United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 17, 1998 Decided May 1, 1998
No. 97-7095
Andrea Heller,
Appellant
v.
Fortis Benefits Insurance Company,
Appellee
Appeal from the United States District Court
for the District of Columbia
(No. 92cv00549)
Joseph F. Cunningham argued the cause and filed the
briefs for appellant.
Jennifer Rand Stein argued the cause for appellee, with
whom Grace E. Speights was on the brief.
Before: Wald, Silberman and Rogers, Circuit Judges.
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge: Andrea Heller appeals the grant
of summary judgment to Fortis Benefits Insurance Company
("Fortis") on her claim that the company improperly denied
her disability benefits and breached its fiduciary duty in
violation of the Employee Retirement Income Security Act of
1974 ("ERISA"), 29 U.S.C. ss 1001-1461 (1994). After pay-
ing Heller disability benefits for five years, Fortis determined
that she no longer qualified as disabled under its plan and
terminated her benefits. The district court approved this
termination and further ordered Heller to reimburse Fortis
for disability payments for which she had not actually been
eligible. Because Heller failed to present a genuine issue of
material fact regarding her qualification for disability benefits
under Fortis' plan, and because we hold that restitution was
an available remedy for the company under ERISA and that
the district court did not abuse its discretion in ordering the
award, we affirm.
I.
Heller worked as a marketing representative for McCue
Systems, Inc. ("McCue"), beginning in March 1985. The job
was stressful, and she injured her back, neck, and shoulder
by carrying heavy computer equipment on numerous business
trips. In January 1986, she filed for disability under McCue's
health benefits plan, which provided for insurance coverage
from Fortis.1 In order to qualify as "totally disabled" under
the plan and thus be eligible for payments, she had to be
"unable to perform the material duties of ... her regular
occupation or employment." Agreeing that she qualified for
payments as a "totally disabled" person under this definition,
Fortis approved Heller's claim. She accordingly received
disability benefits from Fortis for five years, from 1986
through 1991.
__________
1 McCue purchased the plan from the Mutual Benefit Insur-
ance Company, which was succeeded as the company responsible
for administering the plan by Fortis in 1991. For ease of reference,
we refer to Heller's insurer throughout as "Fortis."
Under Heller's plan, however, the standards for her eligi-
bility for benefits changed after five years and, by letter of
February 4, 1991, Fortis informed Heller that it would review
her continued entitlement to benefits. As Heller's plan pro-
vided, a person is "totally disabled" if
A. Occupation Test
(i) during the first 60 months of any One Period of Total
Disability, the Person Insured is under the regular care
and attendance of a Licensed Physician (other than him
or herself) and unable to perform the material duties of
his or her regular occupation or employment; and
(ii) after the first 60 months of any One Period of Total
Disability, the Person Insured is unable to perform the
material duties of any and every gainful occupation or
employment for which the person is or becomes reason-
ably fitted by education, training or experience.
While a Person Insured meets these requirements, limit-
ed employment will not interrupt the Qualifying Period
or the Period of Total Disability.
B. Earnings Test
If a Person Insured is working, and is not disabled by
the Occupation Test definition of Total Disability, we will
consider the Person Insured to be "Totally Disabled"
during any month when he or she is not able, because of
Injury, sickness or pregnancy, to earn more than 50% of
his or her Monthly Earnings.
Fortis advised Heller that it would investigate the merits of
her continued claim for benefits and that "the issuance of any
further benefits should not be construed as an admission of
liability on our part to continue benefits indefinitely beyond
the first sixty months of disability."
Thereafter, Fortis commissioned Crawford & Company
("Crawford"), an employment consulting firm, to interview
Heller, assess whether she could perform any jobs, and
conduct a labor market survey to determine what jobs might
be available for her. In its "Initial Vocational Assessment"
report on March 22, 1991, Crawford concluded that Heller
"possesses many transferable skills from her work history
that would be useful in other less physically demanding types
of work," based on her experience, college education, and
sales skills. From May 10 through June 5, 1991, Crawford
conducted a "Labor Market Survey" that indicated that Hel-
ler "has good transferrable skills that apply to different types
of jobs that are presently available in the labor market, and
those are too numerous to list here, but include customer
service, bank positions, any retail, etc." Crawford listed ten
sales positions for which Heller might be particularly suited.2
Additionally, Fortis dispatched its in-house investigator to
determine whether Heller was working at her husband's law
firm during the time that she was receiving disability bene-
fits. The investigator determined that Heller spent some
time at the firm during the workday, and he also found some
documents implying that she worked there--for instance, a
letter referring to her editing assistance. However, neither
Heller's social security and tax records nor the law firms's
records provided documentation of such employment or in-
come; nor did she ever notify Fortis of any return to work or
receipt of new income.
