Justice v. Reliance Standard Life Insurance Company et al (JRG2)
ORDER granting 30 Motion for Summary Judgment; denying 33 Motion for Summary Judgment; adopting Report and Recommendations re 51 Report and Recommendations. it is hereby ORDERED that the plaintiffs objections are OVERRULED, that this Report and Recommendation is ADOPTED and APPROVED, [Doc. 51], that defendants Motion for Summary Judgment, [Doc. 30], be GRANTED, that the plaintiffs Motion for Summary Judgment, [Doc. 33], be DENIED, and that the case be DISMISSED. Signed by District Judge J Ronnie Greer on 3/13/2017. (JCK)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
RELIANCE STANDARD LIFE INSURANCE
This matter is before the Court to address the plaintiff’s objections, [Doc. 52], to a Report
and Recommendation of the magistrate judge dated January 27, 2017, [Doc. 51]. The defendant
has responded, [Doc. 53], and the matter is ripe for disposition.
In this Employee Retirement Income Security Act of 1974 (“ERISA”) matter the plaintiff
alleges that the defendant improperly terminated his long-term disability (“LTD”) benefits in
violation of the terms of an employee welfare benefits plan. The plaintiff was an hourly
employee of Berkline, a company which has since gone out of business, from March 10, 2004,
until he became disabled on May 15, 2008. The plaintiff, with the assistance of Berkline, applied
for and received LTD benefit payments until May 22, 2014. The defendant, Reliance Standard
Life Insurance Company (“Reliance Standard”), is the insurance company that administers
Berkline’s employee benefits plan. On May 22, 2014, the defendant discontinued Plaintiff’s
LTD benefit payments because the defendant discovered that Plaintiff, as an hourly employee,
was not covered for LTD benefits under Berkline’s plan and that the defendant has mistakenly
been paying LTD benefits which the plaintiff was not entitled to receive.
In the Report and Recommendation, the Magistrate Judge recommended that the
defendant’s motion for summary judgment be granted and the plaintiffs’ motion for summary
judgment be denied. [Doc. 51 at 21]. The plaintiff made two claims for ERISA relief. In the
first, the magistrate judge held that the plaintiff had no claim for breach of fiduciary duty against
the defendant because Berkline, not Reliance Standard, was the defendant’s fiduciary responsible
for making the initial administration of the policy for the benefit of the participants. [Id. at 7].
The plaintiff does not raise any objection to this holding. However, the plaintiff objects to the
Magistrate Judge’s findings and analysis that the plaintiff’s claim of equitable estoppel is without
The Court will review the Report and Recommendation de novo as the magistrate judge
resolved dispositive motions. Fed. R. Civ. P. 72(b)(3). The Court has previously held that the
plan administrator’s decision should be reviewed under the highly deferential arbitrary and
capricious standard. [Doc. 25]. To the extent that the plaintiff objects to this standard of review,
the Court will not review this determination again.
The plaintiff’s objection to the Report and Recommendation is essentially that the
Magistrate Judge erred in rejecting his promissory estoppel claim. The plaintiff’s arguments are
the same arguments made before the Magistrate Judge in his motion for summary judgment and
in response to the defendant’s motion for summary judgment. The plaintiff argues that because
he paid premiums to his employer, Berkline, for group disability insurance benefits, and because
Reliance Standard paid benefits for years, he is entitled to continue to receive those benefits,
notwithstanding the fact that he clearly is not eligible for LTD benefits under the plain language
of the plan. Instead, the plaintiff simply disagrees with the Magistrate Judge’s analysis, citing
the same arguments made in his motion.
The plaintiff, in neither his original arguments for summary judgment nor in his
objection, attempts to address or distinguish a number of the cases cited by the Magistrate Judge
that are seemingly dispositive of the issues. The elements of an estoppel claim are as follows:
(1) there must be conduct or language amounting to a
representation of material fact;
(2) the party to be estopped must be aware of the true facts;
(3) the party to be estopped must intend that the representation be
acted on, or the party asserting the estoppel must reasonably
believe that the party to be estopped so intends;
(4) the party asserting the estoppel must be unaware of the true
(5) the party asserting the estoppel must reasonably or justifiably
rely on the representation to his detriment.
Sprague v. Gen. Motors Corp., 133 F.3d 388, 403 (6th Cir. 1998) (en banc). The plaintiff must
meet all five elements of the claim to be eligible for relief. Id.
As an initial matter, a plaintiff “cannot recover under an estoppel theory for
misrepresentations which contradict unambiguous, written plan terms because their reliance on
the subsequent representation would be unreasonable.” Moore v. Lafayette Life Ins. Co., 458
F.3d 416, 428-29 (6th Cir. 2006) (citing Sprague, 133 F.3d at 403). The plaintiff does not argue
that the term limiting plan eligibility to salaried workers is ambiguous. Therefore, under the
plain reading of Moore, the plaintiff is ineligible to recovery under an equitable estoppel theory.
In regards to the first element of equitable estoppel, notwithstanding that the plaintiff has
not shown the plan language is ambiguous, he cannot show that there is language or conduct
amounting to a representation of material fact. To meet this element, the plaintiff argues that the
defendant’s acceptance of premium payments and the issuance of benefits constitutes a material
representation. The Sixth Circuit has held that where the insurance company accepting premium
payments was unaware that the employee was no longer eligible for disability benefits, the
acceptance of premium payments does not constitute any sort of admission or waiver. See
CLARCOR, Inc. v. Madison Nat. Life Ins. Co., Inc., 491 F. App’x 547, 549 (6th Cir. 20120. The
acceptance of premium payments does not alter the unambiguous coverage requirements of the
plan. Id. at 553. Finally, the Sixth Circuit has held that mistaken payments “cannot serve as the
sole basis for establishing eligibility for a pension plan.” Adams v. General Motors Co., 547
Fed. App’x 661. 665 (6th Cir. 2013). The same can be said for mistaken disability payments,
here. The plaintiff has failed to meet the first requirement of equitable estoppel, i.e., that there is
conduct or language amounting to a representation of a material fact. Therefore, the plaintiff
cannot meet the first equitable estoppel element.
The plaintiff has failed to show that the plan language was unambiguous, and therefore,
he cannot recover under the theory of equitable estoppel. Additionally, even if he could, the
plaintiff has failed to meet at least one of the estoppel requirements, that there is conduct or
language amounting to a representation of a material fact. Therefore, the plaintiff’s objections
are overruled. The Magistrate Judge’s opinion is thorough and well-reasoned on both of these
issues. Additionally, the opinion analyzes and finds that the plaintiff cannot meet any of the
other four equitable estoppel elements and is not entitled to relief. Because the Court finds that
the outcome of this case can be decided on either of the two bases above, the Court will not
address the other elements.
After careful de novo consideration of the record as a whole, and after careful
consideration of the Report and Recommendation of the United States Magistrate Judge, and for
the reasons set out in that Report and Recommendation which are incorporated by reference
herein, it is hereby ORDERED that the plaintiff’s objections are OVERRULED, that this Report
and Recommendation is ADOPTED and APPROVED, [Doc. 51], that defendants’ Motion for
Summary Judgment, [Doc. 30], be GRANTED, that the plaintiffs’ Motion for Summary
Judgment, [Doc. 33], be DENIED, and that the case be DISMISSED.
s/J. RONNIE GREER
UNITED STATES DISTRICT JUDGE
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