Weber v. Ge Group Life Assur. Co.

• Citation: 541 F.3d 1002
• Decision Date: 12 September 2008
• Docket Number: No. 07-5036.,07-5036.
• Parties: Larry WEBER, Plaintiff-Appellee, v. GE GROUP LIFE ASSURANCE COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

541 F.3d 1002

Larry WEBER, Plaintiff-Appellee, v. GE GROUP LIFE ASSURANCE COMPANY, Defendant-Appellant.

No. 07-5036.

United States Court of Appeals, Tenth Circuit.

September 12, 2008.

Joshua Bachrach, Rawle & Henderson, LLP, Philadelphia, PA, for the Defendant-Appellant.

Jon E. Brightmire, Doerner, Saunders, Daniel & Anderson, LLP, Tulsa, OK, for the Plaintiff-Appellee.

Before TACHA, EBEL and McCONNELL, Circuit Judges.

EBEL, Circuit Judge.

Defendant-Appellant General Electric Group Life Assurance Company ("GE") appeals from a summary judgment order obligating it to pay death benefits to Plaintiff-Appellee Larry Weber, the widower of Shelley Clark Weber. GE, the administrator and fiduciary of group insurance plans available to the employees of Winner Communications, Inc. ("Winner"), including Mrs. Weber, argues that Mrs. Weber was not eligible for the Voluntary Life Insurance coverage and also disputes the award of prejudgment interest. We affirm.

I. Background

Mrs. Weber began working for Winner in its marketing department on September 23, 2002. On March 7, 2003, Mrs. Weber completed a GE Enrollment Request form. Therein, she requested Life, Dental, Dependent Dental, Dependent Life, Medical, Dependent Medical, and Long Term Disability insurance. Mrs. Weber requested a Basic Life Insurance Benefits policy in the amount of $53,000 (twice her basic annual earnings). At the same time, Mrs. Weber, using a separate form, enrolled for Voluntary Life Insurance coverage from GE in the amount of $100,000. Mrs. Weber's enrollment application notes that she had been employed full time at Winner since September 23, 2002 with basic annual earnings of $26,500. Mrs. Weber listed Mr. Weber as the primary beneficiary.

A. The Voluntary Life Insurance Policy

The terms of Mrs. Weber's Voluntary Life Insurance policy are set forth in a GE Group Certificate, which contained the terms of the Group Insurance Policy issued by GE to Winner and its eligible employees (for simplicity's sake, we will refer to the Certificate as the "Policy"). Part 1 of the Policy, the "Insurance Schedule," provides that there is no waiting period prior to eligibility for the voluntary employee life insurance coverage. It also states that "[a]n Employee may elect an amount of insurance in increments of $10,000 to the lesser of $300,000 or five times Basic Annual Earnings, subject to a minimum of $20,000."

Part 2 lays out the Policy "Definitions." Three of those definitions impact this appeal. First, the Policy defines "Actively At Work" as follows:

You are actively at work on any day if on that day you are:

1. Working at the Employer's usual place of business or at such place or places that the Employer's normal course of business may require;

2. Performing all of the duties of your job on a full-time basis; and

3. Not confined in any institution providing care or treatment of physical or mental infirmities.

Second, the policy defines an "Eligible Employee" as follows:

Someone who under the terms of the policy:

1. Meets the requirements in the definition of Employee; and

2. Completes the waiting period (described in the "Date of Eligibility" section); and

3. Is working within the United States.

Lastly, the policy defines an "Employee" as follows:

Someone who meets the following requirements:

1. Is an employee of the Employer, as stated in PART 1: Insurance Schedule;

2. Regularly works at least 30 hours per week at the Employer's usual place of business or at such place or places that the Employer's normal course of business may require, unless otherwise stated in PART 1: Insurance Schedule;

3. Is paid for such work in accordance with applicable Wage and Hour Laws; and

4. Is in a classification eligible for insurance as shown in the Employer's Plan of Insurance or as noted in the Insurance Schedule, if applicable.

In a Part 3 subsection entitled "Effective Date of Insurance," the Policy states, "Once you have met the Conditions of Insurability, you will be insured under the Policy on the latest of:

1. The date you become eligible;

2. The date we approve any Evidence of Insurability we require; or

3. The date shown in our approval of your request for insurance."

The Policy cautions, "You must, however, be Actively At Work on that date. Otherwise, you will be insured on the date you are again Actively At Work" (emphasis added).

Lastly, the Policy states that GE "is a fiduciary, as that term is used in ERISA...." More specifically, the Policy notes that, "[i]n this capacity, [GE] is charged with the obligation, and possesses discretionary authority to make claim, eligibility and other administrative determinations regarding those policies, and to interpret the meaning of their terms and language."

