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Moore v. Metropolitan Life Insurance Co.

United States District Court, E.D. Kentucky, Central Division, Lexington

March 7, 2018

DAVID MOORE, Plaintiff,
v.
METROPOLITAN LIFE INSURANCE COMPANY, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          Danny C. Reeves United States District Judge.

         This action arises out of Plaintiff David Moore&#3');">39;s claim for disability benefits under a group insurance policy purchased by his former employer, Defendant American Water Works Company, Inc. (“American Water”), and insured by Defendant Metropolitan Life Insurance Company (“MetLife”). [Record No. 18');">8 ¶¶ 4-10] Moore claims that MetLife improperly omitted certain benefits when it approved his claim for total disability benefits. [Id. ¶¶ 11-23');">3] MetLife contends that Moore&#3');">39;s assertion is based on an old version of his policy, and that the applicable version does not provide for the benefits he seeks. [Record No. 3');">39] Moore continues to believe that he is entitled to the omitted benefits, and moves for judgment under 29 U.S.C. § 113');">32(a)(1)(B). [Record No. 40] He also contends that MetLife failed to conduct a full and fair review of his claim under 29 U.S.C. § 113');">33');">3. [Id.] Conversely, MetLife argues that its benefits determination was correct, and moves for a judgment dismissing Moore&#3');">39;s claims. [Record No. 3');">39]

         Moore also asserts that American Water breached its fiduciary duty by failing to sufficiently advise him of any change to his benefits and by providing him with incorrect policy documents. [Record No. 40] He seeks equitable relief and the imposition of statutory penalties under 29 U.S.C. §§ 113');">32(a)(3');">3) and (c), and moves for summary judgment against American Water. [Record No. 40] American Water asserts that there is no evidence to support Moore&#3');">39;s claims, and moves for summary judgment in its favor. [Record No. 41]

         For the reasons that follow, MetLife&#3');">39;s motion for judgment will be granted, and Moore&#3');">39;s motion for judgment against MetLife will be denied. Moore&#3');">39;s motion for summary judgment against American Water will be granted, in part, and denied, in part. Finally, American Water&#3');">39;s motion for summary judgment will be granted, in part, and denied, in part.

         I.

         David Moore was working for American Water and was enrolled in a group insurance policy purchased by American Water and insured by MetLife when he suffered a heart attack and stroke in January and February of 2015. [Administrative Record (“AR”) 521, 523');">3-24, 526] He initially received short-term disability benefits for 26 weeks, after which MetLife automatically opened a claim under the life insurance component of the plan. [AR 71, 18');">80] MetLife informed Moore by letter dated December 7, 2015, that he satisfied the requirements for Total Disability, and that effective July 14, 2015, his life insurance premiums would be waived while he remained “Totally Disabled” under the plan. [AR 61] The approval letter further stated that Moore&#3');">39;s coverage for Basic Continued Life Protection was $69, 000, and his coverage for Optional Employee Continued Protection was $169, 000, for a combined total of $23');">35, 000.00, which would reduce to a combined total of $10, 000.00, when Moore turned 70 years old on March 2, 203');">33');">3. [Id.]

         Moore was at that point in possession of a 2002 Summary Plan Description (“SPD”) provided by American Water. [Record No. 40-2, pp. 2-3');">3] The 2002 SPD provided that:

[i]f you become eligible for a Permanent and Total Disability benefit and the disability lasts for six months or more, a monthly income of $18');">8 for each $1, 000 of the amount of your basic and optional insurance is payable. The monthly income will continue until the amount of your insurance, plus interest as may be declared by Aetna on the unpaid balance, is exhausted.[1]

[Id. at 3');">33');">3] Additionally, the 2002 SPD did not provide for a reduction in benefits when Moore turned 70 years old. [Id.]

         Moore&#3');">39;s wife called MetLife on December 23');">3, 2015, for an explanation of the approval letter. [AR 66] She called again five days later to inquire about the payment of a monthly income of $18');">8 for each $1, 000 of life insurance coverage. [AR 66] She was advised that MetLife did not offer any coverages that paid benefits to employees. [Id.]

         Moore&#3');">39;s attorney then sent letters to MetLife and American Water on June 13');">3, 2016, requesting “a complete copy of the life insurance policy, insurance certificate, life insurance plan document(s), and summary plan description.” [AR 78');">8-8');">83');">3, 150-51] MetLife called Moore&#3');">39;s attorney the following day and advised him that he would need to contact American Water to obtain the documents.[2] [AR 65] American Water responded by e-mail on July 15, 2016, and attached two documents. [AR 152] The first was a copy of a 2011 SPD which did not provide for the payment of Disability Life Installment Benefits and stated that total disability benefits “reduce[] to $10, 000 when you reach age 70.” [Record No. 41-8');">8, 3');">3');">p. 13');">3] The second was a life insurance certificate which provided for Disability Life Installment Benefits of $18');">8.00 a month for each $1, 000 of life insurance coverage and did not contain a reduction at age 70. [AR 103');">3, 117] The 2011 SPD also stated that, “[i]f a conflict arises between this summary and any official plan documents, the official plan documents will govern.” [Record No. 41-8');">8, 3');">3');">p. 3');">3]

