Owens v. Metro. Life Ins. Co., CIVIL ACTION NO. 2:14-CV-00074-RWS

Decision Date27 September 2016
Docket NumberCIVIL ACTION NO. 2:14-CV-00074-RWS
Citation210 F.Supp.3d 1344
Parties Laura A. OWENS, individually and on behalf of a class of all others similarly situated, Plaintiff, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant.
CourtU.S. District Court — Northern District of Georgia

M. Scott Barrett, Barrett Wylie, LLC, Bloomington, IN, John Chapman Bell, Jr., Leroy Weathers Brigham, Bell & Brigham, Augusta, GA, John W. Oxendine, John Oxendine, P.C., Atlanta, GA, Michael Jordan Lober, Lober, Dobson & Desai, LLC, Roswell, GA, Todd L. Lord, Law Office of Todd L. Lord, Cleveland, GA, William Gregory Dobson, Lober, Dobson & Desai, LLC, Macon, GA, for Plaintiff.

Brendan Ballard, Phillip E. Stano, Irene A. Firippis, Sutherland, Asbill & Brennan, LLP, Washington, DC, Thomas W. Curvin, Atlanta, GA, for Defendant.



This case comes before the Court on Plaintiff's Motion for Partial Summary Judgment [74], Defendant's Motion for Summary Judgment [76], and Defendant's Motion to Exclude the Report and Testimony of Professor Jeffrey W. Stempel. After a review of the record, the Court enters the following Order.


This case arises out of Metropolitan Life Insurance Company's ("MetLife") administration of life insurance death benefits paid on employee benefit plans. On April 17, 2014, Plaintiff Laura Owens, on behalf of herself and of a class of all others similarly situated, brought this action pursuant to the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq .

Plaintiff Laura Owens is the beneficiary of a life insurance policy that provided $95,000.00 in coverage on her husband's life (the "Policy"). (Def.'s SOMF., Dkt. [76–2] ¶ 61.) Owens's husband, Robert F. Owens, was employed prior to his death on April 7, 2012 by CB Richard Ellis, Inc. and was a participant in the CB Richard Ellis Group Insurance Plan (the "Plan"). (Pl.'s SOMF, Dkt. [74–1] ¶ 1.) The Policy provides, "We will pay the Life Insurance in one sum. Other modes of payment may be available upon request." (Id. ¶ 12.)

On or around May 21, 2012, CB Richard Ellis, Inc., submitted a claim for life insurance benefits on Plaintiffs behalf. (Id. ¶ 19.) MetLife approved the claim and established a "Total Control Account" in Owens's name (the "TCA").1 (Id. ¶ 20.) MetLife provided a book of blank drafts to Plaintiff, which allowed her to withdraw funds from the TCA in increments of $250 or more. (Def.'s SOMF, Dkt. [76–2] ¶ 81–82.) The TCA accrued interest at a rate tied to one of two indices; the rate fluctuated weekly but the annual effective interest rate was no lower than 0.50%. (Id. ¶ 84.)

MetLife's practice is to hold payable benefits in its own general account until called upon to transfer funds to cover drafts drawn on Total Control Accounts. (Id. ¶ 25.) This practice extended to the benefits paid on Plaintiffs claim. MetLife established a TCA for Ms. Owens, paying interest at the rate of 0.50%. (Pl.'s SOMF, Dkt. [74–1] ¶ 27.) The funds remained in MetLife's general account, earning interest for MetLife at a higher rate than that paid to Plaintiff. (Id. ¶ 28–29.)

This practice is the basis of Plaintiffs Complaint. Plaintiff alleges that MetLife profited from "investing [Plaintiffs] benefits for its own account." (Id. ¶ 17.) Plaintiff further alleges that MetLife did not disclose that profit or similar profits to Ms. Owens or to the Plan's sponsor or administrator. (Id. ¶ 18.) Plaintiff claims that this conduct constitutes a breach of fiduciary duty.

Plaintiff alleges that MetLife routinely profits in this manner from plan benefits paid on group life insurance policies. (Compl., Dkt. [l] ¶¶ 19-25.) Plaintiff claims that this practice violates the terms of the payment clauses in these policies, which provide "We will pay the Life Insurance in one sum. Other modes of payment may be available upon request." (Id. ¶ 20.)

