BENNETT v. OFFICE OF PERSONNEL MANAGEMENT, (OPM) et al
Filing
74
MEMORANDUM OPINION AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE signed by MAG/JUDGE JOE L. WEBSTER on 12/21/2015; that the Defendant's motion to dismiss under FED. R. CIV. P. 12(h)(3) for lack of jurisdiction (Docket Entry 54 ) be GRANTED. FURTHER RECOMMENDED that all other pending motions (Docket Entries 43 , 44 , 51 , 53 ) be DISMISSED as moot. (Garland, Leah)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
LINDA M. BENNETT, Executdx for
the Estate of F.,ltzabeth H. Maynard,
LINDA M. BENNETT, on behalf of
herself and all others similatly situated,
)
)
)
)
)
Plaintiffs,
)
)
v
)
)
OFF'ICE OF'PERSONNEL
)
MAN,\GEMENT (OPM), OFFICE OF' )
F'EDERAL EMPLOYEE'S GROUP
)
LIFE INSURÂNCE (OFEGLI) and
)
METROPOLITAN LIFE,
)
INSUR,A.NCE. COMPANY,
)
)
Defendants.
)
']..:1.4cv1.37
MEMORANDUM OPINION AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
This mattet is befote the court on the following motions by Defendants Office of
Federal Employee's Group Life Insutance ("OFEGLI") and Metropolitan Life Insurance
Company
(NIetlife): Motion fot
Summary Judgment (Docket Entry 44); Motion fot
Ptotective Otder @ocket Entty 53); and Motion
pending
^re
to Dismiss pocket Entry 54).
the following motions by Plaintiffs:1 Motion to Amend
.,\lso
Scheduling
Otdet(Docket Entry 43); and Motion Regarding the Suffìciency of Answer or Objection.
t
Plaintiff Linda Bennett brings this action on her own behalf and also as the Executrix of
Elizabeth Maynard's estate. In this Recommendation, unless otherwise noted, the use of the term
Plaintiff tefets to Linda Bennett in both her capacities.
pocket Entry 51.) On November 17, 201.5, a hearing was held
as
to all pending and dpe
motions.2
I. PROCEDURAL BACKGROUND
Plaintiff filed the complaint
in this action on February 18, 2014 against thtee
defendants: Office of Personnel Management (OPM); OF'EGLI and Metlife. pocket
Entry
1.)
Plaintiff asserted causes of action relating to the distribution of beneûts under
the life insurance policy of E,ltzal:,eth H. Maynard, Plaintiffls mothet, fot violation of the
Federal Employee's Group Life Insurance Âct of 1,954,5 U.S.C. S 8701 et seq. ("FEGLIÂ"),
breach
of contract,
negligence, negligent infliction
of emotional
disttess, unfair settlement
practices, and ftaud. (Compl. at2,Docket Entry 1.) Plaintiff asked for a jury tttal,a reversal
of the life insutance payments already disbutsed to Pamela Roney, and compensatory
and
punitive damages.3 (Id. at 14.)
Aftet Plaintiff
fi.led this action,
Metlife, without conceding âny wrongdoing, tendered
payment to Plaintiff in the full benefit amount, plus interest. Defendants fìled their motion
fot summary judgment on June 8, 201.5, atguing that because Plaintiff
has teceived all that
she could have received under the Fedetal Employees Gtoup Life Insurance Ptogram
("FEGLI"), she is entitled to no futthet relief. (Docket trnty 44.) Plaintiff subsequently
returned the check to Defendants. (Id. at 2 n.'1.) On August 31,, 20'1,5, Defendants filed
a
'
At the hearing the Court orally granted two of Plaintiff s other modons, for exemption ftom
settlement conference and for extension of time to file a response to the mod.on for protective
ordet. (Jee Docket Entries 42,63.) ,{,dditionally, Plaintiff withdtew het motion fot an evidentiary
hearing. (Docket Entry 60.)
3 By otder dated December 15,
20'l,4,Defendant OPM was dismissed ftom the case. (Docket Etttty
29.) Thus, in this Recommendation the collectìve term "Defendants" tefers to Defendants Metlife
and OFEGLI.
2
motion to dismiss for lack of jurisdiction. (Docket Entry 54.) Defendants argue that the
case should be dismissed because there is
no longer a case or controvetsy, Plaintiffls lawsuit
is moot, and this court no longet has subject matter judsdiction in this matter. (d. at2.)
II.
FACTUAL BACKGROUND
This action involves benefits under Elizabeth Maynatd's life insutance policy issued
through Metlife and FEGLI. Elizabeth Maynard worked for the Depatment of Veterans
'\ffaits. (,\ffidavit
of Jetel Robettson,,{.ttach. 1, Def.'s Mot. Summ. J., DocketEntry
(hereinafter "Robettson
-,\ff.').)