         Moore&#3');">39;s attorney sent MetLife a letter on July 25, 2016, requesting the payment of Disability Life Installment Benefits and clarification of MetLife&#3');">39;s statement that the benefits payable upon Moore&#3');">39;s death would reduce when Moore turned 70 years old to a combined total of $10, 000. [AR 8');">85-8');">87] In support, he attached the certificate he had received from American Water. [Id. at 8');">85-13');">38');">8] MetLife responded by letter dated August 18');">8, 2016, that “[t]he customer&#3');">39;s certificate you submitted to our office for review is not the applicable customer&#3');">39;s certificate that was used for Mr. Moore&#3');">39;s claim review.” [AR 140] Moore&#3');">39;s attorney responded in a letter dated August 29, 2016, with the following questions:

Are you saying that the Plan sent with my July 25 letter is not the correct plan? Or are you saying that you simply used a different certificate in conducting your review? Are you saying that the certificate you used is the correct one? Could you please send me a copy of the certificate you believe is the correct one and whatever certificate you used for your review, if it is different?

[AR 148');">8]

         MetLife investigated the matter to confirm that it had used the correct certificate in reviewing Moore&#3');">39;s claim, and that the certificate Moore&#3');">39;s attorney provided was incorrect. [AR 157-179] MetLife&#3');">39;s review revealed that American Water had a version of its benefits plan in effect in 1996, which was insured by Aetna and included Disability Installment Life Benefits in the amount of $18');">8 per $1, 000 of life insurance coverage with no later reduction in the benefit amount. [Record No. 3');">39-1, pp. 2-3');">3 (citing Record No. 3');">35-3');">3, pp. 11-13');">3)] The 2002 SPD that Moore possessed appears to correspond to this policy. [See Record No. 40-2.] MetLife began insuring the plan on January 1, 2003');">3, and issued a policy to American Water including these same benefits. [Record No. 3');">39-3');">3, p. 527] This is the policy that American Water provided in response to the request from Moore&#3');">39;s attorney. [See Record No. 18');">8-1.]

         However, the policy was amended on April 1, 2006, and retroactively effective to January 1, 2006, and replaced by a new certificate of insurance designated as Certificate 11. [Record No. 3');">39-3');">3, p. 567] Certificate 11 continued to have Disability Installment Life Benefits in the amount of $18');">8 per $1, 000 of life insurance coverage, but reduced the amount of Death Benefits During Total Disability to $10, 000 at age 70. [Id. at 58');">83');">3, 597-98');">8] Additionally, it stated that, “[i]f any prior certificate relating to the coverage set forth herein has been given to the Employee, such certificate is void.” [Id. at 570]

         Certificate 15 replaced Certificate 11 on January 1, 2011, and was retroactively effective to January 1, 2006. [Id. at 566, 620, 622] Certificate 15 retained the reduction in benefits at age 70, and also did not provide for Disability Installment Life Benefits. [Id. at 620-73');">3] Certificate 20 replaced Certificate 15 on March 28');">8, 2011, and retroactively to November 17, 2010. [Id. at 53');">37-3');">38');">8, 674, 676] As with Certificate 15, Certificate 20 included the reduction of Continued Death Benefits During Total Disability at age 70 to $10, 000, and did not include any provision providing Disability Installment Life Benefits. [Id. at 674-773');">3] According to MetLife and American Water, Certificate 20 is the governing document for Moore&#3');">39;s benefits claim. [See Record Nos. 3');">35, 3');">36, 3');">39, 41, 44, 45, 48');">8, 49.]

         The 2011 SPD that American Water sent to Moore&#3');">39;s attorney on July 15, 2016, is consistent with Certificate 20. [Record No. 41-8');">8] Moore does not recall having received the 2011 SPD until that time. [Record No. 40-2] However, in July of 2012, American Water retained A Letter Services, Inc., to distribute the SPDs to American Water employees along with a cover letter explaining the document and its importance. [Record Nos. 44-6; 44-7] Moore&#3');">39;s name and address was included in a list of union employees identified as Lot #4 Pension Eligible. [Record Nos. 44-8');">8; 44-9, p. 23');">3] A Letter Services, Inc., billed American Water for mailing the SPDs to the Lot #4 members on July 3');">31, 2012. [Record No. 44-6]

         Having determined that the certificate used for its review was correct, and that the certificate Moore obtained from American Water was incorrect, MetLife sent the following email to American Water on December 22, 2016:

We received an inquiry regarding a Life Waiver of Premium claim (David M. Moore). Specifically, Mr. Moore and his attorney forwarded MetLife the attached certificate they received from American Water regarding his WOP Claim. It appears Mr. Moore should have received Certificate 20 (attached) which is applicable for All American Water Union Employees.
Can you confirm if this is correct, and if so, would you be able to provide Mr. Moore and his attorney with Certificate 20. Provided below is the contact information ...

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