Snitselaar v. UNUM Life Insurance Company of America et al
ORDER re 25 Amended Complaint filed by Michelle Snitselaar: Defendant Unum Life Insurance Company of America's decision to deny benefits is affirmed. Snitselaar's second claim for relief, Count II of the Amended Complaint, against De fendant Mount Mercy University for breach of fiduciary duty is valid and equitable relief is granted. The Clerk of Court is directed to enter Judgment in favor of Snitselaar against Mount Mercy in the amount of $60,000. Snitselaar may file an ap plication for attorney fees within 10 days of the issuance of the instant order. Defendants may respond to any such application within 10 days of the application. The Clerk of Court is directed to close this case for administrative purposes. Signed by Judge Linda R Reade on 1/22/2019. (skm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
CEDAR RAPIDS DIVISION
UNUM LIFE INSURANCE COMPANY
OF AMERICA and MOUNT MERCY
TABLE OF CONTENTS
RELEVANT PROCEDURAL BACKGROUND...........................................2
SUBJECT MATTER JURISDICTION.....................................................3
RELEVANT FACTUAL BACKGROUND..................................................3
Overview of the Dispute...............................................................4
Snitselaar’s Claim Against Unum for Violation of ERISA (Count I)......6
Standard of review.............................................................6
Snitselaar’s Claim Against Mount Mercy for Breach of Fiduciary
Duty (Count II).........................................................................13
Standard of review...........................................................13
The matter before the court is Plaintiff Michelle Snitselaar’s Amended Complaint
(docket no. 25).
II. RELEVANT PROCEDURAL BACKGROUND
On January 20, 2017, Snitselaar filed a Petition at Law (“Petition”) (docket no. 2)
in the Iowa District Court for Linn County, alleging claims under Iowa law, for breach of
contract and frustration of reasonable expectations against Defendant Unum Life Insurance
Company of America (“Unum”) and breach of fiduciary duty against Defendant Mount
Mercy University (“Mount Mercy”), in the denial of life insurance death benefits. See
generally Petition ¶¶ 17-38. On February 10, 2017, Unum and Mount Mercy jointly filed
a Notice of Removal (docket no. 1), bringing the case before the court.
On March 24, 2017, Snitselaar filed an Amended Complaint and Jury Demand
(“AC&JD”) (docket no. 10), alleging a claim for violation of the Employee Retirement
Income Security Act of 1974 (“ERISA”) and an Iowa state law claim for frustration of
reasonable expectations against Unum (Counts I and II). See generally AC&JD ¶¶ 23-29.
The AC&JD also alleged an Iowa state law claim for breach of fiduciary duty against
Mount Mercy. Id. ¶¶ 30-42. On April 6, 2017, Unum filed a “Motion to Strike Jury
Demand” (docket no. 11) and a “Motion to Dismiss Count II” (docket no. 12) of the
AC&JD. On the same date, Unum also filed an “Answer to Count I” (docket no. 13) of
the AC&JD, generally denying liability and asserting affirmative defenses. On April 13,
2017, Mount Mercy filed a Motion to Dismiss Count III of the AC&JD (docket no. 14).
On May 10, 2017, Snitselaar filed a “Motion for Leave to Amend” (docket no. 22)
the AC&JD. In the Motion for Leave to Amend, Snitselaar sought “to amend [the
AC&JD] to remove [the] Jury Demand and Count II Reasonable Expectations and to
further amend [the AC&JD] to recast  Count III [as a claim for]Breach of Fiduciary Duty
under ERISA, and not as a state law claim.” Motion for Leave to Amend at 2. On May
11, 2017, the Motion for Leave to Amend was granted. See May 11, 2017 Order (docket
no. 24) at 1.
The Amended Complaint presently before the court was filed on May 11, 2017,
alleging that: (1) Unum wrongfully denied Snitselaar’s claim for life insurance death
benefits, thereby violating ERISA, 29 U.S.C. §§ 1001 et seq. (Count I), see Amended
Complaint ¶¶ 16-19, 22-27; and (2) Mount Mercy breached its fiduciary duty, thereby
violating ERISA, 29 U.S.C. §§ 1001 et seq. (Count II), see Amended Complaint ¶¶ 33-35,
38-44. On May 31, 2017, Mount Mercy filed an Answer (docket no. 27), generally
denying liability and asserting affirmative defenses.1 On September 6, 2017, Snitselaar
filed the Plaintiff’s Brief (docket no. 37). On November 16, 2017, Mount Mercy filed a
Defendant’s Brief (“Mount Mercy Brief”) (docket no. 40). On that same date, Unum also
filed a Defendant’s Brief (“Unum Brief”) (docket no. 41).
On January 10, 2018,
Sniteslaar filed a Reply Brief (docket no. 44).
Neither party requests oral argument, and the court finds that oral argument is
unnecessary. The case is fully submitted and ready for decision.
