Sankey v. Metropolitan Life Insurance Company et al
Filing
49
ORDER & REASONS granting 39 Motion for Summary Judgment; granting 40 Motion for Summary Judgment; FURTHER ORDERED that Plaintiff's claims against all Defendants are DISMISSED with prejudice. Signed by Judge Carl Barbier on 5/2/13. (sek, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SANKEY
CIVIL ACTION
VERSUS
NO: 12-1135
METROPOLITAN LIFE INS. CO.
ET AL.
SECTION: "J” (1)
ORDER AND REASONS
Before
the
Court
are
Defendants'
Motions
for
Summary
Judgment (Rec. Docs. 39, 40), Plaintiff's opposition to both
(Rec. Doc. 42), and Defendants' reply to same (Rec. Doc. 48).
Defendants' motions were set for hearing on April 10, 2013, on
the
briefs.
The
Court,
having
considered
the
motions
and
memoranda of counsel, the record, and the applicable law, finds
that Defendants' motions should be GRANTED for the reasons set
forth more fully below.
PROCEDURAL HISTORY AND BACKGROUND FACTS
In this civil action, Plaintiff sues on a life insurance
policy under which she was the named beneficiary and her deceased
husband
was
the
named
insured.
1
Plaintiff’s
husband,
Donald
Franklin Sankey, Jr. ("Mr. Sankey"), was employed by Textron,
Inc. (“Textron”) and had life insurance coverage through a group
policy
with
Metropolitan
Life
Insurance
Company
(“MetLife”)
during his employment. Plaintiff alleges that after Mr. Sankey
terminated his employment, he converted his group policy into an
individual life insurance policy.
Plaintiff asserts that the
policy was worth $188,000 and was issued for a monthly premium of
$638.56.
After
Mr.
Sankey
passed
away
on
April
12,
2011,
Plaintiff submitted a claim to MetLife under the individual life
insurance policy. Plaintiff alleges that on June 21, 2011, she
received a letter from MetLife informing her that MetLife had
made a mistake in issuing the policy and would not honor the
death coverage benefits of $188,000. She asserts that MetLife
only agreed to pay a lesser amount of $55,200, unilaterally
canceling the original policy, issuing a new policy pursuant to
which the limited death benefit was paid, and issuing Plaintiff a
check for the unused premiums.
Plaintiff
commenced
this
action
in
state
court
against
MetLife and Roland Rusich ("Mr. Rusich"), the insurance agent who
allegedly
procured
the
individual
policy
from
MetLife.
Her
petition alleges that MetLife breached its obligation to her by
refusing to pay the full amount of the policy, failing to act
2
upon her application within a reasonable amount of time, and
retroactively
amending
coverage.
She
alleges
that
MetLife
is
liable for the additional contractual amount representing the
difference between $188,000 and the $55,200 she was paid.
She
also claims that she is entitled to penalties, damages, and
attorney’s fees.
MetLife filed a notice of removal with this
Court on May 3, 2012, asserting that federal jurisdiction was
proper under ERISA. On June 6, 2012, Plaintiff filed a motion to
remand. On June 19, 2012, the Court issued an Order and Reasons
denying
the
motion
to
remand
and
finding
that
federal
jurisdiction was appropriate under ERISA.
Defendants filed the instant motions on March 26, 2013.
Plaintiff
responded
in
opposition
on
April
5,
2013,
with
Defendants replying on April 15, 2013.
THE PARTIES’ ARGUMENTS
Defendants argue that Plaintiff's claims against them should
be dismissed as a matter of law. With respect to Plaintiff's
claims
against
Mr.
Rusich,
Defendants
argue
that
Plaintiff's
state law claims against him are completely preempted by ERISA
and, therefore, must be dismissed. Defendants contend that in the
Court's June 19, 2012 Order and Reasons, it determined that this
case fell within the scope of ERISA, thereby also effectively
3
determining that ERISA completely preempted any state law claims.
Furthermore, Defendants argue that even if Plaintiff's claims
against Mr. Rusich are not preempted, they are still without
merit.
With
respect
to
Plaintiff's
ERISA-estoppel
claim,
Defendants argue that Plaintiff cannot meet all of the essential
elements of that claim. In particular, Defendants assert that
because Mr. Rusich represented to Plaintiff's late husband that
he was receiving a $188,000.00 whole life policy, and because
Plaintiff's late husband did in fact receive that policy, Mr.
