The widow of a Cleaver-Brooks Inc. employee has advanced in her legal proceedings aiming to compel the company to cover the attorney’s fees she faced when securing a $500,000 life insurance payout. The late employee had been diagnosed with brain cancer in May 2020. The couple had diligently collaborated to ensure that his life insurance coverage stayed active, however, they received “false and misleading information” from Cleaver-Brooks, which eventually led Reliance Standard to deny benefits, as laid out in the lawsuit details reported by Bloomberg Law.
In response, Mrs. Foughty engaged legal representation to litigate against Reliance and eventually succeeded in attaining the full amount covered under her husband’s policy along with interest. Following this, Mrs. Foughty initiated a lawsuit against Cleaver-Brooks, asserting that the company’s lapses resulted in her bearing “significant” attorney’s fees to secure her benefits.
Cleaver-Brooks, however, has contended that allowing Mrs. Foughty to seek equitable surcharge “will encourage fully insured ERISA plaintiffs in similar circumstances to first sue their plan’s insurer to recover their benefit and then proceed against their employer in a separate action to make up any difference in recovery.” Cleaver-Brooks’ argument did not persuade Judge Thomas W. Thrash Jr., who maintained that the company had not provided any legal authority that barred such a proceeding. The case, labeled as Foughty v. Cleaver-Brooks, Inc., is proceeding in the US District Court for the Northern District of Georgia.
Evans Warncke Robinson LLC represents the plaintiff, Mrs. Foughty, while Jackson Lewis PC is acting on behalf of Cleaver-Brooks.