Haviland v. Metro. Life Ins. Co.

• Decision Date: 22 October 2013
• Docket Number: No. 12–1958.,12–1958.
• Citation: 730 F.3d 563
• Parties: Merrill HAVILAND, et al., Plaintiffs–Appellants, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant–Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

730 F.3d 563

Merrill HAVILAND, et al., Plaintiffs–Appellants,

v.METROPOLITAN LIFE INSURANCE COMPANY, Defendant–Appellee.

No. 12–1958.

United States Court of Appeals, Sixth Circuit.

Argued: March 5, 2013.

Decided and Filed: Sept. 12, 2013.

Rehearing and Rehearing En Banc Denied Oct. 22, 2013.

ARGUED:Jeffrey M. Thomson, Morganroth & Morganroth, PLLC, Birmingham, MI, for Appellants. James L. Griffith, Jr., Akin Gump Strauss Hauer & Feld LLP, Philadelphia, PA, for Appellee. ON BRIEF:Jeffrey M. Thomson, Mayer Morganroth, Morganroth & Morganroth, PLLC, Birmingham, MI, for Appellants. James L. Griffith, Jr., Akin Gump Strauss Hauer & Feld LLP, Philadelphia, PA, David M. Davis, Hardy, Lewis & Page, P.C., Birmingham, MI, for Appellee.

Before: GIBBONS, KETHLEDGE, and STRANCH, Circuit Judges.

GIBBONS, J., delivered the opinion of the court, in which KETHLEDGE, J., joined and STRANCH, J., joined in part. STRANCH, J. (pp. 574–80), delivered a separate opinion concurring in part and dissenting in part.

OPINION

JULIA SMITH GIBBONS, Circuit Judge.

General Motors Corporation (“GM”) provides its salaried retirees with continuing life insurance benefits under an ERISA-governed plan. Metropolitan Life Insurance Company (“MetLife”) issued the group life insurance policy and periodically sent letters to plan participants advising them of the status of their benefits. The plaintiffs, who are participants in the plan, allege that these letters falsely stated that their continuing life insurance benefits would remain in effect for their lives, without cost to them. GM reduced the plaintiffs' continuing life insurance benefits as part of its 2009 Chapter 11 reorganization. The plaintiffs filed this suit against MetLife bringing claims under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132(a)(2) & (a)(3) (“ERISA”), and state law. The district court granted MetLife's motion to dismiss and the plaintiffs appealed. For the reasons that follow, we affirm.

I.

The plaintiffs are salaried retirees of GM or its affiliates. GM established and sponsored the Life and Disability Benefits Program for Salaried Employees (“the Plan”). MetLife issued the group life insurance policy provided under the Plan. The Plan gave MetLife discretionary authority “to construe, interpret and apply the terms of the [Plan] and to determine eligibility for and entitlement to [Plan] benefits in accordance with the terms of the [Plan.]” ¹ (DE 7–9, 179–80; DE 7–10, 189; DE 7–11, 199.)

The plaintiffs allege that they were eligible for continuing life insurance benefits when they retired from GM because they had participated in the Plan for at least ten years. These benefits reduced over time to a minimum amount. The Plan provided that retirees would receive notification of the amount of life insurance to which they were entitled upon retirement or at the commencement of reductions to their benefits and when their minimum amount of benefits was reached. The plaintiffs were not required to contribute to their continuing life insurance benefits after the age of 65.

Each version of the Plan and its accompanying Summary Plan Description (“SPD”) stated that GM “reserves the right to amend, modify, suspend or terminate the [Plan] in whole or in part, at any time.” In addition to this language, the 1987 and 1990 Plans stated that continuing life insurance benefits “will be continued ... until the death of the employe[e] ... subject to the rights reserved to the Corporation to modify or discontinue this Program.” (DE 7–3, 132; DE 7–4, Page 141.) In 2007, the Plan reduced continuing life insurance benefits for retired employees and stated that benefits would continue until the death of the employee or as otherwise modified at a later date. (DE 7–10, Ex. 8, 191.)

Pursuant to the Plan, the plaintiffs received periodic letters from MetLife advising them of the status of their continuing life insurance benefits. For instance, a letter to plaintiff Merrill Haviland stated:

Metropolitan's records show that your Continuing Life Insurance has now fully reduced to the amount of $66,068.00. This amount of Continuing Life Insurance will remain in effect for the rest of your life. If you are presently contributing toward your Continuing Life Insurance, you will no longer be required to make contributions once you attain age 65.

