Schuetta v. Aurora Nat'l Life Assurance Co.
| Citation | 27 F.Supp.3d 949 |
| Decision Date | 08 May 2014 |
| Docket Number | Case No. 13–CV–1007–JPS. |
| Parties | Leo R. SCHUETTA, Plaintiff, v. AURORA NATIONAL LIFE ASSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Timothy S. Knurr, Gruber Law Offices, LLC, Milwaukee, WI, Todd A. Terry, Lloyd Phenicie Lynch Kelly & Hotvedt, S.C., Burlington, WI, for Plaintiff.
Victor J. Allen and Paul E. Benson, Michael Best & Friedrich, LLP, Milwaukee, WI, for Defendant.
The plaintiff, Leo Schuetta, initially filed this case in Racine County Circuit Court. (See Docket # 1). The defendant, Aurora National Life Assurance Company (“Aurora”), however, removed the case to federal court on the basis of diversity jurisdiction, 28 U.S.C. §§ 1332, 1441. (See Docket # 1). The crux of this matter is Aurora's refusal to pay annuity benefits to Mr. Schuetta dating back to the date of his retirement, because Mr. Schuetta did not file a required notification with Aurora. The Court has already partially granted Aurora's motion to dismiss (see Docket # 22) and refused to allow Mr. Schuetta's to amend his complaint (see Docket # 31). Thus, there are only a few claims remaining; Aurora has moved for summary judgment on all of them (Docket # 33). The parties have fully briefed Aurora's motion for summary judgment (Docket # 34, # 38, # 42), and the Court turns to decide it.
Before discussing the parties' legal arguments, the Court first provides the factual and procedural background that underpins this case.
Mr. Schuetta is a former employee of Dana Corporation. (DPFF ¶ 5).1 In connection with Mr. Schuetta's employment, Dana Corporation purchased a retirement annuity for him, which was intended to provide benefits to him upon his retirement. (DPFF ¶ 5). Dana Corporation purchased that annuity through Executive Life Insurance Company (“Executive Life”) in December of 1989. (DPFF ¶ 5).
Shortly after Dana Corporation purchased the annuity, Executive Life began to have serious financial troubles. (See DPFF ¶ 6). The California Superior Court placed Executive Life in conservation in April of 1991. (DPFF ¶ 6). Two years later, the California Superior Court approved a rehabilitation plan for Executive Life and its assets. (DPFF ¶ 6).
As part of that rehabilitation plan, Aurora assumed all of Executive Life's annuity and insurance contracts, as they had been restructured under the rehabilitation plan. (DPFF ¶ 7). Aurora's assumption of those contracts was effective on September 3, 1993, although Dana Corporation had until February 12, 1994, to opt out of the rehabilitation plan. (DPFF ¶¶ 7–8).
Dana Corporation did not opt out, and therefore effectively agreed to participate in the rehabilitation plan. (DPFF ¶¶ 9–10). This meant that Dana Corporation agreed to have Aurora assume Dana Corporation's annuity contracts under a restructured agreement. (DPFF ¶¶ 9–10).
In January of 1994, Mr. Schuetta personally agreed to Aurora's assumption of his annuity contract, and also accepted the terms of the restructured agreement. (DPFF ¶ 11). He now objects to this fact by arguing that he did not necessarily understand the terms of the restructured annuity contract and may also have confused the annuity contract with a separate pension he was to receive. (See Pl.'s Resp. to DPFF ¶ 11). However, any confusion on his part does not negate the fact that he signed an agreement to be bound by the terms of the restructured annuity contract and to allow Aurora to assume that contract. (See, e.g., DPFF ¶ 11 ).
Under the terms of the restructured annuity contract, Mr. Schuetta would be entitled to receive a monthly annuity benefit of $397.51. (DPFF ¶ 12). And Mr. Schuetta was eligible to receive that benefit immediately after agreeing to the restructured contract and Aurora's assumption. (DPFF ¶¶ 12, 14 ()).
However, under the terms of the restructured annuity contract, Mr. Schuetta was not entitled to begin receiving benefits until he submitted a benefit election form. (DPFF ¶ 13). The restructured contract specifically states that:
In order to begin receiving Benefit Payments, a Deferred Participant must: (i) unless otherwise provided in the Schedule of Benefits, terminate employment (as determined by the Owner or the Owner's successor or affiliate), and (ii) elect one of the available Benefit Payment Options described in the Schedule of Benefits.
(Schuetta Depo. Tr., Ex. 9, at 7). In other words, Mr. Schuetta was not entitled to begin receiving payments until he elected his payment option by submitting the required form.
