Keith v. Metropolitan Life Insurance Co et al

Filing 75

MEMORANDUM OPINION AND ORDER (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

LINDA KEITH,

§

Plaintiff,

v.
METROPOLITAN LIFE INSURANCE
COMPANY, CENTRAL BANK, and
CENTRAL BANK WELFARE BENEFIT
PLAN,
Defendants.

§
§
§
§
§
§
§
§
§
§
§

CIVIL ACTION NO. H-15-1030

MEMORANDUM OPINION AND ORDER
Plaintiff, Linda Keith, brought this action against defendants,
Metropolitan Life Insurance Company ("MetLife"), Central Bank, and
Central Bank Welfare Benefit Plan,

for breach of fiduciary duty

under the Employment Retirement Income Security Act

u.s.c.

§§ 1001, et seg.

and May 16, 2017.

("ERISA"),

29

The case was tried to the court on May 15

After carefully considering the evidence and the

parties' arguments, the court makes the following findings of fact
and conclusions of law pursuant to Federal Rule of Civil Procedure
52 (a) (1).

I.

Factual Backqround 1

Linda Keith met John P. White in 1995.
at a

White was a customer

restaurant Keith then owned and operated.

1

The two became

Unless otherwise indicated, these facts are taken from the
Admissions of Fact section of the Joint Pretrial Order, Docket
Entry No. 53, pp. 11-15, or from trial testimony.

close friends and remained so until White's death in 2013.

White

was a regular at Keith's restaurant and sought Keith's occasional
assistance in an unsuccessful business venture.
After White closed his business he was hired by Advantage
Business
White

Capital

served

Advantage

("Advantage") ,

as

from

Vice

2008

a

President

until

2013.

subsidiary of
of

Business

Central

Development

for

fewer

than 20

employees, and Central Bank had fewer than 100 employees.

White's

responsibilities

included

factoring services.

Advantage had

Bank.

soliciting

customers

for

Advantage's

As part of his job White was required to pre-

qualify customers, which involved reading and understanding complex
financial documents.
Central

Bank

was

Plan Administrator

of

the

Central

Bank

Welfare Plan, which provided Central Bank employees with a number
of benefits -- including health insurance, supplemental insurance,
an

employer-matched

§

401(k)

plan,

and

life

insurance.

Descriptions of these benefits were made available to employees
A life insurance

online and at annual open enrollment meetings.

policy covering up to two times the employee's salary was provided
at

Central

Bank's

approximately

expense. 2

$51,500,

giving

White' s
him

ending annual

$103,000

of

life

salary was
insurance

coverage.
From 2008 to 2013 White designated Keith as the beneficiary of
his life insurance policy several times.

2

In 2012 White did not

Certificate of Insurance, Plaintiff's Ex. 4, p. 19.
-2-

designate

a

beneficiary. 3

Unbeknownst

to

Keith,

White

designated his checking account payable on death to her.

also

During

his employment with Central Bank White never purchased supplemental
insurance, participated in the employer-matched§ 401(k) plan, or
elected to increase his life insurance coverage at his own expense.
In 2010 White began to complain of difficulties using his left
hand.

White was eventually diagnosed as suffering from monoplegia

and amyotrophic lateral sclerosis
Gehrig's disease.

(ALS),

commonly known as Lou

As White's physical condition deteriorated, he

could no longer perform his job duties at the bank, and a mutual
decision was made for White to take a leave of absence.

White's

last workday at the bank was March 7, 2013, after which he began a
leave

of

absence

under

the

Family

Medical

Leave

Act

(FMLA) .

Central Bank continued to make premium payments for White's group
insurance coverages, including his life insurance, while White was
on leave.
Central Bank's long-term disability (LTD)
and claims administrator was MetLife.

benefits provider

On March 17,

applied for LTD benefits under MetLife's policy.
2013,

MetLife

acknowledged

receipt

of

2013,

White

On March 18,

White's

disability

application, requested additional information needed to perfect the
claim,

and

advised White

that

he

needed

to

apply

for

Social

Security disability (SSD) benefits.

3

Guardian Insurance Application, Central Bank's Ex. 5, p. 2.
-3-

On

March

19,

2013,

White

met

with

Central

Bank's

Vice

President and Human Resources Manager, Judy Rogers, to discuss his
benefits.
his

Rogers confirmed that White wanted to make no changes to

benefits.

White

reaffirmed

his

designation

beneficiary of his life insurance policy.

of

Keith

as

Rogers discussed with

White the option of maintaining his life insurance policy after
termination at his own expense.

Rogers told White that Central

Bank would make premium payments on the policy through June 1,
2013, after which White would need to make the payments. 4

White

said that he was not interested in maintaining his life insurance
policy after his termination, and Rogers therefore did not provide
him with the paperwork necessary to do so. 5

Central Bank did not

then or at any later time provide White with individual written
notice of his right to maintain his life insurance policy.
March 21,

2013,

email,

In a

Rogers advised White that after June 30,

2013, he would be responsible for his own health insurance but made
no further mention of life insurance. 6
After White ceased working Rogers continued to assist him with
claims for LTD benefits and SSD benefits.