Finally, Fortis assembled the medical reports on Heller
from examinations since the onset of her disability. Three
physicians pronounced her fit for certain kinds of employ-
ment. In 1987, Dr. Philip Pulaski concluded that he "would
have a hard time, at least from the neurologic perspective,
continuing to back up her claims of disability." In 1989, Dr.
John Devor concluded that "[m]ost of the time, [Heller]
probably would not have more than a slight handicap working
either as an outside salesperson or an inside salesperson." In
1990, Dr. Louis Levitt concluded: "In my opinion the patient
is not totally disabled from gainful employment." In addition,
Dr. Raymond Drapkin, Heller's attending physician, who had
been of the opinion that Heller had been disabled, agreed on
January 23, 1991, in response to a questionnaire sent by
Fortis, that Heller was a good candidate for vocational reha-
__________
2 Relying on telephone calls made one year after Crawford
completed its survey, Heller disputes the availability of these jobs.
bilitation. On September 6, 1991, in response to another
questionnaire, Dr. Drapkin further agreed that Heller could
be available for "light work duty" and was "OK" for "seden-
tary work." He answered in the affirmative the question
whether she could "possibly return to work on a full-time
basis as an inside salesperson where she is not require[d] to
travel or lift heavy equipment and where she is allowed to
alternate her position when necessary."
Based on its investigation, Fortis concluded that Heller
satisfied neither the plan's Occupation Test nor its Earnings
Test, and therefore was unqualified to receive benefits. By
letter of January 15, 1992, Fortis notified Heller of the
termination of her benefits. After outlining the medical
information and the information provided by Crawford, the
letter stated: "Based on the medical information and the
results of the Labor Market Survey, benefits could be denied
on these findings alone[;] however we also have information
documenting that [Heller] has worked ... since 12/19/88." In
addition to terminating her benefits, Fortis demanded repay-
ment of "benefits that were not due." The letter did not
advise her of any right to appeal the benefits determination.
Heller sent a number of documents to Fortis, to which
Fortis responded both in writing and by telephone conversa-
tion with Heller's attorney that it would treat the documents
as an appeal of its benefits determination. Nonetheless, two
days after receiving this notice from Fortis, Heller filed suit
alleging, among other things, violation of ERISA, specifically,
29 U.S.C. s 1132(a)(1)(B), which provides that "[a] civil action
may be brought ... by a participant or beneficiary ... to
recover benefits due to him under the terms of his plan, to
enforce his rights under the terms of the plan, or to clarify
his rights to future benefits under the terms of the plan." 29
U.S.C. s 1132(a)(1)(B) (1994). Fortis counterclaimed for res-
titution of benefits paid Heller after January 1991. The
district court resolved the case on cross-motions for summary
judgment, ruling in Fortis' favor on both Heller's claim and
its counterclaim. The court found that Fortis was entitled to
$19,811.00 in restitution, the amount erroneously paid to
Heller after her fifth year of receiving benefits.
II.
On appeal Heller contends that the district court erred in
granting summary judgment against her because Fortis de-
nied her a meaningful review process in violation of 29 U.S.C.
s 1133. She also contends that the district court failed to
apply either test for "total disability" properly in the context
of a motion for summary judgment. Under the Occupation
Test, she maintains, the severity of her disability presented a
material question of fact. Furthermore, she maintains that
the district court could not have concluded that she failed the
Earnings Test on the basis of sparse medical evidence and
undocumented allegations that she was working at her hus-
band's law firm. Finally, she contends that the district court
erred in awarding Fortis restitution. Our review of the grant
of summary judgment, as well as the denial of Heller's own
motion for summary judgment, is de novo. See Henke v.
Department of Commerce, 83 F.3d 1445, 1448 (D.C. Cir.
1996); Tao v. Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994).
Rule 56(c) of the Federal Rules of Civil Procedure provides
that a court shall grant a motion for summary judgment if
"the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of
law." Fed. R. Civ. P. 56(c). Facts are deemed "material" if a
dispute over them "might affect the outcome of the suit under
the governing law." Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). A factual dispute is "genuine" where
"the evidence is such that a reasonable jury could return a
verdict for the nonmoving party." Id. The moving party has
the burden of demonstrating the absence of a genuine issue of
fact for trial. See id. at 256. If the moving party satisfies
this burden, Rule 56(e) provides:
When a motion for summary judgment is made and
supported as provided in this rule, an adverse party may
not rest upon the mere allegations or denials of the
adverse party's pleading, but the adverse party's re-
sponse, by affidavits or as otherwise provided in this
rule, must set forth specific facts showing that there is a
genuine issue for trial. If the adverse party does not so
respond, summary judgment, if appropriate, shall be
entered against the adverse party.
