Plan Denies Benefits Based on Claimant's Criminal Activity
This unusual ERISA case addressed whether the claimant could recover disability retirement benefits when his injuries occurred while he was allegedly engaged in a criminal enterprise.
The claimant, Byron Boyd, formerly an employee of the United Transportation Union (UTU), sought the disability retirement benefits from the UTU plan due to a number of conditions, including hypertension, diabetes, high cholesterol, arrhythmia, and other stress-related problems. The parties did not dispute his underlying disability or inability to perform his job since 2004.
In 2003, however, a grand jury indicted Boyd for crimes involving mail fraud, wire fraud, racketeering, bribery, and embezzlement. He pleaded guilty to RICO conspiracy, which took place between 1994 and 2003 and generated illegal income. Boyd apparently “conspired with others to dominate and control the UTU and its designated legal counsel (“DLC”) program through the commission of various crimes.”
In 2003, Boyd’s doctor noted that Boyd was considering leaving work because of his health problems and high stress levels. Boyd did stop working and sought disability benefits from the Railroad Retirement Board, a prerequisite to receiving disability retirement benefits under the UTU plan. The Railroad Retirement Board granted Boyd’s disability status and determined that Boyd had a right to disability retirement benefits under the UTU plan.
The UTU Summary Plan Description contained the following provision: “You will be eligible to receive a Disability Retirement Benefit if you have completed at least 10 Years of Service and you become disabled, provided that your disability is not due to a deliberate self-inflicted injury or injury incurred while you were engaged in a willful criminal enterprise.” The plan itself included a broader description of the exclusion for injuries “contracted, suffered, or incurred” while engaged in a willful criminal enterprise.
The UTU Pension Administrative Committee applied the plan language and denied benefits to Boyd, determining that he “probably contracted and/or incurred [his health] condition(s)” while engaged in a willful criminal enterprise. Boyd eventually filed suit, and both sides moved for summary judgment.
In an earlier ruling, the federal court held that the language of the plan and SPD were materially different and that the Committee erred when it applied the plan language instead of the SPD language that was more favorable to Boyd. Applying a de novo review of the benefits decision, the court first found that a temporal relationship existed between Boyd’s health problems and his criminal activity. The court concluded that Boyd was entitled to his benefits unless there was a causal connection between his disability and his criminal enterprise. After analyzing the facts, the court held that a reasonable jury could find that the excessive stress in Boyd’s job resulted from his criminal enterprise and subsequent indictment, plea negotiations, and future in prison. Thus, due to the material questions of fact involved, the court refused to grant summary judgment to either side. Despite the court’s references to a reasonable jury, I assume that Boyd’s claims were governed by ERISA. In analyzing the plan language, the court stated that it “interprets terms in an ERISA plan in an ordinary and popular sense as would a person of average intelligence and experience.
The cite is Boyd v. United Transportation Union Insurance Assoc., 2006 WL 2350175 (W.D.