Rusich did not misrepresent any material facts. As a "material
misrepresentation"
is
claim,
assert
Defendants
the
first
that
element
of
Plaintiff's
an
ERISA-estoppel
claim
against
Mr.
Rusich fails.
Likewise, Defendants also argue that Plaintiff's allegations
that Mr. Rusich "'never communicated any policy coverage errors'"
to her or her husband is of minimal significance. Defs.' Mem. in
Supp., Rec. Doc. 40-1, p. 7.
Defendants assert that MetLife did
not discover the error until after Mr. Sankey's death. Defendants
report that MetLife promptly notified Ms. Sankey at that time
and, therefore, there was no error or omission on the part of Mr.
Rusich.
Furthermore, Defendants also assert that the terms of
the Textron plan clearly explain that the amount available for
4
conversion must be decreased by any accelerated benefit received
by the insured. Thus, they argue that Mr. Sankey knew that he was
not entitled to the $188,000 whole life policy, because he had
previously
applied
for
accelerated
benefits
from
his
supplemental life insurance plan. Defendants contend that Mr.
Sankey had a $276,000 supplemental life insurance plan, which he
accelerated
applying
in
for
December
the
2009.
accelerated
Defendants
benefits,
assert
Mr.
that
Sankey
upon
received
$220,800 of those benefits. Thus, they report that he was left
with $55,200 in coverage that was eligible for conversion.
such,
Defendants
reasonably
or
contend
justifiably
that
Mr.
relied
on
Sankey
any
"could
not
As
have
'representations.'"
Defs.' Mem. in Supp., Rec. Doc. 40-1, p. 8.
As to Plaintiff's claims against MetLife, Defendants propose
the following framework for reviewing the plan administrator's
interpretation of an ERISA plan. First, Defendants contend that
the court must determine whether the administrator's decision was
legally
correct.
Second,
if
the
court
determines
that
the
administrator was legally incorrect, the court must review the
decision for an abuse of discretion. Defendants assert that the
administrators decision can only be overturned by the court if it
was
arbitrary
and
capricious.
5
Thus,
Defendants
argue
that
MetLife's determination that Mr. Sankey did not have the right to
convert the group plan to an individual plan for $188,000 was
legally correct. Further, they contend that if it was incorrect,
there
is
substantial
decision,
thereby
evidence
to
indicating
support
that
he
the
did
administrator's
not
abuse
his
discretion.
In addition, Defendants argue that Plaintiff's state law
claims are preempted under ERISA. Likewise, they also contend
that
Plaintiff's
punitive
damages
claims
must
be
for
penalties/extracontractual
dismissed
because
they
are
and
not
an
available remedy under ERISA.
In response, Plaintiff contends that this Court does not
have subject matter jurisdiction over this case because it is not
an
ERISA
case.
Specifically,
Plaintiff
asserts
that
in
this
Court's previous Order and Reasons it only held that ERISA may
apply. Plaintiff argues that there are new facts which clearly
indicate
that
individual
plan
this
that
was
is
not
an
ERISA
not
subject
plan,
to
but
ERISA.
rather,
As
an
evidence,
Plaintiff submits the deposition of Mr. Rusich. Plaintiff argues
that Mr. Rusich's testimony "confirms that Mr. Sankey terminated
his employment with Textron in July 2010
. . . and advised
Textron of his desire to convert to an individual life insurance
6
policy." Pl.'s Opp., Rec. Doc. 42, p. 2 (emphasis in original).
Thus,
Plaintiff
asserts
that
the
plan
in
question
was
an
individual plan, not a group plan, which is not covered under
ERISA's statutory scheme. In support of this argument, Plaintiff
relies on Miller v. Rite Aid Corp., 504 F.3d 1102 (9th Cir.
2007). Plaintiff asserts that in Miller, the court found that
"converted
plans
Plaintiff
are
contends
not
that
ERISA
the
plan
plans."
in
Id.
this
at
1109.
case,
which
Thus,
is
an
individual plan that was converted from a group plan, cannot be
covered under ERISA.
