:: A Concise ERISA Counterclaim Review Checklist

:: A Concise ERISA Counterclaim Review Checklist

July 15, 2008 · Posted in Discussion Board

From a survey of the post-Sereboff counterclaim cases, here’s a list of key recurring issues:

#1 Basis for counterclaim jurisdiction:

  • claim for money damages under the policy (prohibited),
  • based on § 503(a)(3) of ERISA (subject to Sereboff/Knudson requisites, or
  • unjust enrichment (federal common law)


#2 Nature of claim – ranging from a contract-based offset the simplest case for the counterclaim plaintiff, to a judicial claim for recoupment for alleged overpayment, which tends to present more issues

#3 Standard of review – e.g., see :: Claims Manual Policies Rejected As Irrelevant In Disability Offset Case, where the standard of review permitted application of the doctrine of contra prefereundum:

In addition, where a provision in a disability policy is ambiguous, the doctrine of contra prefereundum is applicable if the policy is subject to a de novo review by the court, as in this case. Miller v. Monumental Life Ins. Co., 502 F.3d 1245, 1253 (10th Cir.2007). Application of the doctrine provides for construction of the ambiguous language against the insurer. Id. at 1254-55.

#4 Plan/policy language on which claim is based – as noted in #3, this issue can be conflated with that of the standard of review

#5 Necessity for identification of fund/requirement of tracing – as previously noted, these issues have been confused, with some decisions implying that an equitable lien by agreement suffices to eliminate the need to identify a fund to which the lien may attach

#6 Potential application of 42 U.S.C. § 407. See, Mote v. Aetna Life Ins. Co.435 F.Supp.2d 827 (N.D.Ill.) (June 26, 2006) (holding that 42 U.S.C. § 407 prevented carrier’s counterclaim to Social Security benefits; but see, Smith v. Accenture U.S. Group Long-Term Disability Ins. Plan 2006 WL 2644957 (N.D.Ill.) (September 13, 2006) (”respectfully disagrees with Mote“)

#7 The application of what I describe as the “offset defense” :: Using The Offset Defense In Recoupment Cases

#8 Is the plan fiduciary counterclaim subject to exhaustion requirements?

Note – A forum addressing offset and recoupment issues has been created on erisaboard.com – several attorneys involved in the forum have
been counsel in seminal cases discussed in my posts on these issues