BENNETT v. OFFICE OF PERSONNEL MANAGEMENT, (OPM) et al

Filing 24

MEMORANDUM OPINION AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE signed by MAG/JUDGE JOE L. WEBSTER on 10/22/2014 as set out herein. RECOMMENDED that the court GRANT Defendant's motion to dismiss (Docket Entry 14 ) pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction.(Taylor, Abby)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
LINDA M. BE,NNET:|,
Executtix for the Estate of
Eltzabeth H. Maynard,

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Plaintiff,

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V

1:14CY1,37

)

OF'F'ICE OF PE,RSONNEL
MANAGEMENT, OF'F'ICE OF
FEDERAI E,MPLOYE,E,'S GROUP
LIFE, INSURANCE, and
METROPOLITAN LIF'E,
INSURANCE CO
Defendants

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)
)

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MEMORANDUM OPINION AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
This mattet is before the court on Defendant Office of Personnel Management's

("OPM") motion to dismiss the complaint pursuant to Federal Rules of Civil Procedure
12þ)(1) and 12þ)(6) on the basis that the Defendant has not waived soveteign immunity.
(Docket Entry 14.) Plaintiff Linda Bennett ("Plaintiff' or "Bennett"), appearingpro iz, filed

a response opposing the motion to dismiss. Qocket Entry 17.) OPM filed a teply.l

I

Plaintiff also filed a surreply in response to OPM's reply. pocket Entry 19.) Neither the Fedetal
Rules of Civil Ptocedure not this court's local rules of procedure provide fot the filing of sureply
briefs. See Local Rules 7.2, 7.3 þroper motion practice consists only of a motion and an
accompanying supporting bdef, a response and bdef, and a reply brief which is limited to matters
newly taised in the response); DiPaalo u. Poter,733 F. Srpp. 2d 666,670 G\,{.D.N.C. 201,0) ("Patties
do not have the dght file a surreply."). Therefote, the Court need not consider any novel
substantive ârguments made in this filing. However, given Plainttff s pro -ra status and out of an
abundance of caution, the Coutt will use Plaintiffls surreply whete it is helpful to elucidate the
arguments aheady proffeted in het Complaint and response brief.

(Docket Etttty 18.) The motion has been fully bdefed, and the mattet is tipe fot disposition.

Fot the reasons that follow, it is recommended that Defendant OPM's motion be granted.

I.

FACTU,{L AND PROCEDURAL BACKGROUND
Plaintiff filed this action in the Middle District of Notth Caroltna on February 18,

201,4. (Docket Entty 1.) Naming three defendants (OPM, the Office of Federal Employee's

Gtoup Life Insurance IOFEGLI], and Mettopolitan Life Insutance Co. [Metl-ife]), Plaintiff
alleges sevetal causes

of action telating to the disribution of benefits undet the life insutance

policy of E,ltzabeth Maynatd, Plaintiffs mothet, following Maynatd's death in October

201,2.

These causes of action include a violation of the Federal Employee's Gtoup Life Insurance

Act, 5 U.S.C.

S 8701 et seq.

('FEGLIA"), breach of contract, negligence, negligent infliction

of emotional distress, unfatt settlement ptactices, and fraud. (Compl. at2,Docket Entry

1.)

Plaintiff seeks a |ury tiaI, a reversal of the life insurance payments already disbursed to
Pamela Roney, Plaintiff's sistet, and compensatorT and punitive damages. Qd. at L4.)

The facts of this action center on Elizabeth Maynard's life insurance policy thtough

Metlife and the Federal Employees' Group Life

Insurance Program

("FEGLI" ot

"Progtam"). "Congtess enacted trEGLIA rn 1954 to provide low-cost group life insurance

to Federal employees. Under FEGLIÂ, insurance benefits ate provided undet a master
policy issued by Metlife to the [OPlt{]. OPM administers FEGLIA and has the authority to
ptescribe tegulations necessarT

to c^rry out FEGLIA's purposes."

