exhaustion requirement.’”  Op. at 5.