III. SUBJECT MATTER JURISDICTION
The court has jurisdiction over the instant action because it arises under ERISA, 29
U.S.C. §§ 1132(a)(1)(B) and 1132(a)(3). See 28 U.S.C. § 1331 (“The district courts shall
have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties
of the United States.”).
IV. RELEVANT FACTUAL BACKGROUND
A. The Parties
Snitselaar is a resident of Marion, Linn County, Iowa. Amended Complaint ¶ 1.
Unum did not file an answer to the Amended Complaint filed on May 11, 2017.
Apparently, Unum relies on its Answer to Count I of the AC&JD. Count I of the AC&JD
is nearly identical to Count I of the Amended Complaint. Compare docket no. 10 with
docket no. 25.
Unum Life is a foreign corporation whose principal place of business is located outside the
State of Iowa. Id. ¶ 2. Mount Mercy is an Iowa domestic non-profit whose principal
place of business is located in Cedar Rapids, Iowa. Id. ¶ 4.
B. Overview of the Dispute
Snitselaar has been employed by Mount Mercy since 2007. Id. ¶ 9. Snitselaar is
a participant in the Mount Mercy University Welfare Plan (“the Plan”). Id. ¶¶ 10, 12.
Mount Mercy is the named Plan Administrator and fiduciary of the Plan. Id. ¶ 12. The
Plan is funded by a group life insurance policy issued by Unum. See Administrative
Record (“AR”) (docket no. 34) at 72. Mount Mercy delegated discretionary authority to
Unum to make benefit determinations under the Plan. Id. at 50.
Snitselaar enrolled in the Plan in 2010. Id. at 19, 34. At the time of her
enrollment, Snitselaar was married to Gerard J. Snitselaar (“Gerard”).
Complaint ¶¶ 8, 11. Under the Plan’s group life insurance policy, Gerard was eligible for
coverage because he was Snitselaar’s “lawful spouse.” AR at 54. Snitselaar elected to
have Gerard covered under the Plan’s group policy. Amended Complaint ¶ 11. The total
amount of dependent life insurance under the group policy was $60,000, including $10,000
basic dependent life insurance coverage and $50,000 dependent supplemental coverage.
Id.; AR at 5, 19. Snitselaar was the beneficiary for the dependent coverage. AR at 14
(identifying Snitselaar as the dependent coverage beneficiary), 58 (language in the “Benefit
Information” section of the group Policy discussing “how much will Unum pay you [(the
employee/Snitselaar)] if Unum approves your dependent’s death claim”), 70 (group Policy
defining “You” as “an employee who is eligible” for Unum coverage), 88 (claim
worksheet for Gerard identifying Snitselaar as the beneficiary).
The group policy provides that a dependent spouse’s coverage ends on “the date of
divorce or annulment.” AR at 56. When coverage ends under the group policy, a
dependent may “convert [his or her] coverages to individual life policies, without evidence
of insurability.” Id. at 60. The policy requires that “[y]ou and your dependents must
apply for individual life insurance under this life conversion privilege and pay the first
premium within 31 days after the date . . . you or your dependents no longer are eligible
to participate in the coverage of the [P]lan.” Id.
Snitselaar’s and Gerard’s divorce was finalized on February 26, 2015. Id. at 14142. Gerard died on May 13, 2015. Amended Complaint ¶ 8. On June 4, 2015, Snitselaar
submitted a claim for life insurance benefits under the group policy. AR at 19-23. On
June 25, 2015, Unum denied Snitselaar’s claim for benefits. Amended Complaint ¶ 16;
AR at 150. Unum explained that:
Mount Mercy University’s [g]roup [l]ife policy states an
individual must be legally married to or separated from the
employee to be covered as a dependent spouse. Additionally,
the policy states that dependent coverage ends the date of a
divorce or annulment. . . . Per our telephone conversation on
June 11, 2015, you indicated that your divorce was finalized
in February, 2015. The divorce decree we received was filed
with the courts on February 26, 2015. Therefore, the
dependent life insurance coverage terminated when the divorce
was finalized. Since [Gerard] was not covered under the
policy on his date of death, May 13, 2015, benefits are not
payable for this claim.
AR at 151.
On September 22, 2015, Snitselaar submitted a timely appeal of Unum’s decision.
Id. at 190. In her appeal, Snitselaar noted that, “[w]hile signing up for both of the
voluntary [l]ife [i]nsurance [policies], we were advised you could not lose the insurance
for life changes after the two year waiting period, and were never informed about divorce
affecting the policy.” Id. at 191. According to Snitselaar, she was only provided with
enrollment forms for the basic life insurance coverage and the supplemental coverage. Id.
at 191-92. Snitselaar stated:
We were not informed that there was a policy available to
examine. We were just told that it was a group policy and it
would provide the coverage we elected. Nowhere on either of
these forms did it state that a divorce would affect the
coverage. The two forms along with a spreadsheet of “listed
monthly cost” were the only documents provided.
