Prudential Insurance Company of America v. Dunn et al
OPINION & ORDER: Robinson's Motion for Summary Judgment 22 is Granted, Dunn's Motion for Summary Judgment 23 is Denied, and this court declares that I.R. is the insured's sole beneficiary for the purpose of Plan life insu rance benefits, and is the person entitled to receive the entirety of the proceeds of those benefits from the escrow account into which they have been deposited. A final judgment will be prepared. Signed on 3/17/17 by Magistrate Judge Paul Papak. (gm)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
TAMISHA RAE DUNN,
Cross-Claimant I Cross-Defendant
KRISTEENA ROBINSON, in her capacity as guardian ad !item to LR.,
Cross-Defendant I Cross-Claimant
PAPAK, Magistrate Judge:
Prudential Insurance Company of America ("Prudential") filed this action in interpleader
against Tamisha Rae Dunn (the domestic partner of Prudential's insured at the time of the
insured's decease), minor child LR. (Prudential's insured's minor daughter), and Kristeena
Robinson ("Robinson," Prudential's insured's former wife) in her capacity as guardian ad litem to
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LR. on May 10, 2016. By and through its complaint in interpleader, Prudential alleged that prior
to his decease, its insured Sean Robinson (Prudential's "insured") received life insurance
coverage under a group insurance plan (the "Plan") Prudential issued to CUNA Mutual Group,
the insured's then-employer. Prudential further alleged that the insured designated LR. as his sole
beneficiary in connection with Plan benefits on October 15, 2015, that on or around November 5,
2015, the insured expressed his intention to change that designation to name Dunn as his sole
beneficiary of Plan benefits, and that on December 25, 2015, the insured died, triggering a
$221,000 life insurance benefit under the Plan. Prudential further alleged that on December 31,
2015, the insured's foimer employer made a claim on the Plan for the benefit on behalf of LR.,
and that Dunn made a similar claim, on her own behalf, on February 8, 2016. By and through its
complaint, Prudential sought judicial resolution of the competing claims for Plan benefits made
on behalf of LR. and Dunn.
On July 11, 2016, Dunn filed a cross-claim against LR. and Robinson seeking this court's
declaration that she (Dunn) is the sole valid designee for purposes of dete1mining the beneficimy
of the insured's Plan benefits, and on that same day Robinson filed a cross-claim against Dunn on
LR.'s behalf seeking this court's declaration that LR. is the sole valid designee. On August 3,
2016, Prudential deposited money in the amount of the disputed life insurance benefit into
escrow for the benefit of the insured's beneficimy, following which it was discharged from this
action. This court has subject-matter jurisdiction over this interpleader action pursuant to 28
U.S.C. § 1335 and 29 U.S.C. § I 132(a)(2).
Now before the court are Robinson's motion (#22) for summmy judgment and Dunn's
cross-motion (#23) for summmy judgment as to the remaining parties' competing claims for
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declarato1y relief. I have considered the motion, oral argument on behalf of the parties, and all of
the pleadings and papers on file. For the reasons set f01ih below, Robinson's motion (#22) for
summmy judgment is granted, Dunn's motion (#23) for summmy judgment is denied, and this
court declares that LR. is the insured's sole beneficiary for the purpose of Plan life insurance
benefits, and is the person entitled to receive the entirety of the proceeds of those benefits from
the escrow account into which they have been deposited.
Summmy judgment is appropriate "if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P.
56(a). A pmiy taking the position that a material fact either "cannot be or is genuinely disputed"
must support that position either by citation to specific evidence of record "including depositions,
documents, electronically stored information, affidavits or declarations, stipulations (including
those made for purposes of the motion only), admissions, inte1Togatory answers, or other
materials," by showing that the evidence of record does not establish either the presence or
absence of such a dispute, or by showing that an opposing pmiy is unable to produce sufficient
admissible evidence to establish the presence or absence of such a dispute. Fed. R. Civ. P. 56(c ).
The substantive law governing a claim or defense detennines whether a fact is material. See
1'.Iorelandv. Las Vegas kfetro. Police Dep't, 159 F.3d 365, 369 (9th Cir. 1998).
