Jane Marie Hall v. Metropolitan Life Insurance , 750 F.3d 995 ( 2014 )


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  •                   United States Court of Appeals
    For the Eighth Circuit
    ___________________________
    No. 13-1332
    ___________________________
    Jane Marie Hall,
    lllllllllllllllllllll Plaintiff - Appellant,
    v.
    Metropolitan Life Insurance Company; Dennis Lynn Hall, II,
    lllllllllllllllllllll Defendants - Appellees.
    ____________
    Appeal from United States District Court
    for the District of Minnesota - Minneapolis
    ____________
    Submitted: October 24, 2013
    Filed: May 8, 2014
    ____________
    Before RILEY, Chief Judge, COLLOTON and KELLY, Circuit Judges.
    ____________
    COLLOTON, Circuit Judge.
    Jane Hall sued Metropolitan Life Insurance Company (“MetLife”), alleging
    that MetLife abused its discretion in denying her claim to receive the proceeds of her
    late husband’s life insurance policy under an employee-benefit plan governed by the
    Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-
    1461. The district court1 granted summary judgment for MetLife, and we affirm.
    I.
    Dennis Hall began work at Newmont USA Limited in August 1988. Through
    his employment at Newmont, Dennis obtained a life insurance policy issued by
    MetLife. In 1991, Dennis designated his son, Dennis Hall II, as the beneficiary of the
    life insurance policy. Under the terms of the governing employee-benefit plan (“the
    Plan”), MetLife is expressly granted “discretionary authority to interpret the terms of
    the Plan and to determine eligibility for and entitlement to Plan benefits in accordance
    with the terms of the Plan.” The Plan also informs Newmont employees how they
    may change the beneficiary or beneficiaries of their policy:
    You may designate a Beneficiary in Your application or enrollment
    form. You may change Your Beneficiary at any time. To do so, You
    must send a Signed and dated, Written request to the Policyholder using
    a form satisfactory to [MetLife]. Your Written request to change the
    Beneficiary must be sent to the Policyholder within 30 days of the date
    You Sign such request.
    Jane Hall married Dennis in May 2001. Around March 2010, Jane and Dennis
    began traveling regularly to the Mayo Clinic in Rochester, Minnesota, for medical
    examinations and treatment relating to Dennis’s cancer diagnosis. In November
    2010, Dennis filled out and signed, but never submitted, a beneficiary-designation
    form naming Jane Hall as the sole beneficiary of his policy.
    1
    The Honorable Donovan W. Frank, United States District Judge for the
    District of Minnesota.
    -2-
    On January 25, 2011, Jane and Dennis traveled to Rochester for a routine
    appointment at the Mayo Clinic scheduled for the next day. In the early hours of
    January 26, Dennis awoke, partially paralyzed. After he was rushed to the Mayo
    Clinic, Dennis was informed that he had a very short time to live. On the next day,
    at the clinic, Dennis executed a will. The will provided, in relevant part, that “the
    following specific bequests be made from my estate. . . . Any and all life insurance
    and benefits shall be distributed to Jane Marie Hall. If this beneficiary does not
    survive me, this bequest shall be distributed with my residuary estate.” Dennis died
    later that day.
    On February 2, 2011, after learning of Dennis’s death, a Newmont
    representative sent MetLife a copy of the 1991 form naming Dennis Hall II as the
    beneficiary of the life insurance policy. The representative informed MetLife that the
    1991 form was the most recent document on file, but noted that Jane Hall “claim[s]
    she has a will.” On February 10, 2011, Jane Hall sent MetLife a letter asserting that
    Dennis had learned of his impending death without adequate time to obtain an
    approved form from MetLife, but had intended his will to designate Jane as the
    beneficiary of his life insurance policy. As a result, she contended, she was entitled
    to the proceeds.
    MetLife denied Jane Hall’s claim, explaining that “[a] Will has no bearing on
    a Group Life Insurance benefit,” and that the beneficiary of record was Dennis Hall
    II based on the 1991 form. Jane Hall appealed MetLife’s decision, again arguing that
    Dennis had done all that he could in the circumstances to ensure that she would
    receive the life insurance proceeds. She later informed MetLife of the form Dennis
    had signed in November 2010, but never submitted, naming her as the sole
    beneficiary. After considering this information, MetLife upheld its denial of Jane
    Hall’s claim. Two days later, MetLife distributed the life insurance proceeds to
    Dennis Hall II.
    -3-
    Jane Hall sued MetLife and Dennis Hall II in Minnesota state court; MetLife
    removed the case to federal court. Jane Hall sought a declaratory judgment that she,
    not Dennis Hall II, was entitled to the life insurance proceeds as the beneficiary of the
    policy. She requested a judgment against MetLife for the value of the policy. Jane
    Hall argued that MetLife abused its discretion because Dennis had complied with the
    Plan’s requirements and, alternatively, because Dennis had satisfied the requirements
    of the federal common law doctrine of substantial compliance. MetLife responded
    that it had reasonably exercised its discretion in concluding that neither the will nor
    the November 2010 form had changed the policy beneficiary from Dennis Hall II to
    Jane Hall.
    The parties filed cross-motions for summary judgment. The district court
    granted summary judgment for MetLife and denied Jane Hall’s motion. The court
    ruled that MetLife acted reasonably in refusing to give effect to the November 2010
    form because it had not been filed within thirty days of signature, as required by the
    Plan. The court also determined that MetLife reasonably concluded that Dennis’s
    will did not effect a change in beneficiary: a will cannot directly dispose of a non-
    probate asset (such as the benefits under the policy), and the will bequeathed life
    insurance proceeds “from [Dennis’s] estate,” which was not the designated
    beneficiary under the Plan. The district court also concluded that Jane Hall’s reliance
    on the substantial-compliance doctrine was foreclosed by Kennedy v. Plan
    Administrator for DuPont Savings & Investment Plan, 
    555 U.S. 285
    (2009), and
    Matschiner v. Hartford Life & Accident Insurance Co., 
    622 F.3d 885
    (8th Cir. 2010).
    Jane Hall appeals, and we review the district court’s grant of summary judgment de
    novo. Hankins v. Standard Ins. Co., 
    677 F.3d 830
    , 834 (8th Cir. 2012).
    II.
    Where, as here, a plan governed by ERISA gives the administrator
    discretionary power to interpret the terms of the plan or to make eligibility
    -4-
    determinations, a federal court reviews the administrator’s decisions for abuse of
    discretion. Firestone Tire & Rubber Co. v. Bruch, 
    489 U.S. 101
    , 111 (1989). Under
    this standard, we ask whether the administrator’s interpretation of the plan was
    “reasonable,” Jones v. ReliaStar Life Ins. Co., 
    615 F.3d 941