Id. at 192. Snitselaar also noted that, while her claim was denied on June 25, 2015, “[t]he
premiums for [both life insurance policies] continued to be taken out of [her] pay checks
up through [her] payroll check dated June 26, 2015.” Id. at 193. Snitselaar asserted that
“neither Gerard nor [she] were ever informed either in writing or verbally of [their] rights
to convert the policy to an individual life policy without evidence of insurability after the
divorce was finalized.” Id. at 194.
On October 21, 2015, Unum issued its appeal decision, upholding its denial of
benefits. Unum explained that it “determined the decision on the [group] [l]ife [i]nsurance
claims for Gerard . . . was correct” because Gerard “was no longer eligible for coverage
under the policies because he was no longer an eligible dependent as of Feb[ruary] 26,
2015" and “was not covered on the date of his death.” Id. at 212.
A. Snitselaar’s Claim Against Unum for Violation of ERISA (Count I)
Standard of review
The parties generally agree that the court should review Unum’s decision for abuse
of discretion.2 The abuse of discretion standard of review is extremely deferential and
Snitselaar notes that “Unum in this case was both the evaluator of whether [her]
policy on the life of Gerard was eligible for conversion and the party obligated for paying
life insurance benefits.” Plaintiff’s Brief at 3. Snitselaar asserts that “[t]his conflict of
interest needs to be weighed in determining whether Unum abused its discretion in making
its determination to deny benefits.” Id. While a reviewing court is required to “account
for conflicts of interest in determining whether an administrator has abused discretion[,]”
Eighth Circuit “precedent . . . has consistently rejected the notion that the mere presence
of a potential conflict of interest is sufficient to warrant a less deferential standard.”
Cooper v. Metro. Life Ins. Co., 862 F.3d 654, 660 (8th Cir. 2017). “While a conflict of
reflects the “general hesitancy to interfere with the administration of a benefits plan.”
Norris v. Citibank, N.A. Disability Plan (501), 308 F.3d 880, 883 (8th Cir. 2002) (quoting
Layes v. Mead Corp., 132 F.3d 1246, 1250 (8th Cir. 1998)). “Under an abuse of
discretion standard of review, a plan administrator’s decision will stand if reasonable; ‘i.e.,
supported by substantial evidence.’” Id. (quoting Fletcher-Merrit v. NorAm Energy Corp.,
250 F.3d 1174, 1179 (8th Cir. 2001)).
The court must affirm the plan administrator’s decision “if a reasonable person
could have reached a similar decision, given the evidence before him [or her], not that a
reasonable person would have reached that decision.” Prezioso v. Prudential Ins. Co. of
Am., 748 F.3d 797, 805 (8th Cir. 2014) (quoting Ferrari v. Teachers Ins. & Annuity
Ass’n, 278 F.3d 801, 807 (8th Cir. 2002)). “Any reasonable decision will stand, even if
the court would interpret the language differently as an original matter.” Manning v. Am.
Republic Ins. Co., 604 F.3d 1030, 1038 (8th Cir. 2010). A decision is reasonable if it is
supported by substantial evidence. See Wilcox v. Liberty Life Assurance Co. of Boston,
552 F.3d 693, 700 (8th Cir. 2009). Substantial evidence is “more than a scintilla, but less
than a preponderance.” Id. (quoting Clapp v. Citibank, N.A. Disability Plan (501), 262
F.3d 820, 828 (8th Cir. 2001)). Although a plan administrator may not ignore relevant
evidence without abusing his or her discretion, see id. at 701, only the evidence available
to the plan administrator at the time of benefits denial is relevant to the court’s review, see
King v. Hartford Life & Accident Ins. Co., 414 F.3d 994, 999 (8th Cir. 2005). See also
Gerhardt, 736 F.3d at 780 (“A plan administrator abuses its discretion when it ignores
relevant evidence.” (quoting Wilcox, 552 F.3d at 701)).
interest must be weighed as a factor, . . . the weight afforded to it will depend on the facts
presented to the court.” Id. at 660-61 (citation and quotation omitted). Here, Snitselaar
presents no facts that Unum was biased in its decision making. Accordingly, the court
affords only the bare minimum of weight to Unum’s conflict of insterest.
Snitselaar contends that Unum “breached its insurance contract with [her] in
denying [her] claims for death benefits.” Plaintiff’s Brief at 3. Snitselaar asserts that the
group life insurance policy does not contain the provision required by Iowa Code
§ 509.2(7). Id. at 4. Iowa Code § 509.2 states in relevant part that, “[n]o policy of group
life insurance shall be delivered in this state unless it contains in substance the following
provisions.” Iowa Code § 509.2(7) specifically requires:
A provision that the insurer will issue to the policyholder for
delivery to each person insured an individual certificate setting
forth a statement as to the insurance protection to which the
person is entitled, to whom the insurance benefits are payable,
and the rights and conditions set forth in subsections 8 to 10,
inclusive, following if applicable.