Fed. R. Civ. P. 56(e).
A.
Because Heller made her disability claim through an insur-
ance plan offered by her employer, this coverage case is
governed by ERISA. See 29 U.S.C. ss 1002(1), 1003(a)
(1994). Section 503 of ERISA provides that
every employee benefit plan shall--
(1) provide adequate notice in writing to any partici-
pant or beneficiary whose claim for benefits under the
plan has been denied, setting forth the specific reasons
for such denial, written in a manner calculated to be
understood by the participant, and
(2) afford a reasonable opportunity to any participant
whose claim for benefits has been denied for a full and
fair review by the appropriate named fiduciary of the
decision denying the claim.
Id. s 1133. Initial claims handling must be completed within
time limits prescribed by the Secretary of Labor. See 29
C.F.R. s 2560.503-1(e) (1997). If a claim is denied, the
fiduciary reviewing the denial must act promptly and within
time periods prescribed by the Secretary of Labor following
any request for review by the plan participant. See id.
s 2560.503-1(h). The Secretary has fixed that time period in
most cases at 120 days:
A decision by an appropriate named fiduciary shall be
made promptly, and shall not ordinarily be made later
than 60 days after the plan's receipt of a request for
review, unless special circumstances (such as the need to
hold a hearing, if the plan procedure provides for a
hearing) require an extension of time for processing, in
which case a decision shall be rendered as soon as
possible, but not later than 120 days after receipt of a
request for review.
Id. s 2560.503-1(h)(1)(i). If the decision is not rendered
within the 120-day period, the claim is deemed denied on
review, see id. s 2560.503-1(h)(4), and the claimant may
"bring a civil action to have the merits of his application
determined, just as he may bring an action to challenge an
outright denial of benefits," Massachusetts Mut. Life Ins. Co.
v. Russell, 473 U.S. 134, 144 (1985). Delay in the processing
of an application or appeal does not, however, give rise to a
private right of action for compensatory or punitive relief.
See id.
The relevant regulations also provide that the notice re-
quired by section 1133 includes "appropriate information as to
the steps to be taken if the participant or beneficiary wishes
to submit his or her claim for review." 28 C.F.R. s 2560.503-
1(f)(4). Fortis never advised Heller of her right to appeal in
its denial letter. However, this would not necessarily render
summary judgment in favor of Fortis inappropriate given its
substantial compliance with section 503 of ERISA and its
accompanying regulations. See, e.g., Brehmer v. Inland Steel
Indus. Pension Plan, 114 F.3d 656, 662 (7th Cir. 1997); Kent
v. United of Omaha Life Ins. Co., 96 F.3d 803, 807 (6th Cir.
1996). Indeed, "when claim communications as a whole are
sufficient to fulfill the purposes of Section 1133 the claim
decision will be upheld even if a particular communication
does not meet those requirements. Kent, 96 F.3d at 807.
Here, before Heller filed her lawsuit, she was informed of her
right to appeal and that appeal proceedings were being
commenced. Fortis advised Heller through her present at-
torney on February 19, 1993, a month after sending the
termination later, that it would treat various documents sent
by her as an appeal. Thus, although the initial letter from
Fortis informing Heller of the denial of her disability benefits
did not conform to the requirements of the regulations, "the
procedures, when viewed in light of the myriad communica-
tions between claimant, her counsel and the insurer, [appear]
sufficient to meet the purposes of Section 1133 in insuring
that the claimant understood the reasons for the denial of
[her benefits] as well as her rights to review of the decision."
Id. at 807.
In any event, Heller now asserts that even if Fortis had
resolved her appeal, the established review process was es-
sentially meaningless because it consisted merely of the
claims adjuster's reconsideration of his own work. But we
have no occasion to determine whether Fortis' procedural
shortcomings violated 29 U.S.C. s 1133 and its attendant
regulations, and, if so, what remedy might be appropriate,
because Heller never attempted to make use of Fortis' appeal
process. While the insurer offered to treat Heller's corre-
spondence as an appeal of its denial of benefits, Heller did not
wait to see how the appeal would be resolved. Instead, she
filed her lawsuit two days after Fortis' February 19th offer.