And, unfortunately, Mr. Schuetta did not ever submit that form. He claims he did not even know that he had an annuity (and, consequently, was unaware that he should have submitted a form to start receiving his annuity benefits). (DPFF ¶ 16). This makes some sense: Mr. Schuetta began receiving a pension payment from Dana Corporation after his retirement, and he may have conflated that pension payment with his annuity benefit.
(See DPFF ¶ 15). Furthermore, while he does remember Dana Corporation's employees explaining his pension benefits, he has no recollection of them ever explaining his annuity benefit. (DPFF ¶ 17). His confusion is further borne out by the fact that—shortly after his retirement, but before Executive Life had entered conservation—he sent Executive Life a letter correcting the terms listed regarding his annuity contract so that they resembled his pension benefits. (See DPFF ¶¶ 18; Schuetta Depo. Tr., Ex. 2). Specifically, he mailed a copy of his original annuity contract back to Executive Life, having indicated that he was entitled to only $316.14 per month, that his annuity was a “100% Survivor Life Annuity,” and that his retirement date should have been listed as May 1, 1990 (although it seems that he cannot specifically recall who wrote in those changes). (See DPFF ¶¶ 18; Schuetta Depo. Tr., Ex. 2; Schuetta Depo. Tr. 42:21–43:1). Mr. Schuetta also had a phone conversation with an Executive Life representative, which he referenced in his letter to Executive Life; however, the record evidence does not establish the contents of that conversation or its participants and Mr. Schuetta does not remember the conversation.2
Whatever the reason for Mr. Schuetta's confusion, there is absolutely no question that he did not submit the required election form to Aurora until 2012, well after his retirement. (DPFF ¶¶ 20–21). He took absolutely no action regarding his annuity contract between 1990 and 2012, aside from returning his agreement to the restructured annuity contracts and having the telephone conversation with Executive Life's representative. (DPFF ¶ 21).
It was not until Aurora performed a routine audit in 2012 that Mr. Schuetta ever had any conversation with Aurora—and that conversation happened at Aurora's initiation. (DPFF ¶ 22). Aurora discovered that Mr. Schuetta's wife had passed away during a routine audit, and on October 30, 2012, mailed him a letter with a “Pension Benefit Questionnaire” form, informing him about his benefit options. (DPFF ¶ 22). Mr. Schuetta's daughter called Aurora and filled out the Pension Benefit Questionnaire, hoping to get Mr. Schuetta's benefits to begin. (DPFF ¶¶ 23–24). On that form, in response to the prompt, “I hereby request the Retirement Benefit to commence on ________,” Mr. Schuetta wrote in only the number “1,” rather than a date. (DPFF ¶ 25; Schuetta Depo. Tr., Ex. 5). Mr. Schuetta's daughter thereafter called Aurora on three separate occasions to check up on the processing of Mr. Schuetta's benefits. (Stoll Decl., Exs. B–D). In one of those calls, the following exchange occurred:
(Stoll Decl., Ex. C).3 The parties disagree over the import of the representative's affirmative response to the question regarding back pay. Ultimately, the parties' arguments do not rest upon that answer, and the Court finds it to be immaterial.
Later conversations and communications reinforced that Mr. Schuetta would not be entitled to pay dating back to 1990. (See, e.g. DPFF ¶¶ 28, 31; Stoll Decl., Exs. D–E). On January 10, 2013, Mr. Schuetta's daughter called Aurora and was specifically told that Mr. Schuetta would not receive benefits dating back to 1990. (Stoll Decl., Ex. D). On January 15, 2013, Aurora sent Mr. Schuetta a letter, specifically indicating that it would back date his benefits only to December 1, 2012. (DPFF ¶ 28). On February 12, 2013, Aurora called Mr. Schuetta and told him that he would not be entitled to any benefits before December 1, 2012. (DPFF ¶ 31 ()).
In that February 12, 2013, phone call, Aurora told Mr. Schuetta that it would mail him a check for benefits backdated to December 1, 2012, but no earlier. (DPFF ¶ 32). In keeping with that representation, Aurora sent Mr. Schuetta a check for $1,192.53, constituting annuity payments for the months of December 2012, January 2013, and February 2013. (DPFF ¶ 34). Mr. Schuetta deposited that check into his bank account, and the check cleared Aurora's bank on February 19, 2013. (DPFF ¶¶ 37–38).
Shortly thereafter, Mr. Schuetta retained counsel and filed the instant lawsuit seeking additional benefits. (DPFF ¶¶ 39–41). In his complaint, Mr....
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