Maynard died on October 20,20'1,2. On
Maynard completed a Designation
,\pril
44-1,
1.8,201.2,
of Beneficiary form, identi$ring Pamela Roney as the
primary beneficiary under the policy. S.obertson Aff. Ex. 2, Docket Entty 44-3.) Pamela
Roney is Plaintiffls sistet and Maynard's daughtet. Plaintiff alleges Maynard changed the
benefìciary designation in Âpril 20'1,2 as a result
of undue influence on the part ol
Roney.
(Compl., 12-1.3.) Undet the ptevious beneficiary desþation form, dated Octobet 22,1991.,
Plaintiff was desþated as the primary beneficiary of the benefits payable under Maynard's
life insurance policy. (R.obetson Aff., Ex. 3.)
Âftet Maynard's death on October 20,
201,2,
Roney filed a claim
fot the trEGLI
benefìts. On December 2,2013, Metlife paid Roney fi7,754.67, tepresenting benefits in the
amount
of $7,750, plus interest of
fi4.67. Plaintiff asserts that she notified
November 2012 that she intended to make a
clattø:'
Metlife in
for the F'E,GLI benefits payable under
the policy. She sent her completed claim form to Metlife on December 7, 2012. On
December 1,8, 201,2,
Metlife denied Plaintiffs claim because she was not the designated
beneficiary. On January 1,8, 201,3, Metlife notified Plaintiff that
3
it had aheady
paid the
FEGLI benefits to Roney. On June 2,
201.5, subsequent
notwithstanding the payment alll:eady made
to the filing of this lawsuit
to the named
and
beneficiary under the policy,
Defendants also tendered the full benefit amount, plus interest, to Plaintiff. (R.obetson Aff.,
Ex. 4, Docket E.,tty 44-6.)
III.
DISCUSSION
Article
III of the United
States Constitution "confines
the federal courts to
adjudicating actual 'cases' and 'conúovetsies."' Allen u. Il/right,468 U.S. 731,750 (1984). To
invoke a federal court's iurisdiction, "a plainttff must demonsttate that he possesses a legally
cognizable interest, or 'personal stake', in the outcome of the actfon."
u. S1ncryk,'1.33 S.
Genesis Healthcare Corp.
Ct. 1523, 1528 Q01,3). There must be a dispute that "is definite
concrete, touching the legal relations of parties having advetse legal interests." lVhite
u.
and
Nat'l
Union Fire Ins. Co. of Pittsburgh, Pa.,91.3 F.2d 1,65,1,67 (4th Cir. 1990) (quoting Aetna Ufe Ins.
Co. a. Haworth,300 U.S. 227,240-41, (1937)).
Âdditionally, the United States Supteme Court
has noted:
corollary to this case-or-controversy requirement is that aî actuzl
controversy must be extant at all stages of teview, not merely at the time the
complaint is fìled. . . . If an intervening circumstance deptives the plaintiff of a
personal stake in the outcome of the lawsuit at any point during litigation, the
action can no longet ptoceed and must be dismissed as moot.
A
Gene¡is
Healtltcare,l33 S. Ct. at 1,528;
see
also Virginia ex. rel Coleman u. Calfano, 631. F.2d 324,
326 (4th Cir. 19S0) ("Federal courts have no judsdiction to decide moot cases because of the
case
or controversy requirement of Ârticle
Rules
III of the Constitution."). Undet the Federal
of Civil Procedure, the Court m^y dismiss
^
case
at
arry time
if
that the case lacks subject m^tter jurisdiction. Feo. R. Crv. P. 12(h)(3).
4
the coutt determines
FEGLIA established a life insurance program for federal employees. Undet
FEGLIÂ, an employee may designate a benefici^ty to receive the proceeds of her life
insurance at the time
of het death. The ptogram is administered by the OPM. 5 U.S.C.
871,6. Under the authodty granted to
Metlife.
Jee $
it by FEGLIÂ, OPM
8709; 5 C.F.R. S 870.102 Q013).
S
entered into a contract with
Metlife administeted Plaintiffs claim under
the FEGLI ptogram.
Undet FEGLIA, upon an employee's death, life insutance proceeds are paid in
specified "order
of preference." 5 U.S.C. $ 8705(a). The proceeds accrue "[f]itst to the
beneficiary or beneficiaties designated by the employee
received befote death."
Id.
in a sþed and witnesses writing
Undet the OPM tegulations, an employee "may change
[a]
beneficiary at any time without the knowledge or consent of the ptevious beneficiary."
cFR
S
a
5
870.802(Ð.
The rights and obligations of the patties under the FEGLI progtam are governed by
the Federal Enplo1ees' Groap Ufe Insaranæ Program Standard Contractþr 2012 between OPM and
Metlife (the "Conú^ct"). (Contract, Robettson -Aff., Ex. L, Docket Entty 44-2.) The
contract ptovides that "[i]n any action at law ot equity that relates to the trEGLI Ptogtam,
the claimant will be limited in the amount of tecovery of benefits that would be payable
under the FEGLI Ptogram. No extra-contractual, punitive, compensatorf, consequential
damages
or attorneys' fees shall be tecovetable undet the FEGLI Ptogram."