Summary judgment is not proper if material factual issues exist for trial. See, e.g.,
Celotex Corp. v. Catrett, 477 U.S. 318, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986); Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir. 1995), cert. denied, 116
S.Ct. 1261 (1996). In evaluating a motion for summary judgment, the district coU1is of the
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United States must draw all reasonable inferences in favor of the nonmoving party, and may
neither make credibility determinations nor perform any weighing of the evidence. See, e.g.,
Lytle v. Household },!ffg., Inc., 494 U.S. 545, 554-55 (1990); Reeves v. Sanderson Plumbing
Products, Inc., 530 U.S. 133, 150 (2000).
On cross-motions for summary judgment, the court must consider each motion separately
to determine whether either party has met its burden with the facts constrned in the light most
favorable to the other. See Fed. R. Civ. P. 56; see also, e.g., Fair Hous. Council v. Riverside
Two, 249 F.3d 1132, 1136 (9th Cir. 2001). A court may not grant summmy judgment where the
coU1i finds umesolved issues of material fact, even where the parties allege the absence of any
material disputed facts. See id.
Dunn is an Oregon resident who at the time of the insured's decease was his domestic
partner. LR. is the insured's minor daughter. Robinson is I.R.'s mother and guardian ad !item,
and was the insured's ex-wife prior to his decease.
Material Factual History'
At all material times prior to his decease, the insured was employed by the CUNA Mutual
Group, also known as CMFG Life Insurance Company ("CUNA"). See Dunn's Motion (#23) for
Summary Judgment, Exh. 2 (Deposition of Brenda Schmidt (collectively with Robinson's Motion
(#22) for Summmy Judgment, Exh. A, "Schmidt Depo."), 6:21-23. During the tenure of his
Except where otherwise indicated, the following recitation constitutes my construal of
the evidentimy record in light of the legal standard governing motions for summmy judgment
under Federal Civil Procedure Rule 56.
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employment, CUNA provided the insured with a basic life insurance policy pursuant to an
Employee Retirement Income Security Act ("ERISA") plan (the Plan), in connection with which
CUNA was the Plan administrator. See id, 7:2 - 8:4; see also Dunn's Motion (#23) for
Summary Judgment, Exh. 4 ("Plan Summary"); Schmidt Depo., Exh. 2 ("Plan Document").
Pursuant to the Plan, Prudential agreed to pay the insured's designated beneficiary a benefit of
twice the insured's annual salary in the event of the insure d's death prior to the end of the month
in which he attained age 70. See Plan Summary at 4. The Plan provided that the insured could
"change the [designated] Beneficimy at any time without the consent of the present Beneficiary,
unless [he] ha[d] made an irrevocable choice of Beneficiary." Id at27. It is undisputed that the
insured herein never made an irrevocable choice of beneficiaiy at any material time. See Schmidt
Depo., 12:19-25. The Plan further provided that such a change "must be filed through [CUNA],"
and that such a change would "take effect on the date the form is signed." Plan Summmy at 27.
It is undisputed that, at the time of his death, the designated beneficiaiy of the insured herein
became entitled to a life insurance benefit in the amount of $221,000 pursuant to the Plan.
The Plan expressly provided that:
The Plan Administrator shall have full authority to control and manage the
operation of the administration of the Plan. The administration of the Plan
shall be under the supervision of the Plan Administrator as indicated in the
resolutions adopted from time to time by the Board of Directors of CUNA Mutual
Holding Company. It shall be a principal duty of the Plan Administrator to see
that the Plan is canied out, in accordance with its terms, for the exclusive benefit
of persons entitled to participate in the Plan without discrimination among them.
The Plan Administrator will have full power to administer the Plan in all of
its details, subject to applicable requirements of law. For this purpose, the
Administrator's powers will include, but not be limited to, the following
authority, including discretionary authority, in addition to all other powers
provided by this Plan:
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To make determinations regarding initial and continuing
eligibility to pmticipate in the Plan or to receive benefits or the
amount of benefits available under th[e] Plan;
To make and enforce such rules and regulations as it deems
necessary or proper for the efficient administration of the
To interpret the Plan, its interpretation thereof in good faith to
be final and conclusive on all persons claiming benefits under
the Plan; [and]
To decide all questions concerning the Plan ....
Plan Document, § 6.1 (emphasis supplied).
