Yates v. Symetra Life Ins. Co.
| Decision Date | 03 January 2022 |
| Docket Number | 4:19-CV-154 RLW |
| Citation | 578 F.Supp.3d 1024 |
| Parties | Terri M. YATES, Plaintiff, v. SYMETRA LIFE INSURANCE CO., Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
David A. Osborne, Thomas and Birdsong, Rolla, MO, Glenn R. Kantor, Kantor and Kantor LLP, Northridge, CA, for Plaintiff.
Daniel E. Tranen, Wilson and Elser LLP, Jason D. Johnson, Tressler LLP, Edwardsville, IL, for Defendant.
This closed case is before the Court on Plaintiff Terri M. Yates’ Motion to Alter or Amend Judgment (ECF No. 56) under Rule 59(e), Federal Rules of Civil Procedure. Defendant Symetra Life Insurance Company ("Symetra") opposes the Motion and it is fully briefed. The Court will grant Plaintiff's Motion and reconsider its initial decision in this case. For the following reasons, the Court concludes that Plaintiff is not required to exhaust administrative remedies, that Symetra's decision to deny accidental death benefits was erroneous, and that Plaintiff's claim is not barred by a policy exclusion. The Court will enter judgment in Plaintiff's favor.
This removed case is an action for $50,000 in accidental death benefits under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001, et seq. 1 Plaintiff Terry M. Yates’ ("Plaintiff" or "Ms. Yates") husband, Johnny Yates, died from a heroin overdose on December 20, 2016, at the age of 50. At the time, Ms. Yates was a participant in an ERISA employee benefits group insurance policy provided by her employer. As Ms. Yates’ spouse, Johnny Yates was an insured under the policy's coverages for Life Insurance and Accidental Death and Dismemberment. After her spouse's death, Ms. Yates filed claims under both coverages. Symetra paid the life insurance benefit but denied the accidental death benefit on the ground that Mr. Yates’ death was excluded from coverage by an "intentionally self-inflicted injury" policy exclusion "in view of the fact that the cause of death was due to the insured's intentional act of using Heroin[.]" (ECF No. 42-4 at 3.)
Symetra moved for summary judgment on Plaintiff's ERISA claim for accidental death benefits, asserting it is entitled to judgment based on Plaintiff's failure to exhaust administrative remedies and on the merits of the denial. The Court found that Plaintiff failed to exhaust administrative remedies before filing suit and granted Symetra's motion for summary judgment on that issue. The Court did not reach the merits of Symetra's denial and dismissed the case without prejudice.
Plaintiff's Rule 59(e) Motion asserts that the Court erred in holding that Plaintiff failed to exhaust administrative remedies set forth only in Symetra's denial of benefits letter, because the ERISA plan document at issue did not include a review procedure to exhaust. The Court agrees and will grant Plaintiff's Rule 59(e) Motion, vacate its prior decision in this case, and address the merits of Plaintiff's denial of benefits claim.
"Motions under Rule 59(e) serve the limited function of correcting manifest errors of law or fact or to present newly discovered evidence and cannot be used to introduce new evidence, tender new legal theories, or raise arguments which could have been offered or raised prior to entry of judgment."
Yeransian v. B. Riley FBR, Inc., 984 F.3d 633, 636 (8th Cir. 2021) (quoting Ryan v. Ryan, 889 F.3d 499, 507 (8th Cir. 2018) ). Rule 59(e) was adopted to clarify that "the district court possesses the power to rectify its own mistakes in the period immediately following the entry of judgment." White v. New Hampshire Dep't of Employment Sec., 455 U.S. 445, 450, 102 S.Ct. 1162, 71 L.Ed.2d 325 (1982) (internal quotations omitted). District courts have broad discretion in deciding whether to grant a motion under Rule 59(e). Innovative Home Health Care, Inc. v. P.T.-O.T. Assocs. of the Black Hills, 141 F.3d 1284, 1286 (8th Cir. 1998).
Plaintiff does not raise entirely new arguments in her Rule 59(e) Motion but cites additional case authorities, including out of circuit decisions and a federal regulation, in support of the argument she has made from the outset: that a plan participant must exhaust only those administrative remedies present in the plan document itself. As such, the Court finds Plaintiff's Rule 59(e) Motion is procedurally proper and now reconsiders it prior ruling and concludes administrative exhaustion is not required.
