Harmon v. harmon et al

Filing 63

MEMORANDUM AND ORDER granting 39 MOTION for Summary Judgment and Brief in Support, granting 57 MOTION for Partial Summary Judgment Memorandum in support, (Signed by Judge Gregg Costa) Parties notified.(arrivera, )

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
GALVESTON DIVISION
PATRICIA ANN HARMON, et al,
Plaintiffs,
VS.
LEGH ANN HARMON, et al,
Defendants.

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CIVIL ACTION NO. 3:12-CV-00153

MEMORANDUM AND ORDER
This case arises from the payment of the late William Harmon’s life
insurance proceeds to his daughter, Defendant Legh Ann Harmon. The deceased’s
widow, Plaintiff Patricia Harmon, claims that Legh Ann and her boyfriend,
Defendant Xavier Lee, deceived William into changing the primary beneficiary of
the life insurance policy from Patricia to Legh Ann while William was
incompetent to make such a decision.

Patricia also claims that Defendant

Metropolitan Life Insurance Company, the issuer of the policy, violated various
ERISA provisions by distributing the proceeds to Legh Ann without the original
paperwork showing the beneficiary change and with knowledge that William was
incapacitated when the change was made. Defendants have moved for summary
judgment. Having reviewed the parties’ briefs, the facts, and the applicable case
law, the Court GRANTS Defendants’ motions.
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I.

BACKGROUND
This lawsuit centers around two life insurance policies that William Harmon

obtained while employed by Bayer Corporation. William participated in Bayer’s
employee benefit program, through which he funded and owned a $125,000 basic
life insurance policy and a $125,000 optional supplemental life insurance policy.
A beneficiary designation form shows that on April 19, 2000, William designated
his wife, Patricia Harmon, as the primary beneficiary of the policies, and his
daughter, Legh Ann Harmon, as the secondary beneficiary. Docket Entry No. 3311 at 2.
William’s health appears to have started deteriorating in 2000 because of
“severe pancreatitis with pseudocyst.” Docket Entry No. 48-1 at 7. William grew
physically weak and, in September 2001, began seeing a psychiatrist after suffering
from “depression, anxiety, nightmares, and flashbacks.” Id. The Social Security
Agency deemed him disabled in August 2002 due to “organic mental disorders and
essential hypertension” and he seems to have quit his job around that time. Docket
Entry Nos. 48-3 at 8; 13 at 4. A March 2003 report from the psychiatrist to a
disability claims examiner notes that William’s condition had “been generally
downhill,” showing signs of ongoing deterioration of his cognitive abilities,
vascular dementia, and difficulties with short-term memory. Docket Entry No. 481 at 7.
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On November 22, 2004, Legh Ann was named the primary beneficiary of
the insurance policies, but exactly how that happened is unclear. The evidence of
the beneficiary change is limited and primarily contained in electronic records of
Hewitt Associates—the administrative services provider and record keeper for the
insurance plan until 2010.

Those records include a computer screenshot

documenting that the beneficiary change took place on that date. Docket Entry No.
38-7 at 71–73.

The records also include a spreadsheet of Health Insurance

Portability and Account Act (HIPAA) Notices, which has a November 22, 2004
entry for “Confm PIN Reset”—presumably a notice confirming a change in
William’s personal identification number—and a November 23, 2004 entry for
“HW Bene Confirm”—presumably a notice confirming the change in beneficiary.
Id. at 74.1

Figure 1. Screenshots showing November 22, 2004 beneficiary change. Docket Entry No.
38-7 at 73–74.

