Jerry Higgins v. Lincoln Electric Co.

• Court: Court of Appeals for the Sixth Circuit
• Decided: January 16, 2025
• Docket: 23-5862
• Status: Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 25a0020n.06

Case No. 23-5862

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT FILED Jan 16, 2025 KELLY L. STEPHENS, Clerk ) JERRY HIGGINS, ) Plaintiff-Appellant, ) ON APPEAL FROM THE UNITED ) STATES DISTRICT COURT FOR v. ) THE WESTERN DISTRICT OF ) KENTUCKY LINCOLN ELECTRIC COMPANY, INC., ) Defendant-Appellee. ) OPINION )

Before: SILER, CLAY, and READLER, Circuit Judges.

SILER, Circuit Judge. This appeal arises from an unfortunate set of circumstances: The

Lincoln Electric Company, Inc. (“Lincoln”) provided Jerry Higgins with a Benefit Election Form

suggesting that his annual long-term disability (“LTD”) benefits would total $92,260.80, only for

Higgins to discover after becoming disabled that the plan documents unambiguously capped those

benefits at $60,000. Although this discrepancy led Higgins to forgo supplemental disability

insurance, ERISA requires courts to enforce plan documents as written, and established precedent

demands that a plaintiff meet a heightened standard to prevail on an ERISA-estoppel claim when

plan terms are unambiguous. Because Higgins’s allegations do not satisfy several critical elements

of that heightened standard, the district court dismissed his claim under Federal Rule of Civil

Procedure 12(b)(6). We affirm.

I.

Higgins was employed by Lincoln as a sales representative and participated in its employee

welfare benefits plan, which included LTD benefits insured by Metropolitan Life Insurance No. 23-5862, Higgins v. Lincoln Electric Co., Inc.

Company (“MetLife”). Under the plan, eligible employees could elect between a “Core Plan” and

a “Buy Up Plan.” The Core Plan capped the monthly LTD benefit at 60% of the first $5,555 of

predisability earnings, up to $3,333 per month (approximately $39,996 annually), while the Buy

Up Plan capped it at 60% of the first $8,333 of predisability earnings, up to $5,000 per month

(approximately $60,000 annually). The group policy’s integration clause specified that it, along

with its exhibits, formed the “entire contract,” ensuring that only these unambiguous plan

documents could define the participants’ benefits.

On July 7, 2017, Lincoln provided Higgins with a Benefit Election Form indicating he

would receive $69,195.60 in “Basic Coverage” plus $23,065.20 in “Supplemental Coverage,”

totaling $92,260.80 per year in LTD benefits. Higgins alleges that he relied on this representation

and thus did not purchase any additional disability insurance coverage. In August 2017, after

Higgins became disabled and applied for LTD benefits, Lincoln informed him that his benefits

were limited to $60,000 per year under the plan’s unambiguous terms, not $92,260.80 as reflected

on the Benefit Election Form.

On July 11, 2022, Higgins filed suit asserting, among other claims, that Lincoln should be

estopped from denying him the higher benefits shown in the erroneous Benefit Election Form.

Lincoln moved to dismiss the action pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing

that the plan documents unambiguously capped Higgins’s LTD benefits at $60,000 annually and

that Higgins failed to state a plausible ERISA-estoppel claim as a matter of law. The district court

granted Lincoln’s motion, holding that because the plan terms were unambiguous, Higgins was

required to satisfy the heightened eight-element standard for ERISA-estoppel claims and that he

failed to plausibly allege several of these required elements.

2 No. 23-5862, Higgins v. Lincoln Electric Co., Inc.

II.

Higgins argues that the district court erred by applying the heightened eight-element test

for ERISA-estoppel claims triggered by unambiguous plan terms, contending instead that the plan

was ambiguous or that he satisfied the elements under the less demanding standard. ERISA

principles give primacy to written plan documents, requiring courts to enforce unambiguous terms

as written. See US Airways, Inc. v. McCutchen, 569 U.S. 88, 100–01 (2013); Sprague v. Gen.

Motors Corp., 133 F.3d 388, 403 (6th Cir. 1998) (en banc). When a plan’s terms are unambiguous,

a plaintiff asserting ERISA-estoppel must establish the five elements of equitable estoppel

recognized in Sprague and three additional elements set forth in Bloemker v. Laborers’ Loc. 265

Pension Fund Bloemker, 605 F.3d 436, 442–44 (6th Cir. 2010).

Higgins does not dispute that the official plan documents capped his LTD benefits at

$60,000 annually. Nor does he allege any plan ambiguity in his complaint. The Benefit Election

Form he received is not part of the official plan documents and cannot alter the plan’s clearly stated

benefit limits. See Sprague, 133 F.3d at 403; Crosby v. Rohm & Haas Co., 480 F.3d 423, 429 (6th

Cir. 2007). Because the plan terms are unambiguous, the heightened eight-element Bloemker

standard applies. See Bloemker, 605 F.3d at 444.

The eight elements require a showing of: (1) conduct or language amounting to a

representation of material fact; (2) awareness of the true facts by the defendant; (3) intent by the

defendant that the representation be acted upon; (4) unawareness of the true facts by the plaintiff;

(5) detrimental and justifiable reliance by the plaintiff; plus (6) a written representation; (7) plan

provisions which, although unambiguous, did not allow for individual calculation of benefits; and

(8) extraordinary circumstances. Id. at 442, 444; Sprague, 133 F.3d at 403.

3 No. 23-5862, Higgins v. Lincoln Electric Co., Inc.

Although Higgins adequately alleged a material misrepresentation by pointing to the

erroneous Benefit Election Form, he failed to plausibly allege several other required elements. He

did not plead facts showing that Lincoln knew the true facts and intended to deceive him or acted

with gross negligence akin to constructive fraud. See Zirbel v. Ford Motor Co., 980 F.3d 520, 525

(6th Cir. 2020); Crosby v. Rohm & Haas Co., 480 F.3d 423, 431 (6th Cir. 2007). Nor did he

plausibly allege that Lincoln intended him to rely on the misstatement or that Lincoln stood to gain

from such reliance. See Crosby, 480 F.3d at 427, 431.

Higgins also fails to show that he was unaware of the true facts in a manner that justifies

reliance. He had access to the plan documents, which clearly established a $60,000 yearly cap on

LTD benefits, making reliance on a contradictory Benefit Election Form unreasonable as a matter

of law. See Sprague, 133 F.3d at 404. For the same reason, he cannot demonstrate detrimental

and justifiable reliance on the Benefit Election Form. See id.

Although the misrepresentation was in writing, Higgins does not show that the

unambiguous plan terms prevented him from calculating his benefits. See Pearce v. Chrysler Grp.

LLC Pension Plan, 893 F.3d 339, 350 (6th Cir. 2018). Nor does he allege extraordinary

circumstances—such as affirmative misconduct or repeated assurances—that would override the

unambiguous plan language. See Bloemker, 605 F.3d at 439, 443–444.

Higgins claims the district court should not have applied the heightened standard or that he

met all elements even under that standard, but his arguments are conclusory and unsupported by

the factual allegations in the complaint. Because Higgins fails to plausibly satisfy multiple

essential elements under Bloemker, the district court correctly dismissed his ERISA-estoppel

claim.

4 No. 23-5862, Higgins v. Lincoln Electric Co., Inc.

The district court did not address whether Higgins’s claim was time-barred, noting it was

unnecessary given that his claim failed on the merits. We agree that there is no need to consider

the statute of limitations issue, as the failure on the merits fully resolves this appeal.

III.

For the foregoing reasons, we AFFIRM the judgment of the district court.