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Sepulveda-Rodriguez v. Metlife Group, Inc.

United States District Court, D. Nebraska

December 28, 2017

METLIFE GROUP, INC., a New York Corporation; METROPOLITAN LIFE INSURANCE COMPANY, a New York Corporation; and FORD MOTOR COMPANY, a Delaware Corporation; Defendants.



         This matter is before the court on the parties' cross motions for summary judgment, Filing Nos. 56, 58 and 65.[1] Although styled as cross-motions for summary judgement this is an action for judicial review of an administrative determination denying benefits under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. The plaintiff alleges defendants wrongfully denied her claim for life insurance benefits under a policy provided by late husband's employer. She seeks a reversal of that determination. The defendants move for a judgment affirming the decision.

         The plaintiff alleges five claims. She first seeks the statutory penalty for failure to provide plan documents, specifically, the Summary Plan Description ("SPD") under 29 U.S.C. § 1132(c) from defendant Ford Motor Company.[2] Filing No. 32, First Amended Complaint at 5. She next seeks an award of benefits pursuant to 29 U.S.C. §1132(a)(1)(B) from defendants MetLife Group, Inc. and Metropolitan Life Insurance Company ("Metropolitan").[3] The plaintiff also asserts three claims for equitable relief under 29 U.S.C. § 1132(a)(3) against both Ford and Metropolitan and seeks relief in the nature of surcharge, reformation and equitable estoppel.

         In its motion, Met Life seeks dismissal of the plaintiffs claims. It asks the court to affirm Metropolitan's determination. Metropolitan argues its claim determination was not an abuse of discretion. It also contends that the plaintiffs breach of fiduciary duty claims are improper under ERISA and are barred by the decedent's allegedly inequitable acts.

         Defendant Ford seeks dismissal of the plaintiffs penalty claim as well as her claims for breach of fiduciary duty. Ford argues it substantially complied with ERISA requirements to provide the SPD and contends that because the plaintiff has a remedy for the benefits she seeks under Section (a)(b)(1), there is no need for a duplicative equitable claim.

         The plaintiff seeks a summary judgment against defendant Ford for damages in the amount of the statutory penalty for failure to timely provide plan documents. Further, she asserts she is entitled to judgment in her favor on her claims for benefits and breaches of fiduciary duty under 29 U.S.C. §§ 1132 (a)(1)(B) and (a)(3). She urges the court to reverse the decision denying the plaintiff's claim for optional life insurance benefits.

         I. FACTS

         A. Background

         The facts are gleaned in part from the parties' statements of undisputed facts, the administrative record and affidavits submitted in connection with the motions. See Filing No. 53-1, Administrative Record (Restricted) ("Admin. R."); Filing No. 57, Ford's Brief at 5, 7-14; Filing No. 60, Metropolitan Brief at 2-8; Filing No. 67, Plaintiff's Brief at 1-5; Filing No. 68, Ford Reply Brief at 3-4; Filing No. 69, Metropolitan Reply Brief at 3-4; Filing No. 70, Plaintiff's Reply Brief at 1-4. The administrative record filed by Metropolitan includes a copy of the Ford Motor Co. Life and Accidental Death and Disability Policy ("the Plan") and screenshots of the online version of the Summary Plan Document ("SPD") for the Plan. See Filing No. 53-1, Adm. R. at 120-141. In addition to the Plan documents, the record contains 27 pages of Metropolitan internal records, numerous medical records authorization forms, the decedent's medical records dating back to 2008, and correspondence to and from the plaintiff's counsel.[4] Id. 142-169.

         It is undisputed that Ford Motor Company is the Plan Sponsor and Plan Administrator of the Plan. Metropolitan is the insurer and claim administrator under the Plan.[5] The parties agree Metropolitan issued Group Insurance Policy Nos. 113729-1-G, 113729-G and 113729-16-G to Ford Motor Company. Ford's SPD states that: "The Plan Administrator and Metropolitan have discretionary authority to construe, interpret, apply and administer the Plan. Decisions of the Plan Administrator and Metropolitan are final and conclusive, and are only subject to the arbitrary and capricious standard of judicial review." Filing No. 53-1, Admin. R. 138 & 139. Ford provided Basic Life Insurance to employees at no cost to them, but employees had to pay the cost of any Optional Life Insurance they elected. Id. at 123.

