Owens v. Metropolitan Life Insurance Company
Filing
136
ORDER: Defendant Metropolitan Life Insurance Company's Motion forReconsideration or, in the Alternative, Motion for Certification for Interlocutory Appeal Under 28 U.S.C. § 1292(b) 111 is DENIED. Its Motion to Stay Class Certification Bri efing Deadlines 112 is DENIED as moot. In light of the filing of the Renewed Motion for Class Certification, the Clerk is DIRECTED to terminate the pending status of Plaintiff's original Motion for Class Certification (7]. Signed by Judge Richard W. Story on 01/11/17. (sk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
GAINESVILLE DIVISION
LAURA A. OWENS, individually
and on behalf of a class of all
others similarly situated,
Plaintiff,
v.
METROPOLITAN LIFE
INSURANCE COMPANY,
Defendant.
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CIVIL ACTION NO.
2:14-CV-00074-RWS
ORDER
This case comes before the Court on Defendant Metropolitan Life
Insurance Company’s Motion for Reconsideration or, in the Alternative,
Motion for Certification for Interlocutory Appeal Under 28 U.S.C. § 1292(b)
[111] and Motion to Stay Class Certification Briefing Deadlines [112]. After
reviewing the record, the Court enters the following Order.
Background1
This case arises out of Metropolitan Life Insurance Company’s
(“MetLife”) administration of life insurance death benefits paid on employee
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The Court recites the facts from its September 29, 2016 Order [110].
benefit plans. On April 17, 2014, Plaintiff Laura Owens, on behalf of herself
and of a class of all others similarly situated, brought this action pursuant to the
Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §
1001 et seq.
Plaintiff Laura Owens is the beneficiary of a life insurance policy that
provided $95,000.00 in coverage on her husband’s life (the “Policy”). (Def.’s
SOMF., Dkt. [76-2] ¶ 61.) Owens’s husband, Robert F. Owens, was employed
prior to his death on April 7, 2012 by CB Richard Ellis, Inc. and was a
participant in the CB Richard Ellis Group Insurance Plan (the “Plan”). (Pl.’s
SOMF, Dkt. [74-1] ¶ 1.) The Policy provides, “We will pay the Life Insurance
in one sum. Other modes of payment may be available upon request.” (Id. ¶
12.)
On or around May 21, 2012, CB Richard Ellis, Inc., submitted a claim
for life insurance benefits on Plaintiff’s behalf. (Id. ¶ 19.) MetLife approved
the claim and established a “Total Control Account” in Owens’s name (the
“TCA”).2 (Id. ¶ 20.) MetLife provided a book of blank drafts to Plaintiff,
2
“Total Control Account” is the trade name used by Defendant for what is
known in the life insurance industry as a “retained asset account.” (Pl.’s SOMF, Dkt.
[74-1] ¶ 21.)
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which allowed her to withdraw funds from the TCA in increments of $250 or
more. (Def.’s SOMF, Dkt. [76-2] ¶ ¶ 81–82.) The TCA accrued interest at a
rate tied to one of two indices; the rate fluctuated weekly but the annual
effective interest rate was no lower than 0.50%. (Id. ¶ 84.)
MetLife’s practice is to hold payable benefits in its own general account
until called upon to transfer funds to cover drafts drawn on Total Control
Accounts. (Id. ¶ 25.) This practice extended to the benefits paid on Plaintiff’s
claim. MetLife established a TCA for Ms. Owens, paying interest at the rate of
0.50%. (Pl.’s SOMF, Dkt. [74-1] ¶ 27.) The funds remained in MetLife’s
general account, earning interest for MetLife at a higher rate than that paid to
Plaintiff. (Id. ¶ 28–29.)
This practice is the basis of Plaintiff’s Complaint. Plaintiff alleges that
MetLife profited from “investing [Plaintiff’s] benefits for its own account.”
(Id. ¶ 17.) Plaintiff further alleges that MetLife did not disclose that profit or
similar profits to Ms. Owens or to the Plan’s sponsor or administrator. (Id. ¶
18.) Plaintiff claims that this conduct constitutes a breach of fiduciary duty.
Plaintiff alleges that MetLife routinely profits in this manner from plan
benefits paid on group life insurance policies. (Compl., Dkt. [1] ¶¶ 19–25.)
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Plaintiff claims that this practice violates the terms of the payment clauses in
these policies, which provide “We will pay the Life Insurance in one sum.