    , 945 (8th Cir. 2010), and
    whether the administrator’s determination “was supported by substantial evidence,
    meaning more than a scintilla but less than a preponderance.” Schatz v. Mut. of
    Omaha Ins. Co., 
    220 F.3d 944
    , 949 (8th Cir. 2000). “We examine only the evidence
    that was before the administrator when the decision was made.” Wakkinen v. UNUM
    Life Ins. Co. of Am., 
    531 F.3d 575
    , 583 (8th Cir. 2008).
    A.
    Jane Hall argues that MetLife abused its discretion by refusing to recognize
    either Dennis’s will or the November 2010 form as a sufficient written request under
    the Plan to change the beneficiary from Dennis Hall II to Jane Hall. We address these
    documents separately.
    First, Jane Hall asserts that Dennis’s will effected a change in beneficiary. The
    will “direct[s] that the following specific bequests be made from my estate. . . . Any
    and all life insurance and benefits shall be distributed to Jane Marie Hall. If this
    beneficiary does not survive me, this bequest shall be distributed with my residuary
    estate.” MetLife responds that the will was not a written request “satisfactory to
    [MetLife]” for two reasons: (1) a will cannot dispose of non-probate assets, such as
    the proceeds of an insurance policy, and (2) even if a will could do so, this will did
    not purport to designate Jane Hall as the beneficiary of the policy proceeds; rather,
    it identified the person to whom “life insurance and benefits” payable to Dennis’s
    estate should be distributed. According to MetLife, a life insurance policy payable
    to someone other than Dennis’s estate, such as this one, is unaffected by the terms of
    the will.
    -5-
    We conclude that MetLife reasonably determined that the will was inadequate
    to effect a change in beneficiary. Dennis’s will addressed bequests from his estate.
    The estate was not a beneficiary of the policy, and Dennis’s will—unlike the will in
    Liberty Life Assurance Co. of Boston v. Kennedy, 
    358 F.3d 1295
    , 1297 (11th Cir.
    2004)—did not expressly address the distribution of assets that were not part of the
    estate. Although Dennis’s will directed that “[a]ny and all life insurance and benefits
    shall be distributed to Jane Marie Hall,” that command followed shortly after the
    direction “that the following specific bequests be made from my estate.” It was thus
    reasonable for MetLife to construe the will to address only life insurance proceeds
    that were property of the estate. MetLife did not abuse its discretion simply because
    the will might be amenable to an alternative interpretation. See Rutledge v. Liberty
    Life Assurance Co. of Bos., 
    481 F.3d 655
    , 659 (8th Cir. 2007).
    Second, Jane Hall contends that the November 2010 form satisfies the Plan’s
    requirements. The contents of the form were adequate to effect a change in
    beneficiary, but the Plan expressly required Dennis to submit a written beneficiary-
    change request within thirty days of signature for it to be effective, and he failed to
    do so. Jane Hall argues that the Summary Plan Description (“SPD”) that MetLife
    distributed to Dennis contained no such deadline, and that the SPD should prevail
    over the Plan. Although this court has said that “an SPD provision prevails if it
    conflicts with a provision of a plan,” that rule is inapplicable “when the plan
    document is specific and the SPD is silent on a particular matter.” Jensen v. SIPCO,
    Inc., 
    38 F.3d 945
    , 952 (8th Cir. 1994). In this case, the Plan is unambiguous: a
    written request to change the beneficiary of the life insurance policy must be
    submitted “within 30 days of the date You Sign the request.” The SPD’s silence on
    this point does not trump the Plan’s clear requirement. MetLife thus did not abuse
    its discretion in refusing to give effect to a change-of-beneficiary form that was
    submitted long after the thirty-day window had closed.
    -6-
    Jane Hall asserts that because MetLife’s letter rejecting her appeal did not
    specifically address the November 2010 form, this court should not consider
    MetLife’s “post hoc” argument that the form was ineffective. See King v. Hartford
    Life & Accident Ins. Co., 
    414 F.3d 994
    , 999-1000 (8th Cir. 2005) (en banc).
    MetLife’s letter upholding its denial of her claim—issued thirteen days after MetLife
    received a copy of the November 2010 form—did not specifically address that form.
    The letter did, however, inform Jane Hall that “the latest beneficiary designation on
    file” was the 1991 form naming Dennis Hall II the beneficiary; the administrator thus
    implicitly rejected Jane Hall’s suggestion that the November 2010 form was a valid
    beneficiary designation. MetLife’s invocation of the thirty-day window does not rely
    on a novel interpretation of the Plan, and MetLife’s letter put Jane Hall on notice that
    the November 2010 form was inadequate. As in Hillstrom v. Kenefick, 
    484 F.3d 519
    ,
    527 (8th Cir. 2007), “[n]othing of substance has been advanced in the litigation that
    was not raised in the administrative process.”
    For these reasons, we conclude that based on the evidence presented at the time
    of decision—the 1991 form, Dennis’s will, and the November 2010 form—MetLife
    did not abuse its discretion in determining that Dennis Hall II, rather than Jane Hall,
    was the beneficiary of the life insurance proceeds.
    B.
    Jane Hall also argues that the district court erred by refusing to apply the
    federal common law doctrine of substantial compliance to conclude that Dennis
    effected a change of beneficiary. This court has adverted to the substantial-
    compliance doctrine without adopting it, see Alliant Techsystems, Inc. v. Marks, 
    465 F.3d 864
    , 870 n.1 (8th Cir. 2006), and the parties dispute whether the decisions in
    Kennedy v. Plan Administrator for DuPont Savings & Investment Plan, 
    555 U.S. 285
    (2009), and Matschiner v. Hartford Life & Accident Insurance Co., 
    622 F.3d 885
    (8th
    Cir. 2010), foreclose our ability to recognize the doctrine at all. But assuming for the
    -7-
    sake of argument that the substantial-compliance doctrine remains available after
    Kennedy and Matschiner, the doctrine would not win the day for Jane Hall here.
    Where an ERISA plan administrator is given discretion under the plan to determine
    eligibility for benefits, the substantial-compliance doctrine would not deprive the
    administrator of the power to require strict compliance with the terms of the plan.
    The leading decision that recognizes the doctrine of substantial compliance as
    a matter of federal common law is Phoenix Mutual Life Insurance Co. v. Adams, 
    30 F.3d 554
    (4th Cir. 1994). Jane Hall urges us to apply the doctrine as expressed in that
    case:
    [A]n insured substantially complies with the change of beneficiary
    provisions of an ERISA life insurance policy when the insured: (1)
    evidences his or her intent to make the change and (2) attempts to
    effectuate the change by undertaking positive action which is for all
    practical purposes similar to the action required by the change of
    beneficiary provisions of the policy.
    