         The plaintiff is the widow of Jose Monarrez ("the decedent"), who died on June 4, 2015, of "hypertensive and atherosclerotic heart disease." Filing No. 53-1, Admin. R. at 188. The decedent was employed by Ford as a customer service representative beginning on October 1, 2013. Monarrez enrolled in the Plan when he first became eligible, and benefits were effective on or after November 1, 2013. He requested both basic life insurance coverage in the amount of one and a half times his base annual earnings of $37, 077.60 (or $55, 616.00) and optional employee life insurance coverage in the amount of two and a half times his base annual earnings, which amounted to $92, 694. Id. at 186-87, 504. After he submitted his application for Optional Life Insurance, premiums were withheld thereafter by Ford and forwarded to Metropolitan. Id. at 123-24.

         After Monarrez's death, Metropolitan paid the basic life benefit of $55, 616 to the plaintiff, his widow. Id. at 144. Metropolitan denied the plaintiffs claim for optional life insurance benefits. Id. at 153, 414-15.

         With respect to optional life insurance, the Plan provides:

         If You complete the enrollment process when first eligible for Optional Life Insurance and Optional Accident Insurance under the Flexible Benefits Plan, such insurance will take effect as follows:

• for any amount which You are not required to give evidence of Your insurability, such insurance will take effect on the later of the date You become eligible for such insurance and the first day of the calendar month following the date You complete the Enrollment Process, if You are Actively at Work on that date. You are not required to give evidence of Your insurability for Optional Accident Insurance.
• for any amount for which You are required to give evidence of Your insurability and We determine that You are insurable, such insurance will take effect on the first day of the calendar month following the date We approve Your evidence of insurability, if You are Actively at Work on that date.

Id. at 57 (emphasis in original). The Plan defines Proof as follows:

Proof means Written evidence satisfactory to Us that a person has satisfied the conditions and requirements for any benefit described in this certificate. When a claim is made for any benefit described in this certificate, Proof must establish: the nature and extent of the loss or condition; Our obligation to pay the claim; and the claimant's right to receive payment.
Proof must be provided at the claimant's expense.

Id. at 54.

         The SPD provides that employees are eligible to enroll in optional life insurance on the date of hire or rehire and "Coverage is effective the first of the month following enrollment date or the first of the month following approval of Statement of Health, whichever is later." Id. at 123. The coverage effective date the first of the month following approval of a Statement of Health form (if required). Id. Proof of good health for optional life insurance is described as follows:

Proof of Good Health - Optional Life Insurance
If you elect coverage or increase your coverage when first eligible, during annual enrollment or due to a Qualified Event, you must provide proof of your good health before the election or increase will be effective.
The process of providing proof of good health involves answering five questions about your health status. Depending on your answers to these questions, you may also need to complete a more detailed questionnaire (i.e., a Statement of Health form). In addition to a Statement of Health, medical records or a physical examination may be required at your expense. Any life insurance elections that require proof of good health will not go into effect until evidence of insurability is received and approved by MetLife. MetLife makes all decisions regarding approvals.

Id. at 125. Neither insurability, good health, nor statement of health are defined in the Plan documents.

         The plaintiff filed a claim under the policy on September 21, 2015. Id. at 189-90. Metropolitan responded with a letter stating an investigation was necessary with respect to the claim for optional benefits. Id. at 195, 207. Metropolitan also contacted Ford's third-party administrator for confirmation of the decedent's enrollment in the Plan. Id. at 193-98. The response indicated that the optional life coverage was elected during the 2013 new hire enrollment. Id. at 193. The record contains several screenshots of computer images with typed notations showing that Monarrez was a "new-hirerehire eff 10-1-13, " and had Optional Life coverage effective on November 1, 2013. Id. at 200. Another screenshot indicates an annual enrollment effective Januaryl, 2015. Id. at 199.