1

The spreadsheet also has a November 23, 2004 entry for “HW Sal COE AE,” but the parties do
not explain, and the Court is not aware, of what that means. Docket Entry No. 38-7 at 74.
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In the following years, William’s health continued to deteriorate. After
enduring a major stroke in 2008, he died on June 21, 2010 at the age of sixty-three.
He was survived by Patricia and Legh Ann, as well as three of Patricia’s children
from a prior marriage whom he adopted when he married Patricia.
On June 28, 2010, the Bayer Benefits Center sent Legh Ann a letter advising
her that she was the designated beneficiary of the insurance proceeds and enclosing
a claim form. Docket Entry No. 40 at 49. On June 30, 2010, the Bayer Benefits
Center faxed its Employer’s Statement to MetLife, informing MetLife of William’s
death, details of his coverage, and that Legh Ann was the designated beneficiary.
Docket Entry Nos. 40 at 46–50; 41 at 1–5. Legh Ann submitted her claim form
and the death certificate to MetLife on July 8, 2010. Docket Entry No. 41 at 16–
21.
Patricia alleges that the first time she learned of the beneficiary change was
after William’s death, when the funeral home advised her that the life insurance
policy she provided them to cover the expenses had already been paid to Legh
Ann. Phone logs show that Patricia called MetLife on July 6, 2010 to inquire
about the beneficiary change and ask if she could change the named beneficiary,
but the representative advised her that such action was not possible. Docket Entry
No. 48-3 at 12. She called again two days later, stating that her daughter wanted to
give up her rights and the proceeds, but the Benefits Center once again refused and
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informed her that it had to pay the most current beneficiary listed on file. Id. at 13.
Though not documented in the phone logs, Patricia alleges that she told the
representative that William did not have the mental capacity to change the
beneficiary and that the change must have been a mistake. Compare id., with
Docket Entry No. 48 at 4. She also states that the representative told her the
beneficiary change was made online, but that too is not documented in the phone
logs. Id. The parties also dispute whether, in a subsequent phone call on July 13,
2010, Patricia stated that she would not file a competing claim. Patricia is adamant
that she “consistently asserted her claim,” Docket Entry No. 48 at 5, but the phone
record states: “Isn’t going to file a clm. . . . let Exmnr know not going to file clm,
can proceed.” Docket Entry No. 48-3 at 15. MetLife paid the insurance proceeds
to Legh Ann on July 15, 2010. Docket Entry No. 43 at 37.
Shortly thereafter, Patricia retained counsel in connection with her alleged
interest in the life insurance proceeds. On July 23, 2010, her counsel wrote
MetLife asserting claims on three bases: (1) the change of beneficiary was the
result of Legh Ann’s undue influence; (2) the decedent lacked the mental capacity
to understand the effect of his conduct at the time of the beneficiary change; and
(3) the life insurance premiums were paid with community property entitling
Patricia to a 50% interest. Docket Entry No. 48-4 at 1. MetLife responded on
August 12, 2010, denying the claim. Id. at 4. It reasoned that Patricia had advised
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on July 13 that she would not be filing a claim, and therefore it processed payment
in good faith pursuant to the most recent beneficiary designation on file. Id.
MetLife also informed Patricia’s counsel that, under ERISA, he had sixty days to
file a written appeal, which should include “the reason(s) you believe the claim
was improperly denied, and [] any additional comments, documents, records or
other [information].” Id. at 4–5.
Patricia hired new counsel who filed a formal appeal with MetLife on
October 15, 2010. Docket Entry No. 42 at 8–9. The appeal letter argued that the
payment was based on “insufficient and erroneous documentation provided by
Bayer” and complained that no evidence was provided to Patricia regarding the
beneficiary change. Id. at 8. It also urged that Patricia had “a good faith belief that
there was an error made in the payment of the [] claim” and “a good faith belief
that the designated beneficiary was changed by means of fraud,” but attached no
evidence in support of those beliefs. Id. at 9. After receiving the appeal, MetLife’s
claim examiner referred the appeal to a “senior” who reviewed the entire file and
advised that “[n]othing was provided that would prove that we paid the wrong
Bene based on fraud” and thus that Metlife should uphold the paid-in-good-faith
letter.

Id. at 12.

The examiner also requested that the Plan’s third-party

administrator provide the actual beneficiary designation on file for William
Harmon. Id. at 13–14. Affiliated Computer Services—the company that replaced
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Hewitt as the third-party administrator in 2010—responded that it did not have any
original beneficiary designation paperwork and that the only beneficiary
designation information that it received from Hewitt was in the form of computer
screenshots. Id. at 17–18. Nonetheless, “based on the record before” it, MetLife
determined that the appeal was without merit and upheld the denial of the claim.
Id. at 21–22.
Unsatisfied with MetLife’s determination, Patricia filed suit in state court on
April 20, 2012, naming both herself and the decedent’s estate as plaintiffs.
Defendants removed the action to this Court on May 21, 2012. In her latest
pleading, Patricia names six Defendants: Legh Ann, Xavier Lee, MetLife, Hewitt,
Affiliated Computer Services, and Bayer Corporate & Business Services, LLC.
Docket Entry No. 13 ¶¶ 3–8.
Patricia alleges that Legh Ann and Lee moved in with her in August 2009
with the pretext of caring for William, but with actual intentions of stealing her
money before fleeing to Maryland. Id. ¶ 16. She also alleges that Legh Ann either
accessed William’s life insurance policy information on MetLife’s website and
secretly changed the beneficiary designation or that Legh Ann unduly influenced
William into changing the beneficiary designation. Id. ¶¶ 16–19. Based primarily
on these allegations, Patricia brings causes of action against Legh Ann and Lee for
fraud and misrepresentation; undue influence for the purpose of conversion; unjust
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enrichment and restitution; violation of the Texas Theft Liability Act; intentional
infliction of emotional distress; and constructive trust.
With respect to the corporate Defendants, Patricia brings causes of actions
under ERISA section 502(a)(1)(B) to recover benefits alleged due to her under the
terms of the plan, and under ERISA sections 502(a)(2), 404(a), and 409 for breach
of fiduciary duty. Patricia has dismissed her claims against Hewitt and Affiliated
Computer Services, see Docket Entry Nos. 31; 50, and it appears that Bayer was
never served. However, Patricia still asserts her claims against MetLife. She
alleges that MetLife’s decision to pay Legh Ann was arbitrary and capricious
because it was made with knowledge that: (1) she was asserting a rival claim;
(2) William had mental illnesses when the beneficiary change was made; and
(3) no written beneficiary change was on file despite the fact that beneficiary
changes had to be in writing.
The remaining Defendants now seek summary judgment. Legh Ann and
Lee argue that Patricia has no evidence to support the claims against them.
MetLife argues that it is absolved of liability because its decision to pay Legh Ann
was reasonable and made in good faith; that the claims under ERISA sections