Furthermore, Plaintiff argues that MetLife has waived any
claim that it can dispute a "right to convert" because MetLife
allowed Mr. Sankey to keep the plan for eight months. Plaintiff
also
argues
that
Defendants
are
estopped
from
disputing
the
converted plan after Mr. Sankey's death. Plaintiff contends that
under state law, because the obligation to pay benefits had come
due, the insurer could not retroactively modify the policy and/or
change
the
coverage.
Lastly,
Plaintiff
asserts
that
if
this
action is an ERISA action, summary judgment is not appropriate
because under ERISA, Defendants breached their fiduciary duties
and, therefore, Plaintiff should be allowed to proceed with these
fiduciary claims.
7
In
their
reply,
Defendants
argue
that
Plaintiff
misunderstands the purpose of a conversion option in a group life
insurance plan. Defendants report that Mr. Sankey's group plan
contained an option to convert the plan into an individual plan.
They assert that this option ensured that Mr. Sankey would not
have
to
provide
evidence
of
insurability
to
receive
the
individual plan. Defendant explains that the group plan stated
that "the maximum amount of insurance that [Mr. Sankey] may elect
for the new policy is the amount of [his] Life Insurance which
ends under the Group Policy." Defs. Reply, Rec. Doc. 48, p. 2.
Thus, Defendants argue that the Court has to interpret the groupERISA plan in order to understand whether Mr. Sankey was entitled
to the disputed individual policy. As such, Defendants assert
that the "right to convert" is the central issue in this case and
makes this case an ERISA case.
In addition, Defendants contend that Mr. Rusich's deposition
adds
no
new
administrative
facts
to
record,
this
case
thereby
and
making
is
it
outside
improper
of
the
summary
judgment evidence in an ERISA case. Defendants further argue that
even if Mr. Rusich's testimony was admissible, it would not
matter
because
it
does
not
conflict
with
the
administrative
record which clearly shows that this is a plan covered by ERISA.
8
Lastly,
Defendants
contend
that
this
Court
has
already
distinguished much of the authority that Plaintiff cited in its
previous
Order
and
Reasons.
Defendant
also
asserts
that
the
additional sources cited are all easily distinguishable.
DISCUSSION
A.
Subject Matter Jurisdiction
Because
the
Court
cannot
proceed
with
the
substantive
analysis of this case if it lacks subject matter jurisdiction, it
begins
by
addressing
Plaintiff's
arguments
that
despite
the
Court's findings in its June 19, 2012 Order and Reasons, it lacks
subject matter jurisdiction. Plaintiff argues, as it did in the
previous motion to remand, that ERISA does not govern this suit
because it involves the benefits awarded under an individual
plan.
Defendants
reiterate
that
this
suit
does
not
involve
benefits due under an individual plan, but rather, concerns Mr.
Sankey's right to convert his group plan to an individual plan
for
$188,000.
Therefore,
Defendants
contend
that
this
case
concerns the right to convert a group plan and, as such, is
governed by ERISA's statutory framework. For the reasons stated
in the aforementioned Order and Reasons, this Court agrees with
Defendants' assessment of this case. "Effective resolution of
[Plaintiff's] claim requires judicial consideration of whether
9
Mr. Sankey had a right to convert based on the Textron group
plan." June 19, 2012 Order and Reasons, Rec. Doc. 15, pp. 14-15.
Thus, all of Plaintiff's state law claims against MetLife and Mr.
Rusich are preempted by ERISA, and the Court has jurisdiction
over this case.1
B.
Summary Judgment
With the ERISA framework in mind, the Court now moves to
Defendants'
summary
judgment
arguments.
Summary
judgment
is
appropriate when “the pleadings, the discovery and disclosure
materials on file, and any affidavits show that there is no
genuine issue as to any material fact and that the movant is
entitled to judgment as a matter of law.”
Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986) (citing FED. R. CIV. P. 56(c));
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
When assessing whether a dispute as to any material fact exists,
the
Court
considers
“all
of
the
evidence
in
the
record
but
refrains from making credibility determinations or weighing the
evidence.”
Co.,
530
Delta & Pine Land Co. v. Nationwide Agribusiness Ins.
F.3d
395,
398
(5th
1
Cir.
2008).