    Id. at 564
    (internal quotation omitted). The Seventh Circuit, for example, has applied
    the substantial-compliance doctrine articulated in Phoenix to give legal effect to a
    beneficiary-designation form where the insured requested the form, completed it in
    her own handwriting, and submitted it but forgot to sign and date it. Davis v.
    Combes, 
    294 F.3d 931
    , 941-42 (7th Cir. 2002). The court reasoned that, where the
    insured’s intent is clear, “[t]he fact that [the insured] made a careless error should not
    conclusively determine whether her efforts at naming a beneficiary were effective for
    purposes of the policy and the statute.” 
    Id. at 942.
    But that a court may decide as a matter of common law to excuse technical
    non-compliance with the terms of an ERISA plan does not mean that an
    administrator with discretion under an ERISA plan is forbidden to enforce strict
    compliance with plan requirements. The courts in Davis, Phoenix, and similar cases
    -8-
    were tasked with determining the proper beneficiary in interpleader actions, not
    reviewing an administrator’s decision for abuse of discretion under ERISA. See, e.g.,
    Metro. Life Ins. Co. v. Johnson, 
    297 F.3d 558
    , 560, 567-69 (7th Cir. 2002); 
    Davis, 294 F.3d at 933
    ; Hartford Life & Accident Ins. Co. v. Wilmore, 31 F. App’x 832 (5th
    Cir. 2002) (per curiam); 
    Phoenix, 30 F.3d at 558
    . We, too, have recognized that when
    an administrator is granted no discretion and a denial of benefits is reviewed de novo,
    a reviewing court may look to federal common law “to construe disputed terms in a
    plan.” 
    King, 414 F.3d at 998
    . In that situation, application of the substantial-
    compliance doctrine might be appropriate. Cf. BankAmerica Pension Plan v.
    McMath, 
    206 F.3d 821
    , 827-28 (9th Cir. 2000).
    Whatever the soundness of the substantial-compliance doctrine in another
    context, however, the doctrine does not operate to interfere with discretion granted
    to a plan administrator by an ERISA plan. In exercising its discretion, an
    administrator might choose to excuse technical errors in beneficiary-designation
    forms, see, e.g., Alliant 
    Techsystems, 465 F.3d at 870-71
    , or it might elect to enforce
    strictly the terms of the plan. No rule of federal common law dictates either approach.
    As explained above, MetLife reasonably exercised its discretion in rejecting Dennis’s
    will and the November 2010 form. The district court did not err in refusing to apply
    the substantial-compliance doctrine.
    Our decision comports with the state law on which the Fourth Circuit relied to
    shape the federal common law version of the substantial-compliance doctrine in
    Phoenix. 
    See 30 F.3d at 564
    . State courts draw a firm line between administrators,
    who may require strict compliance with policy requirements for beneficiary changes,
    and courts, which generally allow for substantial compliance when the administrator
    files an interpleader action. In Prudential Insurance Co. v. Kamrath, 
    475 F.3d 920
    (8th Cir. 2007), for example, we described Missouri and New York law on this issue:
    -9-
    By filing an interpleader action to resolve competing claims, an insurer
    waives strict compliance with policy terms directing how to change a
    beneficiary. Under both Missouri and New York law, a court may apply
    the equitable doctrine of substantial compliance to carry out the
    insured’s intent where the insured has not strictly complied with the
    policy terms prescribing how to change a beneficiary.
    
