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D&H Therapy Associates, LLC; Robin Dolan v. Boston Mutual Life Insurance Company

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Before Lynch, Chief Judge, Torruella and Stahl, Circuit Judges.

Both parties appeal from grants of summary judgment in this dispute concerning the benefit eligibility language of a long-term disability benefit plan regulated by the Employee Retirement Income Security Act (ERISA). Plaintiffs D&H Therapy Associates, LLC (D&H), and Robin Dolan appeal from a grant of summary judgment against their claims that Dolan was eligible for and entitled to benefits under the plan or, in the alternative, damages for fraud in the inducement. Defendant Boston Mutual Life Insurance Company (Boston Mutual), in turn, appeals from entry of summary judgment against its counterclaim that it is entitled to reimbursement for payments already made to Dolan, which it says were mistaken.

D&H obtained an ERISA plan from Boston Mutual in 2000. Under the plan, employees who suffer specified reductions in monthly earnings due to long-term disability are eligible for benefits. Dolan is both a part-owner and an employee of D&H. In 2001, she became physically unable to continue some of her tasks as an employee, which prompted a reduction in her monthly W-2 earnings. In 2002, she began receiving benefits under the plan. After a 2006 audit, however, Boston Mutual terminated the benefits and demanded Dolan return past payments. It told Dolan that she had failed to account for her non-salary income, including earnings from her ownership stake in D&H. With those ownership earnings included, Boston Mutual stated, Dolan’s monthly earnings had been higher than her pre-disability monthly earnings since 2002, and so she was not and had never been eligible for payments.

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