All
reasonable
Inherent in this finding is the Court's recognition that Mr. Rusich's
deposition does not substantively change this action in any way. Just as it is
clear from the record that the plan in question was an individual plan, it is
also undisputed that Mr. Sankey was only able to obtain this policy by virtue of
his Textron group plan. The individual policy was a converted policy. As such,
it is the terms of the group policy that govern its existence.
10
inferences are drawn in favor of the nonmoving party, but a party
cannot defeat summary judgment with conclusory allegations or
unsubstantiated assertions.
Little, 37 F.3d at 1075. A court
ultimately must be satisfied that “a reasonable jury could not
return a verdict for the nonmoving party.”
Delta, 530 F.3d at
399.
If the dispositive issue is one on which the moving party
will bear the burden of proof at trial, the moving party “must
come forward with evidence which would ‘entitle it to a directed
verdict if the evidence went uncontroverted at trial.’”
Int’l
Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1263-64 (5th
Cir. 1991) (citation omitted).
The nonmoving party can then
defeat the motion by either countering with sufficient evidence
of its own, or “showing that the moving party’s evidence is so
sheer that it may not persuade the reasonable fact-finder to
return a verdict in favor of the moving party.”
Id. at 1265.
If the dispositive issue is one on which the nonmoving party
will bear the burden of proof at trial, the moving party may
satisfy its burden by merely pointing out that the evidence in
the record is insufficient with respect to an essential element
of the nonmoving party’s claim.
See Celotex, 477 U.S. at 325.
The burden then shifts to the nonmoving party, who must, by
11
submitting
or
referring
to
evidence,
set
showing that a genuine issue exists.
out
specific
facts
See id. at 324.
The
nonmovant may not rest upon the pleadings, but must identify
specific facts that establish a genuine issue for trial.
See,
e.g., id. at 325; Little, 37 F.3d at 1075.
1. Legality of Plan Administrator's Determination
Defendant argues that the plan administrator's decision to
cancel Mr. Sankey's policy was legally correct and, therefore,
that the Court must find in its favor on summary judgment. The
Court agrees.
The district court reviews a plan administrator's decision
to deny benefits de novo. Holland v. Int'l Paper Co. Ret. Plan,
576 F.3d 240, 246-47 (5th Cir. 2009). Where the benefit plan has
given
the
administrator
complete
discretionary
authority
to
determine eligibility for benefits and/or to construe the terms
of
the
plan,
the
Court
determines
whether
the
administrator
abused his discretion in denying a claim. Id. at 246. In the
Fifth Circuit, courts use a two-step analysis to determine abuse
of discretion. Vercher v. Alexander & Alexander, Inc., 379 F.3d
222, 227-28 (5th Cir. 2004) (citing Rhorer v. Raytheon Eng'rs and
Const'rs, Inc., 181 F.3d 634, 639 (5th Cir. 1999)). First, the
court evaluates whether the plan administrator's determination
12
was
legally
correct,
correct.
then
the
Id.
inquiry
If
the
ends.
determination
Id.
However,
was
if
legally
the
court
determines that the administrator's determination was not legally
correct, then the court determines whether the
constituted an abuse of discretion. Id.
administrator's
determination
is
interpretation
In evaluating whether an
legally
correct,
the
court
considers "'(1) whether a uniform construction of the [plan] has
been given by the administrator, (2) whether the interpretation
is fair and reasonable, and (3) whether unanticipated costs will
result from a different interpretation of the policy.'" Id. at
228 (quoting Lain v. UNUM Life Ins. Co. of America, 279 F.3d 337,
344 (5th Cir. 2002)). Where there have been no allegations that
the construction of the plan was not uniform or that there were
unanticipated costs, the court may direct its inquiry to the
second prong of the test and evaluate whether the interpretation
of the plan was fair and reasonable. See id.
factors,
the
district
court
correctly
("Applying these
determined
that
the
essential inquiry here is whether MetLife's interpretation of the
plan was fair and reasonable, as [plaintiff] did not allege that
the construction of the plan was not uniform or that there were
unanticipated costs.") Eligibility for ERISA benefits is governed
by the plain language of the contract. High v. E-systems Inc.,
13
459
F.3d
573,
578-79
(5th
Cir.
2006)
(citing
Threadgill
v.
Prudential Sec. Grp., Inc., 145 F.3d 286, 292 (5th Cir. 1998)).
