Woerner v. Fram Group Operations, LLC, 081916 FED3, 15-2813
|Opinion Judge:||KRAUSE, CIRCUIT JUDGE|
|Party Name:||LOU ANN WOERNER, as the beneficiary of Michael J. Woerner, Appellant v. FRAM GROUP OPERATIONS, LLC; THAT CERTAIN EMPLOYEE WELFARE BENEFIT PLAN SPONSORED BY FRAM OPERATIONS GROUP LLC c/o FRAM OPERATIONS GROUP LLC|
|Judge Panel:||Before: CHAGARES, KRAUSE, SCIRICA, Circuit Judges|
|Case Date:||August 19, 2016|
|Court:||United States Courts of Appeals, Court of Appeals for the Third Circuit|
Submitted under Third Circuit LAR 34.1(a) on June 7, 2016
On Appeal from the United States District Court for the District of New Jersey (D.C. Civil Action No. 2-12-cv-06648) District Judge: Stanley R. Chesler
Before: CHAGARES, KRAUSE, SCIRICA, Circuit Judges
KRAUSE, CIRCUIT JUDGE
Lou Ann Woerner appeals a District Court order granting summary judgment in favor of FRAM1 on her claim for benefits brought under the civil enforcement provision of the Employee Retirement Income Security Act (ERISA). For the reasons set forth below, we will vacate and remand.
Mrs. Woerner's husband, Michael Woerner, was diagnosed with brain cancer while working at Honeywell International, Inc. and elected to take disability leave beginning on June 24, 2011. Shortly thereafter, FRAM acquired Mr. Woerner's business unit from Honeywell, making him an employee of the new company.
As part of its acquisition, FRAM decided to offer a CIGNA life insurance plan (hereinafter "FRAM Plan" or "the Plan") to its new employees, and on October 21, 2011, FRAM distributed an email entitled "Message from FRAM Group HR - Benefits Update for FRAM Group Employees" informing employees about the FRAM Plan. J.A. 273-74. The email announced that "in the coming weeks all new plan options and details will be communicated to you." J.A. 273. "Once you receive and review the benefits details, you may elect the plan of your choosing." J.A. 273.
One week later, on October 28, FRAM sent a follow-up email containing a "brief overview" of the Plan.2 J.A. 107. Coverage would be provided at the election of the employee, and premiums would be set based on "[the] amount of coverage purchased and [the] age [of the employee or spouse]." J.A. 108. The maximum electable coverage would be equal to the lesser of "5 times [the employee's] base salary" or $1, 500, 000. J.A. 108. Employees would be permitted to "[p]urchase coverage for [their] spouse[s] in $5, 000 increments up to a maximum 50% of [their] coverage amount not to exceed $250, 000" and "for [their] children up to a maximum of $20, 000." J.A. 108. And employees would be required to complete a health questionnaire and provide evidence of insurability to qualify for coverage in excess of the "[g]uarantee [i]ssue amount" of $350, 000 for employees and $50, 000 for spouses. J.A. 108. This overview did not, however, contain the key term at issue here-an active-service condition that prescribed that life insurance coverage would not begin until an employee completed one day "performing his or her regular occupation for the Employer on a Full-time basis." J.A. 132.
Mr. Woerner enrolled in the FRAM Plan and selected coverage of $198, 000. On December 7, 2011, he received a confirmation statement listing Mrs. Woerner as his beneficiary and January 1, 2012 as the effective date of coverage and setting premiums at $16.91 per pay period.
The following day, Mrs. Woerner emailed Eric Schueneman, FRAM's Director of Compensation, Benefits & HRIS at FRAM, asking for further information about the Plan. In her email, she requested "a copy of the 2012 Summary Plan Description" (SPD)3 and inquired about the "guaranteed coverage" amount. J.A. 122. FRAM never responded to these inquiries.
Mr. Woerner passed away on February 24, 2012. It is undisputed that the Woerners did not receive notice of the active-service condition while Mr. Woerner was alive, and were not provided an SPD. The record also includes a number of internal communications within FRAM and emails and documents exchanged between FRAM and CIGNA containing information that was not shared with employees during Mr. Woerner's lifetime. In fact, CIGNA did not deliver a final copy of the SPD to FRAM until March 2012, about a month after Mr. Woerner's death, and the written contract between FRAM and CIGNA was not executed until September 2012, another six months later.
In the interim, in April 2012, Mr. Schueneman sent Mrs. Woerner a copy of the SPD and indicated that Mr. Woerner did not qualify for coverage because he never returned to active service. Several weeks later, CIGNA officially denied Mrs. Woerner's claim for benefits in a letter that stated the following: Michael Woerner last worked on June 23, 2011 and was not in active service on January 1, 2012. The confirmation statement you submitted shows the effective date of his election of Voluntary Group Term Life Insurance under Policy FLX 964429 as January 1, 2012. Policy...
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