Silva v. Metro. Life Ins. Co.
| Decision Date | 01 October 2014 |
| Docket Number | No. 13–2233.,13–2233. |
| Citation | 762 F.3d 711 |
| Parties | Salvador SILVA, Plaintiff–Appellant v. METROPOLITAN LIFE INSURANCE COMPANY; Savvis Communications Corporation, Defendants–Appellees. Thomas E. Perez, Secretary of U.S. Department of Labor, Amicus on Behalf of Appellant. |
| Court | U.S. Court of Appeals — Eighth Circuit |
OPINION TEXT STARTS HERE
Peter K. Stris, Victor O'Connell, argued, Gardena, CA, Michael T. George, David C. Knieriem, argued, St. Louis, MO, for Plaintiff–Appellant.
Ann E. Buckley, argued, Saint Louis, MO, for Defendants–Appellees.
Evelyn H. Chung, USA, argued, Washington, DC, amicus brief.
Before GRUENDER, BRIGHT, and MELLOY, Circuit Judges.
Abel Silva (“Abel”) died on June 27, 2010. His father, Salvador Silva (“Silva”), sought to recover the benefits of Abel's life insurance policy. The insurer denied Silva's claim, asserting that Abel did not actually have a policy because he had not provided required paperwork. Silva brought suit against Abel's employer, Savvis Communications Corporation (“Savvis”), and the insurer, Metropolitan Life Insurance Company (“MetLife”), under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001 et seq. The district court denied relief, and Silva appeals. For the reasons below, we reverse and remand.
Silva's son, Abel, began working at Savvis in September 2004. Abel was eligible to purchase Supplemental Life Insurance benefits when he started his job but declined to do so. He signed the following statement at that time:
I have been given the opportunity to enroll in SAVVIS Communications Corporation's Group Supplemental Life Insurance plans. I understand that if I decline now, but later decide to enroll, I will be required to provide evidence of good health that is satisfactory to Hartford Life and understand my request for coverage may be denied.1
Several years later, Abel decided he wanted Supplemental Life Insurance and enrolled for a policy through Savvis's online enrollment system. He requested a coverage level of five times his salary, which amounted to $429,000. Abel's benefits were apparently scheduled to take effect on January 1, 2010, and the policy appeared on Abel's “Benefits Election Package”page on the Savvis intranet.2 Savvis withheld approximately $10 from Abel's bi-weekly paychecks for the policy until Abel died on June 27, 2010. He had paid roughly $128 in premiums for the life insurance policy.
Abel had named Silva as his policy's beneficiary. Following Abel's death, Silva requested payment of the life insurance proceeds from MetLife. MetLife denied Silva's claim because the company believed that Abel had not successfully completed the enrollment conditions required to obtain a supplemental life insurance policy. In particular, MetLife required that Abel provide “evidence of insurability” before MetLife would approve his request for insurance. In MetLife's letters of denial to Silva, and in several internal MetLife communications, various MetLife representatives indicated that the company requires “evidence of insurability” (1) in all instances of late requests 3; and (2) for requests of coverage in excess of three times an employee's base salary amount, whether such requests are timely or not. At least one internal MetLife communication involved MetLife representatives discussing a grant of partial coverage to Abel. In that communication, one of the representatives raised the issue of granting Abel three times his base salary amount as a life insurance benefit, presumably because MetLife considered three times the base salary generally not to require evidence of insurability. Ultimately, however, MetLife asserted in its letters to Silva that Abel was required to provide evidence of insurability to obtain any coverage due to the fact that his request was a late request.
Evidence of insurability is explained in the Savvis Plan (“the Plan”), which is 96 pages long. Two of those pages describe MetLife's “Evidence of Insurability” requirement. Under the “Eligibility Provisions: Insurance for You” page, it reads, in part:
ENROLLMENT PROCESS
If You are eligible for insurance, You may enroll for such insurance by completing the required form. In addition, You must give evidence of Your Insurability satisfactory to Us at Your expense if You are required to do so under the section entitled EVIDENCE OF INSURABILITY.