Metro. Life Ins. Co.

u.

Christ,979 tr.2d 575,576 (7th Cir. 1992) (internal quotations and citations omitted). In turn,

Metlife created a nongovetnmental Office of Federal Employees' Group Life

2

Insutance

('OFEGLI") to administer and adjudicate claims under the Program.2 In this tegard, OPM
operates as an insutance policy holdet, while

Metlife operates

as a

policy issuet

Plaintiff alleges that, at some point dudng het üfe, ldaynard listed both Plaintiff and
Roney as beneficiades on het FEGLI life insutance policy. (Compl. at

9.) However, priot

to her death, Maynatd changed het policy to only list Roney as a benefìciary. Plaintiff
strongly suggests that this change occurred as a result

of undue influence on the part of

Roney. (Id. at 12-13). ìØhen Plaintiff discoveted het mothet's death and subsequently
applied

fot

insutance payments, she was informed that her application was denied and

payment had akeady been made to the named beneficiary. Qd. at 1.0.) Bennett complained

to OPM and OFEGLI, but both parties allegedly dismissed het complaints. (Id. at

11-13.)

Plaintiff contends that these two actions constitute a bteach of OPM and OFEGLI's duty to
veri$z that payment

of a üfe insurance policy is made on establishment of a valid claim (in

this case, ptopedy detetmining whether the change in Maynard's life insurance policy was
the tesult of undue influence and therefore not a valid change). (Id. at 12-1.3.)

II.

STANDARD OF REVIEW
This Coutt must libetally construe complaints ftledl:y pro re litigants, to allow them to

fully develop potentially meritorious cases.

See,

e.!., Craq u. Beto, 401, U.S. 319 (1972).

Flowevet, this tequirement of liberal consttuction does not mean that the Coutt can ignore

a

clear failute in the pleadings. ll/eller u. Dep't of Sodal Serar,901F.2d387 (4th Cir. 1990)

2 Planttff cites to the OPM FEGLI Handbook for the basic policies and structure of FEGLI, and
these facts are not in contention. -fee OPM Fedetal Employees' Group Life Insurance (FEGLI)
Progtam Handbook 2, øaailable at htç://www.opm.gov/healthcare-insurance/lifein s utan

ce

/

re

feren

ce

-m aterials f handb

o

ok. p d f Q0 1, 4) .
a

-)

OPM

seeks dismissal putsuant

to two Federal Rules of Civil Procedure: 12þ)(1) fot

lack of subject matter judsdiction and 1,2þ)(6) fot failure to state a clatrnJ
defendant taises a 1,2þ)(1) challenge to a plaintifls claim, "the burden
matter jurisdiction is on the

plaintiff."

'VØhen

of proving

Nchmond, F-redric,Qsbørg dz Potomac

kk

a

subject

Co. u. United

States,945 tr.2d765,768 (4th Cir. 1991) (citing Adams u. Bain,697 F.2d 121.3,1219 (4th Cu.

1982)). "In detetmining whether jurisdiction exists, the district court is to regard the
pleadings' allegations as mere evidence on the issue, and rr'ay consider evidence outside the
pleadings without converting the ptoceeding

to one for summary judgment," though the

court will apply the standard applicable to a motion fot summary judgment. Id. The movant

will prevail "only if the mateial jurisdictional facts are not in dispute and the moving patty is
entitled to prevail as a matter of
81,3

law." Id. (ctlng Treatacosta

u. FronÍier Padfic Ainraft Iadas.,

tr.2d 1553, 1558 (9th Cir. 1987)).

It is well settled that the United States "enjoys soveteign immunity from suit unless it
expressly waives such

(citing United

imm.r.rity." Henþt u. Be//0,555 tr. App'*. 224,226 (4th Cir.