CUNA, in its capacity as the Plan administrator, recognized two different mechanisms by
and through which Plan participants like the insured could make changes to their Plan beneficiary
designations. See SchmidtDepo., 18:6-8, 31:21-32:4, 32:9-14, 36:22-37:14, 41:1-18, 42:712. In the event a Plan participant expressed an intention to effect a change to a Plan beneficiary
designation in connection with and in the course of CUNA's open enrollment process, CUNA
treated the change of beneficiary as taking effect as of the first day of the following calendar year,
together with any other changes effected in connection with and in the course of open enrollment,
whereas in the event a Plan beneficimy expressed an intention to effect a change to a Plan
beneficiary without using forms expressly intended to effect benefit changes in connection with
open enrollment - specifically, either by sending an email message to a CUNA human resources
employee or by using CUNA's web tool designed for making beneficimy designation changes
outside the open enrollment process - CUNA treated the change of beneficiary as taking effect
immediately. See id.
On October 15, 2015, the insured sent an email message to a CUNA human resources.
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employee advising that his previous domestic partnership with his fcnmer Plan beneficiary had
terminated, and requesting (inter alia) that, "[f]or the time being," CUNA change his primary
Plan beneficiary for purposes of life insurance benefits from his fo1mer domestic pminer to LR.
See id., Exh. 4; see also id., 21: 17 - 23 :6. CUNA effected the requested change that same day.
See id., Exh. 5; see also id., 23:7 - 24:5.
Subsequently, CUNA held an open enrollment period from October 26, 2015, through
November 6, 2015, in connection with employee benefits for calendar year 2016. See Dunn's
Motion (#23) for Summary Judgment, Exh. 5 (CUNA's "Open Emollment Announcement"). On
or around November 5, 2015, and using a form provided by CUNA for making changes to
benefits in connection with its open emollment period, the insured requested that CUNA change
his primmy Plan beneficimy for purposes of life insurance benefits from LR. to Dunn. See
Schmidt Depo., 25:1 - 29:2, 47:14-20, Exh. 6, Exh. 7. Each page of the form the insured used
for this purpose was clearly marked with the words: "Event Date: 01/01/2016," see id, Exh. 7,
which indicated to CUNA that changes elected by and through that form would not take effect
until Janumy 1, 2016, see id., 31 :7-14, 37:9-14. In support of his request to designate Dunn as
his primmy Plan beneficimy, on December 9, 2015, the insured submitted to CUNA an
Affidavit/Certification of Domestic Partnership by and through which he ce1iified that, within the
previous 31-day period, he had established a domestic pminership with Dunn. See Dunn's
Motion (#23) for Summary Judgment, Exh. 7 ("Domestic Pminership Certification").
It is undisputed that the insured died on December 25, 2015. See Complaint, ii 11. It is
further undisputed that on December 31, 2015, CUNA in its capacity as the Plan administrator
made a claim on Prndential for life insurance benefits on behalf of LR. See id., ii 13. CUNA's
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application for life insurance benefits under the Plan expressly indicated that LR. was the
insured's designated beneficimy at the time of his decease, and further expressly referred to Dunn
as the insured's domestic pa1iner, reflecting that CUNA had updated its records in connection
with the insured's Domestic Pfilinership Ce1iification of December 9, 2015, but had treated the
insured's election of November 5, 2015, to change his Plan beneficiary to Dunn as taking effect
as of Janumy 1, 2016, and not before. See id., Exh. B ("CUNA's Application for Group Life
Claim" dated December 31, 2015). It is fu1iher undisputed that, by and through a letter from her
counsel, Dunn requested life insurance benefits under the Plan on her own behalf on Febrnary 8,
2016. See id., Exh. C ("Dunn's Letter Application for Group Life Claim"). Finally, it is
undisputed that, after Prudential filed this interpleader action and after CUNA was made aware
of the competing claims ofl.R. and Dunn, CUNA's corporate representative testified pursuant to
Federal Civil Procedure Rule 30(b)(6) that CUNA did not give immediate effect to expressions
of intent to effect changes to beneficimy designations when made by and through open
emollment forms, but rather treated such expressions of intent as taking effect as of the first day
of the next following calendar year. See Schmidt Depo., 18:6-8, 31 :21 - 32:4, 32:9-14, 36:22 37:14, 41:1-18, 42:7-12.
The pmiies do not dispute any of the operative facts. The patiies' sole area of
disagreement is in connection with the question whether CUNA was required under the Plan to
treat the insured's change ofbeneficimy request ofNovember 5, 2015, as taking effect
immediately, or whether it was a proper exercise of CUNA's discretion as the Plan administrator
to treat that change as taking effect January 1, 2016, together with the insured's other benefits
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elections made in the course of CUNA's open emollment process.
The beneficiary of an ERISA plan is empowered to bring a civil action, inter alia, either
to recover benefits due to him or her under the plan, or to enforce his or her rights under the plan.