On March 20, 2013, White

4

Documents and testimony establish to the court's satisfaction
that White's monthly cost to convert the Policy to an individual
policy was $448.93.
5

The court finds credible Rogers' account of the March 19,
2013, meeting with White and her stated basis for not providing
White with the paperwork for porting or converting his policy.
6

Plaintiff's Ex. 47.
-4-

was interviewed by a MetLife Claim Specialist. 7

White complained

about the MetLife representative to Rogers, who then complained to
MetLife

and

subsequently offered

to

act

as

a

liaison between

MetLife and White, instructing MetLife to communicate through her
to avoid burdening White. 8
White was in frequent contact with both Rogers and MetLife in
the months before his death.
Specialist spoke with White. 9
day. 10

On March 22, 2013, a MetLife Claim
Rogers emailed White

later that

White emailed Rogers on March 25, 2013, to notify her that

he would be "visiting with Social Security" that week and that he
had received the paperwork from MetLife. 11

On March 26,

2013,

MetLife approved White's application for LTD benefits and advised
White that his LTD benefits would begin on June 6, 2013, after a
three-month elimination period. 12
working,
2013.

White,

although not actively

was to remain employed by Central Bank through June 5,

During this time he used the remainder of his vacation and

leave time.

7

MetLife Claim Activity Record, Plaintiff's Ex. 34, pp. 7-14.

8

Id.

at 14-15.

9

Id.

at 32-33.

1

°Central Bank's Ex. 17 -A.

11

Central Bank's Ex. 19.

12

MetLife Claim Activity Record, Plaintiff's Ex. 34, p. 33.
-5-

On April 9,

2013,

MetLife internally generated a claim for

continuation of group life insurance for White. 13

On May 9, 2013,

MetLife sent a letter (uthe May 9th letter") to White acknowledging
ureceipt" of the April 9, 2013, claim. 14

MetLife' s May 9th letter

stated that White's group life insurance plan included ua provision
that continues your coverage while you are not actively at work,"
advised White that a representative umay be in contact" and that
u [n] o action" was required from White at the time.

15

MetLife did

not send the May 9th letter to Central Bank.
On May 21, 2013, MetLife again wrote to White (uthe May 21st
letter"), this time copying Rogers, stating that his insurance plan
required

him

to

be

totally

disabled

continuously

for

nine

consecutive months before he would be eligible for continuation of

13

Plaintiff's Ex. 26, p. 1.

14

Id.
Despite admitting in its earlier briefing, and in the
Admissions of Fact section of the Joint Pretrial Order (Docket Entry
No. 53, p. 14), that MetLife usent" letters to White, MetLife now
contends that Keith failed to prove the letters were actually mailed
to White.
The Fifth Circuit uha [s] recognized that ' [p] lacing
letters in the mail may be proved by circumstantial evidence,
including customary mailing practices used in the sender's
business.'" Custer v. Murphy Oil USA, Inc., 503 F.3d 415, 420 (5th
Cir. 2007) (citing Wells Fargo Business Credit v. Ben Kozloff, Inc.,
695 F.2d 940,
944
(5th Cir. 1983)).
The court finds the
circumstantial evidence in this case, including MetLife's system
notes (Plaintiff's Ex. 33) and Rogers' receipt of a copy of the
May 21st letter, sufficient to prove that both letters were sent and
therefore, presumptively, received by White.
See United States v.
Ekong, 518 F.3d 285, 287 (5th Cir. 2007) (citing Beck v. Somerset
Technologies, Inc., 882 F.2d 993, 996 (5th Cir. 1989)).
lsid.

-6-

group life insurance coverage during his absence from work. 16

The

May 21st letter also stated that MetLife would defer making a
decision on White's claim for continuation of group life insurance
until

December

expired. 17

9,

when

2013,

the

nine-month

waiting

period

Neither the May 9th nor the May 21st letter mentioned

the need to convert White's life insurance policy or that White
could not

qualify

for

continuation of

life

insurance

coverage

because he had not become totally disabled before reaching the age
of 60. 18
On May 28,
insurance. 19

2013,

The

MetLife contacted White regarding his LTD

same

day Rogers 20

called MetLife

to

"get

an

understanding of the meaning" of the May 21st letter and was told
that

White

would

need

to

convert

his

life

insurance

to

an

individual policy in order to maintain coverage during the waiting
period. 21

Rogers did not provide this information to White,

and

there is no evidence that White inquired about either the May 9th

16

Plaintiff' s Ex. 26, p. 2.

17Id.
18

See Certificate of Insurance, Plaintiff's Ex.
("Total disability must start before You attain age 60
19

4,

p. 37
.")

MetLife Claim Activity Record, Plaintiff's Ex. 34, p. 42.

20

The court's earlier Memorandum Opinion and Order (Docket
Entry No. 48) at page 14 mistakenly stated that "White" contacted
MetLife on May 28.
21

MetLife Claims Comment List, Plaintiff's Ex. 33, p. 5.
-7-

or the May 21st MetLife letter or about any options pertaining to
his life insurance policy. 22
White was formally terminated from his position with Central
Bank at the end of his FMLA leave on June 5, 2013.

Central Bank

made its final payment on White's life insurance policy on June 1,
2013.

White's life insurance coverage ended on June 30,

MetLife' s

first LTD payment to White was made by check in the

latter part of June 2013.
Rogers,

2013.

and MetLife

Throughout the month of June, White,

communicated

to

set

up

direct

deposit

of

White's LTD payments.
White continued to participate in the benefits process.
July 24,
Rogers.

