636 F.3d 69 (3rd Cir. 2011), 10-1673, Baldwin v. University of Pittsburgh Medical Center
|Citation:||636 F.3d 69|
|Opinion Judge:||GARTH, Circuit Judge.|
|Party Name:||Deborah L. BALDWIN, as guardian of C.L.D., a minor, K.K.D., a minor, and C.M.D., a minor, Appellant v. UNIVERSITY OF PITTSBURGH MEDICAL CENTER (UPMC); Life Insurance Company of North America.|
|Attorney:||Patrick W. Murray, Esq., (Argued), Stewart, Murray & Associates, Pittsburgh, PA, for Appellant. John G. Ferreira, Esq., Stephanie R. Reiss, Esq., (Argued), Morgan Lewis & Bockius, LLP, Pittsburgh, PA, for Appellee Life Insurance Company of North America. John J. Myers, Esq., Andrew T. Quesnelle, ...|
|Judge Panel:||Before: JORDAN, GREENAWAY, JR., and GARTH, Circuit Judges.|
|Case Date:||March 29, 2011|
|Court:||United States Courts of Appeals, Court of Appeals for the Third Circuit|
Argued Feb. 10, 2011.
[Copyrighted Material Omitted]
This appeal by the plaintiff-appellant Deborah L. Baldwin as the adoptive mother
of three Trent children requires us to decide Baldwin's standing to claim the insurance proceeds of policies subject to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001-1461, which were purchased by the children's biologic mother. The District Court denied relief to Baldwin, holding that she, as the adoptive mother to Trent's three children, has no standing to receive the insurance proceeds on behalf of the children under ERISA. We hold that Baldwin is entitled to offer evidence as to Trent's intent, i.e., understanding of the terms of her insurance policies, in order to establish the facts she alleges in her complaint. As a consequence, we will reverse the District Court's judgment and remand to the District Court for further proceedings as directed in this opinion.
In 2001, Victoria Trent, biologic mother of three minor children, C.L.D., K.K.D., and C.M.D., began working for appellee University of Pittsburgh Medical Center (UPMC). On June 6, 2003, at Trent's urging, Trent's lifelong family friend, Deborah Baldwin, adopted the children and became their legal guardian. New birth certificates were issued for the children. Notwithstanding the adoption, Trent maintained a parental relationship with the children, who still referred to her as " Mom" : she lived with Baldwin and the children for three years after they were adopted by Baldwin, and Trent spent all holidays and festivals with Baldwin and the children.
Trent was employed at UPMC from 2001 to 2008. Trent enrolled in four insurance plans offered by UPMC for the year 2008. The premiums for these were deducted from her salary each pay period: 1) a $25,000 basic life insurance policy; 2) a $25,000 basic accidental death and dismemberment (AD & D) insurance policy; 3) a $100,000 supplemental group life insurance policy; and 4) a $200,000 supplemental A.D. & D insurance policy. Trent designated a beneficiary— Baldwin— for the $25,000 basic life policy, but did not designate a beneficiary for the three remaining policies.
Each of the life policies, as distinct from the ERISA statute, contains the following language:
If there is no named beneficiary or surviving beneficiary, Death Benefits will be paid to the first surviving class of the following living relatives: spouse; child or children; mother or father; brothers or sisters; or to the executors or administrators of the Insured's estate.
To similar effect, the A.D. & D policies provide:
If there is no named beneficiary or surviving beneficiary, or if the Employee dies while benefits are payable to him, We may make direct payment to the first surviving class of the following classes of persons:
2) child or children;
3) mother or father;
4) sisters or brothers;
5) Estate of the Covered Person.
On December 23, 2008, Trent died in an accident at the age of thirty-four. Following Trent's death, Baldwin timely sought payment under each of Trent's insurance policies in accordance with the applicable claims procedure. The insurer, Life Insurance Company of North America (LINA), paid $25,000 due to Baldwin as the designated beneficiary of Trent's basic life policy. However, LINA rejected Baldwin's claims on behalf of the children for the proceeds from the other three policies. LINA explained that as a result of the adoption, the children were no longer considered Trent's " children" for the purposes
of the policies' default-beneficiary provisions.
Baldwin appealed LINA's determination. In a May 15, 2009, letter, LINA, using Cigna Group Insurance (CIGNA) as signatory, detailed the reasons why, after further review, it had again concluded that the insurance proceeds were " not payable" to the children:
While Mrs. Trent may have maintained a relationship with her biological children, this would not supersede the fact that Ms. Trent waived all legal ties with the children. As a result of the adoption [C.L.D., K.K.D., and C.M.D.] became the legal children of Ms. Baldwin and would no longer be eligible for benefits under these policies as the children of Ms. Trent.
At the time of her death, there was no beneficiary named by Ms. Trent for the [$100,000 supplemental group life policy and accidental death policies]. Therefore, the benefits of these policies would be payable under the facility of payment wording contained in this policy. The facility of payment does not contain provisions that allow for payment of benefits to step-children or any other child which may be in a close familial relationship with the insured. Since [C.L.D., K.K.D., and C.M.D.] were not the children of Victoria Trent at the time of her death, no benefits were payable to them....
This policy is a binding contract between Victoria Trent and the insuring company. Therefore, in an effort to provide equitable claims administration to our insureds we must honor all policy provisions. Since Ms. Trent did not designate [C.L.D., K.K.D., and C.M.D.] to receive any proceeds from this policy, we cannot honor payment to them or any other person not designated as beneficiary of record with the employer prior to Ms. Trent's death or the first class of surviving relatives.
Having exhausted all avenues of administrative review of her claim, Baldwin, as guardian of the children, filed a complaint in the District...
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