New 11th Circuit Fiduciary Duty Case

The scope of ERISA’s fiduciary duties was recently analyzed by the Eleventh Circuit in Cotton v. Massachusetts Mutual. The plaintiffs in Cotton accused the carrier of misrepresentation, fraud and promissory estoppel and sought equitable relief requiring that certain life insurance policies perform as described in a whole life policy presentation. The District Court in this case, while rejecting a benefits claim as well as promissory estoppel and individualized fiduciary breach relief, held that the defendants had violated ERISA fiduciary duties entitling the plan to overall relief. The Circuit Court’s reversal focused on the insurer’s role as an alleged fiduciary. Although the carrier had conceded it was a fiduciary for the purpose of making death benefit determinations, it maintained that the plaintiffs had failed to establish that it was a fiduciary for any other purpose. The court agreed. The court noted that “simply urging the purchase of (insurance) products does not make an insurance company an ERISA fiduciary with respect to those products.” Thus it is important to consider not only the scope of ERISA’s fiduciary duties but also the role of the players in a plan, with an emphasis upon whether they truly perform fiduciary duties.