Not only did she shortcut any review that might have oc-
curred, but she even asserted in her complaint that she had
exhausted her administrative remedies. Under the circum-
stances, she cannot establish that she was denied "a fair
opportunity for review" of her claim because she never gave
Fortis a chance to complete its review. Id. at 807. Nor can
she show that Fortis' processing of her claim denial preju-
diced her because she immediately filed suit against the
insurer. See Hancock v. Montgomery Ward Long Term
Disability Trust, 787 F.2d 1302, 1308 (9th Cir. 1986). By
doing so before exhausting the remedies provided by her
insurer, Heller's position now is no different than it would
have been if Fortis had neglected to process her correspon-
dence as an appeal. See 29 C.F.R. s 2560.503-1(h). In
either event, her next move would have been to file suit in the
district court. See Massachusetts Mut. Life Ins. Co., 473
U.S. at 144.
B.
Under the Occupation Test in Fortis' plan, insureds are
considered "totally disabled" (after the first five years of
disability) if they are "unable to perform the material duties
of any and every gainful occupation or employment for which
the person is or becomes reasonably fitted by education,
training or experience." Heller contends that there was a
genuine issue of material fact whether she was unable to
perform the duties of any gainful occupation and whether
there were any job opportunities for which she was reason-
ably fitted.
Heller's examining and treating physicians agreed, howev-
er, that she was able to work in 1992, and she presented no
evidence to contravene the Crawford report that jobs were
available to her. "Courts review ERISA-plan benefit deci-
sions on the evidence presented to the plan administrators,
not on a record later made in another forum," Block v. Pitney
Bowes Inc., 952 F.2d 1450, 1455 (D.C. Cir. 1992), and all the
evidence available to Fortis when it made its claim decision
suggested that Heller was able to work as a medical matter,
at least in a sedentary occupation. Not only had three
outside medical examiners concluded that she was not dis-
abled, but her own attending physician, Dr. Drapkin, also
advised Fortis that Heller was ready for "light work duty"
and "sedentary work." Because Dr. Drapkin's January 15,
1997, declaration that he had always thought his patient was
disabled, regardless of his earlier conclusions as to her suita-
bility for sedentary work, was unavailable to Fortis before it
denied Heller's claim for further benefits on January 15, 1992,
that declaration may not be considered now. See id. Hence,
there is no genuine factual dispute about the medical conclu-
sions available to Fortis at the time it terminated Heller's
benefits. Those medical conclusions unanimously indicated
that Heller was capable of some work.
Nor was there a genuine question of material fact as to the
availability of employment for which Heller would have been
"reasonably fitted by education, training or experience," as
required by the plan. Heller was confronted with Crawford's
vocational assessment indicating that she was a good candi-
date for employment in inside sales because she had transfer-
rable skills, a college education, and job experience. Heller
presented Fortis with nothing to challenge that assessment
other than speculation that it would be difficult at her age for
her "realistically" to get one of the inside sales jobs, and that
the jobs might pay minimum wage. Her evidence that none
of the several jobs listed by Crawford were still available one
year later did not undermine Crawford's assessment; certain-
ly it did not indicate that similar jobs were unavailable.
Therefore, although "the burden of proof is upon the insured
as to questions of coverage and disability," 20 John Alan
Appleman & Jean Appleman, Insurance Law and Practice
s 11376 (1980) (footnote omitted) (citing cases); cf. Perdue v.
Burger King Corp., 7 F.3d 1251, 1254 n.9 (5th Cir. 1993),
Heller did not provide Fortis with evidence suggesting that
she had "an impairment which would prevent [her] from
performing some identifiable job," See McKenzie v. General
Telephone Co., 41 F.3d 1310, 1317 (9th Cir. 1994). Heller did
not present any evidence to Fortis sufficient to establish her
right to benefits under the company's Occupation Test.
Nor can Heller prevail under the alternative Earnings
Test. Under that test, an insured who "is not able, because
of Injury, sickness or pregnancy, to earn more than 50% of
his or her Monthly Earnings" before going on disability is
entitled to benefits. The most important part of this defini-
tion for Heller is the phrase "able ... to earn." Crawford's
analysis of Heller's employment prospects concluded that she
was qualified for a number of available inside sales jobs, and
listed a number of examples paying base salaries between
$20,000 to $35,000 per year. The wages from these jobs
exceeded 50% of the roughly $35,000 that Heller made when
she was working for McCue prior to her disability.3 Again,
Heller has presented no evidence to show that she could not
find a job that would pay at least 50% of the salary she
earned at McCue, despite her obligation to do so. See Fed. R.
Civ. P. 56(e).
__________
3 Indeed, under Fortis' interpretation of its Occupation Test, a
"gainful" occupation is an occupation that pays at least the amount
of the gross monthly long-term disability benefit that the claimant
receives from Fortis--in Heller's case, $1801 per month. Thus,
when it denied Heller's claim under that test, Fortis necessarily
found that Heller could earn at least $1801 per month, which is
more than one half of Heller's average monthly salary at McCue
and thus sufficient to satisfy the Earnings Test. As noted, Heller
has not presented evidence sufficient to sustain a claim against
Fortis' application of its Occupation Test.