Iowa Code § 509.2(8) requires inclusion of:
A provision that if the insurance, or any portion of it, on a
person covered under the policy ceases because of termination
of employment or of membership in the class or classes
eligible for coverage under the policy, such person shall be
entitled to have issued to the person by the insurer, without
evidence of insurability, an individual policy of life insurance
without disability or other supplementary benefits, provided
application for the individual policy shall be made, and the
first premium paid to the insurer, within thirty-one days after
such termination . . . .
Snitselaar asserts that “the group policy does not contain the provision required by Section
509.2(7).” Plaintiff’s Brief at 4. Snitselaar maintains that § 509.2(7) is not preempted
by ERISA. Id. at 5-7. Snitselaar argues that, because § 509.2(7) is not preempted by
ERISA, “Unum breached its contractual obligations” and Unum is “liable to [Snitselaar]
for full death benefits owed under the two policies covering the life of Gerard.” Id. at 7.
Unum argues that Snitselaar’s claim under Iowa Code § 509.2(7) is preempted by
ERISA, and therefore, must be dismissed. See Unum Brief at 10. Unum asserts that
“Section 509.2(7) does not substantially affect the risk pooling arrangement between the
insurer and the insured and, therefore, is not ‘saved’ from preemption under [29 U.S.C.
§] 1144(b)(2)(A).” Id. at 11. Specifically, Unum argues that § 509.2(7) “deals solely
with providing the insured participant notice of the risk pooling arrangement or coverage
that has already been determined.” Id. at 12. Thus, Unum contends that § 509.2(7) “is
not ‘saved’ from preemption by [§] 1144(b)(2)(A).” Id.
Unum further argues that, even if the group life insurance policy was amended or
reformed to include the requirements of § 509.2(7), such an amendment or reformation
would not be “material to [Unum’s] interpretation of the [p]olicies and determination of
[Snitselaar’s] claim.” Id. at 13. Specifically, Unum argues that:
Gera[r]d ceased to be a dependent covered under the Plan upon
his divorce from [Snitselaar]. Whether or not the [p]olicies
included a statement that the insurer provide the policyholder
with an individual certificate has absolutely nothing to do with
that determination. Further, Gera[r]d never exercised his
conversion rights and therefore did not obtain an individual life
insurance policy. Reforming the [p]olicies to include language
requiring [Unum] to provide Mount Mercy with an individual
certificate containing a statement of the insurance coverage
under the [p]olicies does not create insurance coverage for
In the Reply, Snitselaar relies on Larson v. United Healthcare Ins. Co., 723 F.3d
905 (7th Cir. 2013) for the proposition that, if an ERISA plan includes an insurance
policy, then state insurance law requirements become plan terms for purposes of a claim
for benefits under 29 U.S.C. § 1132(a)(1)(B). Reply at 2 (citing Larson, 723 F.3d at 913,
in turn citing, Unum Life Ins. Co. of Am. v. Ward, 526 U.S. 358, 375-76 (1999)).
Snitselaar argues that, “[p]ursuant to the Larson analysis, and United States Supreme Court
holdings, the contract terms mandated by § 509.2(7) become part of the group policy for
purposes of the claim for benefits[.]” Id. Snitselaar maintains that Unum “breached the
contract by not delivering the required certificate to Mount Mercy, along with directives
that it be delivered to [her].” Id. As a result, Snitselaar claims that, “at no time prior to
her divorce from Gerard or his death, was [she] made aware of the conversion rights to
which she was entitled and the steps necessary to make such a conversion.” Id. Snitselaar
concludes that, “[a]s [Unum’s] group policy failed to contain the provision required by
Iowa Code § 509.[2(7)], . . . the denial of benefits determination [Unum] made was on its
face unreasonable[,]” and therefore, Unum abused its discretion in denying her benefits.
Id. at 5.
“To meet the goals of a comprehensive and pervasive Federal interest and the
interests of uniformity with respect to interstate plans, Congress included an express
preemption clause in ERISA for the displacement of State action in the field of private
employee benefit programs.” Prudential Ins. Co. of Am. v. Nat’l Park Med. Ctr., Inc.,
413 F.3d 897, 907 (8th Cir. 2005) (quoting Minn. Chapter of Associated Builders &
Contractors, Inc. v. Minn. Dept. of Pub. Safety, 267 F.3d 807, 810-11 (8th Cir. 2001)).
ERISA provides for two types of preemption: “‘complete preemption’ under ERISA § 502,
29 U.S.C. § 1132, and ‘express preemption’ under ERISA § 514, 29 U.S.C. § 1144.”
Prudential, 413 F.3d at 907. “Complete preemption occurs whenever Congress ‘so
completely [preempts] a particular area that any civil complaint raising this select group
of claims is necessarily federal in character.’” Id. (alteration in original) (quoting Metro.
Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987)). Express preemption, by contrast,
“preempts any state law that relate[s] to any employee benefit plan.” Prudential, 413 F.3d
at 907 (alteration in original) (quotation omitted).