2013,

On

White drove to the bank to drop off papers for

White emailed Rogers the following day to say that he had

forgotten

to

give

her

documents. 23

some

MetLife's

communication with White was on September 5,

2013,

final

regarding a

reduction of his SSD insurance payment. 24
White
thereafter,

was

found

dead

on

September

14,

2013.

Shortly

Keith notified MetLife of White's death and MetLife
On November 25,

2013,

MetLife denied Keith's claim for life insurance benefits. 25

Keith

instructed her to submit a death claim.

22

The court finds credible Rogers' testimony that she continued
to operate under the belief that White was not interested in paying
for life insurance benefits.
23

Plaintiff' s Ex. 50.

24

MetLife Claim Activity Record, Plaintiff's Ex. 34, p. 59.

25

MetLife denial letter to Linda Keith, Plaintiff's Ex. 27.
-8-

appealed the denial of her claim.

On May 1, 2014, MetLife denied

Keith's appeal because White's coverage ended on June 30,
following the last premium payment on June 1,

2013,

2013,

and because

White was not eligible for continuation of his insurance since he
was

60

years

old when he

became

disabled. 26

Keith

filed

her

Original Complaint against defendants on April 21, 2015. 27
II.

Applicable Law

An individual plan beneficiary may bring suit for equitable
relief

for breach of a

fiduciary duty under ERISA' s

so-called

"catch-all" provision, which provides:
A civil action may be brought . . . (3) by a participant,
beneficiary, or fiduciary (A) to enjoin any act or
practice which violates any provision of this subchapter
or the terms of the plan, or (B) to obtain other
appropriate equitable relief
(i)
to redress such
violations or (ii) to enforce any provisions of this
subchapter or the terms of the plan[.]
29 U.S.C.
a

§

plaintiff

fiduciary,

1132 (a) (3).

To recover "appropriate equitable relief,"

"must establish that
(b)

has

breached

its

the

defendant

is

fiduciary duties

(a)

a

plan

under ERISA,

(c) that such a breach caused the plaintiff's injury, and (d) that
the equitable relief sought is indeed appropriate."

Shonowo v.

Transocean Offshore Deepwater. Inc., Civil Action No. 4:10-cv-1500,
2011 WL 3418405, at *5 (S.D. Tex. Aug. 3, 2011)

26

(citing Brosted v.

MetLife denial-of-appeal letter to Linda Keith, Plaintiff's
Ex. 36.
27

Docket Entry No. 1.
-9-

Unum Life Insurance Company of America, 421 F.3d 459, 465 (7th Cir.
2005)

A.

(other citations omitted).
Fiduciary Status 28

The

threshold

question

in

an

ERISA

claim

for

breach

of

fiduciary duty "is not whether the actions of some person employed
to

provide

services

under

beneficiary's interest,
fiduciary

(that

is,

a

plan

adversely

was

performing a

120 S. Ct. 2143, 2152-53 (2000).

fiduciary

1034,

1044

plan

(5th

Cir.

function)

Pegram v.

when

Herdrich,

"[T]he issue of ERISA fiduciary

status is a mixed question of fact and law."
F.3d

a

but whether that person was acting as a

taking the action subject to complaint."

55

affected

1995).

Reich v. Lancaster,

Under

ERISA,

one

is

a

fiduciary to the extent that:
(i)
he
exercises
any discretionary authority or
discretionary control respecting management of such plan
or exercises any authority or control respecting
management or disposition of its assets, (ii) he renders
investment advice for a fee or other compensation, direct
or indirect, with respect to any moneys or other property
of such plan, or has any authority or responsibility to
do so, or (iii) he has any discretionary authority or
discretionary responsibility in the administration of
such plan.
29 U.S.C.

§

1002 (21) (A)

In short,

"[a]

fiduciary within the

meaning of ERISA must be someone acting in the capacity of manager

28

The court is aware that fiduciaries under the Plan owe a duty
to both participants and non-participant beneficiaries.
Because
the alleged harm is the loss of benefits under a life insurance
policy issued to White for the benefit of Keith, their benefits
were aligned, and no further distinction need be made between
acting for White's benefit or for Keith's.
-10-

[or]

administrator."

Pegram,

120

S.

Ct.

at

2151.

Merely

performing administrative duties as required by the plan is not a
fiduciary function.
Express Corp.,

See 29 C.F.R.

492 F. App'x 559,

§

2509.75-8; Walker v. Federal

565

(6th Cir.

2012);

Barrs v.

Lockheed Martin Corp., 287 F.3d 202, 207 (1st Cir. 2002); Plumb v.
Fluid Pump Service, Inc., 124 F.3d 849, 854-55 (7th Cir. 1997).
B.

Breach of Fiduciary Duties

ERISA

Section

404(a)

specifies

that

"a

fiduciary

shall

discharge his duties with respect to a plan solely in the interest
of

the

participants

and

exclusive purpose of:

their

beneficiaries,"

and

"for

(i) providing benefits to participants; and

(ii) defraying reasonable expenses of administering the plan."
U.S.C.

§

the

1104 (a) (1) (A).

29

Such duties shall be discharged "with the

care, skill, prudence, and diligence under the circumstances then
prevailing
familiar

with

enterprise
§

that

of

a
such
a

1104 (a) (1) (B) .

ERISA does

prudent

man

matters

like

acting

would

character

in

use
and

a

in
with

like
the

capacity and

conduct

like

aims."

of

an
Id.

