Taylor v. Metro. Life Ins. Co.

366 F.Supp.3d 810

Stephanie TAYLOR, Plaintiff,

v.METROPOLITAN LIFE INSURANCE COMPANY, Defendant.

Civil Action No. 3:18-CV-0338-D

United States District Court, N.D. Texas, Dallas Division.

Signed February 14, 2019

James David Walker, Jim Walker & Associates, PLLC, Dallas, TX, for Plaintiff.

Linda G. Moore, Estes Thorne & Carr PLLC, Dallas, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

SIDNEY A. FITZWATER, SENIOR JUDGE

On cross-motions for summary judgment in this ERISA¹ action, plaintiff Stephanie Taylor ("Stephanie") and defendant Metropolitan Life Insurance Company ("MetLife") disagree on the question whether MetLife wrongly denied Stephanie certain benefits under a portable life insurance policy on her husband's life. For the following reasons, the court grants MetLife's motion for summary judgment, denies Stephanie's motion for summary judgment, and dismisses this action by judgment filed today.

I

Stephanie's late husband, Jonathan H. Taylor ("Jonathan"), was an employee of Cardinal Health, Inc. ("Cardinal Health") who participated in basic and optional life insurance benefits under Cardinal Health's Group Life Insurance Plan (the "Plan"), which is governed by ERISA.² Under the terms of the Plan, Jonathan had $ 136,000 in Basic Employee Life Insurance and $ 271,000 in Supplemental Employee Life Insurance.

As a result of a disability, the last day Jonathan worked at Cardinal Health was October 20, 2015, and his employment with Cardinal Health ended on or about April 19, 2016. In accordance with the terms of the Plan, Jonathan's life insurance benefits were to end the date his employment ended. Under certain circumstances defined in the Plan, a plan participant has the option to port or to convert his life insurance coverage. Moreover, if the plan participant's employment ends as the result of a disability, he can apply for the continuation of certain insurance. If the plan participant's claim for continuation is approved, his insurance coverage will be continued under the Plan, and no premium payment will be required.

In March 2016 Jonathan applied for the continuation of certain insurance while totally disabled. Before MetLife issued a decision on Jonathan's claim for continuation, Jonathan also elected to port his optional life insurance. According to the Plan and an April 2016 letter, because Jonathan's employment ended due to a reason other than retirement, he had the option of porting—or continuing under another group policy—his optional life insurance.³

As a result of Jonathan's choice to port his optional life insurance, MetLife issued a new certificate of insurance for $ 273,000, effective June 2, 2016 (the "Portable Policy"). Jonathan and Stephanie paid monthly premiums on the Portable Policy from June to September 2016. In September 2016 MetLife informed Jonathan that he met the requirements for total disability under the Plan and that MetLife approved his claim for continuation of, inter alia , his basic and optional life insurance, at no cost to him.

Jonathan died in October 2016. The next month, Stephanie submitted a life insurance claim form to MetLife on the Plan and the Portable Policy. MetLife approved and paid Stephanie's claim for benefits under the Plan, but denied her claim under the Portable Policy. Stated in monetary terms, MetLife approved and paid Stephanie's claim for $ 407,000 in basic and optional life insurance benefits due under the Plan ($ 136,000 in basic life plus $ 271,000 in optional life), but denied Stephanie's claim for $ 273,000 in optional life insurance benefits under the Portable Policy.⁴ MetLife sent Stephanie a denial letter explaining that "insured person[s] cannot have two benefits stemming from the same insurance coverage," and that she had a right to appeal MetLife's decision. D. App. 154.

In January 2017 Stephanie's counsel sent an appeal letter to MetLife. Shortly thereafter, MetLife sent another denial letter, this time including notice that Stephanie's claim is governed by ERISA. Stephanie, through counsel, submitted an administrative appeal to MetLife in June 2017. She contended that she was entitled to $ 273,000 in optional life insurance benefits under the Portable Policy in addition to the benefits that MetLife paid because MetLife sent Jonathan an "Election of Portable Coverage" form, Jonathan completed the form, MetLife issued the Portable Policy to Jonathan with an effective date in June 2016, and Jonathan and Stephanie paid premiums on the Portable Policy through September 2016.

On appeal, MetLife upheld the denial of Stephanie's claim. Via letter to Stephanie's counsel, MetLife stated that, according to the Plan, "Portable insurance ends when continuation of coverage due to disability is approved." D. App. 126. MetLife also stated that "coverage is not a guarantee" and "premium payments are not a guarantee of coverage as premiums can be refunded," which, in this case, MetLife attempted to do. Id.