         Thereafter, internal records show the following task was assigned to Metropolitan employee Edward Sullivan, who is identified in the record as a Senior Client Services Consultant:

Insured enrolled in Optional Life coverage as new hire on 11/1/2013 for 2.5 of base annual earnings ($92, 694.00). Per Plan Master under [Medical Evidence of Insurability or] MEOI: New hire participants who enroll initially eligible are subject to MEOI. All amounts require medical questions. Can you please provide me with his questionnaire or confirm that he answered No to all medical questions.

Id. at 506. The reason for the request is shown as "MEOI Provisions Need assistance Obtaining enrollment History from Employer." Id. On October 8, 2015, Sullivan emailed the following to Terrence Davis and Robert Skulnik:

We suddenly seem to have more frequent inquiries from our group life claims office. This one is regarding JOSE L MONARREZ, SSN [redacted], who died on June 4, 2015. The claim amount we need more information on is $92, 694.00 of Optional Life Insurance that was effective November 1, 2013.
Can one of you provide me with a screen print of the enrollment history and the answers to the five medical questions? With this being within the two-year contestability period, we'll need his responses to the five medical questions he should have answered at the time of his enrollment. If you provide this in the format of an Excel file, please include the questions, answers, the employee's name, and the date/time of the web transaction. We need all of this information included for the purpose of documenting the claim file.

Id. at 239 (redaction added). Rob Skulnik, Client Service Manager, HR Outsourcing Solutions, Xerox HR Services, LLC, responded that "This [participant] made this election as a new hire back in 2013. He was not required to answer the questions. Do you want a screen shot of that election?" Id. at 205. The following day, Sullivan again emailed Skulnik, asking him to double check the new hire enrollment for the medical questions. Id. at 204. After several more requests for the information, Skulnik responded "We have no record of this [participant answering the EOI questions." Id. at 203. On October 19, 2015, Sullivan again emailed Skulnik asking for information. Id. at 202. Skulnik replied "Ed, we are still researching into further but this appears to be an isolated case and our research so far shows the questions were asked but not recorded in our system." Id.

         Internal records also contain screenshots headed "MetLife Life Claim Request Entered" and additional notations indicating "WebMaker - Application" and a web address. Id. at 500-507. Those records and computer generated notices of comments to workflow show a Claim Inquiry was completed on October 15, 2015 as follows: "The [Third Party Administrator or] TPA responded via email that the medical questions were not asked when this person enrolled as a new hire. The GLIF plan is correct - MEOI is required for new hire enrollments and the questions should have been asked. Please see attached[, ]" apparently referring to the screenshots set out above. Id. at 198, 507.

         Notes created on October 21, 2015 by Edward Sullivan state:

The employer's TPA [third party administrator] has indicated they are still researching the case further but this appears to be an isolated case and their research so far shows the questions were asked but not recorded in their system. In order for the coverage to go into effect, the TPA states their programming requires "no" responses to all questions; otherwise, coverage would have been pended for MetLife approval of a SOH. Please see the attached email exchange.

Id. at 505. Notes created by Tamara Wurz, identified as a Life Claim Examiner, to Edward Sullivan dated November 30, 2015, state:

Would you please check to see if they are able to provide us with evidence of the data that they do have-is there something showing that the 5 medical questions had been asked but the answers not recorded? also, can they show us an example of an enrollment where the answers to the medical questions were recorded so that we could compare?"

Id. at 503. An email dated December 1, 2015, from Terrence Davis at Xerox HR Solutions to Edward Sullivan later states "I was able to find some more info on this. The election was processed through a CSR via IVR enrollment. In the attached, I've highlighted the recorded questions and answers for optional life as of 11/5/2013." Id. at 234. The record contains no explanation of the meaning of those terms. Following that email, the administrative record contains a spreadsheet, a listing of questions-some incomplete, a sheet of computer data sets in columns and 27 separately listed date and time stamps each indicating "11/5/2013 7:17:59." Id. at 242-44.[6]

         On 12/07/2015, Sullivan states:

Upon further review, the TPA found the medical questions and answers had been recorded after all. I was informed that the person who handled the initial inquiry may not have been accessing the correct table to obtain the data. Please see the attached email. The Excel file provided has the questions in rows 20 -28 and the ...

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