Carland v. Metropolitan Life Ins. Co.

Decision Date04 June 1991
Docket NumberNo. 90-3014,90-3014
Citation935 F.2d 1114
Parties13 Employee Benefits Ca 2350 Beatrice Hinds CARLAND, Plaintiff-Appellee, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant-Appellant.
CourtU.S. Court of Appeals — Tenth Circuit

Alvin Pasternak (William J. Toppeta, with him on the briefs), New York City, for defendant-appellant.

Andrew L. Oswald, Martindell, Swearer, Cabbage, Ricksecker & Hertach, Hutchinson, Kan., for plaintiff-appellee.

Before TACHA and BALDOCK, Circuit Judges, and KANE, District Judge. *

TACHA, Circuit Judge.

Defendant-appellant Metropolitan Life Insurance Company appeals a grant of summary judgment in favor of plaintiff-appellee Beatrice Carland in an action for wrongful denial of insurance proceeds. On appeal, Metropolitan Life argues the district court erred by finding: (1) the determination of beneficiaries under a life insurance policy is subject to de novo review, (2) the divorce decree intended Beatrice Carland to be the irrevocable and sole primary beneficiary of the entire proceeds of the group policy, and (3) payment of life insurance benefits according to the company's beneficiary designation forms fails to satisfy the plan administrator's obligation under ERISA. Metropolitan Life also argues the district court improperly considered the affidavit of J. Richards Hunter, Beatrice Carland's divorce attorney, in determining the intent of the parties to the divorce decree. We exercise jurisdiction under 28 U.S.C. Sec. 1291 and affirm.


Ralph Carland, an employee of Metropolitan Life, was a holder of a group life insurance policy, Metropolitan Group Policy No. 50 G.L., certificate number 134181. The group policy is part of an employee welfare benefit plan governed by the Employee Retirement Income Security Act (ERISA or Act), 29 U.S.C. Secs. 1001 et seq. During Ralph Carland's marriage to Beatrice Carland, he designated her the primary beneficiary of this policy's proceeds.

On September 4, 1964, Ralph and Beatrice Carland were divorced. At that time, Beatrice Carland was a homemaker and Ralph Carland was employed by Metropolitan Life as district manager of the Hutchinson, Kansas district office. Following the divorce, Ralph Carland was employed in a supervisory position at the New York City office of Metropolitan Life. Sometime after divorcing Beatrice Carland, Ralph Carland married Olive Kohlmeyer Carland.

Ralph and Beatrice Carland negotiated a property settlement agreement that was incorporated into a divorce decree entered by the Reno County District Court in Kansas. The decree provides in pertinent part:

The court further finds that the parties hereto have entered into an agreement which contains the mutual covenants of the parties hereto with regard to that for which they would jointly ask the Court to decree regarding child custody and visitation, child support, alimony, property division and expenses. An executed copy of said agreement is attached hereto and made a part hereof.


[I]n accordance with said agreement Defendant is ordered to pay the premiums on, and to make irrevocable designation of Plaintiff as the sole primary beneficiary under and of, the policies of insurance on the life of Defendant listed in Schedule "A" appended to the Settlement Agreement to which reference has been made herein.

Schedule A of the property settlement agreement lists specific life insurance policies that Ralph Carland agreed to designate Beatrice Carland the sole primary beneficiary of and the face value of those policies:

                                            SCHEDULE "A"
                Policies of Insurance on Life of Ralph C. Carland
                Policy No.   Company                             Face Amount
                17 083 285A  Metropolitan Life Ins. Co.                   $  5,000.00
                22 127 306A  Metropolitan Life Ins. Co.                     10,000.00
                21 300 423   New York Life Ins. Co.                          5,000.00
                21 372 985   New York Life Ins. Co.                          5,000.00
                Ctf. 134181  Metropolitan Group Ins.     Current value, less 1,000.00

On February 15, 1974, Ralph Carland sent a letter to Metropolitan Life. The letter states:

Please note that the attached schedule is from my divorce decree of September 4, 1964, Case 13926. The decree provides that my Group Life Insurance is designated to go to my divorced wife--Beatrice Hinds Carland--in the amount of the current value, less $1,000.00 as of the date of the decree.

