Winkelspecht v. Gustave A. Larson Co.

• Decision Date: 08 March 2012
• Docket Number: No. 10–C–1072.,10–C–1072.
• Citation: 52 Employee Benefits Cas. 2220,857 F.Supp.2d 793
• Parties: Susan Kaye WINKELSPECHT, Plaintiff, v. GUSTAVE A. LARSON COMPANY, Unum Life Insurance Company of America, and Gustave A. Larson Co. Plan, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

857 F.Supp.2d 793

52 Employee Benefits Cas. 2220

Susan Kaye WINKELSPECHT, Plaintiff,

v.GUSTAVE A. LARSON COMPANY, Unum Life Insurance Company of America, and Gustave A. Larson Co. Plan, Defendants.

No. 10–C–1072.

United States District Court, E.D. Wisconsin.

March 8, 2012.

Scott B. Taylor, Urban & Taylor SC, Milwaukee, WI, Steven E. Gillis, Steven E. Gillis Law Office, Green Bay, WI, for Plaintiff.

John E. Murray, Lindner & Marsack SC, Milwaukee, WI, Terrance J. Wagener, Messerli & Kramer PA, Minneapolis, MN, for Defendants.

DECISION AND ORDER ON MOTIONS FOR SUMMARY JUDGMENT

WILLIAM C. GRIESBACH, District Judge.

This ERISA case is about a mix-up over life insurance that unfortunately came to light only after the putative insured died. It is presently before the Court on cross motions for summary judgment. For the reasons that follow, Plaintiff's motion for summary judgment will be granted as to her estoppel claim against the employer and the plan, but denied as to the insurer.

BACKGROUND

Harry Winkelspecht, as an employee of Defendant Gustave A. Larson Company (GALCO), was insured under a group life insurance policy issued by Defendant Unum Life Insurance Company of America (Unum), a benefit GALCO provided its employees under the Gustave A. Larson Company Plan, an employee welfare benefit plan governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001 et seq. GALCO paid the full cost of basic life insurance for active employees, which paid a benefit of 1.5 times the employee's salary upon his or her death. For Winkelspecht, this amounted to $103,000. Mr. Winkelspecht listed his wife, Plaintiff Susan Winkelspecht, as his beneficiary.

The policy contained a “portability” provision which allowed the employee to “port” group life coverage to individual life coverage upon termination of his employment. In pertinent part, the Summary Plan Description (SPD) stated:

WHAT COVERAGE IS AVAILABLE IF YOU END EMPLOYMENT OR YOU WORK REDUCED HOURS? (Portability)

If your employment ends or you retire from your Employer or you are working less than the minimum number of hours as described under Eligible Groups in this plan, you may elect portable coverage for yourself and your dependents.

...

APPLYING FOR PORTABLE COVERAGE

You must apply for portable coverage for yourself and your dependents and pay the first premium within 31 days after the date:

—your coverage ends or you retire from your Employer;

or

—you begin working less than the minimum number of hours as described under Eligible Groups in this plan.

(Am. Compl., Ex. A at 30–31.)

Mr. Winkelspecht retired on January 1, 2008, after thirty-five years with GALCO. Prior to his retirement, Mr. Winkelspecht spoke with Doreen Raebel, a temporary employee who served as the Administrator of Payroll and Benefits for GALCO, about continuing his life insurance coverage under the Unum policy. The undisputed evidence reveals that Ms. Raebel informed Mr. Winkelspecht that his coverage would continue and that the premium would continue to be paid by GALCO. On January 7, 2008, Mr. Winkelspecht emailed Ms. Raebel, inquiring in part: “You told me the life insurance would continue company paid correct?” On January 8, 2008, Ms. Raebel sent a return email to him, stating, in relevant part, “Yes, your life insurance benefit of 1.5 times your base salary will continue to be paid by GA. Larson as well.” (PPFFOF ¶ 10.) Unfortunately, GALCO did not continue paying the premium, and because he did not apply to continue it, the coverage under the Unum policy terminated with his retirement.

Mr. Winkelspecht died on October 28, 2009, approximately eighteen months after he retired from GALCO. Shortly thereafter, Plaintiff's daughter, Jodi Yaeso, discovered the aforementioned email exchange in a safe in the Winkelspechts' home basement, tucked inside the SPD booklet describing Mr. Winkelspecht's benefits. Portions of the Plan SPD relating to the Portability Benefit had been highlighted. (PPFFOF ¶ 11.) Based on this email, Ms. Yaeso sent an email to Susan Klein at GALCO, stating in relevant part:

Dad mentioned a life insurance policy through Larson's that sounded to me like a group life plan, which he carried after retirement. That one I have not found anything specific for as far as a policy. I found benefit plans and information regarding short term disability and life, etc. ... but nothing specific on phone numbers or contacts for claims etc. ... He had notes in his financial file about it being 1.5 times his base salary, but not sure if that dropped in amount after he retired or not? They have a mortgage balance of $70,000 which is what those funds would have covered for mom if he passed. Can you help me learn anything more about this or where I might find details on it? I did contact the funeral home yesterday for more details on Northwestern Mutual (NML) thinking perhaps that was it. They told me a Dave Fritz had called for death certificate copy out of the Milwaukee office of NML. I called his office and spoke with an assistant who said there was a policy on dad for a face value of over $400,000 but payable to GA Larson Co and not the family. Perhaps that was a key employee plan or something else, I am not sure but it did not sound like this was the policy dad was thinking of as the amount is far larger than expected? If there is someone else at the Larson Co I need to speak with please let me know that too and I can take less time from you.

(PSPFOF ¶ 3.)

On November 18, 2009, Ms. Klein responded by forwarding an email she had received from Jill Ziegelbauer, GALCO's then-Administrator of Payroll and Benefits, which stated, “I spoke with policy services at UNUM and there are no policies in force for Wink. He did not continue anything.” (PSPFOF ¶ 4.) On November 24, 2009, Ms. Yaeso sent an email to Ms. Ziegelbauer, stating:

Here is one of the emails I found from dad!! It mentions the life policy which is confusing.... Bottom line is dad thought he kept a policy to cover their mortgage balance and that is $67,483.26. If you think I need to email Scott and Susie to follow up on this, just let me know. Again this is so hard to understand when I can't ask him questions or specifics, but thanks for all of your help!

(PSPFOF ¶ 5.) Ms. Yaeso also attached to her email a copy of the January 2008 exchange between Decedent and Raebel.

On November 24, 2009, Ms. Ziegelbauer emailed Ms. Klein:

I asked Jodi to send me what she was looking at that made her believe her father still had life insurance. She sent the attached emails that were between Doreen and Wink. It says the company will continue to pay for 1.5 times salary life insurance. I don't know why she would have said this. Does this make sense to you ... are you aware of some kind of agreement made? The company should not have been able to continue this through the group plan so I doubt it and I checked his file and don't see anything in his file.

Jodi wants some follow up since she anticipated this would pay the balance on the mortgage. I thought I'd run it by you so it doesn't become one of those “but I have it documented things.” How do you think we should handle.... Just say she made a mistake?

(PSPFOF ¶ 6.)

Ms. Klein responded via email on November 25, 2009, saying, in relevant part: “I have no idea why Doreen would have put this in an email—there is no coverage after termination because he's no longer part of a ‘group.’ ” (PSPFOF ¶ 7.) Ms. Ziegelbauer then responded to Ms. Yaeso on November 25, 2009, stating:

Susie agrees that your father would not have had coverage paid by the company after he terminated. Because he would no longer be an active employee he would not be eligible for coverage under our group plan. I am attaching a copy of our group policy so you can see the terms of the contract.

(PSPFOF ¶ 7.) GALCO, throughout this correspondence, failed to provide Ms. Yaeso with information as to how to file or further pursue a claim for benefits.

After this email, Ms. Yaeso contacted Unum directly and spoke to an Unum representative named “Alison” who informed Ms. Yaeso that Unum could not tell her whether her father was insured through the GALCO Plan because GALCO did not provide Unum a list of employees. (PSPFOF ¶ 8; Yaeso Dep. 44–45.) Again, Unum did not provide information as to how to file a claim for life insurance benefits. Unum instead referred Ms. Yaeso back to GALCO. On December 8, 2009, Ms. Yaeso again emailed Ms. Klein:

I just wanted to follow up again on this life insurance policy for dad, as I have still continued researching it for mom. I received a return phone call from an agent with UNUM who told me that the Group policy for GA Larson is not one that lists on her end each specific employee and so she would not even see dad in her information but that Larson Co themselves manage that group internally and so coverage is directed by your office. I tried to locate Doreen herself as well to see if she remembered the emailed conversations with dad, but then not sure that would be appropriate either. I was not sure whether to reach out to Jill or yourself and was somewhat concerned by Jill's email below referring to a “documented thing” and what to tell me I was able to find out from UNUM that the cost of dad's continued insurance would have been $2.22 per $1000 of coverage and we used a base salary of $65,000 annually to get a monthly premium of $226.44 for dad, which they certainly could afford to continue and would do so with a mortgage balance per mom since they were doing the same with her policy. Lastly, if indeed there was not coverage for dad as he had thought per his conversations with Doreen, do you think my writing a request to Scott or perhaps Carl to distribute some of the key employee benefit they received in excess of $400,000 to pay mom's mortgage balance would be appropriate?

(PSPFOF ¶ 9.) Ms. Klein forwarded Ms. Yaeso's email to Scott Larson for review. (PSPFOF ¶ 10.) On December 10,...