29 U.S.C. § 1144(a), ERISA’s “express preemption” clause states that:
Except as provided in subsection (b) of this section, the
provisions of this subchapter and subchapter III shall supersede
any and all State laws insofar as they may now or hereafter
relate to any employee benefit plan described in section
1003(a) of this title and not exempt under section 1003(b) of
“ERISA’s broad preemption of state law is limited by the ‘savings clause,’ under which
ERISA shall not ‘be constructed to exempt or relieve any person from any law of any State
which regulates insurance. . . .’” Prudential, 413 F.3d at 908 (quoting 29 U.S.C.
§ 1144(b)(2)(A)). In Ky. Ass’n of Health Plans, Inc. v. Miller, 538 U.S. 329 (2003), the
Supreme Court held that “for a state law to be deemed a ‘law . . . which regulates
insurance’ under § 1144(b)(2)(A), it must satisfy two requirements. First, the state law
must be specifically directed toward entities engaged in insurance. . . . Second . . . the
state law must substantially affect the risk pooling arrangement between the insurer and
the insured.” Id. at 341-42. The risk pooling arrangement between insurer and insured
is substantially affected when the scope of permissible bargains between insurers and
insureds is altered. Id. at 338-39.
In Larson, the Seventh Circuit Court of Appeals noted that “[t]he Supreme Court
has held that when an ERISA plan includes an insurance policy, the requirements imposed
by state insurance law become plan terms for purposes of a claim for benefits under
§ 1132(a)(1)(B).” 723 F.3d at 912 (citing Ward, 526 U.S. at 375-76). In Ward, the
Supreme Court stated that the Court has “repeatedly held that state laws mandating
insurance contract terms are saved from preemption under § 1144(b)(2)(A).” 526 U.S.
at 375 (citing Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 758 (1985)). Relying
on Ward, the Seventh Circuit concluded that “when an employee-benefits plan includes an
insurance policy, contract terms mandated by state insurance law become plan terms.”
Larson, 723 F.3d at 912; see also Huang v. Life Ins. Co. of N. Am., 47 F.Supp.3d 890,
901 (E.D. Mo. Sept. 16, 2014) (relying on Ward and Larson for the proposition that state
laws regulating insurance which mandate contract terms are saved from preemption under
§ 1144(b)(2)(A)). However, “an ERISA disclosure violation does not entitle a participant
or beneficiary to benefits to which he [or she] is not entitled [to] under the plan.”
Palmisano v. Allina Health Sys. Inc., 190 F.3d 881, 888-89 (8th Cir. 1999).
In order for Snitselaar to have a claim against Unum, Iowa Code § 509.2(7) must
not be preempted by ERISA. § 509.2(7) requires an insurer to “issue to the policyholder
for delivery to each person insured an individual certificate setting forth a statement as to
the insurance protection to which the person is entitled.” However, § 509.2(7) does not
alter the scope of the bargain between the insured and the insurer. Therefore, under the
second prong of the Miller test, Snitselaar’s claim against Unum is preempted because risk
pooling is not affected by § 509.2(7). 538 U.S. at 338-42.
Even if the court were to assume that, under Ward and Larson that “the contract
terms mandated by § 509.2(7) become part of the group policy for purposes of the claim
for benefits,” Snitselaar’s claim against Unum still fails. See Reply at 2. Snitselaar argues
that Unum breached the insurance contract and abused its discretion in denying her claim
for benefits. See Plaintiff’s Brief at 3-7; Reply 1-5. However, Unum’s breach of the
insurance contract failing to include the provision set forth in § 509.2(7) is not material
to Unum’s interpretation of the group insurance policy and determination of Snitselaar’s
claim. Under the group policy, Gerard ceased to be a dependent covered under the Plan
upon his divorce from Snitselaar. Further, Gerard never exercised his conversion rights
and did not obtain an individual life insurance policy. Regardless of whether or not the
group policy included the provision set forth in § 509.2(7), Gerard, under the terms of the
group policy, was not covered under the Plan upon his divorce from Snitselaar. Unum did
not abuse its discretion in denying Snitselaar’s claim for benefits. See Prezioso, 748 F.3d
at 805 (providing that a decision regarding benefits must be affirmed “if a reasonable
person could have reached a similar decision, given the evidence before him, not that a
reasonable person would have reached that decision”). Further, under the circumstances
presented here, any disclosure failure by Unum pursuant to § 509.2(7) does not entitle
Snitselaar to benefits because she was not entitled to benefits under the terms of the Plan.
See Palmisano, 190 F.3d at 888-89 (providing that “an ERISA disclosure violation does
not entitle a participant or beneficiary to benefits to which he [or she] is not entitled to
under the [p]lan”). The court finds that Unum did not abuse its discretion in interpreting
the terms of the Plan and declines to reverse Unum’s decision on the basis that it failed to
disclose information to Snitselaar pursuant to § 509.2(7). Accordingly, Unum’s decision
B. Snitselaar’s Claim Against Mount Mercy for Breach of Fiduciary Duty (Count II)
Standard of review
Neither party addresses the standard of review for a claim under 29 U.S.C.