The
Fifth
Circuit
applies
ordinary
principles
interpretation when interpreting ERISA plans.
of
contract
High, 459 F.3d
at
578-79 (citing Wegner v. Standard Ins. Co., 129 F.3d 814, 818
(5th Cir. 1997)).
Textron's
group
plan
gives
the
plan
administrator
discretionary authority to interpret the plan and to determine
eligibility
decision
to
for
benefits;
cancel
Mr.
therefore,
Sankey's
the
policy
Court
under
reviews
the
the
abuse
of
discretion framework outlined above.2 The record before the Court
shows that through his group plan, Mr. Sankey had a $276,000.00
supplemental life insurance policy and a $138,000 basic life
insurance policy.3 On December 7, 2009, Mr. Sankey completed an
Accelerated Benefits Claim Form, requesting acceleration of his
supplemental
life
MetLife
Mr.
paid
insurance
Sankey's
policy.4
On
accelerated
December
benefits
21,
claim
2009,
in
the
amount of $220,800.00.5 At that time, it also sent Mr. Sankey a
2
Defs.' Ex. A Part 2, Rec. Doc. 39-4, p. 9.
3
Defs.' Ex. A Part 2. Rec. Doc. 39-4, p. 28.
4
Defs.' Ex. A Part 2, Rec. Doc. 39-4, p. 32.
5
Defs.' Ex. A Part 2, Rec. Doc. 39-4, p. 43.
14
letter explaining that due to the payment of his accelerated
benefits claim, he only had $55,200 remaining in his supplemental
group life insurance plan.6 On September 3, 2010, Mr. Sankey
applied for an individual life insurance plan with MetLife.7 Mr.
Sankey's application for insurance reflects that he requested a
"Whole Life" insurance policy with a face value of $188,000.8
Under the section entitled "policy options," Mr. Sankey chose
"Group Conversion Only."9 Likewise, the form also noted that the
method used to arrive at the face value recommendation for the
new individual policy should be "Group Conversion."10
The
Textron
group
plan
states
that
at
conversion,
"the
amount to which You are entitled to convert under the section
entitled
LIFE
INSURANCE:
CONVERSION
OPTION
FOR
YOU,
will
be
decreased by: the amount of the accelerated benefit paid by
[MetLife]; and the Interest and Expense Charge." Defs.' Ex. A-1
Part 1, Rec. Doc. 39-3, p. 44. Thus, as of September 3, 2010,
6
Defs.' Ex. A Part 2, Rec. Doc. 39-4, p. 43.
7
Defs.' Ex. A Part 2, Rec. Doc. 39-4, pp. 44-57.
8
Defs.' Ex. A Part 2, Rec. Doc. 39-4, p. 45.
9
Defs.' Ex. A Part 2, Rec. Doc. 39-4, p. 45. The Court notes that per Mr.
Rusich's deposition it is clear that Mr. Rusich completed the application forms;
however, Mr. Sankey signed the forms thereby indicating awareness of their
content.
10
Defs.' Ex. A Part 2, Rec. Doc. 39-4, p. 52.
15
under the plain terms of the group policy, because Mr. Sankey had
previously accelerated his benefits under his supplemental life
insurance policy, he only had $55,200 available to convert into
an
policy.11
individual
determination
that
Mr.
As
Sankey
such,
did
the
not
have
administrator's
a
right
to
an
individual life insurance policy in the amount of $188,000 was
legally correct and in keeping with the fair and reasonable terms
of the plan.12 Accordingly, the Court finds that as a matter of
law, the administrator's determination should be upheld.
In
making
this
determination
the
Court
also
finds
Defendants' reliance on White v. Provident Life & Accident Ins.
Co.,
114
F.
3d
plaintiff
sued
insurance
policy
26
his
(4th
Cir.
insurer
and
a
for
1997),
persuasive.
coverage
converted
under
individual
a
life
In
White,
group
life
insurance
policy. 114 F.3d at 27. The plaintiff, while retaining coverage
under his group life insurance policy, had applied for and was
11
The amount of the accelerated benefit payment was $220,800 of $276,000
of available coverage, thereby leaving $55,200 of coverage available. The Court
notes that this calculation does not take into account the $138,000 basic life
insurance policy under which Mr. Sankey had coverage. Neither party has asserted
that this policy should have been taken into account in assessing the total
amount of coverage available under Mr. Sankey's individual life insurance policy.
