MEMORANDUM OPINION AND ORDER
SIM LAKE, District Judge.
Plaintiff, Linda Keith, brought this action against defendants, Metropolitan Life Insurance Company ("MetLife"), Central Bank, and Central Bank Welfare Benefit Plan, for breach of fiduciary duty under the Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001, et seg. The case was tried to the court on May 15 and May 16, 2017. After carefully considering the evidence and the parties' arguments, the court makes the following findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a)(1).
Factual Backqround 1
Linda Keith met John P. White in 1995. White was a customer at a restaurant Keith then owned and operated. The two became close friends and remained so until White's death in 2013. White was a regular at Keith's restaurant and sought Keith's occasional assistance in an unsuccessful business venture.
After White closed his business he was hired by Advantage Business Capital ("Advantage"), a subsidiary of Central Bank. White served as Vice President of Business Development for Advantage from 2008 until 2013. Advantage had fewer than 20 employees, and Central Bank had fewer than 100 employees. White's responsibilities included soliciting customers for Advantage's factoring services. As part of his job White was required to pre-qualify customers, which involved reading and understanding complex financial documents.
Central Bank was Plan Administrator of the Central Bank Welfare Plan, which provided Central Bank employees with a number of benefits — including health insurance, supplemental insurance, an employer-matched § 401(k) plan, and life insurance. Descriptions of these benefits were made available to employees online and at annual open enrollment meetings. A life insurance policy covering up to two times the employee's salary was provided at Central Bank's expense.
From 2008 to 2013 White designated Keith as the beneficiary of his life insurance policy several times. In 2012 White did not designate a beneficiary.
In 2010 White began to complain of difficulties using his left hand. White was eventually diagnosed as suffering from monoplegia and amyotrophic lateral sclerosis (ALS), commonly known as Lou Gehrig's disease. As White's physical condition deteriorated, he could no longer perform his job duties at the bank, and a mutual decision was made for White to take a leave of absence. White's last workday at the bank was March 7, 2013, after which he began a leave of absence under the Family Medical Leave Act (FMLA). Central Bank continued to make premium payments for White's group insurance coverages, including his life insurance, while White was on leave.
Central Bank's long-term disability (LTD) benefits provider and claims administrator was MetLife. On March 17, 2013, White applied for LTD benefits under MetLife's policy. On March 18, 2013, MetLife acknowledged receipt of White's disability application, requested additional information needed to perfect the claim, and advised White that he needed to apply for Social Security disability (SSD) benefits.
On March 19, 2013, White met with Central Bank's Vice President and Human Resources Manager, Judy Rogers, to discuss his benefits. Rogers confirmed that White wanted to make no changes to his benefits. White reaffirmed his designation of Keith as beneficiary of his life insurance policy. Rogers discussed with White the option of maintaining his life insurance policy after termination at his own expense. Rogers told White that Central Bank would make premium payments on the policy through June 1, 2013, after which White would need to make the payments.
After White ceased working Rogers continued to assist him with claims for LTD benefits and SSD benefits. On March 20, 2013, White was interviewed by a MetLife Claim Specialist.
White was in frequent contact with both Rogers and MetLife in the months before his death. On March 22, 2013, a MetLife Claim Specialist spoke with White.
On April 9, 2013, MetLife internally generated a claim for continuation of group life insurance for White.
On May 21, 2013, MetLife again wrote to White ("the May 21st letter"), this time copying Rogers, stating that his insurance plan required him to be totally disabled continuously for nine consecutive months before he would be eligible for continuation of group life insurance coverage during his absence from work.
On May 28, 2013, MetLife contacted White regarding his LTD insurance.
White was formally terminated from his position with Central Bank at the end of his FMLA leave on June 5, 2013. Central Bank made its final payment on White's life insurance policy on June 1, 2013. White's life insurance coverage ended on June 30, 2013. MetLife's first LTD payment to White was made by check in the latter part of June 2013. Throughout the month of June, White, Rogers, and MetLife communicated to set up direct deposit of White's LTD payments.
White continued to participate in the benefits process. On July 24, 2013, White drove to the bank to drop off papers for Rogers. White emailed Rogers the following day to say that he had forgotten to give her some documents.
White was found dead on September 14, 2013. Shortly thereafter, Keith notified MetLife of White's death and MetLife instructed her to submit a death claim. On November 25, 2013, MetLife denied Keith's claim for life insurance benefits.
An individual plan beneficiary may bring suit for equitable relief for breach of a fiduciary duty under ERISA's so-called "catch-all" provision, which provides:
29 U.S.C. § 1132(a)(3). To recover "appropriate equitable relief," a plaintiff "must establish that the defendant is (a) a plan fiduciary, (b) has breached its fiduciary duties under ERISA, (c) that such a breach caused the plaintiff's injury, and (d) that the equitable relief sought is indeed appropriate."
