Boyles v. Am. Heritage Life Ins. Co.

• Decision Date: 22 April 2019
• Docket Number: Case No. 3:15-cv-274
• Parties: Ronald P. BOYLES, Jr., Plaintiff, v. AMERICAN HERITAGE LIFE INSURANCE COMPANY d/b/a Allstate Benefits a/k/a Allstate Life Insurance Company of New York, Jeffrey Azzato, St. Marys Insurance Agency, Inc., and Unum Life Insurance Company of America a/k/a Unum Group, Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

383 F.Supp.3d 470

Ronald P. BOYLES, Jr., Plaintiff,

v.AMERICAN HERITAGE LIFE INSURANCE COMPANY d/b/a Allstate Benefits a/k/a Allstate Life Insurance Company of New York, Jeffrey Azzato, St. Marys Insurance Agency, Inc., and Unum Life Insurance Company of America a/k/a Unum Group, Defendants.

Case No. 3:15-cv-274

United States District Court, W.D. Pennsylvania.

Signed April 22, 2019

Michael B. Cohen, Altoona, PA, for Plaintiff.

Matthew W. McCullough, MacDonald, Illig, Jones & Britton, Erie, PA, for Defendants.

MEMORANDUM OPINION

KIM R. GIBSON, UNITED STATES DISTRICT JUDGE

I. Introduction

Before the Court is Jeffrey Azzato and St. Marys Insurance Agency's ("St. Marys") Motion for Summary Judgment (ECF No. 91). The Motion has been fully briefed (ECF Nos. 93, 94, 97, 98, 101, 102, 103) and is ripe for disposition.

After numerous back surgeries and a difficult recovery, Plaintiff Ronald P. Boyles, Jr. contacted Mr. Azzato, the president of Mr. Boyles's employer, St. Marys. Mr. Boyles told Mr. Azzato that he was considering applying for disability benefits. Mr. Azzato instead offered to pay Mr. Boyles's full salary while he recovered and Mr. Boyles thus did not pursue disability.

Months later, St. Marys changed disability insurers. Because of his continued receipt of his full salary and the change in disability policies, when Mr. Boyles ultimately stopped working due to his health problems, both the old and new disability insurers denied his claim for disability benefits. Mr. Boyles filed the present suit against the insurers, St. Marys, and Mr. Azzato pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. , for the denial of disability benefits and for St. Marys and Mr. Azzato's alleged breaches of fiduciary duty.

St. Marys and Mr. Azzato (collectively, "Defendants") now seek summary judgment on the breach of fiduciary duty claims and a respondeat superior claim against St. Marys.

For the reasons that follow, Defendants' Motion is GRANTED .

II. Jurisdiction and Venue

The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1331, as Mr. Boyles's claims arise under federal law. Venue is proper in this District under 29 U.S.C. § 1132(e)(2).

III. Procedural History

Mr. Boyles filed his First Amended Complaint (ECF No. 26) against American Heritage Life Insurance Company ("Allstate"), Mr. Azzato, St. Marys, and Unum Life Insurance Group ("Unum") on November 24, 2015. Mr. Boyles brought twelve counts, many of which were resolved by this Court's Opinions and Orders on Defendants' Motions to Dismiss and Allstate and Unum's Motions for Summary Judgment.¹ (See ECF No. 81, 82.) After these two Opinions, only Mr. Azzato and St. Marys remain as Defendants. (See ECF No. 82 at 16.) Only three counts remain: (1) Count VIII: ERISA § 502(a)(3) — Breach of Fiduciary Duty against Mr. Azzato, (2) Count XI: Respondeat Superior against St. Marys, and (3) Count XII: ERISA § 502(a)(3) — Breach of Fiduciary Duty against St. Marys. (See ECF Nos. 81, 82; see also ECF No. 93 at 10; ECF No. 97 at 1.)

On January 4, 2019, Mr. Azzato and St. Marys filed a Motion for Summary Judgment (ECF No. 91), accompanied by their Brief in Support (ECF No. 93), Concise Statement of Material Facts (ECF No. 94), and an Appendix containing numerous Exhibits (ECF No. 91-3). Mr. Boyles filed his Memorandum in Opposition (ECF No. 97) and Exhibits in Support thereof (ECF No. 98) on February 15, 2019. Mr. Azzato and St. Marys then filed their Reply Brief (ECF No. 101), Supplemental Concise Statement of Material Facts (ECF No. 102), and Appendix with Exhibits (ECF No. 103) on March 4, 2019.

IV. Undisputed Facts²

A. The Parties

St. Marys is an independent insurance agency with its principal office in St. Marys, Pennsylvania. (ECF No. 94 ¶ 1; ECF No. 97 at 1.) Mr. Azzato is the president and co-owner of St. Marys. (ECF No. 94 ¶ 1; ECF No. 97 at 1.)

In October 2006, St. Marys acquired Boyles Insurance Agency. (ECF No. 94 ¶ 3.) Mr. Boyles, who was an employee of Boyles Insurance Agency, became an employee of St. Marys. (Id. ¶¶ 2-3; ECF No. 97 at 2.) He worked primarily out of St. Marys's Boyles Insurance Agency office in State College, Pennsylvania. (ECF No. 94 ¶ 6; ECF No. 97 at 2.) Mr. Boyles's last day of work for St. Marys for which he was paid full salary was November 22, 2013, although he continued to receive paid vacation benefits through December 31, 2013. (ECF No. 94 ¶ 9; ECF No. 97 at 5.)

