Crosby v. Crosby
| Decision Date | 17 February 1993 |
| Docket Number | Nos. 92-1500,92-1501,s. 92-1500 |
| Citation | 986 F.2d 79 |
| Parties | 16 Employee Benefits Cas. 1742 Margaret CROSBY, Plaintiff-Appellee, v. Joan CROSBY, Defendant-Appellant, General Motors Corporation; Metropolitan Life Insurance Company, Defendants-Appellees. Margaret CROSBY, Plaintiff-Appellant, v. Joan CROSBY; General Motors Corporation; Metropolitan Life Insurance Company, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Michael Lawrence Marshall, Schlachman, Belsky & Weiner, P.A., Baltimore, MD, argued for appellant.
Richard Jay Hackerman, Baltimore, MD, Joseph Trovato, New York City, argued (A. Lawrence Giuliani, Baltimore, MD, for appellee Crosby; William J. Toppeta, New York City, for appellee Metropolitan Life; Dennis L. Casey, Paul, Hastings, Janofsky & Walker, Washington, DC, for appellee GM, on brief), for appellees.
Before WIDENER, PHILLIPS, and HAMILTON, Circuit Judges.
Joan Crosby (Joan) appeals the district court's summary judgment decision holding that Margaret Crosby (Margaret), rather than Joan, should receive the remaining insurance proceeds from the group life insurance plan on the life of Leonard Crosby (Leonard). Margaret cross-appeals the district court's summary judgment decision holding that she could not recover from Metropolitan Life Insurance Company (Met Life) or General Motors Corporation (GM) the proceeds previously paid to Joan under the same group life insurance plan.
We conclude that the district court properly determined that Margaret should receive all future life insurance proceeds and that neither Met Life nor GM should have to pay Margaret the amount already paid to Joan under this plan. We, therefore, affirm.
Margaret married the decedent Leonard on December 10, 1961. Six months later they separated without obtaining a legal divorce. Thereafter, Margaret began living with Lee Andrew Williams and had three children by him. Margaret also changed the name on her social security card and her checking account to Williams, and titled her house in the name of Williams. Meanwhile, Leonard married Joan in January 1969. Leonard and Joan lived together until Leonard's death on January 29, 1990.
As an employee of GM, Leonard participated in a group life insurance plan underwritten by Met Life. The plan provided that, upon the employee's death, Survivor Income Benefit Insurance (SIBI) benefits would be paid to the "widow of a deceased male employee, but only if she was legally married to him at the time of his death and had been legally married to him for at least one year." Joint Appendix (J.A.) at 104. Leonard designated Joan as his wife and beneficiary under this group life insurance plan.
Upon Leonard's death, Joan submitted a "Statement of Claim for Life Insurance Proceeds Under the General Motors Life and Disability Benefits Program," requesting that Met Life/GM pay the SIBI benefits to her. 1 As part of her claim, Joan submitted her marriage certificate acknowledging her marriage to Leonard. On the application for his license to marry Joan, Leonard had indicated he was single. Because Met Life/GM had no evidence to dispute Joan's legal status as Leonard's widow, Met Life/GM began paying SIBI benefits to Joan on March 13, 1990. Met Life/GM paid approximately $3,600 to Joan before receiving notice of Margaret's claim as Leonard's legal widow. Met Life/GM then escrowed all subsequent payments, taking the position of a stakeholder ready to pay whomever the court directed.
In September 1990, Margaret filed this action against Joan and Met Life/GM in the Circuit Court for Baltimore County, Maryland. Margaret sought a declaration that she was the legal widow of Leonard, thereby entitling her to all future SIBI benefits. In addition, Margaret claimed unjust enrichment against Joan, seeking to recover the SIBI payments already received by Joan. Joan responded that Margaret should be estopped from claiming both the prior and future benefits, alleging that Margaret knew of Joan's marriage years before Leonard's death, but did nothing to notify Joan of Margaret's existing marriage to Leonard.
Met Life/GM removed the case to the United States District Court for the District of Maryland on September 26, 1990. On August 1, 1991, the district court held that Margaret was the legal widow of Leonard Crosby and thereby awarded her all future SIBI benefits, 769 F.Supp. 197. However, the district court refused to hold Joan liable under an unjust enrichment theory for the SIBI benefits already received, reasoning that it was "[ ]equitable for [Joan] to retain the [$3,600]." J.A. at 209. The district court relied on the fact that Joan had lived with Leonard for twenty-two years, honestly believing that they were legally married, while Margaret had no contact whatsoever with Leonard for fifteen years before coming forward to claim the SIBI benefits.