Therefore, I direct the Company to make the following Beneficiary designations:

Primary beneficiaries:

BEATRICE HINDS CARLAND--divorced wife, $13,000.00 (Current value, less $1,000 as of date of divorce, September 4, 1964)

OLIVE KOHLMEYER CARLAND--present wife, Group Insurance over and above $13,000.00

Secondary Beneficiaries:

RALPH C. CARLAND, JR. and CHRISTOPHER BRIEN CARLAND (Share and share alike or all to survivor)

I further request that the beneficiary designation be effective as of the date of this memo of record.

In March 1974, Ralph Carland completed two change of beneficiary forms for the group policy. One names Beatrice Carland primary beneficiary for $13,000 and Olive Carland primary beneficiary for the amount in excess of $13,000. The other form designates Olive Carland sole primary beneficiary for all proceeds of the group policy. It is unclear which form was completed last.

Ralph Carland died on April 9, 1987. Within three days, the Tulsa, Oklahoma office of Metropolitan Life received a letter from Beatrice Carland notifying the company of her claim to the policy proceeds. The letter enclosed a copy of the relevant portions of the decree. The Tulsa office sent Beatrice Carland claim application forms and requested a death certificate for Ralph Carland.

While waiting for the death certificate to arrive, Beatrice Carland spoke with a Metropolitan Life employee in the company's office in Wichita who assured her she was sole primary beneficiary of the group policy. However, Beatrice Carland was informed later that the company intended to pay the proceeds to another individual. Although Beatrice Carland supplied company officials with documentation supporting her claim, Metropolitan Life paid Olive Carland the entire proceeds of the group policy. Metropolitan Life later informed Olive Carland of Beatrice Carland's claims to the proceeds of the group policy. Olive Carland agreed to resolve the issue of the conflicting beneficiary designation forms by returning $13,000 of the proceeds. Metropolitan Life then paid Beatrice Carland this amount plus interest.

Beatrice Carland filed suit against Metropolitan Life in Reno County District Court for wrongful denial of insurance proceeds. Metropolitan Life removed the action to federal district court pursuant to 28 U.S.C. Sec. 1441. The insurance company filed a motion to dismiss or for summary judgment, arguing any obligation under ERISA had been satisfied by payment of the proceeds to the beneficiaries of record. Beatrice Carland responded she stated a claim under ERISA and moved for summary judgment. The district court granted Beatrice Carland's motion for summary judgment. Carland v. Metropolitan Life Ins. Co., 727 F.Supp. 592 (D.Kan.1989).

A. Standard of Review

We review a summary judgment under the same standard a district court applies pursuant to Rule 56 of the Federal Rules of Civil Procedure. Osgood v. State Farm Mut. Auto. Ins. Co., 848 F.2d 141, 143 (10th Cir.1988). In determining whether a genuine issue of material fact remains, we view all facts and inferences in the light most favorable to the nonmoving party. Burnette v. Dow Chemical Co., 849 F.2d 1269, 1273 (10th Cir.1988). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The substantive law regarding a claim identifies which facts are material in a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

Metropolitan Life contends we only should review a beneficiary determination for an abuse of discretion by the plan administrator. In Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956, 103 L.Ed.2d 80 (1989), the Supreme Court held a denial of benefits challenged under ERISA is reviewed under a de novo standard unless the benefit plan gives the administrator discretionary authority to construe the terms of the plan. Here, the group policy does not grant Metropolitan Life such discretion. Rather, the plan requires the company to pay proceeds to the beneficiary of record. We find no reason to apply an abuse of discretion standard in this action.

1. Preemption in General

Both parties agree this case is governed by ERISA. The ERISA preemption clause provides in pertinent part: "[T]he provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan...." 29 U.S.C. Sec. 1144(a). This clause establishes a broad area of exclusively federal concern preempting state law claims that "relate to" an employee benefit plan. See FMC Corp. v. Holliday, --- U.S. ----, 111 S.Ct. 403, 407, 112 L.Ed.2d 356 (1990). The Supreme Court has stated the preemption clause is "deliberately expansive" and should be given its "broad common-sense meaning." Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46-47, 107 S.Ct. 1549, 1552-53, 95 L.Ed.2d 39 (1987) (citing Shaw v. Delta Air Lines, 463 U.S. 85, 97-98, 103 S.Ct. 2890, 2900, 77 L.Ed.2d 490 (1983)); see also Settles v. Golden Rule Ins. Co., 927 F.2d 505, 508 (10th Cir.1991). The Supreme Court also has held state common law tort and contract claims for improper processing of benefits claims are preempted...

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