Other modes of payment may be available upon request.” (Id. ¶ 20.)
Plaintiff claims she exhausted her administrative remedies when, on or
around November 21, 2013, Plaintiff submitted a claim on the Policy to
MetLife. (Id. ¶¶ 26–28.) MetLife did not respond to Plaintiff’s claim within
90 days, as required by the ERISA addenda to the Plan’s Certificates of
Insurance. (Id.)
Plaintiff now brings her claims pursuant to ERISA on behalf of herself
and the class of others similarly situated.3 Plaintiff further brings claims on
behalf of a subclass of Georgia residents. Plaintiff claims that MetLife
functioned as a fiduciary when it engaged in the conduct described above. (Id.
¶ 31.) Further, Plaintiff claims that MetLife is a party in interest to the Plan.
(Id. ¶¶ 36–37.) On those bases, Plaintiff brings the following causes of action:
breach of the duty of loyalty imposed by ERISA § 404(a)(1)(A) (Count I);
breach of the fiduciary duties imposed by ERISA § 406(b)(1) (Count II),
3
The Court does not address class certification in the present Order.
Plaintiff’s Motion for Class Certification has not yet been fully briefed before the
Court. (See Dkt. [113].)
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§ 406(a)(1)(B) (Count III), and § 406(a)(1)(C) (Count IV); and postmortem
interest for the Georgia subclass (Count VI).4
On November 30, 2015, Plaintiff filed a Motion for Partial Summary
Judgment [75] as to the five remaining counts, and, on the same day, Defendant
filed a Motion for Summary Judgment [76]. The Court, in its Order [110]
dated September 27, 2016, granted Plaintiff’s Motion for Partial Summary
Judgment [75] as to Counts II, III, and VI and denied the motion as to Counts I
and VI. The Court denied Defendant’s Motion for Summary Judgment [76].
Defendant subsequently and simultaneously filed Defendant Metropolitan Life
Insurance Company’s Motion for Reconsideration or, in the Alternative,
Motion for Certification for Interlocutory Appeal Under 28 U.S.C. § 1292(b)
(“Motion”) [111] and its Motion to Stay Class Certification Briefing Deadlines
[112].
Discussion
I.
Motion for Reconsideration
A.
Legal Standard
4
Count V, for declaratory relief regarding coverage by state insurance
guaranty funds for the Georgia subclass, was dismissed on Defendant’s Motion to
Dismiss for Failure to State a Claim. (Dkt. [41].)
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Under the Local Rules of this Court, “[m]otions for reconsideration shall
not be filed as a matter of routine practice[,]” but rather, only when “absolutely
necessary.” LR 7.2(E), N.D. Ga. Such absolute necessity arises where there is
“(1) newly discovered evidence; (2) an intervening development or change in
controlling law; or (3) a need to correct a clear error of law or fact.” Bryan v.
Murphy, 246 F. Supp. 2d 1256, 1258–59 (N.D. Ga. 2003). A motion for
reconsideration “may not be used to present the court with arguments already
heard and dismissed or to repackage familiar arguments to test whether the
court will change its mind.” Id. at 1259. Nor may it be used “to offer new
legal theories or evidence that could have been presented in conjunction with
the previously filed motion or response, unless a reason is given for failing to
raise the issue at an earlier stage in the litigation.” Adler v. Wallace Comput.
Servs., Inc., 202 F.R.D. 666, 675 (N.D. Ga. 2001). Finally, “[a] motion for
reconsideration is not an opportunity for the moving party . . . to instruct the
court on how the court ‘could have done it better’ the first time.” Pres.
Endangered Areas of Cobb’s History, Inc. v. U.S. Army Corps of Eng’rs, 916
F. Supp. 1557, 1560 (N.D. Ga. 1995).
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B.
Discussion
Defendant has identified five possible clear errors of law and fact for
which its motion for reconsideration should be granted. The Court addresses
each individually.
1.