(DE 1–2, Compl., 35.) A letter to another plan participant said: “This fully reduced amount of your Continuing Life Insurance remains in effect, without cost to you, for the rest of your life.” ( Id. at 36.) Finally, a third letter stated: “Metropolitan records show that you now have $103,400.00 of Continuing Life Insurance in effect, without cost to you, for the rest of your life.” ( Id. at 37.)

In 2009, GM and its affiliated debtors filed bankruptcy proceedings. The bankruptcy court approved the Amended and Restated Master Sale and Purchase Agreement, which reduced salaried retirees' continuing life insurance benefits to $10,000. The 2009 Plan reduced each salaried retirees' continuing life insurance benefits accordingly, effective August 1, 2009, and deleted language providing that the benefits would continue until the death of the retiree. (DE 7–11, Ex. 9, 204.)

The plaintiffs filed this suit in Michigan state court in June 2011 on behalf of themselves and putative class members. MetLife removed it to federal court, arguing that the district court had federal question jurisdiction because the state-court action is completely preempted by ERISA. Alternatively, MetLife asserted diversity jurisdiction under the Class Action Fairness Act. The Amended Complaint brings the following claims: (1) promissory estoppel; (2) breach of the terms of the Plan; (3) breach of fiduciary duty pursuant to 29 U.S.C. § 1132(a)(2); (4) declaratory judgment pursuant to 29 U.S.C. § 1132(a)(3); (5) unjust enrichment pursuant to 29 U.S.C. § 1132(a)(3); (6) equitable restitution pursuant to 29 U.S.C. § 1132(a)(3); (7) conversion; (8) unjust enrichment; (9) breach of contract; (10) negligent misrepresentation; and (11) violation of the Uniform Trade Practices Act. The district court granted MetLife's motion to dismiss the Amended Complaint, and the plaintiffs timely appealed the dismissal of their ERISA claims.²

II.

We review a district court's ruling on a motion to dismiss de novo, construing the complaint in the light most favorable to the plaintiff and accepting all factual allegations as true. Erie Cnty. v. Morton Salt, Inc., 702 F.3d 860, 867 (6th Cir.2012). “ ‘To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face.’ ” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)) (internal quotation marks omitted).

III.

“ ‘ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit plans.’ ” Ingersoll–Rand Co. v. McClendon, 498 U.S. 133, 137, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990) (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983)). It does so “by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts.” 29 U.S.C. § 1001(b). ERISA distinguishes pension plans that provide retirees with post-retirement income from welfare benefit plans. Pension plans are subject to statutory vesting requirements. See29 U.S.C. § 1053. By contrast, “ERISA does not create a substantive right to welfare benefits ... nor does ERISA establish a vesting requirement for welfare benefits. Indeed, a welfare benefit may be terminated at any time so long as the termination is consistent with the terms of the plan.” Price v. Bd. of Trustees of Indiana Laborer's Pension Fund, 707 F.3d 647, 651 (6th Cir.2013) (internal citation omitted).

“The civil enforcement scheme of [§ 1132(a) ] is one of the essential tools for accomplishing the stated purposes of ERISA.” Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 52, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987). It provides, in relevant part, that:

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. § 1132(a)(3).

A. Promissory Estoppel

The plaintiffs allege that MetLife falsely promised that their continuing life insurance benefits would not be reduced for the rest of their lives, when in fact their benefits were reduced to $10,000. According to the plaintiffs, these false promises affected the plaintiffs' retirement and estate planning decisions.

We addressed promissory estoppel claims under ERISA in Sprague v. General Motors Corp., 133 F.3d 388 (6th Cir.1998) ( en banc). The plaintiffs in Sprague alleged that GM violated ERISA by denying them fully “paid up” lifetime health care benefits. Id. at 392. The district court certified a class of early retirees and held, after a bench trial, that GM was estopped from changing the health care benefits of the early retirees based on oral and written representations it made to them. Id. at 396. On appeal, we explained that promissory estoppel claims are viable under ERISA. Id. at 403 n. 13. The elements of a promissory estoppel claim are:

(1) there must be conduct or language amounting to a representation of material fact; (2) the party to be estopped must be aware of the true facts; (3) the party to be estopped must intend that the representation be acted on, or the party asserting the estoppel must reasonablybelieve that the party to be estopped so intends; (4) the party asserting the estoppel must be unaware of the true facts;...