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502(a)(2), 404, and 409 fail as a matter of law; and that the estate does not have the
capacity to sue. For the reasons below, the Court grants Defendants’ motions. 2
II.

STANDARD OF REVIEW
When a party moves for summary judgment, the reviewing court shall grant

the motion “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 dispute about a material fact is genuine “if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). All reasonable doubts on questions
of fact must be resolved in favor of the party opposing summary judgment. See
Evans v. City of Houston, 246 F.3d 344, 348 (5th Cir. 2001) (citation omitted).
III.

DISCUSSION
A.

The Claims Against Legh Ann Harmon and Xavier Lee

Though Patricia’s amended complaint broadly accuses Legh Ann and Lee of
secretly changing the beneficiary designation by means of fraud and deception, it
provides very little insight into how they may have done so or for what acts or

2

Both MetLife and the individual Defendants argue that the Estate’s claims should be barred
because a decedent’s estate is not a proper legal entity that can sue or be sued. See Docket Entry
Nos. 39 at 22 (citing Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex. 2005)); 57
at 26 (citing Price v. Estate of Anderson, 522 S.W.2d 690, 691 (Tex. 1975)). Though Plaintiffs
concede this argument in their responses to both motions for summary judgment, the Court need
not address the issue, as the merits of both Plaintiffs’ claims are the same and fail for the reasons
discussed below.
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omissions they are liable. Rather, Patricia relies on the following circumstantial
evidence to establish wrongdoing:
1. William had mental health issues in 2004;
2. the beneficiary change was allegedly done by computer, and William
did not own a computer or know how to use one; and
3. Legh Ann had a financial motive to be named beneficiary.
From these benign facts, Plaintiffs want the jury to conclude that Legh Ann and
Lee either coerced or tricked William into changing the beneficiary or obtained his
computer password and made the change themselves. While, as a general matter,
circumstantial evidence may be used to establish the type of wrongful conduct that
is at the heart of Patricia’s claims, the Court determines that this circumstantial
evidence is insufficient to enable a reasonable juror to return a verdict finding that
Legh Ann or Lee engaged in wrongdoing.
Patricia suggests that William’s mental health issues made him susceptible
to deception or coercion by Legh Ann and Lee. However, Patricia presents no
evidence that Legh Ann and Lee were communicating with William in 2004, much
less that they were in a position to deceive or coerce him into changing his
beneficiary status at that time. Patricia alleges that Legh Ann and Lee “were fully
aware that William B. Harmon was not competent and lacked mental capacity
because that was their announced reason for moving in with” him in August 2009,

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but she does not explain how such awareness of William’s mental capacity in 2009
relates to the beneficiary change in 2004. Docket Entry No. 13 ¶ 17.
With respect to the computer, even assuming that the beneficiary change
occurred online, the circumstantial evidence regarding the use of a computer fails
to create a fact issue that Legh Ann and Lee engaged in wrongdoing.3 Patricia
provides her own affidavit testimony stating the William did not own or know how
to operate a computer, but even if William did not know how to use a computer,
there is no credible evidence that Legh Ann or Lee made the change or that they
had access to William’s password. Patricia states that she “believes that Legh Ann
Harmon was able to access William B. Harmon’s life insurance policy information
at Met Life’s website and secretly make the change of beneficiary designation,”
Docket Entry No. 13 ¶ 19, but she cites no admissible evidence supporting such
accusations in her summary judgment response.4 See Docket Entry No. 59.

