Susan Sippel v. Reliance Standard ( 1997 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
_____________
No. 97-1504SI
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Susan Sippel, *
*
Appellant, *
* On Appeal from the United
v. * States District Court
* for the Southern District
* of Iowa.
Reliance Standard Life *
Insurance Company, *
*
Appellee. *
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Submitted: October 20, 1997
Filed: November 13, 1997
___________
Before RICHARD S. ARNOLD, Chief Judge, LOKEN and HANSEN, Circuit Judges.
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RICHARD S. ARNOLD, Chief Judge.
This is an action under the Employee Retirement Income Security Act of 1974
(ERISA), 29 U.S.C. § 1132(a)(1)(B), for denial of benefits claimed to be owed under
policies insuring against accidental death. The plaintiff, Susan E. Sippel, is the
surviving spouse of Larry Sippel, who had been a long-time employee of IBP, Inc.
During his employment, Mr. Sippel was insured through two separate $100,000
accidental-death policies purchased by IBP from the defendant, Reliance Standard
Insurance Company. Mr. Sippel left his employment with IBP and was killed in an
automobile accident shortly thereafter. The District Court1 held that under the plain and
unambiguous language of the policies, Mr. Sippel had no coverage at the time of his
death. We affirm.
We summarize our reasons in brief compass. Mr. Sippel left IBP on
February 25, 1993. He was killed on March 18, 1993, less than 31 days later. The
question of coverage turns on the language of the policies, which grant to insured
persons a privilege of conversion from group coverage to individual coverage under
certain circumstances. A covered person’s eligibility ceases when his employment
ceases, but he has a right to convert his coverage to an individual policy. Conversion
requires, however, that the covered person “apply for it within 31 days after his
coverage ends.” The policies provide further as follows, in language critical to the
instant case:
The converted policy will:
(a) take effect on the date of termination of
this insurance, or on the date of application for
the converted policy, whichever is later; . . ..
Under this language, Mr. Sippel’s coverage terminated when he left IBP, on
February 25, 1993. He had 31 days, that is, until March 28, 1993, to apply for
conversion. He never made such an application. Perhaps he intended to do so within
the 31 days, and was prevented by his unexpected and untimely death, but the fact
remains that no application for conversion was ever made. Accordingly, individual
coverage never took effect, and the claim for benefits must fail. If Mr. Sippel had
applied for conversion, it would have been granted, according to the plain language of
1
The Hon. Ronald E. Longstaff, United States District Judge for the Southern
District of Iowa.
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the policy, and no additional evidence of insurability would have had to be furnished.
The circumstances are unfortunate, but the language of the policies is clear.
Plaintiff also argues that the defendant is estopped to deny that an effective
conversion took place. She states that a premium payment of $5.80 was made by way
of a payroll deduction from Mr. Sippel’s final paycheck. We assume that this payment
represented the premium for the first month of what would have been converted
individual coverage. This $5.80 was then, in combination with premiums deducted
from the paychecks of other employees, forwarded by IBP to Reliance. In some
circumstances receipt of a premium can work an estoppel against an insurance
company, but we do not believe, at least in an ERISA case, that this can occur when
the language of the policy is as clear as it is here. We therefore reject the estoppel
argument.
Further details are contained in the well-reasoned opinion of the District Court.
We do not believe the case requires further elaboration from us.
Affirmed.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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