    Id. at 924
    (citations omitted). State courts recognize, on the other hand, that allowing
    an administrator to require technical compliance with policy provisions protects the
    administrator from “paying the wrong person and being forced to pay twice.”
    Travelers Ins. Co. v. Smith, 
    435 N.E.2d 1188
    , 1190 (Ill. App. Ct. 1982). Because the
    administrator eliminates that concern by filing an interpleader action, many courts
    apply equitable principles like substantial compliance in the interpleader context.
    See, e.g., Brown v. Agin, 
    109 N.W.2d 147
    , 150-51 (Minn. 1961); Faircloth v.
    Coleman, 
    86 S.E.2d 107
    , 109-10 (Ga. 1955); Metro. Life Ins. Co. v. Sandstrand, 
    82 A.2d 863
    , 865-66 (R.I. 1951); Wilkie v. Phila. Life Ins. Co., 
    197 S.E. 375
    , 380, 382
    (S.C. 1938). In applying the substantial-compliance doctrine in Phoenix, the Fourth
    Circuit highlighted that it was considering an interpleader action, and “not a case in
    which an insured or a beneficiary is attempting to use an equitable theory to establish
    liability on the part of the administrator or the insurer when the written terms of the
    ERISA plan provide 
    otherwise.” 30 F.3d at 565
    . Even assuming for the sake of
    analysis that the substantial-compliance doctrine is available to federal courts in the
    interpleader context, we would not extend it to the circumstances presented here.
    *       *       *
    The judgment of the district court is affirmed.
    ______________________________
    -10-
    

