Wegner v. Tetra Pak, Inc.
| Decision Date | 30 November 2022 |
| Docket Number | CIVIL 4:20-CV-608-SDJ |
| Parties | PATRICIA WEGNER, individually and on behalf of the ESTATE OF TROY WEGNER v. TETRA PAK, INC., ET AL. |
| Court | U.S. District Court — Eastern District of Texas |
This case involves a claim for payment of supplemental life insurance benefits under an insurance policy governed by the Employee Retirement Income Security Act, 29 U.S.C. § 1001, et seq. (“ERISA”). During his employment with Defendant Tetra Pak, Inc., Troy Wegner elected a group supplemental term life insurance plan (the “Plan”), which was supplied by Defendant Hartford Life & Accident Insurance Company to Tetra Pak under policy number GL-681363 (the “Policy”). Wegner named his wife, Patricia Wegner (“Mrs. Wegner”) as his sole beneficiary under the Policy.
After Troy Wegner passed away from acute myeloid leukemia, Hartford paid Mrs. Wegner $170,000 as the beneficiary of Troy Wegner's supplemental life insurance. Asserting that she is owed an additional $30,000 in benefits under the Policy Mrs. Wegner brought this suit against Hartford and Tetra Pak.[1] In addition to her denial-of-benefits claim, Mrs. Wegner also brings claims against Hartford and Tetra Pak for failure to follow claims procedure and provide Plan documents under ERISA, along with additional alleged statutory violations. Because the Court concludes that Mrs. Wegner is not eligible for the additional benefits she seeks and that her remaining claims are likewise without merit, the Court will uphold the denial of additional benefits and dismiss Mrs. Wegner's claims against Defendants.
The parties agree that de novo review applies in this case.[2]The Court's responsibility in conducting de novo review is to “determine whether the monthly (twenty-four pay periods per year) versus bi-weekly (twenty-six pay periods per year) misunderstanding. (Dkt. #48 at 8-9).
Regardless, it is clear that Troy Wegner elected $200,000 in supplemental life insurance benefits. See infra Part II(A). The Court therefore continues with its analysis with the understanding that Mrs. Wegner is claiming entitlement to an additional $30,000 in benefits: the difference between the $200,000 elected and the $170,000 paid. Even if Mrs. Wegner had adequately or clearly claimed entitlement to either of the higher amounts, the Court's conclusions would apply equally. administrator made a correct decision.” Pike, 368 F.Supp.3d at 1030 (quoting Niles v. Am. Airlines, 269 Fed.Appx. 827, 832 (10th Cir. 2008)); see also Batchelor v. Life Ins. Co. of N. Am., 504 F.Supp.3d 607, 609-10 (S.D. Tex. 2020). The Court must “independently weigh the facts and opinions in the administrative record to determine whether the claimant has met [her] burden of showing” that she is entitled to benefits “within the meaning of the policy.” Pike, 368 F.Supp.3d at 1030 (quoting Richards v. Hewlett-Packard Corp., 592 F.3d 232, 239 (1st Cir. 2010)). It must also resolve questions of fact and weigh the evidence. Revels v. Standard Ins. Co., 504 F.Supp.3d 556, 560 (N.D. Tex. 2020) (citation omitted). “De novo review requires that the court apply the same standard as the plan administrator in deciding whether the benefits were owed under the plan's terms.” Ariana M. v. Humana Health Plan of Tex., Inc., No. CV H-14-3206, 2018 WL 4384162, at *12 (S.D. Tex. Sept. 14, 2018), aff'd, 792 Fed.Appx. 287 (5th Cir. 2019).
Hartford and Tetra Pak seek judgment as a matter of law under Federal Rule of Civil Procedure 52. (Dkt. #47 at 4, 6-7); (Dkt. #48 at 2). Rule 52 provides that in “an action tried on the facts without a jury . . . the court must find the facts specially and state its conclusions of law separately.” FED. R. CIV. P. 52(a)(1).