3

While the evidence is inconclusive whether the beneficiary change occurred online, by letter,
by fax, or by phone, the Court will assume that it occurred online because MetLife and the thirdparty administrators could not find paperwork for the beneficiary change and reasonable doubts
on factual disputes are to be resolved in favor of the nonmoving party. See Evans, 246 F.3d at
348 (citation omitted).
4
Though not attached to her summary judgment response, Patricia states in her deposition that
during one of her phone conversations with MetLife after William’s death, the representative
told her that Legh Ann changed the designation on the computer. See Docket Entry No. 57-13 at
1. But such a statement is inadmissible hearsay when used against Legh Ann or Lee. It is not in
MetLife’s phone logs and Patricia is unable to identify the representative. Indeed, in her
deposition, Patricia ultimately admitted that she does not know whether Legh Ann and Lee did
anything to change the beneficiary status. See Docket Entry Nos. 48-3 at 12–16; 57-13 at 1, 18;
55 at 7–9.
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Accordingly, given that Patricia cannot create a fact issue to show that Legh
Ann and Lee engaged in wrongful conduct, and her claims are all contingent on
such conduct, summary judgment is warranted.

Moreover, the following

examination of each of the alleged causes of action highlights additional legal
deficiencies, which make it impossible for a reasonable jury to return a verdict for
Patricia. See Anderson, 477 U.S. at 248.
1. Fraud and Misrepresentation
The first cause of action Patricia asserts is “fraud and misrepresentation.”
Docket Entry No. 13 at 9. A plaintiff seeking to prevail on a fraud claim in Texas
must prove that:
(1) the defendant made a material misrepresentation; (2) the defendant
knew the representation was false or made the representation
recklessly without any knowledge of its truth; (3) the defendant made
the representation with the intent that the other party would act on that
representation or intended to induce the party’s reliance on the
representation; and (4) the plaintiff suffered an injury by actively and
justifiably relying on that representation.
Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 217 (Tex. 2011)
(citations omitted).
The claim fails for a number of reasons. Patricia provides no evidence that
Legh Ann and Lee made any representations that were relied on, much less that

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they made any false representations. The representations underlying the claim are
still unclear.5
And there is certainly no evidence that Patricia “suffered an injury by
actively and justifiably relying on that representation.” Exxon, 348 S.W.3d at 217
(citations omitted). While Patricia raises vague allegations about Legh Ann and
Lee fraudulently inducing William into changing his beneficiary designation and
fraudulently inducing MetLife into changing the designation without proper
permission, she never alleges that she relied on any representation as required for a
fraud claim. To the extent Legh Ann misrepresented her claim to the insurance
proceeds, Plaintiffs did not rely on such statements and conduct, but challenged
them with MetLife and now in court. Plaintiffs’ fraud claim fails as a matter of
law.
2. Undue Influence
Plaintiffs label their second cause of action as “undue influence for the
purpose of conversion,” Docket Entry No. 13 at 9, which, to the Court’s
5

In the complaint, Patricia alleges that misrepresentations were directed toward William without
specifying what those were. See Docket Entry No. 13 at 9 (“Plaintiffs will show that Legh Ann
Harmon and Xavier Lee made material and false representations and omissions of material facts
to Plaintiffs in coercing William B. Harmon to change the beneficiary designation” and that
“William B. Harmon did act and rely on the fraudulent and false statements.”). However, in her
summary judgment response, Patricia asserts that the misrepresentation was the filing of a life
insurance claim after William’s death: “The act of making a claim for the life insurance benefits
of William B. Harmon by Legh Ann Harmon with her knowledge . . . of his mental disability is
an act of fraud because she and Xavier Lee knew or they should have known that Legh Ann
Harmon did not have the right to claim the life insurance proceeds . . . .” Docket Entry No. 59 at
13–14.
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knowledge, is simply an undue influence claim.

“Undue influence in the

procurement of a testament is a ground for its avoidance separate and distinct from
the ground of testamentary incapacity; for while testamentary incapacity implies
the want of intelligent mental power, undue influence implies the existence of a
testamentary capacity subjected to and controlled by a [dominant] influence or
power.”

