Lanpher v. Metro. Life Ins. Co.
| Decision Date | 29 September 2014 |
| Docket Number | Civil No. 12–2561 JRT/JSM. |
| Citation | 50 F.Supp.3d 1122 |
| Parties | Richard K. LANPHER, Plaintiff, v. METROPOLITAN LIFE INSURANCE COMPANY and Bank of America, successor to Merrill Lynch & Co., Inc., as employer and plan administrator of The Merrill Lynch & Co., Inc., Supplemental Long Term Disability Plan, Defendants. |
| Court | U.S. District Court — District of Minnesota |
Katherine L. MacKinnon, Katherine L. MacKinnon, Attorney at Law, St. Louis Park, MN, for plaintiff.
William D. Hittler, Nilan Johnson Lewis, PA, Minneapolis, MN, for defendant Metropolitan Life Insurance Company.
Wood W. Lay, Winston & Strawn, LLP, Charlotte, NC, and Blake J. Lindevig, Faegre Baker Daniels LLP, Minneapolis, MN, for defendant Bank of America.
This case involves a dispute over a former employee's access to benefits under a supplemental long-term disability insurance plan. Plaintiff Richard Lanpher was an employee at Merrill Lynch (succeeded by Defendant Bank of America, referred to as “Merrill Lynch” throughout), through which he was automatically enrolled in Basic Long Term Disability Benefits plan (the “Basic” plan). Once his salary exceeded $60,000, he became eligible for enhanced benefits under the “Supplemental” long-term disability benefits plan. He did not seek to enroll in the Supplemental plan right away, but did several years later. To enroll in the Supplemental plan, he was required to fill out a Statement of Health and obtain prior approval, based on his submission, from the plan's insurer, Defendant Metropolitan Life Insurance Company (“MetLife”). Upon his application with Merrill Lynch, he received preliminary approval pending MetLife's approval based on his Statement of Health. He then submitted the Statement of Health and subsequently received a letter from MetLife stating that he had been approved and that Merrill Lynch would make the appropriate changes to his coverage.
Six years later, he ended his employment with Merrill Lynch on account of depression and sought disability benefits under both the Basic and Supplemental plans. After several denials and appeals, he ultimately received notice from MetLife that he would receive benefits under the Basic plan. That notice did not indicate that he had been either approved or denied for Supplemental benefits. His attorney inquired further specifically about the Supplemental, and ten months later received from MetLife a denial notice for the Supplemental benefit, citing as grounds for denial the fact that he did not have coverage under the Supplemental plan at the time his employment ended. On appeal to Merrill Lynch, his claim was also denied for lack of coverage.
Discovery has since revealed that, although MetLife has in its records that it approved Lanpher for the Supplemental benefits on the basis of his Statement of Health, there is no evidence that it communicated this to Merrill Lynch (which would have triggered the deduction of premiums from his paychecks). The parties reference three methods by which MetLife would have communicated this to Merrill Lynch at the time: (a) sending a monthly spreadsheet with the list of employees approved and for which insurance plan, (b) carbon copying Merrill Lynch on approval letters to participants after reviewing their Statement of Health, and (c) weekly status reports indicating approval of employees. With regard to (a), the record includes the spreadsheet for the relevant period, which should have included Lanpher, but it does not. With regard to (b), the approval letter Lanpher received from MetLife does not indicate that a copy was sent to Merrill Lynch. With regard to (c), MetLife has not produced the weekly status reports, claiming that it has discarded them as part of its document handling policies.
Lanpher brings this suit under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., alleging first under 29 U.S.C. § 1132 that MetLife improperly denied him benefits due under the Supplemental plan and seeking reversal of that denial, and second, that MetLife and/or Merrill Lynch breached their fiduciary duties under 29 U.S.C. § 1104(a)(1) by failing to enroll him properly and subsequently denying benefits on that account. All parties have moved for summary judgment, with Lanpher moving only against MetLife.
The Court concludes that it was an abuse of discretion and an unreasonable interpretation of the policy documents for MetLife to conclude that, although Lanpher had fulfilled all of the enrollment requirements, he was not entitled to benefits because of a determination that he was not “covered” at the time of his disability because premiums had not been paid, where the plan language did not expressly make coverage contingent upon the employee's payment of premiums. The Court will therefore grant Lanpher's motion for summary judgment on his claim for benefits under 29 U.S.C. § 1132(a)(1)(B). In the alternative, the Court concludes that Lanpher would alternatively be entitled to equitable relief on account of MetLife's breach of its fiduciary duty to Lanpher. Finding insufficient evidence of any breach of fiduciary duty by Merrill Lynch, the Court will grant Merrill Lynch's motion for summary judgment.
There are two long-term disability plans involved in this case. First, the Basic plan provides benefits of sixty percent of the first $5,000 of the employee's pre-disability monthly earnings to a disabled employee after six months of continuous disability. The Basic plan required no contribution from employees. (ML 56.)
Employees who made more than $60,000 per year could elect to enroll in the second plan, the Supplemental long-term disability benefit plan (“the Supplemental Plan” or “the Plan”). (ML 121.) Employees who enrolled in the Supplemental Plan could elect to receive benefits of either forty percent or sixty percent of their predisability earnings over $60,000 after an elimination period of twenty-six weeks. (ML 115, 121, 159.)
The Plan allowed employees to enroll in the Supplemental Plan without providing evidence of insurability if they requested the insurance within forty-five days of becoming eligible. (ML 121.) But if an employee requested the Supplemental insurance more than 45 days after becoming eligible, the employee was required to give evidence of their insurability to MetLife by submitting a “Statement of Health” form, which was subject to MetLife's approval. (ML 121.) The Plan's Certificate of Insurance provided that in such a circumstance, “[i]f We determine that You are insurable, such insurance will take effect on the date We state in Writing, if You are Actively at Work on that date.” (ML 121.) The Certificate of Insurance describes the enrollment process as follows:
If You are eligible for insurance, You may enroll for Disability Income Insurance: Long Term Benefits by completing the required form.... If You enroll for Contributory Insurance, You must also give the Employer Written permission to deduct premiums from Your pay for such insurance. You will be notified by the Employer how much You will be required to contribute.
(ML 121.) MetLife is the insurer and claims fiduciary for the Plan, and Merrill Lynch is the employer and plan administrator. (ML 147–49.)
Lanpher was automatically enrolled in the Basic plan as part of his benefit package with Merrill Lynch. 1 He explained in a written statement made in the course of this dispute that in early 2001 he sought to enroll in the Supplemental Plan because he “needed the added income protection from the [Supplemental] plan because my income was far in excess of the $60,000 threshold at that time and I had a wife and three children to support.” (Lanpher Statement ¶¶ 5, 7.) After seeking to enroll with his employer, he received a letter dated April 4, 2001 from Merrill Lynch confirming his enrollment and indicating that he would need to fill out, and MetLife would need to approve, a “Statement of Health” form before coverage would take effect. (Aff. of William D. Hittler in Supp. of Mot. for Summ. J. (“Hittler Aff.”), Ex. B at BA 26, Feb. 1, 2014, Docket No. 47.) The letter stated:
(Id. ) When Lanpher received this letter on April 4, 2001, he had already submitted the Statement of Health form to MetLife on March 20, 2001, which MetLife received on March 22, 2001. (Hittler Aff., Ex. A at 1737–38.) Lanpher then received an approval letter dated from MetLife April 16, 2001 stating:
(Hittler Aff., Ex. B at BA 27.) Lanpher stated that (Lanpher Statement ¶ 11.)
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