United States Court of Appeals For the Seventh Circuit
Insurance – ERISA — breach of fiduciary duty
Where an insurer told an insured her surgery would be covered, it breached its fiduciary duty when it later refused to pay for the surgery.
“Kenseth’s failure to volunteer additional information regarding the origin of her illness is not material to any of Dean’s actions or omissions in breaching its fiduciary duty as we defined that possible breach in our first opinion. Whether Dean’s breach of duty caused Kenseth’s damages is a different question, but Kenseth’s actions (or omissions) have nothing to do with whether Dean breached its duty as a fiduciary. As of yet, Dean has offered no rebuttal to the facts regarding the ambiguity of the policy, the invitation to call customer service with coverage questions, the absence of any warning that the advice given by customer service did not bind Dean, and the failure to advise participants of any other means to obtain a definitive assessment of coverage prior to incurring costs. We leave it to the district court on remand to determine whether Dean breached its fiduciary duty. If so, the court must determine whether that breach (as opposed to any other cause) harmed Kenseth, and then fashion appropriate equitable relief to remedy the harm.”
Vacated and Remanded.
Appeal from the United States District Court for the Western District of Wisconsin, Crabb, J., Rovner, J.