By: Ian H. Morrison and Christopher M. Busey

While the debate over Amara and its implications continues, the Eleventh Circuit gave welcome ammunition to ERISA plan administrators and fiduciaries in a recent opinion. In Board of Trustees of the National Elevator Industry Health Benefit Plan v. Montanile, No. 14-11678 (Nov. 25, 2014), the court held that a summary plan description constituted a written instrument that sets out enforceable terms of an ERISA employee welfare benefit plan. The court affirmed the District Court of Southern District Florida’s grant of summary judgment for the Plaintiff-Appellee Board of Trustees.

Robert Montanile participated in the National Elevator Industry Health Benefit Plan, a jointly administered health and welfare plan. He was hit by a drunk driver and recovered $500,000 in a lawsuit against that driver. The Plan’s Board of Trustees sued to recover payments it had made for Montanile’s treatment for injuries suffered in the crash under subrogation and reimbursement clauses that appeared only in the Plan’s summary plan description.

Montanile argued that the reimbursement and subrogation provisions were unenforceable because they were not set forth in the formal plan documents and that equity did not permit the Plan to recover.  The Eleventh Circuit court of appeals disagreed.

The Eleventh Circuit first addressed Montanile’s contention that recovery was unavailable under ERISA § 502(a)(3), which permits only equitable remedies. He argued that an equitable lien or constructive trust were unavailable because he’d spent or dissipated the money received from the settlement.  Relying on another recent Eleventh Circuit case — AirTran Airways, Inc., v. Elem, 767 F.3d 1192 (11th Cir. 2014) — the court found that, because the settlement funds were “specifically identifiable” prior to the dissipation, the Board’s equitable lien remained intact.

The court then addressed ERISA’s elephant in the room. Montanile argued, relying on Amara, that the subrogation provision could not be enforced because it appeared only in the SPD. The court first rejected the argument that a document could not be both a written instrument that set forth the plan’s terms, as required by ERISA § 3(a)(1), 29 U.S.C. § 1102(a)(1), and a summary plan description, as required by § 102, 29 U.S.C. § 1022. On this point, the court specifically distinguished Amara. It observed that Amara held only that an equitable remedy — there, reformation of a plan — was not permitted under ERISA § 502(a)(1)(B). The Supreme Court’s holding thus had no bearing on Montanile’s case, in which the Board of Trustees sought relief under § 502(a)(3). The court also confronted the oft-repeated proclamation that an SPD “suggests information about the plan” and is “not itself part of the plan.” Although Amara precludes enforcement of SPDs “where the terms of that summary conflict with the terms specified in other, governing plan documents,” the Eleventh Circuit noted that the Supreme Court only rejected the proposition that SPDs “necessarily may be enforced . . . as the terms of the plan itself.” This “leaves open the possibility that terms in those summaries may, at times, be enforced, even though they are not always enforceable.”

Thus, because in this case the SPD was a plan document, the court found it enforceable. In fact, the court noted that ignoring the SPD would lead to an absurd result as the plan documents alleged to constitute all governing plan documents by Montanile did not “specify the basis on which payments are made to and from the plan,” as required by ERISA § 402(b), 29 U.S.C. § 1102. Those provisions existed only in the SPD. Thus, under his interpretation, “there would be no governing document that specifies Plan participants’ rights or obligations regarding benefits.” Accordingly, the Eleventh Circuit held that the SPD contained enforceable terms of the plan and affirmed the grant of summary judgment for the plan’s Board of Trustees.

The implications for this opinion are still unclear. This opinion follows decisions from other circuits that have similarly enforced terms in summary plan descriptions. For example, the Eighth Circuit recently found a grant of discretion to a claims administrator contained only in the plan’s SPD to be valid. See Prezioso v. The Prudential Insurance Company of America, 748 F.3d 797 (8th Cir. 2014). The Eleventh Circuit’s decision supports a more nuanced and pragmatic reading of Amara—one advanced by plan fiduciaries and administrators since Amara. While several circuits have gone the other way on this issue or have yet to weigh in, this decision may suggest that another Supreme Court showdown over ERISA plan documents is in the offing.