Not considering certain key undisputed facts in determining
whether MetLife paid Plaintiff’s life insurance benefits in
conformance with the Policy and Plan
Defendant makes two arguments that the Court should grant its Motion
for Reconsideration for failing to consider its factual record in interpreting the
Policy’s payment provision. First, it argues that the Court should have
considered, under federal common law, that C.B. Richard Ellis, Inc. intended
plan benefits to be paid via a TCA. (Motion, Dkt. [111], at 4–9.) This is the
first time that Defendant has raised this argument regarding federal common
law in its briefs. In fact, in its Motion for Summary Judgment and associated
briefs and responses, Defendant advocated for the application of Georgia law
in interpreting the Policy. (E.g., Br. in Supp. of Def. Metro. Life Ins. Co.’s
Mot. for Summ. J. (“Mot. for Summ. J.”), Dkt. [76-1], at 15 (“With respect to
interpreting the Policy’s ‘contractually defined benefits,’ under Georgia law,
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‘[t]he cardinal rule of construction is to ascertain the intention of the parties.’
O.C.G.A. § 13-2-3.”)) None of the cases relied upon in its Motion were
mentioned in the briefing surrounding the two motions for summary judgment
ruled on in the Order [110]. A motion for reconsideration may not be used “to
offer new legal theories or evidence that could have been presented in
conjunction with the previously filed motion or response, unless a reason is
given for failing to raise the issue at an earlier stage in the litigation.” Adler,
202 F.R.D. at 675. Defendant has not provided such a reason here. Thus,
Defendant’s Motion for Reconsideration as to this issue is DENIED.
Second, Defendant argues that the Court’s failure to consider Plaintiff’s
ability to access the funds in her TCA account supports a grant of its Motion.
All of the arguments made, however, were previously made in its Motion for
Summary Judgment and various responses. It is merely attempting to
repackage its earlier argument, which the Court addressed in its discussion on
effective possession versus actual possession in its Order [110]. (Order, Dkt.
[110], at 14–15.) A motion for reconsideration is not intended for such
rehashed arguments. As such, Defendant’s Motion for Reconsideration on this
issue is DENIED.
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2.
Not addressing the inconsistency between the definition of
“payment” applied in the Order and the definition of
“payment” applied in the majority of U.S. Circuit Courts of
Appeal decisions
Defendant next argues that the Court committed a clear error by failing
to reconcile the definition of “payment” used in Mogel v. Unum Life Insurance
Co., 547 F.3d 23 (1st Cir. 2008), and that used in various other circuit court
decisions. (Motion, Dkt. [111], at 11–14.) This argument was previously made
in detail in Defendant’s Motion for Summary Judgment. (Mot. for Summ. J.,
Dkt. [76-1], at 25–26.) The Court considered Defendant’s argument at that
time. (Order, Dkt. [110], at 15–17.). A motion for reconsideration is not a
proper mechanism for Defendant to reassert its prior argument. Defendant’s
Motion for Reconsideration as to this issue is therefore DENIED.
3.
Not considering MetLife’s alternative argument that its
payment of life insurance benefits through a TCA was
permissible under the Policy and Plan as an “other mode[]
of payment”
Defendant next argues that the Court should have held that payment of
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life insurance benefits through a TCA was “permissible under the Policy’s
provision that ‘other modes of payment may be available upon request.’”
(Motion, Dkt. [111], at 14.) The Court addressed and rejected this argument as
it was previously stated in Defendant’s Motion for Summary Judgment.
(Order, Dkt. [110], at 12 n.5.) A motion for reconsideration “may not be used
to present the court with arguments already heard and dismissed or to
repackage familiar arguments to test whether the court will change its mind.”
Bryan, 246 F. Supp. 2d at 1259. Defendant’s Motion for Reconsideration as to
its alternative argument is therefore DENIED.
4.
Not considering whether MetLife’s alleged ERISA
violations proximately caused Plaintiff harm
Next in its Motion, Defendant argues that reconsideration should be
granted based on the Court’s failure to consider whether its alleged ERISA
violation proximately caused Plaintiff’s harm. (Motion, Dkt. [111], at 16–18.)
First, the Court notes that Defendant’s argument with regards to proximate
cause were previously raised in its Motion for Summary Judgment. (Mot. for
Summ. J., Dkt. [76-1], at 29–30.) As this argument has already been “heard
and dismissed,” a motion for reconsideration may not be used “to test whether
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the court will change its mind.” Bryan, 246 F. Supp. 2d at 1259. Furthermore,
the Court finds that Edmonson v. Lincoln National Life Insurance Co., 725
F.3d 406 (3d Cir. 2013), the case upon which Defendant’s argument relies, is
sufficiently factually distinguishable as to be inapplicable here. As such,
Defendant’s Motion for Reconsideration as to this issue is DENIED.
5.
