Pentland v. Metro. Life Ins. Co.

• Decision Date: 09 February 2021
• Docket Number: Civil Action No 18-cv-00409-RBJ
• Citation: 519 F.Supp.3d 876
• Parties: Yvette PENTLAND, Plaintiff, v. METROPOLITAN LIFE INSURANCE COMPANY, Schlumberger Technology Corporation, and Schlumberger Group Life, Accidental Death & Dismemberment and Business Travel Accident Plan, Defendants.
• Court: U.S. District Court — District of Colorado

519 F.Supp.3d 876

Yvette PENTLAND, Plaintiff,

v.METROPOLITAN LIFE INSURANCE COMPANY, Schlumberger Technology Corporation, and Schlumberger Group Life, Accidental Death & Dismemberment and Business Travel Accident Plan, Defendants.

Civil Action No 18-cv-00409-RBJ

United States District Court, D. Colorado.

Signed February 9, 2021

Michael James Hoover, Interpleader Law, LLC, Baton Rouge, LA, for Plaintiff.

Jack M. Englert, Jr., Holland & Hart, LLP, Greenwood Village, CO, for Defendant Metropolitan Life Insurance Company.

Jack M. Englert, Jr., Holland & Hart LLP, Greenwood Village, CO, Matthew Gerald Sheridan, Baker Botts LLP, Houston, TX, for Defendant Schlumberger Technology Corporation.

Jack M. Englert, Jr., Holland & Hart, LLP, Greenwood Village, CO, Matthew Gerald Sheridan, Baker Botts LLP, Houston, TX, for Defendant Schlumberger Group Life, Accidental Death & Dismemberment and Business Travel Accident Plan.

ORDER ON PLAINTIFF'S MOTION FOR JUDGMENT ON THE ADMINISTRATIVE RECORD

R. Brooke Jackson, United States District Judge

This matter is before the Court on plaintiff's motion for judgment on the administrative record, or, alternatively, for summary judgment. ECF No. 42. For the reasons discussed below, plaintiff's motion is DENIED, and judgment is entered in favor of the defendants.

I. FACTUAL BACKGROUND

The following facts are taken from the administrative record. Tony Pentland ("decedent") was a Schlumberger employee and was insured under a group life insurance plan ("group plan") administered by defendant Metropolitan Life Insurance Company ("MetLife"). ECF No. 43-1 at 1. As a part of the group plan Mr. Pentland elected basic and supplemental life insurance coverage. In September 2015 Mr. Pentland was diagnosed with terminal cancer

and went on disability leave. ECF No. 43-5 at 2. Mr. Pentland remained eligible for life insurance coverage under the group plan while on disability. On the last day he worked Mr. Pentland was insured for $126,000 in basic life insurance and $200,000 in supplemental life insurance under the group plan. ECF No. 43-1 at 140.

On November 30, 2015 Mr. Pentland emailed Sheri Jordan, also a Schlumberger employee, to ask if he could enroll in benefits for the 2016 year despite being on disability. ECF No. 43-5 at 7. Ms. Jordan responded to Mr. Pentland and stated "[a]n exception has been made to allow you to enroll in your 2016 benefits. Your benefit elections were made according to the elections submitted on your 2016 enrollment form. Attached is a copy for your review." Id. The attachment to that email stated that Mr. Pentland had basic life insurance coverage in the amount of $126,000 and supplemental life insurance in the amount of $325,000. ECF No. 43-1 at 141. On September 5, 2016 Mr. Pentland again emailed Sheri Jordan and asked if he would be able to enroll in benefits despite still being on disability. ECF No. 43-5 at 21. Ms. Jordan replied "[a]s long as you continue to make your benefit payments you will be mailed a packet towards the end of the year to elect your benefits for 2017." Id. Mr. Pentland continued receiving benefits through the 2017 calendar year. The group plan contained an actively-at-work requirement which states, "If You complete the enrollment process ... such insurance will take effect ... on the date You become eligible for such insurance if You are Actively At Work on that date." ECF No. 43-1 at 38.

However, on March 30, 2017 Mr. Pentland was terminated as a result of being on long-term disability for twelve months. ECF No. 43-4 at 148. The group plan permitted employees to convert their coverage to an individual policy in the event their life insurance under the group plan ended or was reduced. ECF No. 43-1 at 58. The relevant provisions outlining this conversion option read,

LIFE INSURANCE: CONVERSION OPTION FOR YOU

If Your life insurance ends or is reduced for any of the reasons stated below, You have the option to buy an individual policy of life insurance ("new policy") from Us during the Application Period in accordance with the conditions and requirements of this section ....

You will have the option to convert when:

A. Your life insurance ends because:

• You cease to be in an eligible class;

• Your employment ends;

• This Group policy ends, provided You have been insured for life insurance for at least 5 continuous years; or

• This Group policy is amended to end all life insurance for an eligible class of which You are a member, provided You have been insured for at least 5 continuous years....

