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The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 22 attorneys engaged exclusively in employee benefits, estate planning and employment law. Five of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.






Contact Info

The Wagner Law Group


Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418


New York Office

Tel: (716) 650-5987

Fax: (716) 633-0301

333 International Drive

Suite B-4

Williamsville, NY 14221


San Francisco Office

Tel: (415) 625-0002

Fax: (415) 829-4385

315 Montgomery Street

Suite 902

San Francisco, CA 94104







November 1, 2012 

 State and Federal Law Alert




Court Finds Insurer is Proper Party in ERISA Benefits Lawsuit




 A federal district court in the Seventh Circuit was recently asked to decide whether a participant in an ERISA-covered employee benefit plan could sue an insurer directly to recover benefits. According to certain federal courts, only employee benefit plans, and not insurers, may be subject to lawsuits for employee benefits. This rule is based on Section 502(d)(2) of ERISA, which provides that any money judgment against an employee benefit plan is enforceable only against the plan.


In Ayotte v. Prudential Insurance Co. of America, a plan participant filed a lawsuit against the insurer of his employer's ERISA-covered, long-term disability plan after the insurer denied his claim for benefits. The insurer moved to have the case dismissed, citing controlling precedent within the Seventh Circuit, which, it argued, requires lawsuits for the recovery of benefits to be brought against employee benefit plans, not insurers.


The court noted that while lawsuits of this nature generally must be filed against the plan, there is an exception to this rule. Specifically, the court acknowledged that a participant seeking to recover ERISA-covered benefits may file a lawsuit against a party other than the ERISA plan where: (i) that party is "closely intertwined" with the plan; and (ii) the party determines eligibility for benefits and makes benefit payments.


In reviewing the facts of this case, the court found that the controlling plan documents refer to the insurer and the plan interchangeably. Moreover, the court determined that the insurer: (i) issued the contract containing the terms of the plan; (ii) had sole discretion to interpret those terms and to determine eligibility for benefits; and (iii) was obligated to pay benefits under the plan. The court concluded the insurer was closely intertwined with the plan and, thus, was the logical defendant in the participant's lawsuit. Therefore, the court denied the insurer's motion to dismiss the lawsuit.


While the court allowed the case to proceed, it noted that the participant may deem it prudent to amend his complaint to include the plan sponsor as a defendant in order to secure relief should he prevail on his claims. The court reasoned that the participant's case hinged on "rather murky" case law and that its interpretation of the exception to Section 502(d)(2) was in direct conflict with other district courts within the Seventh Circuit.


Ayotte highlights the lack of clarity that still exists as to whether plan insurers are proper defendants in ERISA litigation. In fact, very few federal appeals court decisions have squarely addressed this issue. Thus, an employer acting as the ERISA plan sponsor and administrator for its insured plan will generally find itself a party to a participant's lawsuit seeking to recover benefits. In such situations, it is essential that the insurer is also made a party to the lawsuit to enforce the insurer's obligations under the plan.




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This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.