"Other than including these general dictates,

not expressly enumerate the particular duties of a

fiduciary, but rather relies on the common law of trusts to define
the general scope of a fiduciary's responsibilities."
Schlumberger,

Ltd.,

338 F.3d 407,

quotation marks omitted) .

412

(5th Cir.

Martinez v.

2003)

(internal

"A trustee has a duty in dealing with a

beneficiary to deal fairly and to communicate to the beneficiary
-11-

all material facts the trustee knows or should know in connection
With the rna t ter.
Fiduciaries

11

RESTATEMENT (THIRD)
who

TRUSTS

OF

gratuitously

§

7 8 ( 2 0 0 7) .

communicate

with

plan

participants may owe a duty to "do so in a manner calculated to
avoid

confusion

commission."

and

misunderstanding,

whether

by

omission

or

See Switzer v. Wal-Mart Stores, Inc., 52 F.3d 1294,

1298-1299 (5th Cir. 1995)

(holding that the Fifth Circuit "d[id]

not necessarily disagree" with the district court's implication).
Other

circuits

have

held

that

performance of [its] duties,

a

"fiduciary

may

not,

in

the

'materially mislead those to whom the

duties of loyalty and prudence are owed.'"
Corp. 204 F.3d 475, 492 (3d Cir. 2000).

Adams v. Freedom Forge

Fiduciaries have "not only

a negative duty not to misinform, but also an affirmative duty to
inform when the

trustee knows

that

silence might be harmful."

Unisys Corp. Retiree Medical Benefits Erisa Litigation v. Unisys
Corp., 579 F.3d 220, 227 (3d Cir. 2009)

(quoting Bixler v. Central

Pennsylvania Teamsters Health & Welfare Fund, 12 F.3d 1292, 1300
(3dCir. 1993)).
C.

Harm/Detrimental Reliance

If a fiduciary breaches a fiduciary duty, the plaintiff must
prove that the breach caused the plaintiff's injury in order to be
entitled to equitable relief.
"The

Fifth

Circuit

has

not

Shonowo,
squarely

2011 WL 3418405 at *5.

addressed

what

an

ERISA

beneficiary must establish to recover for misrepresentations by a
-12-

fiduciary, but . . . to recover under an equitable estoppel theory,
an ERISA beneficiary 'must establish a material misrepresentation,
reasonable and detrimental reliance upon the representation, and
extraordinary
Dawson,
March

No.

3:13-cv-04150-M,

31,

2017)

Association,
case

circumstances.'"

(citing

123 F. 3d 281,

law consistently and

Continental

Insurance

2017 WL 1196857,

Weir
290

v.

Federal

(5th Cir.

at *6
Asset

1997)).

"strongly suggest [s]

Co.

(N.D.

v.
Tex.

Disposition
Fifth Circuit

materiality and

detrimental reliance are required in the Fifth Circuit for an ERISA
beneficiary to recover for a breach of fiduciary duty."

Id.

The

Seventh Circuit has held that "a plaintiff must demonstrate that:
(1)

the defendant was

defendant

made

'acting in a fiduciary capacity;'

'affirmative

misrepresentations

or

failed

adequately inform plan participants and beneficiaries;'
misrepresentation

or

inadequate

disclosure

was

(2)

the
to

( 3)

the

material;

and

(4) the plaintiff detrimentally relied on the misrepresentation or
inadequate disclosure."

Unisys, 579 F.3d at 228.
III.

A.

Analysis

MetLife

1.

Fiduciary Status

Keith
generated

argues
a

claim

that

MetLife

on White's

acted
behalf

as
and

communication with him regarding that claim.

a

fiduciary

when

it

initiated gratuitous
MetLife argues that

it was acting merely as claims administrator for the Central Bank
-13-

Plan

and

not

as

a

fiduciary.

Ordinarily,

" [a]

third-party

administrator who merely performs ministerial duties or processes
claims is not a fiduciary."

Reich, 55 F.3d at 1047.

who performs purely ministerial functions such as
claims]

for

an

employee

benefit

plan

within

"[A] person

[processing of

a

framework

of

policies, interpretations, rules, practices and procedures made by
other persons is not a fiduciary."
"because such person does

29 C.F.R.

§

2509.75-8.

This is

not have discretionary authority or

discretionary control respecting management of the plan, does not
exercise

any

authority

or

control

respecting

disposition of the assets of the plan."

Id.

management

or

MetLife argues that

the April 9, 2013, internal claim was generated automatically on
White's behalf as a result of the determination of White's LTD
claim.

MetLife's representative testified that its policy is to

generate

such

MetLife' s

claims

actions

in

all

such

exceeded the

cases.

scope of

Keith
its

argues

that

administrative or

ministerial role.
The

court

finds

that

MetLife

acted

as

a

fiduciary

by

generating the internal claim for continuation of White's life
benefits.

In doing so MetLife acted in its discretion on behalf of

a plan participant.

MetLife presented no evidence that the plan

documents required it to generate a claim on White's behalf or that
it

was

otherwise

interpretations,

operating

rules,

within

a

framework

of

policies,

practices and procedures made by other

-14-

persons.
policy to

The evidence indicates that it was MetLife's own internal
generate

continuation of

determination of an LTD claim.
voluntary,

discretionary

participant.
obtaining

a

life

insurance

claims upon

MetLife appears to have taken a

action

for

the

benefit

of

a

Plan

By exercising its discretion to assist White
potential

benefit,

MetLife

acted

as

a

in

fiduciary.