§ 1132(a)(3). In Moore v. Lafayette Life Ins. Co., the Sixth Circuit Court of Appeals
determined that the district court properly reviewed a § 1132(a)(3) breach of fiduciary duty
claim de novo because “[c]laims for breaches of fiduciary duty and promissory estoppel
are not claims for denial of benefits and are therefore addressed in the first instance in the
district court, requiring no deference to any administrator’s action or decision.” 458 F.3d
416, 427 (6th Cir. 2006); see also Bidwell v. Univ. Med. Ctr., Inc., 685 F.3d 613, 616
(6th Cir. 2012) (providing for de novo review in § 1132(a)(3) breach of fiduciary duty
claims). Accordingly, the court shall apply de novo review to Snitselaar’s breach of
fiduciary duty claim against Mount Mercy.
Snitselaar argues that Mount Mercy breached its fiduciary duty by failing to provide
to her a summary plan description and/or certificate of insurance from Unum as required
by 29 U.S.C. § 1022 and Iowa Code § 509.2(7). See Plaintiff’s Brief at 9. Snitselaar
maintains that she did not receive the required summary plan description or certificate of
insurance from Mount Mercy, and therefore, “was never aware of her conversion rights
with respect to her ex-spouse Gerard.” Id. Snitselaar argues that, because she did not
receive the summary plan description or certificate of insurance, she “did not exercise the
conversion rights and her claims were denied.” Id. Snitselaar concludes that she is
entitled to “make-whole, monetary relief” from Mount Mercy pursuant to 29 U.S.C.
§ 1132(a)(3). Id.
In response, Mount Mercy argues that Snitselaar’s breach of fiduciary duty claim
is barred because it duplicates her claim for benefits against Unum. See generally Mount
Mercy’s Brief at 8-9. Mount Mercy also argues that “the subject plan complies with Iowa
Code section 509.2" and “any non-substantive differences between the language of the
Iowa statute and the Plan documents do not constitute an actionable breach of fiduciary
duty.” Id. at 9. Specifically, Mount Mercy argues that the Plan complied with the terms
of § 509.2(7). Id. at 10. Lastly, Mount Mercy argues that “any damages incurred by
Snitselaar were caused by her reliance on inaccurate advice by her divorce attorney, and
not by any actions by Mount Mercy.” Id. at 12. Mount Mercy maintains that, “[b]ecause
Snitselaar cannot establish causation, no relief is available under ERISA.” Id. at 14.
Mount Mercy concludes that, “[i]f Snitselaar or Gerard failed to exercise their conversion
rights due to their reliance on their divorce attorneys’ advice that coverage continued, it
is unfortunate, however, that reliance is not attributable to Unum or Mount Mercy and is
not actionable under ERISA.” Id.
In the Reply, Snitselaar points out that in addition to the requirements of § 509.2(7),
29 U.S.C. § 1024(b)(1) also requires that a plan administrator provide all plan participants
a copy of the summary plan description. See Reply at 5. Snitselaar argues that “Mount
Mercy did not furnish a copy of the certificate of coverage or [s]ummary of [b]enefits to
[her] until after Gerard’s death. This is not disputed. Mount Mercy clearly breached its
duty under § 1024(b)(1) by failing to timely deliver the certificate of coverage or
[s]ummary of [b]enefits.” Id. Snitselaar maintains that she has shown both harm and
causation. Id. at 6. Snitselaar asserts that the harm to her was Unum’s denial of benefits.
Id. Snitselaar further asserts that “[i]t is without question that Mount Mercy’s failure to
provide a certificate of insurance or summary plan description to [her] was the direct and
only cause of [her] harm.” Id. Lastly, Snitselaar argues that her claim against Mount
Mercy is not duplicative. See generally id. at 6-7.
A cause of action under 29 U.S.C. § 1132(a)(3) allows:
a participant, beneficiary, or fiduciary (A) to enjoin any act or
practice which violates any provision of this subchapter or the
terms of the plan, or (B) to obtain other appropriate equitable
relief (i) to redress such violations or (ii) to enforce any
provisions of this subchapter or the terms of the plan[.]
Id.; see also CIGNA Corp. v. Amara, 563 U.S. 421, 443-44 (2011) (recognizing that an
equitable claim for surcharge, reformation or estoppel may be permitted under ERISA for
a breach of fiduciary duty); Silva v. Metro. Life Ins. Co., 762 F.3d 711, 722 (8th Cir.
2014) (recognizing that Amara changed the legal landscape by permitting equitable remedy
under ERISA for a plan administrator’s breach of fiduciary duties).
The Supreme Court described the equitable remedy of surcharge under § 1132(a)(3)
Equity courts possessed the power to provide relief in the form
of monetary “compensation” for a loss resulting from a
trustee’s breach of duty, or to prevent the trustee’s unjust
enrichment. Indeed, prior to the merger of law and equity this
kind of monetary remedy against a trustee, sometimes called
a “surcharge,” was “exclusively equitable.”