Rothermel v. Duncan, 369 S.W.2d 917, 922 (Tex. 1963) (citations

omitted). “To show undue influence, a plaintiff must prove: ‘(1) the existence and
exertion of an influence; (2) the effective operation of such influence so as to
subvert or overpower the mind of the testator at the time of the execution of the
testament; and (3) the execution of a testament which the maker thereof would not
have executed but for such influence.’” Wackman v. Rubsamen, 602 F.3d 391,
412–13 (5th Cir. 2010) (quoting Rothermel, 369 S.W.2d at 922). The cause of
action can also apply in the context of a life insurance policy dispute.

See

McDaniel v. Householder, No. 11-09-00307-CV, 2011 WL 3793326, at *3 (Tex.
App.—Eastland Aug. 25, 2011, no pet.) (citing In re Estate of Woods, 542 S.W.2d
845, 847 (Tex. 1976) and Rothermel, 369 S.W.2d at 922) (setting out the same
elements of an undue influence cause of action).
The party seeking to set aside the instrument bears the burden of proving
undue influence. Rothermel, 369 S.W.2d at 922. “The evidence must show more
than mere opportunity to exercise influence.” Wackman, 602 F.3d at 413 (citing
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Dulak v. Dulak, 513 S.W.2d 205, 209 (Tex. 1974)).

A plaintiff may use

circumstantial evidence to prove the claim, but still must “introduce some tangible
and satisfactory proof.” Rothermel, 369 S.W.2d at 922 (citation omitted). And the
influence must not merely be present, but unduly exerted such that “the free
agency of the testator was destroyed.” Id. Such influence often takes the form of
“force, intimidation, duress, excess importunity or deception” and “usually
involves an extended course of dealings and circumstances.” Id.
Patricia is unable to raise a genuine issue of fact that Legh Ann or Lee
exerted any influence over William and thus her undue influence claim is subject
to summary judgment.

Patricia presents no evidence to demonstrate that

Defendants were in a position to exercise dominion over William in November
2004, when the beneficiary designation was changed, much less that they actually
did so.
The Court is not persuaded by any of Patricia’s alleged bases for the claim.
Patricia attempts to prove her claim by arguing that William was mentally disabled
since 2001, but, even if such allegations were true, undue influence requires
exertion of influence rather than mere incapacity. See Rothermel, 369 S.W.2d at
922. Patricia does not present such evidence of influence, or even evidence that in
2004, Legh Ann communicated with William or knew of his purported incapacity.
See Paige-Hull v. Wofford, No. 3:05-CV-1339-BH, 2008 WL 4274504, at *7 (N.D.
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Tex. Sept. 17, 2008) (“When circumstantial evidence is relied upon, the
circumstances must be so strong and convincing and of such probative force as to
lead a well-guarded mind to a reasonable conclusion not only that undue influence
was exercised but also that it controlled the willpower of the testator at the precise
time the will was executed.” (citing Estate of Davis v. Cook, 9 S.W.3d 288, 293
(Tex. App.—San Antonio 1999, no pet.)). Even if Patricia asserted her claim
based on lack of mental capacity rather than undue influence, the evidence from
Dr. Wamble—while showing that William suffered from disabilities and mental
illness in 2004—fails to show that William lacked “sufficient mind and memory to
understand the nature and effect of his act.” Decker v. Decker, 192 S.W.3d 648,
652 (Tex. App.—Fort Worth 2006, no pet.).
In sum, Patricia presented no direct evidence of undue influence and her
circumstantial evidence is weak and not probative. The undue influence claim fails
as a matter of law.
3. Unjust Enrichment
Plaintiffs next assert a cause of action for “unjust enrichment and
restitution,” based on Legh Ann’s “receipt of approximately $250,000.00 in ill
gotten life insurance proceeds as a direct and proximate result of her fraudulent
representations to Plaintiff.” Docket Entry No. 13 at 10. “A party may recover
under the unjust enrichment theory when one person has obtained a benefit from
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another by fraud, duress, or the taking of an undue advantage.” Heldenfels Bros.,
Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992) (citations omitted).
For the reasons already discussed, Patricia has not offered evidence to raise a
genuine issue whether Legh Ann received the life insurance proceeds by fraud or
other undue means. Rather, Legh Ann received the life insurance money as the
last designated beneficiary on file. See Fortune Prod. Co. v. Conoco, Inc., 52
S.W.3d 671, 684 (Tex. 2000) (“When a valid agreement already addresses the
matter, recovery under an equitable theory is generally inconsistent with the
express agreement.” (citation omitted)).