MetLife therefore owed White a fiduciary duty to act in his best
interest and to avoid misinforming him. 29
2.

Breach of Fiduciary Duties

MetLife owed White a statutory duty under ERISA to perform its
duties with respect to a plan solely in White's interest and to do
so with the care, skill, prudence, and diligence called for by the
circumstances.

It also owed White a duty to communicate with him

in a manner calculated to avoid confusion and misunderstanding, and
not to materially mislead him.

The court finds that MetLife did

not breach these fiduciary duties.

The evidence establishes that

MetLife was acting solely in White's interest by generating the
claim for continuation of coverage.

MetLife initiated the claims

process on White's behalf to make a potential benefit available to
him, notwithstanding that White was ultimately ineligible for the
benefit described in MetLife's letters.

29

The court has previously held that MetLife did not act as a
fiduciary in other respects. Memorandum Opinion and Order, Docket
Entry No. 48, pp. 10-11.
-15-

Although MetLife's actions could potentially have confused or
misled White,

sending the May 9th and May 21st letters did not

constitute a breach of fiduciary duty because they contained no
misinformation.
MetLife' s

When read in conjunction with the Plan documents,

letters did not misstate

the circumstances regarding

White's coverage or the status of the claim.

When the letters were

sent, White was still employed and his premiums were still being
paid by Central Bank.
no action was
coverage.

The letters therefore accurately stated that

then required by White in order to maintain his

And because MetLife was not the Plan Administrator, it

owed no duty to provide White with notice of his options
maintaining coverage upon termination.

for

The court therefore finds

that MetLife did not breach any fiduciary duty to White.
3.

Harm/Detrimental Reliance

Even if MetLife had breached a fiduciary duty, the court finds
that Keith has not proven that MetLife's actions were the cause of
her alleged harm (i.e.,

the loss of benefits under White's life

Keith must

insurance policy) .

prove

that,

but

for

MetLife' s

actions, White would have maintained his life insurance policy.

In

effect,

on

Keith

must

prove

that

White

detrimentally

relied

MetLife's letters in failing to take action to maintain his life
insurance policy.
the

Because premium payments were required during

9-month waiting period before

any determination of

waiver

eligibility would be made, Keith must prove that White would have
made the payments had he known that he needed to do so.
-16-

The court finds credible Rogers' testimony that White told her
he had no interest in maintaining the life insurance policy at his
own expense.

Rogers testified that she discussed White's option to

maintain his life insurance policy after his termination with him
during the exit interview on March 19, 2013.

White replied that he

had no interest in doing so, and Rogers therefore did not provide
him with any further information or with the accompanying paperwork.
In addition to Rogers'

testimony,

circumstantial

evidence

supports a finding that White would not have maintained the policy
at his own expense.

White declined to participate in a number of

employer-subsidized benefits,

including a matching § 401(k) plan

and supplemental insurance.

White often failed to attend annual

meetings

were

at

which benefits

paperwork months later.

discussed and often completed

Moreover, although White designated Keith

as the beneficiary of his life insurance policy for several years,
in

2012

he

neglected

to

designate

any

beneficiary

for

the

subsidized life insurance.
Although White was fond of Keith and wanted her to receive the
benefit.of his life insurance policy in the event of his death, the
court

finds

insurance

that

White

premiums while

would

not

on a

have

paid

substantial

fixed disability

income

life

without

knowing how long he might need to do so. 3 ° Furthermore, Keith stood

30

Evidence offered at trial shows that White's expected Social
Security income was $1,797.10 for September of 2013 and $1,902.00
thereafter (Central Bank's Ex. 21).
Evidence also showed that
(continued ... )
-17-

to receive the balance of White's checking account upon his death,
then valued at over $74,000.
testimony, self-sufficient.

And Keith was,

according to her

The court concludes that White would

not have elected to deplete his limited resources indefinitely in
exchange for a benefit that Keith did not need.
Even

assuming

that

White

did

want

insurance policy at his own expense,

to

maintain

the

life

Keith has not proven by a

preponderance of the evidence that he would have done so but for
MetLife's letters.

The evidence of White's ongoing interactions

with Central Bank, MetLife, and other benefit providers shows that
he was both willing and able to act to secure his desired benefits,
as he did with his SSD and LTD benefits.

White's duties at the bank

involved interpreting complex financial documents, and there is no
evidence of mental impairment at the time the letters were sent.
White

had

been

confused

by

MetLife's

letters,

he

contacted either Rogers or MetLife for clarification.

could

If
have

The court

finds that White did not detrimentally rely on the MetLife letters.
B.

Central Bank

1.

Fiduciary Status

An employer, such as Central Bank, acts as an ERISA fiduciary
to the extent that it acts in its capacity as plan administrator.

30

( • • • continued)
White's premium payment would have been $448.93 per month, or over
20% of White's income. The only other asset identified that White
could have used to pay the premiums was the checking account that
he had designated payable on death to Keith.

-18-

2.