Finding as a matter of law that the assets backing MetLife’s
TCA libailities were plan assets, contrary to U.S. Supreme
Court and circuit court precedent
Finally, Defendant urges the Court to reconsider its prior finding as a
matter of law that the assets backing the TCA liabilities were plan assets by
adopting the reasoning of the First Circuit in Merrimon v. Unum Life Insurance
Co. of America, 758 F.3d 46 (1st Cir. 2014). (Motion, Dkt. [111], at 16–20.)
This argument regarding the status of the liabilities was fully briefed by the
parties in their various motions and responses prior to the Court’s Order [110].
As Defendant’s argument has already been heard, it is not an appropriate
ground for the grant of a motion for reconsideration. Defendant’s Motion for
Reconsideration as to this issue is therefore DENIED.
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II.
Motion for Certification for Interlocutory Appeal Under 28 U.S.C. §
1292 (b)
A.
Legal Standard
The courts of appeals “have jurisdiction of appeals from all final
decisions of the district courts . . . .” 28 U.S.C. § 1291. An exception to this
final decision rule is provided by § 1292(b), which allows a district judge to
certify the appeal of an interlocutory order when the judge determines that the
order to be appealed “involves a controlling question of law as to which there
is substantial ground for difference of opinion and that an immediate appeal
from the order may materially advance the ultimate termination of the litigation
. . . .” 28 U.S.C. § 1292(b). Even if these requirements are satisfied, the Court
of Appeals retains discretion to refuse to allow the appeal. “Section 1292 is
intended to be used sparingly and only in exceptional cases where a speedy
appeal would avoid protracted litigation.” U.S. ex rel. Powell v. American
InterContinental University, Inc., 756 F. Supp. 2d 1374, 1378 (N.D. Ga. 2010).
A substantial difference of opinion as to a question for which an
interlocutory appeal is sought exists “when a legal issue is (1) difficult and of
first impression, (2) the district courts of the controlling circuit are split as to
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the issue, or (3) the circuits are split on the issue.” CFPB v. Frederick J. Hanna
& Assocs., P.C., 165 F. Supp. 3d 1330, 1335 (N.D. Ga. 2015). Neither the
mere lack of authority on the issue nor the claim that the district court’s ruling
is incorrect constitutes a substantial ground for difference of opinion. See In re
Scientific-Atlanta, Inc. Sec. Litig., No. 1:01-CV-1950-RWS, 2003 WL
25740734, at *1 (N.D. Ga. Apr. 15, 2003).
B.
Discussion
Defendant has identified two possible controlling questions of law for
which there is substantial ground for difference of opinion and the immediate
review of which may materially advance the ultimate termination of the
litigation. The Court addresses each individually.
1.
Whether crediting life insurance benefits to an interestbearing account with draft-writing privileges while
retaining the assets backing the account liabilities
constitutes payment in one sum.
Section 1292(b) appeals are intended “for situations in which the court of
appeals can rule on a pure, controlling question of law without having to delve
beyond the surface of the record in order to determine the facts.” McFarlin v.
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Conseco Servs., LLC., 381 F. 3d 1251, 1259 (11th Cir. 2004). “In determining
whether to grant review, we should ask if there is substantial dispute about the
correctness of any of the pure law premises the district court actually applied in
its reasoning leading to the order sought to be appealed.” Id. “The legal
question must be stated at a high enough level of abstraction to lift the question
out of the details of the evidence or facts of a particular case and give it general
relevance to other cases in the same area of law.” Id.
Defendant’s first proposed question does not meet this standard. It is
worded in such a way that it is factually specific to the current case. Because
of the nature of ERISA, cases turn on the specific language of the policy at
issue. So too here, where Defendant’s question focuses on the meaning of
“payment in one sum” under the Policy. While Defendant packages its
arguments throughout its Motion as ones of law, the true issue is one of
applying the law to a set of facts, the language of the Policy. Such
circumstances are not appropriate grounds for certification for appeal under §
1292(b).
Further, there is no substantial difference of opinion as to this question,
which is required for an appeal under § 1292(b). A substantial difference of
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opinion may exist in one of three ways. First, a substantial difference of
opinion exists where the issue is difficult and of first impression. While this is
an issue of first impression in the Eleventh Circuit, lack of authority alone is
insufficient to meet this requirement for an appeal under § 1292(b). And while
this issue is one of first impression, it involves the application of traditional
rules of contract interpretation. This is not the difficult issue for which §
1292(b) was intended. Second, a substantial difference of opinion may exist
when there is a difference of opinion within the controlling circuit, but the only
other case to address this issue in the Eleventh Circuit, Garrison v. Jackson
National Life Insruance Co, 908 F. Supp. 2d 1293 (N.D. Ga. 2012), is in
agreement with the Order [110].