Likewise it is clear from the record that MetLife fully paid the benefits due
under Mr. Sankey's basic life insurance policy on June 14, 2011 and that the
policy was never converted. Defs.' Ex. A-1 Part 3, Rec. Doc. 39-5, pp. 23-35;
Defs.' Ex. A-1 Part 5, Rec. Doc. 39-7, p. 78.
12
See Defs.' Ex. A-1 Part 3, Rec. Doc. 39-5, p. 38 (June 21, 2011 letter
explaining reasoning for issuing new $55,200.00 policy to Mr. Sankey).
16
issued
a
converted
plaintiff's
maintain
group
coverage
life
insurance
policy
provided
simultaneously
policy.
that
under
Id.
Nevertheless,
insureds
both
could
not
policies.
Id.
Approximately four years after issuing plaintiff the policy, the
insurance company realized its mistake and notified plaintiff
that he could not maintain coverage under both policies. Id. The
insurance company repaid plaintiff's premiums on the individual
policy and requested that the policy be returned. Id. Plaintiff
refused. Id. The court found that the plain language of the group
policy indicated that plaintiff had no right to a converted
individual policy as long as he maintained his group insurance
coverage.
Id.
administrator
at
was
28.
As
correct
such,
in
the
his
court
found
determination
that
the
that
the
individual plan should be returned, and that plaintiff was not
eligible for benefits under the individual plan. Id.
In the instant matter, as in White, the issue of whether Mr.
Sankey is entitled to $188,000 of coverage under the individual
conversion policy is contingent upon the terms of Mr. Sankey's
group plan. In this case, just as the insurance company in White
mistakenly issued the plaintiff an individual conversion plan
outside the terms of the group policy, MetLife also mistakenly
issued a plan that was not allowed per the plain language of the
17
group policy. Furthermore, upon realizing the discrepancy, just
like the insurance company in White, MetLife immediately notified
Plaintiff of the error, issued the proper policy, and returned
the premiums to Plaintiff.13 Thus, as the court in White found
that the plaintiff was not entitled to the mistakenly issued
policy, this Court also finds that the Plaintiff in this case is
not entitled to the $188,000.00 individual conversion policy.
Rather, Plaintiff is only entitled to the $55,200 policy that
should have been issued in the first place.
2. ERISA-Estoppel and/or Waiver
Plaintiff has argued that even if the Court finds that the
plan
administrator's
interpretation
was
legally
correct,
it
should find that Plaintiff is still entitled to the $188,000
individual conversion plan under the doctrines of ERISA-estoppel
and/or
waiver.
The
Court
finds
that
Plaintiff's
argument
is
without merit.
To establish an ERISA-estoppel claim in the Fifth Circuit,
the plaintiff must establish that: (1) there has been a material
misrepresentation;
(2)
he/she
13
reasonably
relied
on
the
See Defs.' Ex. A-1 Part 3, Rec. Doc. 39-5, p. 38 (June 21, 2011 letter
notifying plaintiff of the mistake, explaining that Mr. Sankey was issued a new
policy, and documenting that MetLife would be sending Plaintiff an check for
$4,467.35, which is the amount of the excess premiums paid for the mistakenly
issued policy).
18
misrepresentation to his/her detriment; and (3) extraordinary
circumstances existed. Mello v. Sara Lee Corp., 431 F.3d 440,
444-45 (5th Cir. 2005). A "misrepresentation is material if there
is a substantial likelihood that it would mislead a reasonable
employee in making an adequately informed decision." High, 459
F.3d
at
579.
"A
'party's
reliance
can
seldom,
if
ever,
be
reasonable or justifiable if it is inconsistent with the clear
and unambiguous terms of plan documents available to or furnished
to the party.'" Id. at 580 (quoting Sprague v. GMC, 133 F.3d 388,
404 (6th Cir. 1998)).
In the instant case, even assuming that MetLife, through Mr.
Rusich, misrepresented a material aspect of the plan and that
Plaintiff relied on it to her detriment, the Court cannot find
that such reliance was reasonable. As has been noted, the plain
language of the plan provides that the amount available for
conversion to an individual plan is reduced by any accelerated
benefit payment. Such information was available to Mr. Sankey
and, therefore, it would not have been reasonable for him to rely
on
information
to
the
contrary.