Breach of Fiduciary Duties

Keith

argues

that

(1)

Central

Bank

did

not

fulfill

its

obligation to pay "up to 9 months" of premium payments after White
began his
required
(3)

leave,

(2)

information

Rogers

Rogers
about

failed
his

to provide White with the

options

upon

termination,

failed to communicate to White the

and

information she

obtained in her May 28th phone call with MetLife.
Keith first argues that because White left work due to his
illness, Central Bank was obligated under the terms of White's life
insurance policy to pay his life insurance premiums for up to nine
months

after he

provisions,

ceased working.

courts

are

to

give

"When construing ERISA plan
the

language

of

an

insurance

contract its ordinary and generally accepted meaning if such a
meaning exists."

Provident

Life

&

Accident

Sharpless, 364 F.3d 634, 641 (5th Cir. 2004)

Insurance

Co.

v.

(citations omitted).

The provision in the policy on which Keith relies states in part:
The Employer has elected to continue insurance by paying
premiums for employees who cease Active Work in an
eligible class for any of the reasons specified below.
You will be notified by the Employer how much You will be
required to contribute.
Insurance will continue for the following periods:
1.

for the period You cease Active Work in an eligible
class due to injury or Sickness, up to 9 months;

At the end of any of the continuation periods listed
above, Your insurance will be affected as follows:

-20-

•

if You resume Active Work in an eligible class at
this time, You will continue to be insured under
the Group Policy;

•

if You do not resume Active Work in an eligible
class at this time,
Your employment will be
considered to end and Your insurance will end in
accordance with the DATE YOUR INSURANCE ENDS
subsection of the section entitled ELIGIBILITY
PROVISIONS: INSURANCE FOR YOU. 31

Although the court agrees that White qualified for up to nine
months of employer-paid premiums while on leave, 32 this provision
no

longer applied after White

was

terminated.

The

clearly deals with temporary absences from work.
ceasing "Active Work."

provision

It refers to

"Active Work" is defined in the policy as

"performing all of the usual and customary duties of Your job on a
Full-Time

basis. " 33

The

policy

further

ceasing Active Work and ending employment.

distinguishes

between

Moreover, the eligible

categories of "continuation periods" involve temporary conditions
including injury or sickness,

layoffs,

and

leaves

of

absence.

These "continuation periods" may end with either a return to Active
Work or the end of employment.
White was initially entitled to a continuation period of up to
nine months of employer-paid premiums because he ceased Active Work

31

Certificate of Insurance, Plaintiff's Ex. 4, p. 30.

32

The court finds that White left work due
"Sickness" is a defined term including "illness."
White's ALS clearly qualifies, and because he ceased
ALS-related symptoms, White ceased work "due to .
33

Id. at 23.
-21-

to illness.
Id. at 23.
work due to
Sickness."

due to sickness on March 7, 2013.

But White's continuation period

ended because of his termination on June 5,

2 013.

The policy

states:
DATE YOUR INSURANCE ENDS
Your insurance will end on the earliest of:

3.

the end of the period for which the last premium
has been paid for You; or

4.

for Basic Life Insurance, the last day of the
calendar month in which Your employment ends; Your
employment will end if You cease to be Actively at
Work in any eligible class, except as stated in the
section entitled CONTINUATION OF INSURANCE WITH
34
PREMIUM PAYMENT .

The policy states that insurance will end on the earliest of the
dates listed.

White was terminated on June 5, 2013.

White's life

insurance therefore ended no later than June 30, 2013, the last day
of the calendar month in which his employment ended.

After his

employment ended White was no longer eligible for insurance under
Central Bank's group life insurance policy. 35
as a matter of law,

The court concludes,

that Central Bank was not required under the

terms of the policy to pay White's life insurance premium after he
was terminated.
The court also finds that Central Bank met its fiduciary duty
to inform White of his options upon termination.

The court finds

34

Certificate of Insurance, Plaintiff's Ex. 4, p. 27.

35

White would have

Under the terms of the policy,
maintain coverage at his own expense.
-22-

had to

credible Rogers'

testimony that she explained White's options to

him in the March 19, 2013, exit interview.

Rogers owed no duty to

provide White with written notice of his life insurance options
after

he

expressed

benefits.

As

one

no

interest

court

in maintaining

noted,

in

contrast

life

to

insurance

the

statutory

requirement that employers provide written notice to employees of
their COBRA right to continue health coverage, no such statutory
requirement applies to life insurance.
Accident Insurance Co.,

997 F. Supp.

Prouty v. Hartford Life and
2d 85,

90

(D. Mass.

2014).

Nor did Rogers breach a fiduciary duty under the terms of the Plan.
Although Plan documents indicate that the Plan Administrator should
provide participants with a Notice of Right to Convert, Rogers was
not obligated to do so in light of White's statement that he was
not

interested

employment

was

in

continuing

terminated

his

and

life

because

insurance
White's

after

options

his
were

explained in the Plan documents made available to all employees.
In support of Keith's arguments that Central Bank breached a
fiduciary

duty

by

failing

to

provide

White

with

material

information regarding his benefits, Keith relies on a decision from
the Western District of Pennsylvania:
Company

of

North

America,

Civil

Erwood v.
Action

WL 1383922, at *1 (W.D. Pa. April 13, 2017).
as

here,

employee's

an employer failed
right

to

convert

No.

Life Insurance
14-1284,

2017

In the Erwood case,

to provide written notice of
his

-23-

life

insurance

policy

to

the
an

individual policy or with the conversion forms with which to do so.
At a meeting with the director of human resources and a benefits
representative for life insurance and long-term disability,
employee showed signs of mental

impairment,

the

repeating the same

question several times, and his wife was distraught.

