Long-term disability (“LTD”) and life insurance benefit disputes under the Employee Retirement Income Security Act of 1974 (“ERISA”) frequently hinge on complex medical questions and policy interpretations. However, another layer of complexity arises when fiduciaries—such as plan administrators or employers—make misleading statements or omit material information about a participant’s benefits. The recent decision in Erban v. Tufts Medical Center Physicians Organization, Inc., 2025 WL 2319055 (D. Mass. July 23, 2024), offers a clear example of how courts are increasingly willing to allow claims of fiduciary breach and the equitable remedy of surcharge to proceed when plaintiffs plausibly allege that they were misled.

Background of the Dispute

Plaintiff Lisa Erban is the surviving spouse of Dr. John Erban, a respected oncologist and hematologist who dedicated over 30 years of service to Tufts Medical Center. Dr. Erban’s distinguished medical career ended abruptly on August 14, 2019, when he sought emergency medical care and was diagnosed with an aggressive and malignant brain tumor. He underwent emergency surgery the following day and began a medical leave of absence under the Family and Medical Leave Act. Due to the severity of his condition, Dr. Erban was unable to return to work, and Tufts formally terminated his employment on February 12, 2020. Tragically, Dr. Erban succumbed to his illness on September 2, 2020, at the age of 65.

This ERISA breach of fiduciary duty lawsuit arises from the denial of $801,000 in basic and supplemental life insurance benefits under a policy issued by Hartford Life & Accident Insurance Company through Tufts’ employee benefits plan. Ms. Erban sued three defendants: Tufts Medical Center Physicians Organization, Inc. (Dr. Erban’s employer); the named ERISA plan administrator, Tufts Medical Center Physicians Organization (“TMCP “); and Nicholas Martin, the Director of Human Resources at Tufts, who had direct communications with the Erbans concerning Dr. Erban’s employment benefits. Plaintiff’s main allegation was that Defendants breached their fiduciary duties under ERISA by failing to inform her that she could continue Dr. Erban’s group life insurance coverage after he stopped working due to illness. Had she known, she alleged, she would have taken the necessary steps to preserve his coverage through the final months of his life.

Defendants responded that they had no such duty because no continuation right existed under the Plan. Defendants filed a motion to dismiss the breach of fiduciary duty and equitable estoppel claims.

Fiduciary Status Under ERISA

The court denied in part the defendants’ motion to dismiss, allowing Plaintiff’s claims for breach of fiduciary duty and equitable estoppel to proceed. Specifically, Judge William G. Young found that TMCP’s and Martin’s alleged misrepresentations—particularly repeated statements that Dr. Erban was eligible for life insurance coverage—were sufficient to plausibly allege a fiduciary breach.

The court first addressed whether Defendants were fiduciaries and if they were, were they acting as fiduciaries when they misrepresented benefits. Under ERISA, individuals or entities may be deemed fiduciaries either by being explicitly named in the plan or functionally, based on their conduct. While plan administrators are typically named fiduciaries under 29 U.S.C. § 1102(a), courts recognize “functional fiduciaries” under 29 U.S.C. § 1002(21)(A) when a person exercises discretionary control over plan management or administration. As the court explained, a person may be a fiduciary “for some purposes and not for others.” This determination hinges on whether the person was performing a fiduciary function when taking the action at issue.

The court found that Nicholas Martin, Tufts’ HR Director, functioned as a fiduciary when he guided the Erbans through the life insurance benefits process. Despite Defendants’ argument that Martin’s role was purely ministerial, the court held that Martin “affirmatively assumed the role of guiding the Erbans,” provided forms, explained benefit options, and made representations about the impact of Dr. Erban’s employment ending. Because Martin knew about Dr. Erban’s medical condition and acted as the primary source of information about benefits, the court concluded he was acting as a fiduciary in those communications. As the court explained, quoting Varity Corp. v. Howe, 516 U.S. 489 (1996), fiduciaries may be liable when they mislead beneficiaries while “answer[ing] beneficiaries’ questions about the meaning of the terms of a plan so that those beneficiaries can more easily obtain the plan’s benefits.”

Breach of Fiduciary Duty

Plaintiff alleged that Defendants breached their fiduciary duties under ERISA by failing to inform her that she could continue Dr. Erban’s group life insurance coverage after he stopped working due to illness. Two Plan provisions controlled the question. First, the Continuation Provision specifies that coverage “can be continued by Your Employer beyond a date shown in the Termination provision, if Your Employer provides a plan of continuation which applies to all employees the same way.” Second, the Sickness or Injury Provision states in relevant part that if a participant is not working “due to sickness or injury, all of [his] coverages … may be continued: 1) for a period of 12 consecutive month(s) from the date [he was] last Actively at Work.” (Emphasis original)

Because Martin never informed the Erbans of the continuation option, including when Plaintiff specifically asked Martin if she could “just private pay” their current life insurance plan, the court held that:

Defendants breached their fiduciary duty to provide accurate and complete information. See Watson, 298 F.3d at 114 (explaining that in some circumstances, a fiduciary must “accurately convey material information to beneficiaries”); Brenner, 2015 WL 1307394, at *1 (same); see also In re Unisys Corp. Retiree Med. Benefit ERISA Litig., 57 F.3d 1255, 1264 (3d Cir. 1995) (recognizing a duty “not to misinform employees through material misrepresentations and incomplete, inconsistent or contradictory disclosures”).

The court then held that Section 1132(a)(3) permits ERISA plaintiffs to seek surcharge against a fiduciary. For these reasons, Ms. Erban successfully convinced the court that defendants breached their fiduciary duties to her and her late husband regarding the continuation and supplemental life insurance conversion claims, and that surcharge damages in the full amount of the policies was available to her to remedy this harm

Distinguishing Benefits Denial from Fiduciary Misconduct

What distinguishes Erban from more typical life insurance denials is the court’s acknowledgment that fiduciary breach claims serve a different purpose from benefit recovery claims. While Section 1132(a)(1)(B) focuses on enforcing the terms of the plan, Section 1132(a)(3) “provides equitable remedies for other forms of misconduct.” Here, Plaintiff’s fiduciary breach and estoppel claims were not based solely on the denial of benefits, but rather on affirmative misrepresentations made by TMCP and Martin.

Conclusion

Erban v. Tufts Medical Center Physicians Organization is a strong reminder that ERISA litigation is not limited to the plain terms of a benefits policy. Fiduciaries must act with care, clarity, and consistency when advising employees about benefit coverage. They have a duty to discuss conversion of the plans with plan participants and to make truthful statements about them. The failure to notify can be as legally potent as a failure to accurately represent. Missteps—even if well-intentioned—can expose them to liability beyond the underlying denial of benefits.

If you believe you were misled about your benefits coverage or have had a disability or life insurance claim wrongfully denied, McKennon Law has the experience and expertise to help you evaluate your ERISA rights and remedies.