Plaintiff claims she exhausted her administrative remedies when, on or around November 21, 2013, Plaintiff submitted a claim on the Policy to MetLife. (Id. ¶¶ 26-28.) MetLife did not respond to Plaintiffs claim within 90 days, as required by the ERISA addenda to the Plan's Certificates of Insurance. (Id. )

Plaintiff now brings her claims pursuant to ERISA on behalf of herself and the class of others similarly situated.2 Plaintiff further brings claims on behalf of a subclass of Georgia residents. Plaintiff claims that MetLife functioned as a fiduciary when it engaged in the conduct described above. (Id. ¶ 31.) Further, Plaintiff claims that MetLife is a party in interest to the Plan. (Id. ¶¶ 36-37.) On those bases, Plaintiff brings the following causes of action: breach of the duty of loyalty imposed by ERISA § 404(a)(1)(A) (Count I); breach of the fiduciary duties imposed by ERISA § 406(b)(1) (Count II), § 406(a)(1)(B) (Count III), and § 406(a)(1)(C) (Count IV); and postmortem interest for the Georgia subclass (Count VI).3

On November 30, 2015, Plaintiff filed a Motion for Partial Summary Judgment [75] as to the five remaining counts, and, on the same day, Defendant filed a Motion for Summary Judgment [76]. Defendant also filed a Motion to Exclude the Report and Testimony of Professor Jeffrey W. Stempel ("Def.'s Mot. to Exclude") [75] that day. As an initial matter, Defendant's request for oral argument on its Motion to Exclude (Def.'s Reply in Supp. of Def.'s Mot. to Exclude, Dkt. [107] ) is DENIED . The Court now considers the parties' arguments in turn.

I. Motions for Summary Judgment
A. Legal Standard

Federal Rule of Civil Procedure 56 requires that summary judgment be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." "The moving party bears ‘the initial responsibility of informing the ... court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.’ " Hickson Corp. v. N. Crossarm Co. , 357 F.3d 1256, 1259 (11th Cir. 2004) (quoting Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). Where the moving party makes such a showing, the burden shifts to the non-movant, who must go beyond the pleadings and present affirmative evidence to show that a genuine issue of material fact does exist. Anderson v. Liberty Lobby. Inc. , 477 U.S. 242, 257, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

The applicable substantive law identifies which facts are material. Id. at 248, 106 S.Ct. 2505. A fact is not material if a dispute over that fact will not affect the outcome of the suit under the governing law. Id. An issue is genuine when the evidence is such that a reasonable jury could return a verdict for the non-moving party. Id. at 249–50, 106 S.Ct. 2505.

Finally, in resolving a motion for summary judgment, the court must view all evidence and draw all reasonable inferences in the light most favorable to the non-moving party. Patton v. Triad Guar. Ins. Corp. , 277 F.3d 1294, 1296 (11th Cir. 2002). But, the court is bound only to draw those inferences that are reasonable. "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Allen v. Tyson Foods. Inc. , 121 F.3d 642, 646 (11th Cir. 1997) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson , 477 U.S. at 249–50, 106 S.Ct. 2505 (internal citations omitted); see also Matsushita , 475 U.S. at 586, 106 S.Ct. 1348 (once the moving party has met its burden under Rule 56(a), the nonmoving party "must do more than simply show there is some metaphysical doubt as to the material facts").

B. Discussion

Plaintiff brings several claims under both ERISA and Georgia law. She claims Defendant breached its fiduciary duties under ERISA when it opened a TCA in her name and kept a majority of the interest earned on the assets backing the account rather than sending her a single check for the entire amount owed her. ERISA §§ 404(a)(1)(A) and 406(b)(1) require Defendant be a fiduciary for liability to attach; ERISA §§ 406(a)(1)(B) and (C) require Defendant be a fiduciary and a party in interest. As defined by ERISA, "a person is a fiduciary with respect to a plan to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, ... or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan." 29 U.S.C. § 1102(21)(A). Defendant, as the plan administrator, was a fiduciary under this definition.

Not every action a fiduciary takes, however, is undertaken as a fiduciary. ERISA fiduciaries may wear multiple hats, and they "may have financial interests adverse to beneficiaries." Pegram v. Herdrich , 530 U.S. 211, 225, 120 S.Ct. 2143, 147 L.Ed.2d 164 (2000). Acting adversely to a beneficiary's interest alone is not enough. The actions must have been undertaken when "that person was acting as a fiduciary (that is, was performing a fiduciary function)" as well. Id. at 226, 120 S.Ct. 2143. Defendant was wearing its fiduciary hat when it created a TCA in Plaintiffs name and mailed her a blank draftbook for the account. Under trust law, which is used to inform the scope of fiduciary duties under ERISA, fiduciary administration includes performing duties imposed or exercising powers conferred by trust documents. Varity Corp. v. Howe , 516 U.S. 489, 502, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996). Distributing benefits as directed by the Policy falls with the scope of ERISA's...

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