Document Info

Docket Number: 13-1332

Citation Numbers: 750 F.3d 995, 58 Employee Benefits Cas. (BNA) 1213, 2014 WL 1813156, 2014 U.S. App. LEXIS 8652

Judges: Riley, Colloton, Kelly

Filed Date: 5/8/2014

Precedential Status: Precedential

Modified Date: 11/5/2024

Authorities (19)

Wilkie v. Philadelphia Life Insurance , 187 S.C. 382 ( 1938 )

Metropolitan Life Insurance v. Sandstrand , 78 R.I. 457 ( 1951 )

Mary L. Schatz v. Mutual of Omaha Insurance Company, Mutual ... , 220 F.3d 944 ( 2000 )

Linda Davis v. David Combes and Wendy Jackson, as Guardian ... , 294 F.3d 931 ( 2002 )

bradley-j-hillstrom-md-v-john-r-kenefick-briggs-and-morgan-pa-ge , 484 F.3d 519 ( 2007 )

fred-g-jensen-james-j-monahan-richard-f-kriegler-walter-c-clark-on , 38 F.3d 945 ( 1994 )

Phoenix Mutual Life Insurance Company v. William Jackson ... , 30 F.3d 554 ( 1994 )

bank-of-america-pension-plan-an-employee-benefit-plan-bank-of-america , 206 F.3d 821 ( 2000 )

Metropolitan Life Insurance Company v. Mildred Johnson v. ... , 297 F.3d 558 ( 2002 )

Ronald H. Rutledge v. Liberty Life Assurance Company of ... , 481 F.3d 655 ( 2007 )

Faircloth v. Coleman , 211 Ga. 356 ( 1955 )

Wakkinen v. Unum Life Insurance Co. of America , 531 F.3d 575 ( 2008 )

Travelers Insurance Co. v. Smith , 106 Ill. App. 3d 318 ( 1982 )

Jones v. Reliastar Life Insurance , 615 F.3d 941 ( 2010 )

Matschiner v. Hartford Life & Accident Insurance , 622 F.3d 885 ( 2010 )

The Prudential Insurance Company of America v. Mary Beth ... , 475 F.3d 920 ( 2007 )

Liberty Life Assurance Co. v. Barbara Kennedy , 358 F.3d 1295 ( 2004 )

Hankins v. Standard Insurance , 677 F.3d 830 ( 2012 )

Kennedy v. Plan Administrator for DuPont Savings & ... , 129 S. Ct. 865 ( 2009 )

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