Exhaustion Of Administrative Remedies Not Required When Claimant Reasonably Relied On Administrator’s Statement That He Was Not Required To Exhaust His Remedies Before Filing A Lawsuit

December 28th, 2008 Comments Off on Exhaustion Of Administrative Remedies Not Required When Claimant Reasonably Relied On Administrator’s Statement That He Was Not Required To Exhaust His Remedies Before Filing A Lawsuit Keller v. Albertsons, Inc. Employees’ Disability Benefits Plan, 589 F. Supp. 2d 1205 (C.D. Cal. 2008) Initially approving plaintiff’s claim for LTD benefits under the “own occupation” definition of disability, after two years, plaintiff’s claim was reviewed under the “any occupation” standard, and his claim for benefits was terminated. In a letter sent to the plaintiff, the Plan stated “the final assessment indicates you are capable of performing sedentary work, therefore you no longer meet the Plan’s definition of ‘Total Disability.’” Although this letter informed plaintiff that he had the right to bring a civil action, the letter failed to mention his right to an administrative appeal. After plaintiff filed a civil suit under ERISA, the Plan sought to bar recovery on the grounds that the he did not exhaust his administrative remedies. The Court rejected this argument, finding that an ERISA claim is not barred by the doctrine of exhaustion if the reason the claimant failed to exhaust was that he reasonably believed, based on communications from the Plan, that he was not required to exhaust his administrative remedies before filing a lawsuit. Further, while noting that the plan conferred discretion the claim administrator, the Court explained that because the claim administrator’s procedural irregularities (i.e., the misinformation regarding the availability of an administrative appeal) prevented a full development of the Administrative Record, plaintiff was allowed to submit evidence that he was denied to opportunity to submit on appeal – here, the opinion of a vocational expert – and the underlying claim decision would be reviewed de novo. After reviewing the Administrative Record and the additional evidence, the Court found that the plaintiff was totally disabled under the Plan’s “any occupation” definition.