Id. at *3.

The employee's wife repeatedly asked if their benefits and coverage
would remain the same and received assurances from the director.
Id. at *2-3.

The employer provided the employee with an FMLA leave

packet that did not include the information necessary to allow him
to convert or continue coverage after the FMLA period.

Id. at *3.

While on leave, the employee's life insurance policy lapsed without
his knowledge.

Id. at *11.

After the employee died, his wife's

claim for death benefits under the policy was denied.

Id. at *5.

The

29

§

court

concluded

1132(a) (3)

by

that

failing

the
to

employer

provide

violated

the

employee

U.S.C.

with

the

information necessary to maintain his life insurance benefit and
that the employee and his wife relied to their detriment on the
employer's inadequate disclosures.
Erwood,

while

distinguishable.

In

both
Erwood

Id. at *12-13.

well-written
the

employer

and

persuasive,

failed

to

make

is
the

employee or his wife aware of their options either orally or in
writing.

Here Rogers explained White's options to him in the exit

interview and did not provide him with written notice based on his
response.

In Erwood the employee and his wife clearly expressed a

-24-

desire to have their insurance benefits remain in effect.

White

expressed no interest in doing so when given the option by Rogers
at his exit interview. 36

The court in Erwood concluded that the

inaction that led to the lapse of coverage could only be explained
by a detrimental reliance on the employer's assurances.
court has previously explained,

there are other,

explanations for White's inaction.

As this

more plausible

Moreover, as the employer in

Erwood was aware, the employee was mentally impaired and his wife
was distraught.

By all accounts White's cognitive faculties were

unaffected by his illness, and he was actively involved in securing
his disability and health benefits up until the time of his death.
The court's holding in Erwood therefore does not support a finding
that Rogers breached any fiduciary duty to White.
Rogers did not breach a fiduciary duty to White by failing to
report to him the information she learned from MetLife regarding
his eligibility to convert his policy.

Rogers' communications with

MetLife did not yield any new, material information.

When Rogers

contacted MetLife to gain a clearer understanding of the May 21st
letter, she learned that White would need to convert his policy and
pay premiums in order to be eligible for a waiver.

36

Since White had

Keith argues that White's decision to continue with the same
designated beneficiary is evidence of White's intent to maintain
coverage.
But maintaining Keith as beneficiary is only evidence
that White intended to maintain the status quo, with Central Bank
paying his premiums.
White's election is not evidence that he
would have maintained the policy at his own expense, and the court
has found otherwise.
-25-

already informed Rogers

that

he

had no

interest

in paying

to

maintain the life insurance policy, Rogers had no duty to advise
him that his options were unchanged since his exit interview.
3.

Harm/Detrimental Reliance

There are two potential causes of harm based on the alleged
breaches by Central Bank.

If Central Bank owed a duty to continue

making payments on White's policy for nine months after he ceased
Active Work, the bank's failure to do so was unquestionably harmful
to Keith.

The court has explained why it concludes that Central

Bank owed no such duty.
The

alleged

miscommunication
material
letters.

facts

or

harm

as

of

Central

is analogous

result

a

Bank's

to the

of
failure

issues

Central
to

Bank's

communicate

raised by MetLife' s

Even if Central Bank's actions had constituted a breach

of fiduciary duty, the court finds that Keith has not proven that
those actions were the cause of her alleged harm (i.e., the loss of
benefits under White's life insurance policy).

Keith must prove

that but for Central Bank's actions White would have maintained his
policy.

Keith has failed to prove that Central Bank's actions

caused her alleged harm for

substantially the

stated in Section III.A.3. above.

same reasons as

Based on Rogers' testimony and

the evidence of White's previous benefits elections,
finds

the court

that White knew he would have to pay for life insurance

benefits after June of 2013 and that he chose not to do so.
-26-

IV.

Attorneys' Fees and Costs

Defendants seek an award of costs, and Central Bank also seeks
attorneys' fees.

A.

37

Keith objects to an award of attorneys' fees.

38

Applicable Law
The Federal Rules of Civil Procedure state that "[u]nless a

federal statute, these rules, or a court order provides otherwise,
costs--other

than

prevailing party."

attorney's

fees--should

Fed. R. Civ. P. 54(d) (1).

be

allowed

to

the

ERISA provides that

"the court in its discretion may allow a reasonable attorney's fee
and costs of action to either party."

29

u.s.c.

§

1132 (g) (1).

"The Fifth Circuit has held that an award of costs in an ERISA case
is limited to those listed in 28 U.S.C.

§

1920."

Humphrey v.

United Way of Texas Gulf Coast, 802 F. Supp. 2d 847, 868 (S.D. Tex.
2011)

(citing Cook Children's Medical Center v.

New England PPO

Plan of General Consolidated Management, Inc., 491 F.3d 266, 275-76
(5th Cir. 2007), cert. denied, 552 U.S. 1180, 128 S. Ct. 1223, 170
L. Ed. 2d 6 0 ( 2 0 0 8) ) .
The United States Supreme Court has held that "a court 'in its
discretion' may award fees and costs 'to either party,' as long as
37

Defendant Metropolitan Life Insurance Company's Motion for
Costs and Brief in Support, Docket Entry No. 71; Defendants Central
Bank and Central Bank Welfare Benefit Plan's Motion for Recovery of
Attorneys' Fees and Costs and Brief in Support, Docket Entry
No. 72; Defendant Metropolitan Life Insurance Company's Supplement
to Its Motion for Costs, Docket Entry No. 74.
38

Plaintiff's Response to Defendant Central Bank and Central
Bank Welfare Benefit Plan's Motion for Recovery of Attorney's Fees
and Costs and Brief in Support, Docket Entry No. 73.
-27-

the

fee

claimant has

merits.'"
S. Ct.

