ERISA Interest Suit Back on Track

January 15, 2002 ( - An accounting company worker was right to go after ERISA-required interest on delayed disability payments, a federal appeals court has ruled.

 A three-judge panel at the Second US Circuit Court of Appeals threw out a lower-court decision, which dismissed plaintiff Helen Dunnigan’s lawsuit against MetLife.

“We agree with the district court that an award in such circumstances serves as an equitable make-whole remedy,” wrote appeals Judge Pierre N. Leval.

The appeals court also returned the dispute to US District Judge Shira Scheindlin to decide if it should be converted into a class action, according to the New York Law Journal.

Benefits Denied in 1994

Helen Dunnigan applied to MetLife for long-term disability benefits in July 1994, four months after she was diagnosed with Chronic Fatigue Syndrome. MetLife turned her down in November, a month after the required 90-day period for determining such benefits.

Dunnigan turned to the courts after the August 1995 benefits denial. In 1999, almost five years after she first applied for benefits, MetLife gave her a lump-sum payment without interest.

In the lawsuit, Dunnigan demanded the interest, saying it was part of the benefits rightly due her.

Scheindlin granted MetLife’s request to throw out the suit, saying that there was no fixed date when the payments were due because MetLife needed the time to assess her proof of disability.

The case is Dunnigan v. Metropolitan Life Insurance, 00-7399.