The surcharge remedy extended to a breach of trust committed
by a fiduciary encompassing any violation of a duty imposed
upon that fiduciary.
Amara, 563 U.S. at 441-42 (internal citations and citations to authority omitted). In order
“[t]o obtain relief under the surcharge theory, a plan participant is required to show harm
resulting from the plan administrator’s breach of a fiduciary duty.” Silva, 762 F.3d at
722; see also Amara, 563 U.S. at 444 (“We believe that, to obtain relief by surcharge for
violations of §§ [1022 and 1024(b)], a plan participant or beneficiary must show that the
violation injured him or her.
But to do so, he or she need only show harm and
causation.”). Recovery under § 1132(a)(3) on the surcharge theory, allows for “makewhole, monetary relief” in the amount of benefits owed under the plan. See Silva, 762
F.3d at 724 (collecting cases). Plan participants may assert both a claim for denial of
benefits and a claim for breach of fiduciary duty, so long as each claim asserts a different
theory of liability. See Jones v. Aetna Life Ins. Co., 856 F.3d 541, 547 (8th Cir. 2017).
A plan administrator breaches its fiduciary duty when it fails to provide a plan
participant with the necessary information regarding a plan. Silva, 762 F.3d at 721.
Under 29 U.S.C. § 1024(b), “[p]ublication of the summary plan description . . . shall be
made to participants and beneficiaries . . . as follows: (1) The administrator shall furnish
to each participant, and each beneficiary receiving benefits under the plan, a copy of the
summary plan description.” See also 29 U.S.C. § 1022(a) (“A summary plan description
of any employee benefit plan shall be furnished to participants and beneficiaries as
provided in section 1024(b) of this title.”). 29 U.S.C. § 1022(b) provides in pertinent part
that “[t]he summary plan description shall contain . . . the plan’s requirements respecting
eligibility for participation and benefits . . . [and] circumstances which may result in
disqualification, ineligibility, or denial or loss of benefits. . . .” The Second Circuit Court
of Appeals has explained that “ERISA’s disclosure provisions were enacted to ‘ensur[e]
that the individual participant knows exactly where he stands with respect to the plan,’ and
the regulations promulgated under ERISA are designed to achieve that goal.” Leyda v.
Allied Signal, Inc., 322 F.3d 199, 208 (2d Cir. 2003) (quoting Bruch, 489 U.S. at 118).
First, Mount Mercy’s argument that Snitselaar’s breach of fiduciary duty claim is
barred because it duplicates her claim for benefits against Unum is misplaced. In Silva,
the Eighth Circuit explained that duplicate recovery is barred, but alternate theories of
liability are not barred. 762 F.3d at 727. Here, Snitselaar’s claim against Unum for
breach of the insurance policy is not duplicative of her claim against Mount Mercy for
breach of fiduciary duties because each claim asserts a different theory of liability.
Specifically, in Count I, Snitselaar seeks relief for Unum’s denial of benefits under the
Plan. In Count II, Snitselaar seeks equitable relief for Mount Mercy’s breach of fiduciary
duty. See Jones, 856 F.3d at 547 (finding that under ERISA, a claim for denial of benefits
alleged a separate theory of liability from a claim for breach of fiduciary duty); see also
Silva, 762 F.3d at 727-28 (finding that a claim under § 1132(a)(1)(B) for breach of terms
of an insurance policy asserted a different theory of liability from a claim under
§ 1132(a)(3) for breach of fiduciary duty, and that the two claims were not duplicative).
Accordingly, the court finds that Snitselaar’s breach of fiduciary duty claim against Mount
Mercy is not barred as duplicative of her claim against Unum.
Second, regardless of whether the Plan complied with the terms of § 509.2(7), there
is no doubt that Mount Mercy and the Plan failed to comply with the requirements of
§ 1022 (listing the description and requirements for a summary plan description) and
§ 1024(b) (stating that an administrator “shall furnish” a summary plan description to each
participant) by failing to provide Snitselaar with a summary plan description. See Silva,
762 F.3d at 721 (“Under ERISA, the plan administrator must distribute a summary plan
description to all participants”); Antolik v. Saks, Inc., 463 F.3d 796, 800 (8th Cir. 2006)
(“Adequate disclosure of employee benefits is an important ERISA principle. To this end,
the statute provides that an ERISA plan administrator . . . shall furnish a ‘summary plan
description’ to plan participants and beneficiaries”); Palmisano, 190 F.3d at 888 (“The
[summary plan description] is an important part of ERISA’s reporting and disclosure
requirements. It is a plain language summary of the plan’s terms and benefits that must
be distributed to participants.”). It is undisputed that Mount Mercy did not provide
Snitselaar with the summary plan description. Accordingly, the court finds that Mount
Mercy’s breached its fiduciary duty.