For these reasons, the district court properly concluded
that the medical and occupational evidence before Fortis at
the time of its decision to terminate benefits was sufficient to
support that decision. Because Heller has presented no
contradictory evidence, we need not reach other disputed but
nonmaterial issues of fact, such as whether Heller actually
was working for her husband's law firm, in order to affirm
the grant of summary judgment.
III.
This circuit has not previously decided whether there is a
cause of action for restitution under ERISA. Fortis filed its
counterclaim for restitution pursuant to ERISA's provision
that "[a] civil action may be brought ... by a ... fiduciary
(A) to enjoin any act or practice which violates any provision
of this subchapter or the terms of the plan, or (B) to obtain
other appropriate equitable relief ... to redress such viola-
tion." 29 U.S.C. s 1132(a)(3). As the Third Circuit conclud-
ed in Luby v. Teamsters Health, Welfare & Pension Trust
Funds, 944 F.2d 1176 (3d Cir. 1991), "[a]lthough ERISA itself
does not explicitly provide a statutory right of restitution, it is
clear that Congress intended federal courts to fashion a
federal common-law under ERISA, and this permits applica-
tion of a federal common-law doctrine of unjust enrichment."
Id. at 1186. A number of courts have created an unjust
enrichment remedy, permitting ERISA fiduciaries such as
Fortis to seek restitution against third parties who wrongly
or mistakenly receive money to which the plan is entitled.
See, e.g., Blue Cross & Blue Shield of Ala. v. Weitz, 913 F.2d
1544, 1548-49 (11th Cir. 1990); Provident Life & Accident
Ins. Co. v. Waller, 906 F.2d 985, 994 (4th Cir. 1990). But see
NYSA-ILA GAI Fund v. Poggi, 617 F. Supp. 847, 849
(S.D.N.Y. 1985). As the district court correctly concluded,
this furthers the goal of ERISA to safeguard "the corpus of
funds set aside" under the plan.4 Luby, 944 F.2d at 1186; see
__________
4 While Luby itself is different from the instant case to the
extent that it involved a mistaken payment to a nonbeneficiary
also Printing Industry of Ill. Employee Benefit Trust v.
Stout, 157 F.R.D. 448, 451 (N.D. Ill. 1994) ("[D]enial of a
federal cause of action would ultimately undermine ERISA's
goal of expanding pension and welfare benefit plan cover-
age."). Accordingly, we hold that Fortis could properly seek
restitution under ERISA.
The question remains whether the district court properly
granted Fortis restitution. Here, the scope of our review is
more limited than with regard to whether restitution was a
possible remedy; we only review awards of restitution for
abuse of discretion. See United States v. Rezaq, 134 F.3d
1121, 1141 (D.C. Cir. 1998). Generally, restitution is an
appropriate remedy where there is unjust enrichment:
three elements encompass the equitable remedy of un-
just enrichment and quasi-contract: the plaintiff must
show that (1) he had a reasonable expectation of pay-
ment, (2) the defendant should reasonably have expected
to pay, or (3) society's reasonable expectations of person
and property would be defeated by nonpayment.
Waller, 906 F.2d at 993-94 (citing Colin Kelly Kaufman,
Corbin on Contracts s 19A, at 50 (Supp. 1989)). Heller
contends that the restitution ordered by the district court was
unfair essentially because she had not been notified that the
company would seek restitution until it terminated her pay-
ments. Her plan did not specifically provide for restitution
and Fortis never expressly stated that its payment of the
benefits after the five year term expired was conditional. Yet
the district court was presented with evidence that Fortis had
previously notified Heller in writing that its payment of
benefits after the first five years could not be deemed an
admission of liability. Reasonably viewed, Fortis thereby
notified Heller that it expected reimbursement for benefits
for which she was not eligible. It is true that the plan did not
expressly provide for restitution, but nothing in the plan
__________
instead of a disputed payment to a beneficiary, the principle re-
mains the same. In both cases the recipient of the money receives
benefits to which she is not entitled, a cost unfairly borne by the
other members of the plan. See Weitz, 913 F.2d at 1548.
prohibited such recovery by Fortis. While it might well be
preferable for the plan to be explicit on the point, notice by
letter may well afford more effective notice than a provision
buried in a lengthy policy statement. The district court,
therefore, did not abuse its discretion in ordering restitution
in such circumstances.
Accordingly, we affirm the judgment.