Finally, a substantial difference of opinion exists when the circuits are
split on the issue. Defendant argues that a circuit split exists here, with “the
First Circuit Mogel panel on the one side, and the First Circuit Merrimon and
Vander Luitgaren panels, the Second Circuit, and the Third Circuit on the other
side.” (Motion, Dkt. [111], at 23.) As discussed in the Order [110], these
referenced cases are not, in fact, in opposition to one another. (Order, Dkt.
[110], at 15–16.) Every case that Defendant argues is in conflict with Mogel
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explicitly distinguishes Mogel on its facts. See, e.g., Merrimon, 758 F.3d at
56–57 (“The decision in [Mogel] is not at odds with the conclusion that the
monies retained by the insurer are not plan assets. Mogel involved a plan that
contained a specific directive to pay beneficiaries in a lump sum.”); Vander
Luitgaren v. Sun Life Assurance Co., 765 F.3d 59, 65 n.5 (1st Cir. 2014) (“The
result that we reach is also consistent with our decision in [Mogel].”);
Edmonson, 725 F.3d at 425 (“But the terms of the policy in Mogel required an
immediate lump sum payment upon receipt of proof of a claim. Because the
policy here is silent as to the form of payment, Lincoln had discretion as to how
to comply with its requirements . . . .”); Faber v. Metro. Life Ins. Co., 648 F.3d
98, 106–07 (2d Cir. 2011) (“Mogel is better understood as predicated on the
fact, not present here, that the insurer failed to abide by plan terms requiring it
to distribute benefits in lump sums.”). These cases are consistent, with their
differences in outcome as a result of the differing policy language in each case.
Thus, there is no circuit split to justify a finding of a substantial difference of
opinion. Defendant’s Motion for Certification for Interlocutory Appeal Under
28 U.S.C. § 1292(b) is therefore DENIED as to Defendant’s first proposed
question.
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2.
Whether general account assets backing an insurance
company’s liabilities to a beneficiary under an ERISA §
401(b)(2) guaranteed benefit policy are “plan assets.”
Defendant’s argument regarding this second proposed question is brief.
While it quotes the requisite standards, it provides no additional support for its
position. (See Motion, Dkt. [111], at 24 (“[T]here is ‘substantial ground for
difference of opinion’ because it is ‘difficult and of first impression’ in the
Eleventh Circuit and there is a split on this issue in the First Circuit.”)) This
argument is essentially that made in Part I.E of its Motion in reference to its
motion for reconsideration. As discussed above, the arguments raised with
regard to this issue were raised during briefing on the motions for summary
judgment and addressed in the Order [110]. This is, in essence, a claim that the
Court’s ruling was incorrect, which does not constitute a substantial ground for
difference of opinion under § 1292(b). See In re Scientific-Atlanta, Inc. Sec.
Litig., No. 1:01-CV-1950-RWS, 2003 WL 25740734, at *1 (N.D. Ga. Apr. 15,
2003). Thus, Defendant’s Motion for Certification for Interlocutory Appeal
Under 28 U.S.C. § 1292(b) is DENIED as to Defendant’s second proposed
question.
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II.
Motion to Stay Class Certification Briefing Deadlines
In light of the Court’s denial of Defendant’s Motion [111], its Motion to
Stay Class Certification Briefing Deadlines [112] is DENIED as moot.
Additionally, the Court notes that Defendant has already filed its response to
Plaintiff’s Renewed Motion for Class Certification [113]. Plaintiff shall file
her reply brief on or before February 13, 2017.
Conclusion
In accordance with the foregoing, Defendant Metropolitan Life
Insurance Company’s Motion for Reconsideration or, in the Alternative,
Motion for Certification for Interlocutory Appeal Under 28 U.S.C. § 1292(b)
[111] is DENIED. Its Motion to Stay Class Certification Briefing Deadlines
[112] is DENIED as moot. In light of the filing of the Renewed Motion for
Class Certification, the Clerk is DIRECTED to terminate the pending status of
Plaintiff’s original Motion for Class Certification [7].
SO ORDERED, this 11th day of January, 2017.
________________________________
RICHARD W. STORY
United States District Judge
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