Stephanie filed suit against MetLife in January 2018 in Texas state court, alleging that MetLife had wrongfully denied her claim and appeals. MetLife timely removed the action to this court. Both parties now move for summary judgment on Stephanie's ERISA claim.

II

MetLife is moving for summary judgment on a claim for which Stephanie will have the burden of proof at trial. Because Stephanie will have the burden of proof, MetLife's burden at the summary judgment stage is to point the court to the absence of evidence of any essential element of Stephanie's claim. See Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once it does so, Stephanie must go beyond her pleadings and designate specific facts demonstrating that there is a genuine issue for trial. See id. at 324, 106 S.Ct. 2548 ; Little v. Liquid Air Corp. , 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per curiam). An issue is genuine if the evidence is such that a reasonable jury could return a verdict in Stephanie's favor. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Stephanie's failure to produce proof as to any essential element of the claim renders all other facts immaterial. TruGreen Landcare, L.L.C. v. Scott , 512 F.Supp.2d 613, 623 (N.D. Tex. 2007) (Fitzwater, J.). Summary judgment is mandatory where Stephanie fails to meet this burden. Little , 37 F.3d at 1076.

Because Stephanie will have the burden of proof at trial on her ERISA claim, to be entitled to summary judgment she "must establish ‘beyond peradventure all of the essential elements of the claim[.]’ " Bank One, Tex. N.A. v. Prudential Co. of Am. , 878 F.Supp. 943, 962 (N.D. Tex. 1995) (Fitzwater, J.) (quoting Fontenot v. Upjohn Co. , 780 F.2d 1190, 1194 (5th Cir. 1986) ). This means that Stephanie must demonstrate that there are no genuine and material fact disputes and that she is entitled to summary judgment as a matter of law. See Martin v. Alamo Cmty. Coll. Dist. , 353 F.3d 409, 412 (5th Cir. 2003). "The court has noted that the ‘beyond peradventure’ standard is ‘heavy.’ " Carolina Cas. Ins. Co. v. Sowell , 603 F.Supp.2d 914, 923-24 (N.D. Tex. 2009) (Fitzwater, C.J.) (quoting Cont'l Cas. Co. v. St. Paul Fire & Marine Ins. Co. , 2007 WL 2403656, at *10 (N.D. Tex. Aug. 23, 2007) (Fitzwater, J.) ).

Further, in a non-jury case, such as this ERISA action, "a district court has somewhat greater discretion to consider what weight it will accord the evidence." Johnson v. Diversicare Afton Oaks, LLC , 597 F.3d 673, 676 (5th Cir. 2010) (quoting In re Placid Oil Co. , 932 F.2d 394, 397 (5th Cir. 1991) ). "When deciding a motion for summary judgment prior to a bench trial, the district court ‘has the limited discretion to decide that the same evidence, presented to him or her as a trier of fact in a plenary trial, could not possibly lead to a different result.’ " Id. (quoting In re Placid Oil Co. , 932 F.3d at 398).

III

The court turns to the question whether MetLife's denial of Stephanie's claim was proper.

A

MetLife avers that—regardless whether the court applies the de novo or the abuse of discretion standard of review—its denial of benefits should be upheld. Stephanie contends that—under either standard—MetLife's denial of benefits should be reversed. The court agrees that the standard of review is not dispositive of this case because the outcome would be the same under either de novo or abuse of discretion review: MetLife properly denied Stephanie's claim to recover death benefits under the Portable Policy.

"[A] denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe terms of the plan." Firestone Tire & Rubber Co. v. Bruch , 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). Here the Plan grants MetLife discretionary authority to determine eligibility for Plan benefits and to interpret the terms of the Plan, meaning that abuse of discretion is the proper standard of review. The Texas Legislature, however, enacted a statute that renders discretionary clauses unenforceable in several insurance contexts, including life and group life insurance policies, meaning that de novo is actually the proper standard of review. See Tex. Ins. Code Ann. §§ 1701.62, 1701.002(1)(C) (West 2009 & Supp. 2018). Because the question whether ERISA preempts the Texas antidelegation statute is an open one in the Fifth Circuit,⁵ the court will analyze Stephanie's ERISA claim under both standards of review.

De novo review would apply if ERISA does not preempt the Texas statute rendering discretionary clauses unenforceable. See, e.g. , Woods v. Riverbend Country Club, Inc. , 320 F.Supp.3d 901, 909 (S.D. Tex. 2018). Under a de novo review of a plan administrator's determination of ERISA benefits, the court reviews the plaintiff's claim "as it would ... any other contract claim—by looking to the terms of the plan and...