A. Fiduciary Status
The threshold question in an ERISA claim for breach of fiduciary duty "is not whether the actions of some person employed to provide services under a plan adversely affected a plan beneficiary's interest, but whether that person was acting as a fiduciary (that is, was performing a fiduciary function) when taking the action subject to complaint."
29 U.S.C. § 1002 (21) (A) In short, "[a] fiduciary within the meaning of ERISA must be someone acting in the capacity of manager [or] administrator."
B. Breach of Fiduciary Duties
ERISA Section 404(a) specifies that "a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and their beneficiaries," and "for the exclusive purpose of: (i) providing benefits to participants; and (ii) defraying reasonable expenses of administering the plan." 29 U.S.C. § 1104(a)(1)(A). Such duties shall be discharged "with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims."
Fiduciaries who gratuitously communicate with plan participants may owe a duty to "do so in a manner calculated to avoid confusion and misunderstanding, whether by omission or commission."
C. Harm/Detrimental Reliance
If a fiduciary breaches a fiduciary duty, the plaintiff must prove that the breach caused the plaintiff's injury in order to be entitled to equitable relief.
Keith argues that MetLife acted as a fiduciary when it generated a claim on White's behalf and initiated gratuitous communication with him regarding that claim. MetLife argues that it was acting merely as claims administrator for the Central Bank Plan and not as a fiduciary. Ordinarily, "[a] third-party administrator who merely performs ministerial duties or processes claims is not a fiduciary."
The court finds that MetLife acted as a fiduciary by generating the internal claim for continuation of White's life benefits. In doing so MetLife acted in its discretion on behalf of a plan participant. MetLife presented no evidence that the plan documents required it to generate a claim on White's behalf or that it was otherwise operating within a framework of policies, interpretations, rules, practices and procedures made by other persons. The evidence indicates that it was MetLife's own internal policy to generate continuation of life insurance claims upon determination of an LTD claim. MetLife appears to have taken a voluntary, discretionary action for the benefit of a Plan participant. By exercising its discretion to assist White in obtaining a potential benefit, MetLife acted as a fiduciary. MetLife therefore owed White a fiduciary duty to act in his best interest and to avoid misinforming him.
Breach of Fiduciary Duties
MetLife owed White a statutory duty under ERISA to perform its duties with respect to a plan solely in White's interest and to do so with the care, skill, prudence, and diligence called for by the circumstances. It also owed White a duty to communicate with him in a manner calculated to avoid confusion and misunderstanding, and not to materially mislead him. The court finds that MetLife did not breach these fiduciary duties. The evidence establishes that MetLife was acting solely in White's interest by generating the claim for continuation of coverage. MetLife initiated the claims process on White's behalf to make a potential benefit available to him, notwithstanding that White was ultimately ineligible for the benefit described in MetLife's letters.
Although MetLife's actions could potentially have confused or misled White, sending the May 9th and May 21st letters did not constitute a breach of fiduciary duty because they contained no misinformation. When read in conjunction with the Plan documents, MetLife's letters did not misstate the circumstances regarding White's coverage or the status of the claim. When the letters were sent, White was still employed and his premiums were still being paid by Central Bank. The letters therefore accurately stated that no action was then required by White in order to maintain his coverage. And because MetLife was not the Plan Administrator, it owed no duty to provide White with notice of his options for maintaining coverage upon termination. The court therefore finds that MetLife did not breach any fiduciary duty to White.
Even if MetLife had breached a fiduciary duty, the court finds that Keith has not proven that MetLife's actions were the cause of her alleged harm (i.e., the loss of benefits under White's life insurance policy) . Keith must prove that, but for MetLife's actions, White would have maintained his life insurance policy. In effect, Keith must prove that White detrimentally relied on MetLife's letters in failing to take action to maintain his life insurance policy. Because premium payments were required during the 9-month waiting period before any determination of waiver eligibility would be made, Keith must prove that White would have made the payments had he known that he needed to do so.
The court finds credible Rogers' testimony that White told her he had no interest in maintaining the life insurance policy at his own expense. Rogers testified that she discussed White's option to maintain his life insurance policy after his termination with him during the exit interview on March 19, 2013. White replied that he had no interest in doing so, and Rogers therefore did not provide him with any further information or with the accompanying paperwork.
In addition to Rogers' testimony, circumstantial evidence supports a finding that White would not have maintained the policy at his own expense. White declined to participate in a number of employer-subsidized benefits, including a matching § 401(k) plan and supplemental insurance. White often failed to attend annual meetings at which benefits were discussed and often completed paperwork months later. Moreover, although White designated Keith as the beneficiary of his life insurance policy for several years, in 2012 he neglected to designate
Although White was fond of Keith and wanted her to receive the benefit.of his life insurance policy in the event of his death, the court finds that White would not have paid substantial life insurance premiums while on a fixed disability income without knowing how long he might need to do so.