Section 1,.1.7,8x. 1 to Robertson Affidavit, Docket Entry 44-2.)
"ffihete
(Contract,
a beneficiary has
been duly named, the insurance proceeds she is owed under FEGLIA cannot be allocated to
another person by operation of state law." Hillrzan
5
u.
MareÍta, 133 S. Ct. 1.943,1953 Q01,3)
Under the Contact here, the only cogntzable claim for recovery is fot payment of
benefits under the
Policy. Plaintiffs claims fot relief, including "the tevetsal of
any
payments; compensation fot economic loss and emotional distress, punitive damages, a¡d a¡
order to recover any fraudulent claims" are simply not cognizable undet the terms of the
Contract and any damages beyond the FEGLI benefits are nottecovetable.
Finally, as atgued by Defendants, Plaintiff has teceived all that she is entitled to
teceive under FEGLI, theteby tendering het claim moot. As noted by the Supteme Coutt in
Genesis Healthcare,
stake
where an intervening citcumstance deprives the plaintiff
in the outcome of the litigation, the action must be dismissed
1,528.
as
of a petsonal
moot.
133 S. Ct at
All Plaintiff here was entitled to under the Contact is recovery of the benefits that
would be payable under the FEGLI program. Because Metlife has now tendeted payment
of those benefits to Plaintiff, plus intetest, she has received all the benefìts to which she is
argtably entitled.
2006
See
WL 2191254
Hines a. Sheet Metal lYorkers' Nat'l Healtlt Fund Plan,
No. 1:05CV1159,
(À4.D.N.C. }une 1,4, 2006) (unpublished) (whete plaintiff fi.led suit for
health coverage under a union health plan, and the plan's trustees reinstated het health
coverage after suit was filed, court dismissed the case as moot).
Plaintiffs tefusal to accept the payment tendered by Defendants does not change the
tesult.
See,
e.!., IWallace u. Crown Corþ. and Seal Pen¡ion Plan, Civ. Action No. 4:05-673-RBH,
2007 WL 3176233 P.S.C. Oct. 26,2007) (case mooted by defendant's disability payment to
plaintiff, despite the fact that defendant did not admit that plaintiff was entided to the
benefits and the patties had not entered into a settlement agreement).
6
Plaintiff argues that 5 U.S.C. S 8705 does not authonze Metlife to make
payments undet the facts
of this case. Howevet, there is nothing in the statutory
¡u¡o
scheme
which allows Plaintiff to assert wtongful payment by Metlife under these citcumstances. In
othet wotds, there is not a private cause of action to enforce the rights and obligations of
Metlife under its conttact with OPM. Moreover, Plaintiffs argument that she will
subject to cdminal tax liability
caselaw or other authority
if
be
she accepts the payment is unavailing. Plaintiff offets no
to support het arguments.
This coutt appteciates that Plaintiff feels strongly about this matter. Flowevet,
a
cofiunon sense application of FEGLIA leads to the conclusion that Plaintiff is entitled to no
more than the benefits under the life insurance policy issued to PlaintifPs mothet pursuant
to the FEGLI program. The Court concludes that the tendet to Plaintiff by Metlife of the
benefits payable under trEGLI and the Contract, all that Plaintiff is atguably entitled to,
mooted Plaintiffs claim, thereby depriving the Coutt of jurisdiction over the action.a
,{.ccordingly,
F'eo. R. Crv. p. 12
IT IS RECOMMENDED
(r)ø
that Defendants'motion to dismiss undet
for lack of jurisdiction (Docket Enry 54) be
GRANTED. IT
IS
a In addition to bringing this acdon on her own behalf, Plaintiff purports to bring this acd.on on
behalf of the Estate of Elizabeth Maynard. However, it is clear that the Estate does not have a claim
to the ptoceeds in this matter. Ptoceeds payable pursuant to FEGLIA arc pa;Ld directly to the
desþated beneficiaries under the policy, and are not consideted pat of the estate of the insured
(unless estate is named as the desþated beneficiary) . Sæ 5 U.S.C. $ 8705(a). Additionally, while the
caption of the Complaint names Linda Bennett "on behalf of hetself and alJ othets similarþ
situated," it is clear that only Plaintiff and Roney (as past and current desþated beneficiaries) have
any intetest in the proceeds payable undet the FEGLI policy. Indeed, if Plaintiff is attempting to
âssert a class action, she has never filed a motion to certi$r a class, and het attempt to represent a
class of "others similady situated" is unsuccessful.
7
FURTHER RECOMMENDED that all other pending motions (Docket Entries 43; 44:'
51;53) be DISMISSED as moot.s
L Wdster
Stem !\lagistnttJudge
Durham, Notth Carobna
December 21,20L5
t
There are two other pending motions which are not yet ripe: Plaintiffs Motion to Compel
pocket Etttry 70) and Defendant's Motion fot Extension of Time to File Response to Motion to
Compel. (Docket Etttty 72.) In the event the district court adopts this tecommendadon and grants
the motion to dismiss, these two modons will be moot.
8
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