See 29 U.S.C. § 1132(a)(l). Fiduciaries ofERISA plans are required to discharge their duties in
connection with such plans "solely in the interest of the participants and beneficiaries" of such
plans and "for the exclusive purpose" of "providing benefits to participants and their
beneficiaries" and defraying administrative costs, 29 U.S.C. § 1104(a)(l)(A), and must discharge
such duties additionally "in accordance with the documents and instruments governing" such
plans, 29 U.S.C. § 1104(a)(l)(D), see also Kennedy v. Plan Adm'rfor DuPont Sav. & Inv. Plan,
555 U.S. 285, 288 (2009).
Where an ERISA plan expressly confers discretion on a plan administrator with respect to
management of the ERISA plan, the administrator's exercise of discretion "is not subject to
control by the co mt except to prevent an abuse by the [administrator] of [its] discretion."
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111 (1989); see also ivfetropolitan Life
Insurance Co. v. Glenn, 554 U.S. 105, 108, 116 (2008); Conkrightv. Frommert, 559 U.S. 506,
513 (2010). However, applicable Ninth Circuit jurisprudence establishes that, even where an
ERISA plan contains an express grant of discretion, not eve1y determination made by an ERISA
plan administrator constitutes an exercise of that discretion warranting deferential review. See
Jebian v. Hewlett-Packard Co. Empie. Benefits Org. Income Prat. Plan, 349 F.3d 1098,
1105-1106 (9th Cir. 2003). The Jebian comt found that an ERISA plan administrator does not
exercise its discretion for purposes of determining whether review of its discretion will be de
nova or for abuse of discretion when it acts in accordance with a plan provision calling for an
Page 9 - OPINION AND ORDER
"automatic decision," id., while the Ninth Circuit elsewhere found that an ERISA plan
administrator's decision is subject to de nova review notwithstanding a grant of discretion where
the administrator "utterly fails to follow applicable procedures," Abatie v. Alta Health & Life Ins.
Co., 458 F.3d 955, 959 (9th Cir. 2006), see also id. at 971 ("When an administrator engages in
wholesale and flagrant violations of the procedural requirements of ERISA, and thus acts in utter
disregard of the underlying purpose of the plan as well, we review de novo the administrator's
decision to deny benefits. We do so because, under Firestone, a plan administrator's decision is
entitled to deference only when the administrator exercises discretion that the plan grants as a
matter of contract.").
Under the Firestone abuse of discretion standard, the "test for abuse of discretion ... is
whether '[the court is] left with a definite and film conviction that a mistake has been
committed."' Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 676 (9th Cir. 2011),
quoting United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en bane). In making that
determination, the courts of the Ninth Circuit consider whether the administrator's discretionaiy
determination was"'(!) illogical, (2) implausible, or (3) without support in inferences that may be
drawn from the facts in the record." Id., quoting Hinkson, 585 F.3d at 1262. These
considerations apply both to the plan administrator's factual dete1minations and to the
administrator's ultimate application oflaw to fact. See Walker v. Am. Home Shield Long Term
Disability Plan, 180 F.3d 1065, 1069-1070 (9th Cir. 1999).
It follows from the foregoing that the crux of the parties' dispute is over whether CUNA
foimally exercised its discretion as the Plan administrator to dete1mine that LR. was in fact the
insured's designee as of December 25, 2015, notwithstanding the insured's contra1y expression of
Page 10- OPINION AND ORDER
intent of November 5, 2015, and if it did so, whether that exercise of discretion constituted abuse
of discretion under the Firestone standard. As to the question whether CUNA exercised
discretion under the Plan when it dete1mined that I.R. was the insured's sole beneficimy for basic
life insurance benefits, while the evidence of record presents a close legal question, I find that it
did so. First, CUNA exercised discretion "[t]o make and enforce such rules and regulations as it
deems necessmy or proper for the efficient administration of the Plan," Plan Document, § 6.1,
when, in addition to providing Plan participants with mechanisms for effecting immediate
changes to beneficiary designations as required under the te1ms of the Plan, see Plan Summmy at
27, it elected to allow Plan participants alternatively to effect defened changes to beneficimy
designations by expressing their intention to make such changes at a specified future date,
through the f01ms designed for use in connection with the open enrollment process. That
election was not such a flagrant violation of the terms of the Plan or made in such utter disregard
of the underlying purpose of the Plan as to fall outside CUNA's discretionmy authority pursuant
to Abatie, supra, because it did not foreclose any Plan participant from effecting immediate
changes to beneficimy designations at any time during the calendar yem", including during the
open enrollment process, either by using CUNA's approved foim for effecting immediate
beneficimy designation changes or by sending an email message to CUNA human resources
requesting an immediate change, and because it provided Plan participants with increased
flexibility in the exercise of their rights under the Plan without curtailing any such right, in
keeping with CUNA's "principal duty ... to see that the Plan is carried out, in accordance with
its terms, for the exclusive benefit of persons entitled to pmticipate in the Plan .... " Plan
Document, § 6.1.