Hardt v.

2149,

established

2152
a

achieved

'some degree

Reliance Standard Life

(2010)

(citation omitted).

five-factor

test

for

deciding

of

success

on the

Insurance Co. ,

13 0

The Fifth Circuit
whether

to

award

attorneys' fees under§ 1132(g) (1) in Iron Workers Local No. 272 v.
Bowen,

624 F.2d 1255,

1266

Court's decision in Hardt,

(5th Cir.

1980).

Since the Supreme

the Fifth Circuit has held that the

Bowen test is no longer mandatory.

See, e.g., LifeCare Management

Services LLC v. Insurance Management Administrators Inc., 703 F.3d
835,

846-47

(5th

Cir.

2013);

1

Lincoln

Financial

Metropolitan Life Insurance Co., 428 F. App'x 394, 396
2011)

(per curiam)

(unpublished) .

Co.

v.

(5th Cir.

The court nevertheless finds

those factors helpful:
In deciding whether to award attorneys' fees to a party
under section 502(g), therefore, a court should consider
such factors as the following: ( 1) the degree of the
opposing parties' culpability or bad faith; (2) the
ability of the opposing parties to satisfy an award of
attorneys' fees; (3) whether an award of attorneys' fees
against the opposing parties would deter other persons
acting under similar circumstances; ( 4) whether the
parties requesting attorneys' fees sought to benefit all
participants and beneficiaries of an ERISA plan or to
resolve a significant legal question regarding ERISA
itself; and ( 5) the relative merits of the parties'
positions.
Bowen, 624 F.2d at 1266 (5th Cir. 1980)
B.

(citations omitted).

Analysis

1.

Costs

The court finds that neither defendant breached a fiduciary
duty to Keith and that neither defendant's actions caused Keith's
-28-

alleged harm.

Each of

the defendants

degree of success on the merits.

therefore achieved some

The court therefore concludes

that an award of defendants' costs is appropriate. 39
2.

Attorneys' Fees

At the conclusion of trial the court expressed its tentative
position that no attorneys'

fees would be awarded in this case.

Nothing has since persuaded the court to change its view.

This

dispute involved close questions that were well-suited to a trial
on the merits.

The result reached by the court was not a foregone

conclusion.
Under

the

conclusion.

Bowen

factors,

the

court

would

reach

the

same

There is no culpability or bad faith on the part of

Keith in bringing this action.

Had the court not concluded at the

summary judgment stage that a reasonable factfinder could find in
favor of Keith, there would have been no trial.

Although the court

has no specific evidence as to whether Keith is able to satisfy an
award, even Central Bank's reduced fee request of $34,164.86 would
represent

a

substantial

although awarding

fees

sum
might

to

many

well

retirees.

deter would-be

Keith's position, no such deterrence is warranted.
bring a

meri tless

action.

Turning to

39

the

fourth

Furthermore,
litigants

in

Keith did not
factor,

the

Each of the defendants has submitted a Bill of Costs and
MetLife has submitted further documentation in support of the costs
sought. These submissions are premature. Local Rule 54.2 states,
in part: "An application for costs shall be made by filing a bill
of costs within 14 days of the entry of a final judgment."
-29-

resolution of this case did not bring a substantial benefit to all
plan participants or resolve a significant question regarding ERISA
itself.

Finally,

regarding the relative merits of the parties'

positions, the court notes that it took a trial during which the
court repeatedly questioned all parties, and the court's ultimate
resolution of disputed facts and murky law, to bring this matter to
its conclusion.

The court concludes that no award of attorneys'

fees is warranted in this case.
V.

Conclusion40

If any finding of fact should more properly be characterized
as a conclusion of law,
law.

it is hereby adopted as a conclusion of

If any conclusion of law should more properly be charac-

terized as a finding of fact, it is hereby adopted as a finding of
fact.
Based on the evidence, the court's credibility determinations,
and

the

court's

analysis,

the

court

entitled to relief under 29 U.S.C.

§

holds

that

1132(a) (3)

Keith

is

not

The court finds

that defendants did not breach any fiduciary duty to White or
Keith.

Furthermore, if

either defendant breached a fiduciary duty

to White or Keith, the court finds that Keith provided no evidence

40

The fact that the court has not expressly addressed in this
Memorandum Opinion and Order any other arguments the parties may
have made reflects the court's conclusion that they lacked merit
and/or that the party asserting the argument failed to prove it at
trial.
-30-

that the alleged harm -- the loss of benefits -- was the result of
MetLife's action or Central Bank's inaction.
Consistent with the court's holding and findings,

the court

will enter a final judgment that Keith take nothing from either
defendant.

No attorneys'

fees will be awarded.

Costs will be

taxed against Keith.
SIGNED at Houston, Texas, on this the 9th day of June, 2017.

SIM LAKE
UNITED STATES DISTRICT JUDGE

-31-