The Court previously determined that no trial would be set in this matter, as it is to be handled as an appeal of Defendants' benefits determination. See (Dkt. #26 at 2); Crosby v. La. Health Serv. & Indem. Co., 647 F.3d 258, 264 (5th Cir. 2011) (). This action is therefore before the Court on the administrative record developed below, the parties' briefs, and oral argument.[3]
In the Fifth Circuit, “Rule 52(a) does not require that the district court set out [its] findings on all factual questions that arise in a case.” Koenig v. Aetna Life Ins. Co., No. 4:13-CV-359, 2015 WL 6554347, at *3 (S.D. Tex. Oct. 29, 2015) (quoting Valley v. Rapides Parish Sch. Bd., 118 F.3d 1047, 1054 (5th Cir. 1997)). The rule is satisfied where the findings present the reviewer with “a clear understanding of the basis for the decision.” Century Marine Inc. v. United States, 153 F.3d 225, 231 (5th Cir. 1998) (citation omitted). In accordance with Rule 52(a), this Memorandum Opinion and Order provides the Court's findings of fact, followed by its conclusions of law.[4]
Troy Wegner worked for Tetra Pak as a shop lead from 2011 until he passed away. (A.R. 219). He left work in October of 2018 and began receiving short term disability benefits following a diagnosis of acute myeloid leukemia. In November 2018, he elected $200,000 in supplemental life insurance benefits under the Policy. This election amount is undisputed. He also designated Mrs. Wegner as his beneficiary under the Policy. The coverage was set to take effect on January 1, 2019. (A.R. 242). After returning to work sporadically in 2019, Troy Wegner died on July 2, 2019.
The Policy provides for supplemental life insurance with a “Guaranteed Issue Amount” of “[t]he amount You elect in increments of $10,000, subject to the lesser of $250,000 or 3 times Your annual Earnings.” (A.R. 30). The record shows that Troy Wegner's annualized pay in 2019 was $57,636.80. (A.R. 60-61, 204-08). His annualized earnings, $57,636.80, multiplied by three, yields a total of $172,910.40, which, rounded to the nearest $10,000 increment, is $170,000. See (A.R. 60-61). The Court therefore finds that Troy Wegner's Guaranteed Issue Amount under the Policy was $170,000.
The Policy further states that Hartford requires an insured to provide Evidence of Insurability (“EOI”) if the insured enrolls for an amount of life insurance greater than the Guaranteed Issue Amount. (A.R. 32). EOI “must be satisfactory to [Hartford]” and may include a medical exam or an attending physician's statement, among other items. (A.R. 32). If EOI is not satisfactory to Hartford, the insured's amount of life insurance will “equal the amount for which [the insured was] eligible without providing [EOI]”-that is, the Guaranteed Issue Amount. (A.R. 32). Because Troy Wegner elected $200,000 in supplemental life insurance benefits, which was greater than his Guaranteed Issue Amount of $170,000, the Court finds that Troy Wegner was required to submit EOI to be eligible for the higher coverage amount under the Policy.
The record includes no evidence that Troy Wegner submitted EOI. Defendants assert that he failed to submit the required EOI, and as a result, his life insurance benefits were limited to the Guaranteed Issue Amount of $170,000. Mrs. Wegner, however, disputes that her husband was adequately notified-or notified at all-of the requirement to submit EOI. She asserts that the evidence Defendants have provided to show that Troy Wegner was notified of the requirement to submit EOI is insufficient to prove that he was the recipient of such notices.
The Court notes, however, that in addition to the language of the Policy itself, which plainly notified Troy Wegner of the need for EOI, Defendants also use an online program called Benefits Solver to administer the Plan. Troy Wegner's online Benefits Solver account includes a “Benefits Summary,” which specifically states that his $200,000 supplemental life insurance election was “[p]ending EOI.” (A.R. 235-39). The Court finds that the record shows Troy Wegner was notified of the requirement to submit EOI, and that he failed to do so.[5]See (A.R. 235-39) (showing that, as to the submission of EOI, Troy Wegner was in a “[p]ending EOI” status on his Benefits Summary); (A.R. 242-43) (confirming Troy Wegner's status regarding EOI on Benefits Solver as “Pending Proof of Insurability”).
Following Troy Wegner's passing, Mrs. Wegner applied for payment of his supplemental life insurance benefits. On August 7, 2019, Hartford sent Mrs. Wegner a letter denying all supplemental benefits based on the Policy's “Deferred Effective Provision,” which states that if the insured is not “Actively at Work” on the effective date of the coverage, January 1, 2019, the coverage will not become effective until the insured is “Actively at Work.” (A.R. 109-12). This denial was based on Tetra Pak's erroneous reporting to Hartford that Troy Wegner's last day physically at work was October 4, 2018. (A.R. 109-12). On August 30, 2019, Hartford upheld its erroneous denial of benefits for the reasons provided in the August 7 denial in a second letter. (A.R. 180).
However, following the initial denial, Tetra Pak's representative realized that its determination that Troy Wegner was last physically at work on October 4, 2018, was erroneous, as he returned to the office in early 2019 for a period of time. Tetra Pak's representative informed Hartford of this error and requested that Hartford reprocess the claim. (A.R. 84).
Upon review, Hartford determined that Mrs. Wegner was entitled to Troy Wegner's...
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