After this ruling, Margaret amended her complaint against Met Life/GM in a second effort to recover the $3,600 in benefits paid to Joan. In her amended complaint, Margaret alleged unlawful payments against Met Life/GM because the policy required payments to be made to the legal widow of Leonard. On March 18, 1992, the district court awarded summary judgment in favor of Met Life/GM, concluding that Margaret had "superior knowledge" to Met Life/GM and was equitably estopped from asserting any claim against Met Life/GM for the SIBI benefits erroneously paid to Joan. J.A. at 293-94. The district court reasoned that, as early as January 1990, Margaret knew of Joan's purported marriage to Leonard and thus the potential for a competing claim to Leonard's estate assets. Nevertheless, the district court opined, Margaret waited eight months before filing this action to assert her marital rights to Leonard's estate, 785 F.Supp. 1227.
On appeal, Joan contends that Margaret should be estopped from asserting any rights to future SIBI benefits. The district court rejected Joan's estoppel claim on two grounds. First, the district court reasoned that estoppel requires either a misrepresentation or silence despite a duty to speak and concluded that nothing in the present case required Margaret to inform Joan of her existing marriage to Leonard. Second, the district court observed that estoppel requires reliance by the injured party and concluded that in the present case Joan did not change her position to her detriment in reliance on Margaret's silence.
Joan challenges each of the district court's conclusions regarding her estoppel claim. First, she claims that a duty to speak arises whenever a party has greater knowledge of the relevant facts. Second, Joan claims that estoppel should apply whenever a party's silence precludes another from taking steps to protect herself from a loss. We disagree with both arguments. Maryland law imposes a duty to speak "only where the silence or inaction constitutes a fraud...." Beesley v. Hanish, 70 Md.App. 482, 521 A.2d 1235, 1243 (1987). See also, Ganley v. G & W Limited Partnership, 44 Md.App. 568, 409 A.2d 761, 766 (1980); Jordan v. Morgan, 252 Md. 122, 249 A.2d 124, 129 (1969). Because the record contains no evidence of fraud by Margaret, she had no duty to inform Joan of her existing marriage to Leonard. Thus, Margaret's silence does not estop her from asserting her right to the SIBI benefits even though she had greater knowledge than Joan and her silence may have prevented Joan from protecting herself.
Joan also contends that Margaret waived her marital rights in Leonard's estate. In support, Joan points to the fact that Margaret cohabitated with Lee Andrew Williams, had three children by him, changed the name on her social security card and her checking account to Williams, and titled her house in the name of Williams. This claim likewise fails. Although the facts might suggest that Margaret intended to waive her marital rights in Leonard's estate, this does not entitle Joan to the SIBI benefits. The group life insurance plan requires Met Life/GM to pay the benefits to Leonard's legal widow. Because Margaret is Leonard's legal widow, Joan has no entitlement to the proceeds under the plan, notwithstanding Joan's claim that Margaret waived these rights.
In Margaret's cross-appeal, she claims that Met Life/GM should be liable to her for the $3,600 in SIBI benefits erroneously paid to Joan. 2 Margaret bases her claim on two grounds. We disagree with both arguments and discuss our reasons for rejecting each argument separately.
Margaret first argues that 29 U.S.C. § 1055(a) of the Employee Retirement Income Security Act (ERISA) requires Met Life/GM to pay the SIBI benefits to a "qualified beneficiary." Because the district court found Joan not to be the legal widow, any payments to her were not payments to a "qualified beneficiary" and therefore did not satisfy Met Life/GM's obligations under ERISA. We disagree.
Although ERISA requires benefits to be paid to a "qualified beneficiary," we do not think this principle requires Met Life/GM to pay Margaret the $3,600 already paid to Joan. When an administrator of an ERISA plan has discretion to determine eligibility for plan benefits, a court should review the determination of benefits eligibility under the abuse of discretion standard. Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956, 103 L.Ed.2d 80 (1989). This lenient standard applies when the administrator has "the 'power to construe disputed or doubtful terms' or to resolve disputes over benefits eligibility." De Sobel v. Vitro Corp., 885 F.2d 1180, 1187 (4th Cir.1989) (quoting Bruch, 489 U.S. at 115, 109 S.Ct. at 956). Under this standard of review, a court should not disturb the administrator's decision if reasonable. De Sobel, 885 F.2d at 1187.
In the present case, Met Life/GM had the power to determine Joan's eligibility to receive benefits by determining whether she was Leonard's legal...
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