As such, Defendants are entitled to

summary judgment on the unjust enrichment claim.
4. Texas Theft Liability Act
The fourth cause of action pled in Plaintiffs’ complaint is violation of the
Texas Theft Liability Act, which imposes liability on a “person who commits
theft.” Tex. Civ. Prac. & Rem. Code Ann. § 134.003(a). It defines “theft” as
“unlawfully appropriating property or unlawfully obtaining services as described
by” certain provisions of the Penal Code. Id. § 134.002(2). The penal provision
implicated here is section 31.03, which prohibits appropriation of property
“without the owner’s effective consent.” Tex. Penal Code Ann. § 31.03(b)(1).
Once again, Plaintiffs fail to present sufficient evidence to show that Legh
Ann or Lee unlawfully appropriated the life insurance proceeds. Contrary to
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Plaintiffs’ claims, Patricia was not listed as the last-named beneficiary on file, and
thus the proceeds were not her property. Plaintiffs’ claim under the Texas Theft
Liability Act is subject to summary judgment.
5. Intentional Infliction of Emotional Distress
Next, Plaintiffs claim that some nebulous conduct on the part of Legh Ann
and Lee was “aimed at illicitly obtaining all of the insurance proceeds” and done
for the purpose of depriving Patricia of money and causing her to suffer severe and
intense emotional distress. Docket Entry No. 13 at 11. To succeed on this claim, a
plaintiff must establish that: “(1) the defendant acted intentionally or recklessly;
(2) the defendant’s conduct was extreme and outrageous; (3) the defendant’s
actions caused the plaintiff emotional distress; and (4) the resulting emotional
distress was severe.” Hoffmann-La Roche Inc. v. Zeltwanger, 144 S.W.3d 438,
445 (Tex. 2004) (citation omitted).
As an initial matter, it is not clear if Plaintiffs are pursuing this claim
because they did not respond to Defendants’ summary judgment arguments. In
any event, given that Patricia cannot even identify the conduct at issue, she clearly
cannot establish “extreme and outrageous” conduct. Id. (defining such conduct as
“so extreme in degree, as to go beyond all possible bounds of decency, and to be
regarded as atrocious, and utterly intolerable in a civilized community” (citations

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and internal quotation marks omitted)).

Plaintiffs’ intentional infliction of

emotional distress claim is subject to summary judgment.
6. Constructive Trust
Finally, Plaintiffs asks that the Court impose a constructive trust on the
$250,000 of life insurance proceeds. “A constructive trust is an equitable remedy
created by the courts to prevent unjust enrichment.” Hubbard v. Shankle, 138
S.W.3d 474, 485 (Tex. App.—Fort Worth 2004, pet. denied) (citation omitted). To
obtain a constructive trust, a proponent must prove: “(1) breach of a special trust,
fiduciary relationship, or actual fraud; (2) unjust enrichment of the wrongdoer; and
(3) tracing to an identifiable res.” Id. (citation omitted). Whether to impose a
constructive trust at all is within the discretion of the trial court. Id. (citation
omitted).
For the reasons described above, Plaintiffs fail to raise a fact issue on
whether Defendants breached any duty or committed actual fraud. Accordingly,
the request for a constructive trust is subject to summary judgment.
B.

The Claims Against MetLife

Plaintiffs bring two categories of ERISA claims against MetLife. They
allege that MetLife breached its fiduciary duties under ERISA sections 404(a),
409, and 502(a)(2) and that Plaintiffs are entitled to recover plan benefits under
section 502(a)(1)(B).
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1. Fiduciary Duty Claims
Plaintiffs allege that MetLife breached its fiduciary duty “by failing to act
solely in the interest of participants, in failing to act in accordance with the life
insurance policy terms and in preferring their own financial interest over that of the
participant.”

Docket Entry No. 13 at 14.

Plaintiffs no longer appear to be

advancing these claims, as they conceded in their summary judgment response all
of MetLife’s arguments as to why the claims fail as a matter of law. Accordingly,
the Court will only briefly address the reason each fiduciary duty claim is subject
to summary judgment.
The ERISA provisions on which Plaintiffs’ fiduciary duty claims are based
only provide causes of action for breaches of duty to the plan as a whole, as
opposed to an individual policy or beneficiary.

Section 502(a)(2) of ERISA

authorizes certain parties to bring actions to recover for violations of the fiduciary
obligations defined in section 409(a). See 29 U.S.C. § 1132(a)(2);6 LaRue v.
DeWolff, Boberg & Assocs., Inc., 552 U.S. 248, 253 (2008).