States u. Mc'I-.ernore,45

U.S. 286,288 (1846)).

show that the United States has waived

If a plaintiff fails in her butden to

its sovereign immunity, "the

dismissed fot want of judsdiction under Rule 12þ)

case should be

(1)." l[/illians u. United States, 50 tr.3d 299,

304 (4th Cn. 1995) (citing Kirchmann u. United States, S tr.3d 1273,1275 (8th C1t. 1,993));

¡ Although OPM

201,4)

see

also

classifies its motion as one undet both Federal Rules 12þX1) and 12þ)(6), OPM's
motion only addresses the issue of sovereþ immunity. Because the Coutt recognizes this as a
jurisdictional issue, it need not addtess the merits of the motion undet 12þ)(6). See Henþ u. Be//0,
555 F. App'" 224,227 (4th Cir. 2014) (zffirming disuict court's dismissal "fot lack of subject-mattet
jurisdiction on soveteþ-immunity grounds).
4

þ.D.I.C.

u.

Mejter,510 U.S. 471,475 (1994) (noting that "fs]overeign immunity is jurisdictional

in nature.").

III.

DISCUSSION
The only issue for the Court to decide in this matter is whether ot not the United

States has waived

its soveteign immunity with respect to Bennett's claim.

Govetnment's motion must fall.

If not,

If

so, then the

then the motion must be granted and OPM must be

dismissed from the present action.

It is undeniable that the United States
cettain claims against
657-58 (D.C.

Ct.

the extent that

FEGLL\]

it

under the

has waived sovereign

FEGLI-{.

See, e.!., Barne¡

immunity with respect to

u. Unind Stutes, 307 tr.2d 655,

1962) (concluding that "the United States has consented to be sued . . . to

^fly

such civil action or claim can

and a breach by the Govetnment

be ¡hown

to inuolue sorne rigbt reated @ lthe

of some duty with respect theteto.") (emphasis

added). Adopting the D.C. Citcuit's test, the present motion then boils down to two simple
questions: Does the Act confet upon Bennett a right to ensure a change in beneficiades of

life insutance policy undet FEGLI was validly enacted, and,

if

a

so, did the Government

breach that duty in this case?

Coufts disagree about the limit of the Government's duties under trEGLL{. Some
courts have held that the Government has a duty to teview an insured's beneficiary fotms

for accuracy. In
a

Carson u. United

SÍate¡No. 92-2231,1993WL 219211 P.D.C. June 7, 1,993),

widow sued for nonpayment of life insurance benefìts under FEGLI, and contended that

the alleged cancellation of her late husband's insutance policy should have been deemed
ineffective. The plaintiff claimed that het husband telied on the Govetnment's misleading

5

representation that it would pay his life insutance conffibutions, or, altetnatively, that he was

*2. In

not competent, three months before his death ftom AIDS, to waive coverage. Id. at
tesponse, the United States argued that rt had no affrmative duty

to ensure the insured's

competency before cancelling his policy ot to inform the beneficiaries of the cancellation.

Id. at x3. The coutt accepted the plaintifls argument about the insured's competency, and
denied the Govetnment's motion. Id. atx4. In so tuling, the court held that the complaint

taise[d] a material disputed fact regarding fthe insured's] legal competence to
waive his life insurance policy. It is possible plaintiff may be able to
demonstrate at tial that the deceased's waivet of his life insutance benefìts
was not effective, eithet because he was incompetent to waive the benefìts ot
because he detdmentally relied on
. the representation of the District of
Columbia government.

Id. atx4;

see

al¡o

Nixon a. United States,916 F.Supp.2d 855, 861 (Nl.D. I11.2013) (denying the

Government's motion to dismiss when plaintiffs alleged that the Government breached
legal duty

it

a

owed undet FEGLIA by failing to cottectly maintain a beneficiary designation

form.).

In contrast, othet courts have held that the Government owes no duty to ensure the
correctness

of benefìciary designation forms. Fot example, rn Argent

2516, 1,991

Vil,

u. OPM,

No. 96 Civ.

