Rhea was the beneficiary of an employee benefit plan who suffered injuries from medical malpractice. The plan covered some of her medical expenses, and, after she settled the malpractice claim, sought reimbursement.  Rhea refused to reimburse the plan, claiming that it did not have an enforceable written instrument.  The court, on report and recommendation of the presiding Magistrate Judge, held that the plan satisfied ERISA’s statutory requirements, ordered restitution, and awarded attorneys fees.  The U.S. Fifth Circuit affirmed:

“When the Plan paid Rhea’s medical expenses, its SPD was functioning as both an SPD and a written instrument. That is nothing peculiar: Plan sponsors commonly use a single document to satisfy both requirements, and courts have blessed the practice.”  In rejecting the participant’s argument that a separate document is required under the U.S. Supreme Court’s decision in CIGNA v. Amara, 563 U.S. 421 (2011), the Court noted that: “We are not grappling with a conflict between an SPD and a written instrument but, instead, are deciding whether an SPD can function as a written instrument in the absence of a separate written instrument.”

Most interestingly, the SPD at issue referenced an “official Plan Document” that does not exist. “Though we have never addressed this issue, at least one other circuit has held that an SPD that defers to a non-existent plan document can be enforced as the plan’s governing text…. Rhea has not presented evidence that defendants made intentional misrepresentations and has not cited any caselaw suggesting that an ERISA plan administrator breaches its duty of loyalty when it includes such an errant disclaimer somewhere in a plan document. Most importantly, and fatal to her position, Rhea has not demonstrated how this misrepresentation is material or detrimental to her interest. As the MJ observed, including the disclaimer in the SPD was ‘sloppy,’ but the disclaimer does not render the Plan’s terms unenforceable.”

Finally, the Court upheld the award of attorneys fees.  The Magistrate Judge considered each of the relevant factors, “including, most significantly, that Rhea was at least arguably acting in bad faith when she moved to deny the Plan a recovery to which it is contractually entitled”; and found that “the other factors generally favor a fee award to these defendants.”


Rhea v. Alan Ritchey Welfare Benefit Plan, No.16-41032, 2017 WL 2332538 (5th Cir. May 30, 2017).