Mr. Boyles's job duties with St. Marys consisted of selling insurance, soliciting clients and following up on leads, maintaining and servicing his existing book of business, writing new policies or obtaining new coverage for existing clients, handling claims by clients, spending "face time" with clients at least once per year or on some other regular basis, fielding calls, e-mails, and text messages around the clock, and traveling to meet and/or solicit clients and to attend seminars. (ECF No. 94 ¶ 10.) His schedule was more flexible than other employees in St. Marys's State College office and he was able to conduct business remotely. (Id. ¶¶ 11-12.)

B. St. Marys's Disability Insurance Policies

St. Marys sponsored an employee benefits plan for its employees, including Mr. Boyles. (Id. ¶ 27; ECF No. 97 at 2.) This plan included group short-term ("STD") and long-term ("LTD") disability insurance. (ECF No. 94 ¶ 27; ECF No. 97 at 2.) St. Marys was not the plan administrator for the STD or LTD policies.³ (ECF No. 94 ¶ 191.) Instead, Allstate and Unum, who insured the plans, were the plan administrators with the discretion to determine eligibility for benefits. (Id. ; ECF No. 82 at 5.) Thus, with respect to STD and LTD benefits under both the Allstate and Unum policies, neither St. Marys nor Mr. Azzato had the discretion to (1) decide whether a group member was paid disability benefits; (2) determine whether an employee was eligible for benefits; (3) determine the level or amount of benefits an employee would or could receive under the policies; (4) determine whether an applicant/employee met the definition of "disability" under the policies; (5) pay benefits if granted; and (6) determine the length of time an individual would receive STD or LTD benefits. (ECF No. 94 ¶ 48.)

1. The Allstate Policy

Allstate insured St. Marys's disability plan from January 1, 2010 through July 31, 2013. (Id. ¶ 28; ECF No. 97 at 2.) The Allstate plan provided that full-time, active employees working 30 or more hours per week were eligible for coverage. (ECF No. 94 ¶ 30.) To receive STD benefits, an employee had to be continuously disabled for the elimination period of 30 days. (Id. ¶ 34; ECF No. 97 at 2-3.) The monthly benefit for a qualifying employee was 60% of monthly earnings up to a maximum benefit of $ 2,500 for no more than six months. (ECF No. 94 ¶ 34; ECF No. 97 at 2-3.) To receive LTD benefits, the employee had to be continuously disabled for the elimination period of 180 days. (ECF No. 94 ¶¶ 35, 135; ECF No. 97 at 3.) The monthly benefit was 60% of monthly earnings up to a maximum benefit of $ 6,000 per month payable to age 65. (ECF No. 94 ¶¶ 35, 135; ECF No. 97 at 3.) If the employee continued to receive more than 80% of his monthly earnings, regardless of whether he was totally or partially disabled or working full- or part-time, he did not satisfy the definition of "disability" and no benefits were payable. (ECF No. 94 ¶¶ 36, 38; ECF No. 97 at 2-3.)

2. The Switch from Allstate to Unum

St. Marys had the authority to cancel the Allstate policy (ECF No. 94 ¶¶ 31, 123, 139), which it did effective July 31, 2013 when it switched group disability coverage to a policy issued by Unum. (Id. ¶¶ 28, 32, 122; ECF No. 97 at 2, 4.) St. Marys originally sought a quote from Unum for STD and LTD policies in mid-June 2013. (ECF No. 94 ¶¶ 40, 128; ECF No. 97 at 4.) Around that time, St. Marys had established a business relationship with Unum and had begun to write for Unum. (ECF No. 94 ¶ 31.) To further its relationship with Unum, St. Marys switched its disability coverage to Unum. (Id. ¶¶ 42, 129-30.) During this switch, Mr. Azzato did not contemplate that Mr. Boyles may file for disability at some point. (Id. ¶ 144.)

Before the change from Allstate to Unum took effect, a St. Marys employee told Mr. Boyles that St. Marys "currently did just switch to Unum," although Mr. Boyles thought the change would not occur until the policy renewal date and there is a dispute as to whether Mr. Boyles knew the employee was referring to St. Marys's disability policies.⁴ (Id. ¶¶ 145-48.) Mr. Boyles did not ask Mr. Azzato any questions regarding the switch from Allstate to Unum. (Id. ¶¶ 147, 149, 155.) Further, Mr. Boyles did not request information from Mr. Azzato or St. Marys regarding St. Marys's disability coverage. (Id. ¶¶ 150-53.) And Mr. Azzato never failed or refused to provide information in response to a request from Mr. Boyles. (Id. )

3. The Unum Policy

Under the Unum policy, full-time employees in active employment with St. Marys had STD and LTD coverage. (Id. ¶ 44; ECF No. 97 at 3.) In order to be considered in active employment, employees had to be working at least 37.5 hours per week. (ECF No. 94 ¶ 45; ECF No. 97 at 3.) STD benefits under the Unum policy were 60% of weekly earnings to a maximum benefit of $ 625 per week for a maximum of 26 weeks. (ECF No. 94 ¶ 47; ECF No. 97 at 3.) LTD benefits were 60% of monthly earnings to a maximum of $ 6,000 per month. (ECF No. 94 ¶ 47; ECF No. 97 at 3.) The Unum policy differed from the Allstate policy because Unum's LTD policy provided a monthly benefit payable for five years whereas Allstate provided a maximum of $ 6,000 a month payable to age 65. (ECF No. 94 ¶ 135.)

C. Mr. Boyles's Back Problems and Surgeries

Mr. Boyles had a history of back problems. (Id. ¶ 50; ECF No. 97 at 3.) From late 2011 through September 2012, Mr. Boyles had four surgical procedures related to the implant of a spinal stimulator. (ECF No. 94 ¶ 51; ECF No. 97 at...