473975 (S.D.N.Y. ,\ug. 20, 1997), the coutt gtanted the govetnment's

12þ)(1) motion to dismiss based on very similar facts to the present action. In Argent, the

plaintiff seemingly alleged that the insured's son conspited to unlawfully altet his fathet's
beneficiary designation to reduce plaintiffs share of the insurance proceeds and increase his

ov/n shate. Id. at

x1.

The ArgenÍ court adopted a n trow undetstanding

of

the

Government's duties undet F'EGLIA, fìnding that such duties are limited to "negotiating

('¡

and procuting group life insutance for its employees." Id. at *2 (internal citations omitted)

In

fact, the coutt went on to exptessly distinguish Car¡on ftom the present facts:

p]ven if the Govetnment has a duty to ensure that a waiver of insurance is
effective, it does not follow that the Government has a duty to review
designations fot ftaud. -A waivet of insurance telinquishes all of the insured's
rights under a policy, wheteas a designation of beneficiary form merely sets
fotth the allocation of ptoceeds which would otherwise be detetmined by law.
Id. atx3;

see

al¡o Craber u. Metro. Life Ins. Co.,855 F. Supp.2d

673,677 (l\T.D. Ohio 2012) ("the

only legal duty imposed on the United States undet F'EGLIA is to ensute that the correct

trEGLI policy is negotiated and issued");

Kimble u. United Staîes,345 F.2d 951,953 (D.C. Cir.

1,965) (finding that the Govetnment met its obligations

to insured's widow when it furnished

the insurance company with the insuted's file, even though the insutance company paid the

tesulting policy benefits to the insuted's cofiunorì law wife, not his widow); Groue u. United
SÍates,170 tr. Srpp. 176, 1,77 (E.D.Va. 1959) (holding that a suit against the Government can

be maintained "only
issuance

if it

of the insutance

could be shown that the Govetnment had failed to cause the
contract

in the proper amount

according

to

decedent's salary

eatned as an employee.").

The facts of the present action are more similat to those in Argent. As in Argent,
Plaintiff is asking the Court to declare that the Government has an affumative duty to veti$r
that all changes in benefìciary designation forms undet FEGLI ate validly executed. Such an
extension of duties would not be consistent with Congress's intentions to limit the role

of

the United States undet FEGLI to "negotiattngand procuring group life insurance policies

fotitsemployees." Rail¡backu.UnitedStates,181 F.S.rpp. I65,766p.Neb. 1960). Thus,
because the Govetnment

did not owe Plaintiff the duty she alleges, it has not waived
7

sovereign immunity with respect to her claim. The Complarnt agunst the Government must

therefote be dismissed.
Furthetmore, as the Argent court noted, "[I|t would be unwise, absent a much cleatet
legislative statement,

to

expose the Government

administtative lapse which might occur

FEGLI."
use

of

1,997

WL

to potential monetary liability fot

in the course of operating a prognam

473975, at x4 (internal citation

^s

every

latge

as

omitted). It would not be an efficient

scarce governmental tesoutces, absent an express statement

ftom Congress to the

contta\, to force the Govetnment to investigate all claims of the type alleged by Plaintiff
Plaintiff may still yet have a cause of action against Metlife, but, as then-Judge Butget
explained

in

Barnes,

"fPlaintiffl's temedy, whatever

it

rnay be, is not by way

of a suit against

the United States." 307 P.2d at 660 @wget, J., concurring).

IV.

CONCLUSION
Fot the reasons stated above, IT IS RECOMMENDED that the court GR {,NT

Defendant's motion to dismiss pocket Entty 14) pursuant to Rule 12þ)(1) for lack of
subject matter judsdiction.

L \!'dxrer
Strmr ltl4gistnæ Jurlge

Octobet 22,2014
Dutham, North Carolina

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