Third, under the circumstances presented here Mount Mercy’s breach of fiduciary
duty by failing to provide Snitselaar with a summary plan description, see §§ 1022,
1024(b) caused Snitselaar harm. Mount Mercy’s failure to provide Snitselaar a summary
plan description caused Snitselaar harm because she had no notice that Gerard would cease
to be a covered dependent if they divorced. Mount Mercy’s failure to provide Snitselaar
a summary plan description also caused Snitselaar harm because she was not provided with
notice of the conversion rights with respect to Gerard and those conversion rights were not
exercised. As a result, Snitselaar’s benefits claim was denied by Unum, because due to
their divorce, Gerard “was no longer eligible for coverage under the policies . . . [as] he
was no longer an eligible dependent" and “was not covered on the date of his death.” AR
Mount Mercy argues that it was not the cause of Snitselaar’s harm because
Snitselaar relied on advice from her divorce attorney that coverage would continue after
the divorce, and therefore, neither she nor Gerard exercised their conversion rights. See
Mount Mercy’s Brief at 14. The court is unpersuaded by this argument. In support of its
argument, Mount Mercy references a “Claim Document,” in which a Unum employee
documented a telephone conversation she had with Snitselaar. See AR at 91. The
document states that “both [Snitselaar’s] lawyer and Gerard’s lawyer advised [Snitselaar]
that per the decree, as the policy was in her name, she would be entitled to the benefits.”
Id. This document does not support Mount Mercy’s argument that Snitselaar relied on her
divorce attorney’s advice to not exercise conversion rights or that the advice informed her
that divorce from Gerard would make him ineligible under the group life insurance policy.
Instead, the document simply demonstrates that, because the group policy was in
Snitselaar’s name, under the divorce decree, she would be entitled to the benefits. The
reason Snitselaar was harmed is that Mount Mercy failed to provide Snitselaar a summary
plan description, which would have provided her with notice that Gerard would cease to
be a covered dependent if they got divorced, and would have provided her notice of the
conversion rights with respect to Gerard. Because Snitselaar was not provided the
summary plan description as required by §§ 1022(b) and 1024(b)(1), the conversion rights
provided for in the group policy were not timely exercised after her divorce from Gerard.
Therefore, her claim for benefits was denied because Gerard was ineligible under the
Mount Mercy also references a June 2015 email, where a Mount Mercy employee
requested assistance from Unum in interpreting the insurance policy.3 See AR at 160. The
email states that Snitselaar’s divorce was final in late February 2015 and that a co-worker
“found something on page 21 that talks about a divorced spouse is not eligible.” Id. The
email further states:
We would be grateful for any help you can provide to us on
this. We should have checked it out when [Snitselaar] came
into our office in March but when she said that her lawyer said
it was ok as long as she continued to pay the premium we
didn’t do anything more.
Id. This email is too vague to support Mount Mercy’s argument that Snitselaar relied on
advice from her divorce attorney regarding Gerard’s eligibility under the group policy and
the failure to exercise the conversion rights. An email that states Snitselaar’s “lawyer said
it was ok” does not eliminate the harm caused by Mount Mercy’s failure to provide
Snitselaar with the summary plan description. See Silva, 762 F.3d at 721 (providing that
a plan administrator breaches its fiduciary duty when it fails to provide a plan participant
A second email from a third-party, Mercer Health & Benefits, LLC, to a Unum
representative reiterates the information provided in the Mount Mercy email. See AR at
with the necessary information regarding a plan).
The court finds that Snitselaar has shown harm resulting from Mount Mercy’s
breach of its fiduciary duty. See id. at 722 (“To obtain relief under the surcharge theory,
a plan participant is required to show harm resulting from the plan administrator’s breach
of a fiduciary duty”); see also Amara, 563 U.S. at 444 (“We believe that, to obtain relief
by surcharge for violations of §§ [1022 and 1024(b)], a plan participant or beneficiary
must show that the violation injured him or her. But to do so, he or she need only show
harm and causation.”). Accordingly, the court finds that Snitselaar is entitled to equitable
“make-whole, monetary relief” in the amount of benefits owed under the Plan from Mount
Mercy. See Silva, 762 F.3d at 724-25 (collecting cases).
C. Attorney Fees
Snitselaar “requests attorney fees under the authority of 29 U.S.C. § 1132(g)(1).”
Amended Complaint ¶ 44. In light of the discussion above, the court finds that Snitselaar
may file an application for attorney fees. The instant order should not be construed in any
way as implying that an award of attorney fees is proper.
In light of the foregoing, Defendant Unum Life Insurance Company of America’s
decision to deny benefits is AFFIRMED. Snitselaar’s second claim for relief, Count II
of the Amended Complaint (docket no. 25), against Defendant Mount Mercy University
for breach of fiduciary duty is VALID and equitable relief is GRANTED. The Clerk of
Court is DIRECTED to enter Judgment in favor of Snitselaar against Mount Mercy in the
amount of $60,000. Snitselaar may file an application for attorney fees within 10 days of
the issuance of the instant order. Defendants may respond to any such application within
10 days of the application. The Clerk of Court is DIRECTED to close this case for
IT IS SO ORDERED.
DATED this 22nd day of January, 2019.
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