Under well-

established Supreme Court precedent, section “502(a)(2) does not provide a
remedy for individual injuries distinct from plan injuries.” LaRue, 552 U.S. at 256;
see also Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 142 (1985) (“A fair
contextual reading of the statute makes it abundantly clear that its draftsmen were
6

While section 409 establishes the liability for a breach of fiduciary duties, section 404 sets out
the fiduciary duties. See 29 U.S.C. § 1104.
20 / 27

primarily concerned with the possible misuse of plan assets, and with remedies that
would protect the entire plan, rather than with the rights of an individual
beneficiary.”).
Because Plaintiffs are seeking to recover based on their individual injuries,
rather than injuries to the entire plan resulting from mismanagement of plan assets,
their fiduciary duty claims fail as a matter of law.
2. ERISA Section 502(a)(1)(B) Claim
Plaintiffs’ proper statutory avenue for challenging the beneficiary
determination is section 502(a)(1)(B), which allows a plan participant or
beneficiary to file suit “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). In cases such as
this one in which the plan grants the plan administrator discretionary authority to
interpret the terms of the plan and to render benefit decisions, see Docket Entry
No. 40 at 43, courts review the administrator’s decisions for abuse of discretion.
Holland v. Int’l Paper Co. Ret. Plan, 576 F.3d 240, 246 (5th Cir. 2009) (citing
Stone v. UNOCAL Termination Allowance Plan, 570 F.3d 252, 257–58 (5th Cir.
2009)). “A plan administrator abuses its discretion where the decision is not based
on evidence, even if disputable, that clearly supports the basis for its denial.” Id.
(citations and internal quotation marks omitted). “Under the abuse of discretion
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standard, if the plan fiduciary’s decision is supported by substantial evidence and is
not arbitrary and capricious, it must prevail.” Corry v. Liberty Life Assurance Co.
of Boston, 499 F.3d 389, 397–98 (5th Cir. 2007) (citations and internal punctuation
omitted).

“Substantial evidence is ‘more than a scintilla, less than a

preponderance, and is such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.’” Ellis v. Liberty Life Assurance Co. of Boston,
394 F.3d 262, 273 (5th Cir. 2004) (quoting Deters v. Sec’y of Health, Educ. &
Welfare, 789 F.2d 1181, 1185 (5th Cir. 1986)).

A court’s “review of the

administrator’s decision need not be particularly complex or technical; it need only
assure that the administrator’s decision fall somewhere on a continuum of
reasonableness—even if on the low end.” Vega v. Nat’l Life Ins. Servs., Inc., 188
F.3d 287, 297 (5th Cir. 1999) (en banc), abrogated on other grounds by Metro.
Life Ins. Co. v. Glenn, 554 U.S. 105 (2008).
Moreover, “when assessing factual questions, the district court is constrained
to the evidence before the plan administrator.”

Id. at 299 (collecting cases).

“[E]vidence may not be admitted in the district court that is not in the
administrative record when that evidence is offered to allow the district court to
resolve a disputed issue of material fact regarding the claim . . . .” Id. at 289.
“[T]he administrative record consists of relevant information made available to the

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administrator prior to the complainant’s filing of a lawsuit and in a manner that
gives the administrator a fair opportunity to consider it.” Id. at 300.
MetLife did not abuse its discretion when it issued the insurance benefits to
Legh Ann and later when it denied Patricia’s appeal, because its decisions were
based on substantial evidence—namely, Hewitt’s electronic records showing the
beneficiary designation change on November 22, 2004.7

Plaintiffs object to

MetLife’s decision to pay the insurance benefits to Legh Ann on three grounds:
(1) “Met Life knew Patricia [] was asserting a rival claim”; (2) “Met Life knew that
William [] suffered from a mental disability that would render him incapable of
changing the designated beneficiary”; and (3) “Met Life knew the date on the
written beneficiary designation naming Legh Ann [] the beneficiary under
William[’s] life insurance policies could not be ascertained by Met Life causing
the written beneficiary designation of Legh Ann [] to be defective and non
compliant with the Summary Plan Description and the terms of the Met Life
insurance policies.” Docket Entry No. 48 at 9. The Court finds these objections
unconvincing.

7

The Court’s finding is also bolstered by the fact that MetLife had no conflict of interest in
rendering is decision. See Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 115 (2008) (“[A] conflict
should be weighed as a factor in determining whether there is an abuse of discretion.” (citation
and internal quotation marks omitted)). Unlike some life insurance cases in which an
administrator is determining whether or not to issue a payment that would come out of its own
pockets, MetLife was merely deciding whether to issue a $250,000 payment to Legh Ann or
Patricia.
23 / 27