B. Mr. Weber's Claim

Mrs. Weber passed away on September 9, 2003. She was survived by her husband (the Appellee here) and her then 3-year-old son. On behalf of Mr. Weber, an insurance broker named E. Clark James sent GE a death claim for Mrs. Weber's Basic and Voluntary Life Insurance policies on September 23, 2003. Mr. James's letter attached a "Notice of Claim Proof of Death" form, which Janessa DeVore, Winner's Personnel Manager, completed on September 19, 2003. In that form, Ms. DeVore noted that May 16, 2003, was Mrs. Weber's "Date Last Worked on a Full-time Basis" and certified under penalty of perjury that the information she supplied was "true, correct and complete."

Shortly thereafter, on October 13, 2003, GE paid out Mrs. Weber's Basic Life Insurance benefits to Mr. Weber.¹ However, in regard to the Voluntary Insurance benefits, GE requested additional documentation from Winner because "Ms. Weber's date of last active service (5/16/03) was so close to the effective date of the Voluntary Life Insurance coverage ... (5/1/03)" that GE needed to verify that Mrs. Weber "was actively at work, working on a full-time basis, thirty hours or more per week on or after May 1, 2003."

Winner duly sent along documentation regarding Mrs. Weber's work at Winner. On October 28, 2003, Winner's Vice-President of National Sales, Sam Youngwirth, sent GE a letter documenting Mrs. Weber's duties as a Winner employee. He attached Winner's Payroll Register for Mrs. Weber from January 1, 2003, to May 31, 2003. Youngwirth also attached a series of e-mails from Mrs. Weber to Ms. DeVore that listed Mrs. Weber's hours worked. In an e-mail entitled "Hours worked May 1-15," Mrs. Weber states that she worked 5 hours on Monday May 12, 4 hours on May 13, 5 hours on May 14 and 5 hours on May 15.² Despite this documentation, an insurance broker working with Mr. Weber advised GE that he believed that Mrs. Weber had worked up until two weeks prior to her death.

GE denied Mr. Weber's claim in a letter dated December 3, 2003. Therein, GE explained that Mrs. Weber was never eligible for the Voluntary Life Insurance coverage because she was not a "full-time employee, Actively At Work as defined by the policy at the employer's usual place of business, performing all the duties of her job on a full-time, 30 hour per week basis" after the May 1, 2003, effective date for the policy. The denial letter noted that GE based its decision on the documentation it requested from Winner and on the Policy. Having explained the decision to deny the claim, GE invited Mr. Weber to submit any documentation that might alter the determination.

Mr. Weber, through counsel, protested the denial in a letter dated August 10, 2004, but submitted no new documentation.³ GE responded on September 9, 2004. GE maintained that Mrs. Weber's failure to work at least 30 hours a week after May 1, 2003, doomed her claim for coverage. Specifically, GE stated that, "[b]ased on the information we have received to date, Ms. Weber did not work at least 30 hours a week, on or after the policy effective date of May 1, 2003, and was not eligible for coverage under the policy." GE thus reiterated the determinative rationale identified in its initial decision.

C. Mr. Weber's Lawsuit

Mr. Weber filed suit in Oklahoma state court in March 2005 against GE and the insurance brokers with whom he had dealt.⁴ GE promptly removed the case to federal court, asserting that Mr. Weber's state causes of action — for breach of contract, promissory estoppel, bad faith breach of contract, and breach of fiduciary duty — sought recovery under an employee welfare benefit plan and, therefore, were preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461.⁵ Simultaneously, GE moved the federal court to dismiss the complaint based on ERISA preemption. Mr. Weber countered that GE had failed to show that ERISA governs the Voluntary Life Insurance plan and contended that the plan fell within the 29 C.F.R. § 2510.3-1(j) safe harbor.⁶ Because GE premised its removal on federal question jurisdiction, Mr. Weber asked the court to remand the case to the state court.

In August 2005, the district court held that ERISA governed Mr. Weber's claims and directed Mr. Weber to file an Amended Complaint. Mr. Weber complied, amending his complaint to include two ERISA claims alongside two state claims; GE answered. Mr. Weber then filed a motion to remand the case on May 9, 2006, arguing that ERISA did not govern the dispute because the Voluntary Life Insurance policy fell within the 29 C.F.R. § 2510.3-1(j) safe harbor exemption from ERISA's umbrella. In support, Mr. Weber offered fourteen exhibits, including (1) portions of the depositions of a Winner human resources employee and the insurance brokers, (2) Winner's Benefit Plan Description packet, and (3) various documents eventually produced by GE in the administrative record. Just a few days after he moved for a remand, Mr. Weber settled with the non-diverse insurance brokers.

The district court refused to remand the case in a minute order dated June 30, 2006. Therein, the district court noted that the "only issue remaining is ERISA," and set a...