ERISA does not preempt a claim for Malicious Prosecution against UNUM in Florida, says a federal court. This is not a typical ERISA disability case. It does not involve the general question: Is the claimant disabled under the terms of the policy?
Instead, in this case, UNUM terminated the claimant, Ms. Johnson’s, disability benefits after being on claim for over five years. UNUM then filed an insurance fraud case with the State Attorney’s Office. Ms. Johnson was arrested, and a criminal investigation was conducted. It was determined that she did not commit insurance fraud.
Following the criminal investigation, she sued UNUM for breach of contract (for terminating her disability benefits) and for malicious prosecution (for UNUM's role in the criminal investigation). UNUM moved to dismiss the case. It argued that since the malicious prosecution claim relates to her disability claim, it is preempted by ERISA.
Ms. Johnson responded arguing that UNUM's actions caused issues unrelated to her disability such as mental anguish and loss of enjoyment. She argued that because of that it is not preempted by ERISA. It was her position that the relief sought is related to the tortious acts of UNUM . She is not seeking relief under the disability plan. The Court agreed.
This case raises an interesting issue in disability insurance cases. Insurance companies can be held accountable for its bad behavior outside the purview of ERISA. This is not common, but it is important to keep in mind that ERISA does not shield insurance companies from everything. In this case, the important factor was that the relief being sought did come from the disability plan thus it was not governed by ERISA.
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