Page 11 - OPINION AND ORDER
Second, CUNA exercised discretion "[t]o make dete1minations regarding ... eligibility
... to receive benefits" under the Plan and "[t]o interpret the Plan," id., when it dete1mined that
the insured had, by using open enrollment forms to request a change in his beneficiary
designation, requested a change of beneficiary to take effect as of January 1, 2016, both on or
prior to December 31, 2015, when CUNA applied for benefits on behalf of LR. and subsequently,
after this litigation had been initiated, when CUNA's corporate representative testified in
deposition that under CUNA's rnles of Plan administration, it construed changes to beneficiary
designations made by and through open enrollment forms effectively as expressions of intent to
make such changes as of the first day of the next following calendar year. Again, CUNA's
election tended to further the purpose of the Plan and did not so flagrantly violate any Plan
provision as to be outside its discretionary authority, in that it provided plan participants with
flexibility in making changes to beneficiary designations without depriving them of any rights
mandated by the Plan.
Third, at the time CUNA applied for life insurance benefits on I.R's behalf, describing
LR. as the insured's designee, it exercised discretion "[t]o make determinations regarding ...
eligibility ... to receive benefits" under the Plan, "[t]o interpret the Plan," and "[t]o decide all
questions concerning the Plan," Plan Document, § 6.1, in that it had received both the insured's
election to change his Plan beneficiary to Dunn made by and through open enrollment forms and
the insured's advice that he had fo1med a domestic relationship with Dunn, and had elected to
defer the effectiveness of the change ofbeneficimy designation until the listed "Event Date" of
Janumy 1, 2016, while giving immediate effect to the insured's Domestic Partnership
Certification and immediately updating its records accordingly. Once again, for the same reasons
Page 12 - OPINION AND ORDER
discussed above in connection with CUNA's elections to provide Plan participants with a
mechanism for requesting defened changes to Plan beneficiaries and to construe the insured's
election ofNovember 5, 2015, to change his Plan beneficiary to Dunn as taking effect January 1,
2016, this election was within CUNA's discretionmy authority as the Plan administrator.
Dunn further argues that, even if CUNA intentionally exercised its discretion as the Plan
administrator to determine that LR. was the insured's beneficiary as of December 25, 2015, that
exercise constituted abuse of discretion in light of the Plan language mandating that changes to
beneficiary designations take effect as of the date the appropriate form is signed by the Plan
patiicipant, see Plan Summary at 27. As noted above, CUNA's exercise of discretion will not be
disturbed unless it is illogical, implausible, or without factual basis. See Salomaa, 642 F.3d at
676. In light of the facts that CUNA's provision to Plan participants of a mechanism for effecting
defened changes to beneficimy designations did not impair the ability of Plan participants to
make immediate changes to beneficimy designations at any time and that the insured here was
aware of (and had successfully availed himself of) one of the mechanisms for effecting
immediate designation changes but chose not to use either of those mechanisms in connection
with his election of November 5, 2015, in favor of the open emollment process, CUNA's
determination that LR. was the insured's sole beneficiaty as of December 25, 2015, was not
illogical, implausible, or baseless. As such, although I do not offer any opinion as to whether the
same result would obtain under de nova review of the Plan administrator's determination, I find
that this court is without authority to overturn CUNA's dete1mination for abuse of discretion. See
Page 13 - OPINION AND ORDER
For the reasons set foiih above, Robinson's motion (#22) for summmy judgment is
granted, Dunn's motion (#23) for summary judgment is denied, and this court declares that LR. is
the insured's sole beneficiary for the purpose of Plan life insurance benefits, and is the person
entitled to receive the entirety of the proceeds of those benefits from the escrow account into
which they have been deposited. A final judgment will be prepared.
Dated this 17th day of March, 2017. (
Honorable Paul Papak
United States Magistrate Judge
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