Posted May 14th, 2014 in Top Stories
Nilan Johnson Lewis Attorney Bill Hittler Successfully Argues Before the Eighth Circuit on Behalf of Metropolitan Life Insurance Company
Nilan Johnson Lewis attorney Bill Hittler recently argued an ERISA life insurance case on behalf of Metropolitan Life Insurance Company before the Eighth Circuit Court of Appeals. The case involved the issue of whether a claims fiduciary acted reasonably by paying the beneficiary designated under the terms of the employee benefit plan instead of a later designation which did not comply with the plan’s terms.
In Jane Marie Hall v. Metropolitan Life Ins. Co., No. 13-1332, 2014 U.S. App. LEXIS 8652 (8th Cir. May 8, 2014). Dennis Hall (decedent) completed a beneficiary designation form designating his son, Dennis Hall II, and submitted that form to his employer in 1991 as the terms of the employer’s benefit plan required. In November 2010, Mr. Hall completed a form designating his spouse, Jane Marie Hall, but did not submit that form to his employer within 30 days according to the plan’s terms. Mr. Hall also completed a last will and testament in late January, 2011, which stated in part that any life insurance benefits payable to his estate were to be given to Mrs. Hall. Following Mr. Hall’s passing on that same day, Mrs. Hall sought payment from MetLife of the life insurance benefits. MetLife denied the claim and paid the plan benefits to Dennis Hall, II.
Following the district court’s grant of summary judgment in MetLife’s favor, Mrs. Hall appealed, contending that the court erred because Mr. Hall did comply with the plan’s requirements and alternatively that it should have applied the federal common law of “substantial compliance” which focused on the decedent’s intent where there was not complete compliance with the plan’s terms. The Eighth Circuit upheld summary judgment in MetLife’s favor, holding that (1) MetLife reasonably concluded that the will was inadequate to effect a change in beneficiary, given that the estate was not a named beneficiary of Mr. Hall’s life insurance proceeds; and (2) the November 2010 beneficiary designation form could not change the existing beneficiary designation because it was not submitted to his employer within 30 days of signing as the plan required. The Court also addressed Mrs. Hall’s federal common law argument, holding that even if the Supreme Court’s decision inKennedy v. Plan Administrator for DuPont Savings & Inv. Plan and the Eighth Circuit’s decision in Matschiner v. Hartford Life & Accident Ins. Co. did not preclude federal common law, nonetheless the doctrine “would not deprive the administrator of the power to require strict compliance with the terms of the plan.”
This case is important because it clarifies the Eighth Circuit’s adherence to the ERISA provisions requiring claims fiduciaries to follow the terms of a benefit plan, which is consistent with ERISA’s goals of providing clear rules for plan participants who wish to change their beneficiary designations.