The EVIDENCE OF INSURABILITY section reads, in part:
We require evidence of insurability satisfactory to Us as follows: ...
5. [I]f You make a request during an annual enrollment period to increase the amount of Your Supplemental Life Insurance to an option which is more than one level above Your current amount of Supplemental Life Insurance
If You do not give Us evidence of insurability or the evidence of insurability is not accepted by Us as satisfactory, the amount of Your Supplemental Life Insurance will not be increased....
9. [I]f You make a late request for Supplemental Life Insurance. A late request is one made more than 31 days after You become eligible.
If You do not give Us evidence of insurability or the evidence of insurability is not accepted by Us as satisfactory, You will not be covered for Supplemental Life Insurance.
Because Abel electronically selected a policy coverage level that required evidence of insurability, Savvis asserts that a prompt window appeared on his computer screen. The prompt allegedly notified Abel to contact the Savvis Benefits Department (located in the same office building as Abel) to complete a Statement of Health form, which was a necessary step to fulfill MetLife's evidence of insurability requirement. Savvis would then send the form to MetLife for review and approval or denial of a life insurance policy.
We pause here to emphasize four points: First, there is no mention of a Statement of Health form anywhere in the Savvis Plan, only that plan participants must provide evidence of insurability. In fact, there are no directions at all for how to fulfill the evidence of insurability requirement. Second, Defendants have not produced a copy of a Statement of Health form or any other evidence regarding what information MetLife required plan participants to provide. Third, Defendants have not provided evidence of the online prompt, which they assert notified Abel of the Statement of Health form requirement. The only evidence that this prompt existed is a single internal memo from a MetLife representative stating that such a prompt exists, but without providing any additional information such as the text included in the prompt or a screen capture.4 That memo, which is in the form of a call log comment section, reads: Finally, as discussed below, it was later revealed that around 200 other Savvis employees similarly had not submitted their Statement of Health forms, or if they had, they had not been provided to MetLife.
MetLife addressed and defended some of these complications in its benefits denial letter to Silva's attorney, which stated, in part:
Even though evidence of insurability is not defined in the Plan, the online enrollment system advised [Abel] of the Statement of Health requirement. Regardless, ... the Plan requires that evidence of insurability be ‘accepted by Us as satisfactory.’ MetLife requires a Statement of Health, which is then reviewed in connection with underwriting. [Abel's] attendance at work with no health issues is not sufficient proof of evidence of insurability. Finally, premium payments are not a guarantee of coverage and the acceptance of premium payments in error does not create coverage under an ERISA-governed Plan.
Further, Defendants are unsure whether Abel received a copy of the Plan (which contained information regarding the evidence of insurability requirement), and if he did, when and how he received it. Defendants claim that Abel should have received a copy of the Plan at some point, either when he was first hired at Savvis and declined coverage or when he later signed up for supplemental life insurance in January 2010. In any case, the Plan was available for viewing on the Savvis intranet.
ERISA mandates that plan administrators provide a condensed and understandable Plan explanation, in the form of a summary plan description, to plan participants.529 U.S.C. §§ 1022, 1024(b). A summary plan description is required to advise participants, in plain and simple terms, how to obtain coverage and in what instances participants can lose coverage, such as by not providing evidence of insurability. See§ 1022. MetLife contends that the Plan itself, which is nearly 100 pages, also functioned as the Plan's summary plan description. It appears that no separate summary plan description existed for the Plan.
After this lawsuit began, MetLife conducted an internal investigation to see if other Savvis Plan policy holders also did not have an approved Statement of Health form on file. The company discovered around 200 Savvis employees lacked this documentation.6 Savvis notified these employees and allowed them to correct or submit the required documents but did not allow Silva to do so. 7 Silva points out that Defendants have not shown any disqualifying health condition or activity that would have prompted MetLife to deny Abel life insurance coverage had they received a completed Statement of Health form from him.
As noted above, MetLife, the plan fiduciary responsible for reviewing claims, 8 denied Silva's claim for Abel's supplemental life insurance benefits. MetLife determined that Abel's request for supplemental life insurance was...
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