Furthermore,
Defendant
has
provided the Court with a letter dated January 4, 2010, in which
MetLife explicitly explained to Mr. Sankey that his accelerated
benefits
payment
had
reduced
his
19
remaining
supplemental
life
insurance coverage to $55,200.00.14 Thus, as of September 2010,
when Mr. Sankey applied for the conversion plan, he was fully
aware that he did not have $276,000.00 available to convert.
Therefore,
the
Court
finds
that
Plaintiff's
ERISA-estoppel
argument fails as Plaintiff cannot establish all elements of the
claim.15
As to Plaintiff's waiver argument, in the Fifth Circuit,
waiver is defined as "'a voluntary or intentional relinquishment
of a known right.'" High, 459 F.3d at 581 (quoting Pitts v. Am.
Sec. Life Ins. Co., 931 F.2d 351, 357 (5th Cir. 1991)). In the
instant case, once MetLife discovered that it had issued the
mistaken policy, it immediately canceled the policy and returned
all of Mr. Sankey's premium payments. As such, the Court cannot
say that MetLife acted intentionally to relinquish its rights
and, therefore, the doctrine of waiver does not apply to this
14
Def. Ex. A-1 Part 2, Rec. Doc. 39-4, p. 45. While the Court is aware
that Plaintiff contests that Mr. Sankey ever read this letter, the Court also
notes that Plaintiff has not provided the Court with any summary judgment
evidence such as deposition testimony to corroborate that assertion. Furthermore,
even if Mr. Sankey had not read the letter, he was still privy to the plain terms
of the plan and could not reasonably rely on any representations contrary to the
plan.
15
The Court also notes that even if Plaintiff could establish that Mr.
Sankey reasonably relied on the alleged misrepresentation, she has still failed
to provide any evidence of "extraordinary circumstances" as required by the third
prong of the estoppel test. See Mello, 431 F.3d at 443 (finding that repeated
assurances that insured would receive a certain amount of benefits for a six-year
period constituted extraordinary circumstances).
20
case. See Pitts, 931 F.2d at 357 (finding waiver had occurred
only
where
an
insurance
company
continued
to
accept
premiums/cashed premium checks five months after learning that a
policy was issued in error).
3. Extracontractual Damages and/or Penalties
Defendants also argue that Plaintiff's claims for penalties
and damages should be dismissed as they are not allowed under
ERISA. The Court agrees.
The
ERISA
statute
states,
in
pertinent
part,
that
a
participant or beneficiary of the policy may file suit in order
to recover, “benefits due to him under the terms of his plan, to
enforce his rights under the terms of the plan, or to clarify his
rights to future benefits under the terms of the plan.” 29 U.S.C.
§ 1132(a)(1)(B). The Supreme Court has stated that the civil
remedies
provided
by
the
statute
were
intended
to
be
comprehensive and exclusive, explaining that, “Congress did not
intend to authorize other remedies that it simply forgot to
incorporate expressly.” Mass. Mutual Life Ins. Co. v. Russell,
473 U.S. 134, 146-48 (1985); see also Pilot Life Ins. Co., 481
U.S. at 54. In keeping with the Supreme Court’s opinions, the
Fifth Circuit has expressly found that ERISA does not allow for
recovery of extracontractual, punitive, or compensatory damages.
21
Rogers v. Hartford Life & Acc. Ins. Co., 167 F.3d 933, 943-44
(5th Cir. 1999); Medina v. Anthem Life Ins. Co., 983 F.2d 29, 3233 (5th Cir. 1993). Extracontractual damages are defined as more
damages than a beneficiary would be entitled to receive under the
terms of the ERISA plan. Nero v. Industrial Molding Corp., 167
F.3d 921, 931 (5th Cir. 1999). Thus, any damages Plaintiff seeks
that are beyond the scope of what the Court could award under the
life
insurance
plan
should
be
dismissed.
Likewise,
as
any
penalties would also be beyond the scope of the ERISA plan, they
should also be dismissed. Accordingly,
IT IS ORDERED that Defendants' motions are GRANTED.
IT IS FURTHER ORDERED that Plaintiff's claims against all
Defendants are DISMISSED with prejudice.
New Orleans, Louisiana this 2nd day of May, 2013.
____________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
22
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