First, whether MetLife knew that Patricia was asserting a rival claim when it
paid Legh Ann is insignificant. The question in reviewing even a disputed claim is
whether Metlife’s decision was an abuse of discretion. And, in any event, Patricia
still had the opportunity to appeal the decision, which she did, though
unsuccessfully.
Plaintiffs’ second argument, regarding MetLife’s knowledge of William’s
incapacity, is also unavailing. According to Plaintiffs, MetLife knew that William
was disabled because William’s “employee records would contain extensive
records regarding [his] disability including information that he was receiving social
security disability payments.” Docket Entry No. 48 at 10–11. There is a big
difference between having a disability and being incapacitated. Plaintiffs fail to
identify any information that MetLife possessed showing that William was
incapacitated in 2004. Such evidence must have been in the administrative record
and not merely in Plaintiffs’ summary judgment submissions, such as Dr.
Wamble’s affidavit. See Vega, 188 F.3d at 299. When Patricia filed her appeal
with MetLife, she did not attach any medical records or other information
suggesting that William was mentally incapacitated in November 2004, even
though MetLife’s right-to-appeal letter advised her to include any additional
documents or records. Docket Entry No. 42 at 6–9. Therefore, even if MetLife
possessed documents regarding William’s disability in its employee records—such
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as the Social Security Administration notice that William was found disabled in
August 2002 with “organic mental disorders,” Docket Entry No. 48-3 at 8—
MetLife did not abuse its discretion by failing to conclude from that information
that on November 22, 2004, William lacked “sufficient mind and memory to
understand the nature and effect of his act.” Decker, 192 S.W.3d at 652.8
Plaintiffs’ third objection concerns whether MetLife abused its discretion by
paying Legh Ann even though it did not have written documentation designating
her as the beneficiary. Plaintiffs’ argument is premised on the notion that the plan
requires beneficiary changes to be in writing and that the beneficiary change was
invalid because it was purportedly made online. As discussed above, it is not clear
the change was made online, and unlike this Court’s standard for viewing the
evidence, MetLife need not resolve that dispute in Plaintiffs’ favor. Moreover, the
record is not clear whether the plan actually prohibited online or telephonic
beneficiary changes. For instance, the insurance certificate allows a participant to
change his beneficiary designation by “send[ing] a Signed and dated, Written
request to the Policyholder using a form satisfactory to Us”; however, it defines
“Written” as “a record which is on or transmitted by paper or electronic media
8

Patricia notes two other ways in which MetLife should have been aware of William’s
incapacity. First, she states that she advised them of the disability; however, she never alleges
that she provided MetLife with any evidence of the disability. Second, she states that Bayer
advised MetLife that William had been on disability when MetLife was preparing payment of the
life insurance proceeds, but the correspondence to which she refers makes no mention of mental
incapacity. See Entry No. 48-4 at 13.
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which is acceptable to Us and consistent with applicable law.” Docket Entry No.
40 at 32, 35. And other insurance plan documents, such as the Online Bayer
Benefits Manual, allow a participant to “change [his] beneficiary at any time on
this site or by calling the Bayer Benefits Center and [the] choices will take effect
immediately.” Docket Entry No. 38-7 at 76; see also id. at 79 (allowing online
beneficiary changes). In the end, MetLife chose to follow the most recent records
it had from the third-party administrator, which showed that Legh Ann was the last
named beneficiary. Those records were merely computer screenshots and may not
have been as reliable as certain other forms, but they nonetheless provided
substantial evidence from which MetLife could make a decision. The law does not
require that MetLife base its decision by a preponderance of the evidence, but
merely by more than a scintilla. Ellis, 394 F.3d at 273 (citation omitted).9
IV.

CONCLUSION
For the foregoing reasons, the Court GRANTS Defendants Legh Ann

Harmon and Xavier Lee’s Motion for Summary Judgment (Docket Entry No. 57)

9

Plaintiffs mention two other reasons why MetLife’s decision was arbitrary and capricious.
They point out that the Hewitt screenshot listing Legh Ann as the beneficiary has a “2” next to
her name, meaning that she was the secondary beneficiary. See Figure 1, supra. But the “2” is
merely a relationship code for child. See Docket Entry no. 38-7 at 67. Plaintiffs also try to draw
suspicion from the fact that Legh Ann called Bayer or MetLife on July 8, 2010 to verify when
she was listed as the beneficiary and that MetLife responded that it was unable to read the date
on the document. See Docket Entry No. 48-3 at 11. The Court does not find this evidence to be
probative of any wrongdoing or conspiracy.
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and GRANTS Defendant Metropolitan Life Insurance Company’s Motion for
Summary Judgment (Docket Entry No. 39).
IT IS SO ORDERED.
SIGNED this 2nd day of August, 2013.

___________________________________

Gregg Costa
United States District Judge

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