If your life insurance ends or is reduced for any other reason, the maximum amount of insurance that You may elect for the new policy is the amount of Your life insurance which ends under this Group policy.

Id. at 58–59.

After Schlumberger terminated Mr. Pentland, MetLife Transitions Solutions sent Mr. Pentland a letter stating that his coverage under the group plan ended on March 30, 2017, the same day he was terminated. ECF No. 43-1 at 192. MetLife further informed Mr. Pentland that he was able to convert his policy under the group plan to an individual policy. ECF No. 43-5 at 9. The letter from MetLife states

As the insurance carrier for your group life coverage, we understand that you have experienced a change of benefits provided through Schlumberger. This change is effective 3/30/2017, and at that time your life insurance benefits will end or be reduced. You have some options and we would like to help you with these time sensitive and important decisions. Please look at the chart below to see which coverage is eligible for Conversion, Portability, or both ....

Coverage Type	Amount Eligible for Conversion
Basic Life	$207,000
Optional Life	$525,000
Spouse Dependent Life	$160,000
Child Dependent Life	$15,000

Id.

In this same letter MetLife also included the contact information for the financial professional who could help Mr. Pentland convert his coverage under the group plan: "[w]e have arranged for financial professionals with Massachusetts Mutual Life Insurance Company (MassMutual) to help explain your options, if you choose, since MetLife cannot provide you with individual guidance." Id. Mr. Robert Lucke, a MassMutual employee, assisted Mr. Pentland and plaintiff with converting his group plan coverage to an individual policy. The individual policy, dated May 1, 2016, states that the "face amount of insurance" was $732,000. ECF No. 43-3 at 63. The individual policy's payment provision states that "[w]hen the insured dies, an amount of money, called the insurance proceeds, will be payable to the beneficiary. The insurance proceeds are the total of: The Face Amount of Insurance ..." Id. at 66.

After electing an individual conversion policy in the amount of $732,000, plaintiff emailed Mr. Lucke on May 15, 2017 to confirm the details of the new policy. ECF No. 43-5 at 12. That email reads, "Hi and happy Monday. Just so I am clear ... sorry this is all new ... if I am approved and [Tony] passes next month, would I be covered for the full $732k provided premiums were paid?" Id. Mr. Lucke responded, "[y]es, his off roll date was 3/30, so the new policy would be effective 32 days later, May 2nd. You gave me a voided check, so when the policy is set up they will take the May premium." Id. at 11. In her declaration, plaintiff writes "[b]ecause he was sick and knew he was dying, Tony and I contacted MassMutual and ultimately converted his coverage to an individual policy with a face value of $732,000, despite the high monthly cost." Id. at 4.

Mr. Pentland died on November 15, 2017 after a twenty-eight-month battle with cancer

. ECF No. 43-3 at 135. Following his death, plaintiff filed a claim with MetLife to collect the insurance proceeds under the individual policy. However, on December 12, 2017 MetLife sent a letter to Yvette indicating that the individual policy had been rescinded because the group plan was still in effect. ECF No. 43-1 at 19. That letter states

This policy was issued as a result of a conversion option on [Tony Pentland's] group life insurance through his employer, Schlumberger. When [Mr. Pentland] separated from the company on 3/30/2017, he was disabled due to illness. Under the terms of this group policy, the group coverage remains in effect for an extended period of time when the individual is disabled prior to separation.

The individual policy was issued on 5/1/2017. We have reviewed the terms of the group policy and found that the group coverage was still in effect under the original contract at the time of [Mr. Pentland's] death. There is no change to the death benefit payable.... However, as the conversion to the individual policy was not necessary in this instance, enclosed please find a check for $11,945.64, which represents a refund of the premiums paid, plus interest, from the date of issue.

Id. Accordingly, MetLife did not pay the $732,000 amount under the individual policy. MetLife did not cite to any specific provision of the group policy to support its decision to rescind the individual policy. It also did not explain or mention the policy's actively-at-work requirement.

Once the claim was submitted to MetLife, several employees began working on plaintiff's claim and noticing irregularities. Jessica Prievo, a senior claims examiner in the Group Life Claims division, wrote, "I am currently reviewing a claim that was received in our office for a former Schlumberger employee by the name of Tony Pentland.... The information received in our office indicates that there was a conversion notice sent to [Mr. Pentland] from MetLife Transitions Solutions indicating that the Group Coverage terminated or reduced on March 30, 2017." Id. at 192. On December 15, 2017 Jason Longo, another MetLife employee, wrote "[w]e think they potentially allowed this person to receive increases while not actively at work, hence allowing them to cover a lot more that should have been in effect." Id. at 182. On that same date, yet another MetLife employee wrote,

I am reviewing a waiver claim

...