Id. (quoting Galman v. Prudential Ins. Co. of Am., 254 F.3d 768, 770 (8th Cir. 2001) ).
The Eighth Circuit excuses a beneficiary from the exhaustion requirement in certain limited circumstances. Brown v. J.B. Hunt Transp. Servs., Inc., 586 F.3d 1079, 1085 (8th Cir. 2009). ERISA participants have not been required to exhaust administrative remedies prior to filing suit when "an ERISA-governed plan fails to comply with its antecedent duty under § 1133 to provide participants with notice and review," id.; "when the available review procedures neither complied with ERISA's fiduciary review requirements nor applied to the specific claimants," Wert v. Liberty Life Assur. Co. of Boston, Inc., 447 F.3d 1060, 1064 (8th Cir. 2006) ; or if exhaustion of remedies would prove futile, which is a narrow exception. Brown, 586 F.3d at 1085.
In this case, the parties agree that neither the Symetra Group Insurance Policy provided to Phelps County Bank nor the Employee Benefits Insurance Certificate provided to the Bank's employees includes an exhaustion requirement. The Court finds that the Group Insurance Policy and the Employee Benefits Insurance Certificate constitute the plan documents, as these are the only documents in the record that could be considered plan documents, and Symetra has not provided any other documents that it contends are plan documents.
In moving for summary judgment, Symetra contends Plaintiff was required to exhaust the administrative appeal procedure set forth in letter that denied her claim. Plaintiff responds that exhaustion was not required because Symetra's Group Insurance Policy does not include a review procedure to exhaust, and the Eighth Circuit does not permit an ERISA plan administrator or court to impose extra-contractual terms.
The Court concludes that because Symetra did not include any internal claims review procedure in its plan documents, the plan does not include a contractual exhaustion requirement and Symetra cannot impose such a requirement on Plaintiff.
Symetra argues it was not required to include the appeal procedure in its plan documents because it detailed those procedures in its benefits denial letter to Plaintiff. "But ‘one of ERISA's central goals is to enable beneficiaries to learn their rights and obligations at any time,’ including before a denial of benefits, and Congress required plans to be ‘established and maintained pursuant to a written instrument’ that enabled beneficiaries to determine those rights and obligations ‘on examining the plan documents.’ " Wallace v. Oakwood Healthcare, Inc., 954 F.3d 879, 887-888 (6th Cir. 2020) (citing Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 83, 115 S.Ct. 1223, 131 L.Ed.2d 94 (1995) ) (quoting 29 U.S.C. § 1102(a)(1) ; and then quoting H.R. Rep. No. 93-1280, at 297 H.R. Rep. No. 93-1280, at 297 (1974)). In Wallace, the Sixth Circuit held that for a plan fiduciary to avail itself of the judicially created exhaustion requirement, "its underlying plan document must—at minimum—detail its required internal appeal procedures." Id. at 888.2
The Sixth Circuit's holding in Wallace appears to be in accord with Eighth Circuit precedent, although the Eighth Circuit has not directly addressed the issue presented in this case. In Conley, the Eighth Circuit stated that the ERISA exhaustion doctrine is 34 F.3d at 716 () For instance, the full Eighth Circuit held that retirees were not required to exhaust an arbitration procedure under an ERISA plan that did not include explicit plan language extending the plan's arbitration requirement to retirees as a class of participants. Anderson v. Alpha Portland Indus., Inc., 752 F.2d 1293, 1295 (8th Cir. 1985) (en banc).
The Eighth Circuit has consistently emphasized the importance of the written language of ERISA plans and enforced plans as written. This is in accord with the Supreme Court's instruction that ERISA is "built around reliance on the face of written plan documents," Curtiss-Wright Corp., 514 U.S. at 83, 115 S.Ct. 1223, and that "[t]he plan, in short, is at the center of ERISA." US Airways, Inc. v. McCutchen, 569 U.S. 88, 101, 133 S.Ct. 1537, 185 L.Ed.2d 654 (201...
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