Even assuming that White did want to maintain the life insurance policy at his own expense, Keith has not proven by a preponderance of the evidence that he would have done so but for MetLife's letters. The evidence of White's ongoing interactions with Central Bank, MetLife, and other benefit providers shows that he was both willing and able to act to secure his desired benefits, as he did with his SSD and LTD benefits. White's duties at the bank involved interpreting complex financial documents, and there is no evidence of mental impairment at the time the letters were sent. If White had been confused by MetLife's letters, he could have contacted either Rogers or MetLife for clarification. The court finds that White did not detrimentally rely on the MetLife letters.
B. Central Bank
An employer, such as Central Bank, acts as an ERISA fiduciary to the extent that it acts in its capacity as plan administrator.
The court also finds that Rogers acted as a fiduciary on behalf of Central Bank when she volunteered to serve as a liaison between White and MetLife. There is no evidence that Rogers' involvement was required by the Plan. Rogers' assistance was voluntary and motivated by a benevolent desire to assist White in light of his deteriorating physical condition. Plan administrators who gratuitously undertake to communicate with plan participants regarding plan benefits owe fiduciary duties when doing so.
Breach of Fiduciary Duties
Keith argues that (1) Central Bank did not fulfill its obligation to pay "up to 9 months" of premium payments after White began his leave, (2) Rogers failed to provide White with the required information about his options upon termination, and (3) Rogers failed to communicate to White the information she obtained in her May 28th phone call with MetLife.
Keith first argues that because White left work due to his illness, Central Bank was obligated under the terms of White's life insurance policy to pay his life insurance premiums for up to nine months after he ceased working. "When construing ERISA plan provisions, courts are to give the language of an insurance contract its ordinary and generally accepted meaning if such a meaning exists."
Insurance will continue for the following periods:
Although the court agrees that White qualified for
White was initially entitled to a continuation period of up to nine months of employer-paid premiums because he ceased Active Work due to sickness on March 7, 2013. But White's continuation period ended because of his termination on June 5, 2013. The policy states:
The policy states that insurance will end on the earliest of the dates listed. White was terminated on June 5, 2013. White's life insurance therefore ended no later than June 30, 2013, the last day of the calendar month in which his employment ended. After his employment ended White was no longer eligible for insurance under Central Bank's group life insurance policy.
The court also finds that Central Bank met its fiduciary duty to inform White of his options upon termination. The court finds credible Rogers' testimony that she explained White's options to him in the March 19, 2013, exit interview. Rogers owed no duty to provide White with written notice of his life insurance options after he expressed no interest in maintaining life insurance benefits. As one court noted, in contrast to the statutory requirement that employers provide written notice to employees of their COBRA right to continue health coverage, no such statutory requirement applies to life insurance.
In support of Keith's arguments that Central Bank breached a fiduciary duty by failing to provide White with material information regarding his benefits, Keith relies on a decision from the Western District of Pennsylvania:
Rogers did not breach a fiduciary duty to White by failing to report to him the information she learned from MetLife regarding his eligibility to convert his policy. Rogers' communications with MetLife did not yield any new, material information. When Rogers contacted MetLife to gain a clearer understanding of the May 21st letter, she learned that White would need to convert his policy and pay premiums in order to be eligible for a waiver. Since White had already informed Rogers that he had no interest in paying to maintain the life insurance policy, Rogers had no duty to advise him that his options were unchanged since his exit interview.
There are two potential causes of harm based on the alleged breaches by Central Bank. If Central Bank owed a duty to continue making payments on White's policy for nine months after he ceased Active Work, the bank's failure to do so was unquestionably harmful to Keith. The court has explained why it concludes that Central Bank owed no such duty.
The alleged harm as a result of Central Bank's miscommunication or of Central Bank's failure to communicate material facts is analogous to the issues raised by MetLife's letters. Even if Central Bank's actions had constituted a breach of fiduciary duty, the court finds that Keith has not proven that those actions were the cause of her alleged harm (i.e., the loss of benefits under White's life insurance policy). Keith must prove that but for Central Bank's actions White would have maintained his policy. Keith has failed to prove that Central Bank's actions caused her alleged harm for substantially the same reasons as stated in Section III.A.3. above. Based on Rogers' testimony and the evidence of White's previous benefits elections, the court finds that White knew he would have to pay for life insurance benefits after June of 2013 and that he chose not to do so.
Attorneys' Fees and Costs
Defendants seek an award of costs, and Central Bank also seeks attorneys' fees.
A. Applicable Law
The Federal Rules of Civil Procedure state that "[u]nless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney's fees—should be allowed to the prevailing party." Fed. R. Civ. P. 54(d)(1). ERISA provides that "the court in its discretion may allow a reasonable attorney's fee and costs of action to either party." 29 U.S.C. § 1132(g)(1). "The Fifth Circuit has held that an award of costs in an ERISA case is limited to those listed in 28 U.S.C. § 1920."
The United States Supreme Court has held that "a court `in its discretion' may award fees and costs `to either party,' as long as the fee claimant has achieved `some degree of success on the merits.'"
The court finds that neither defendant breached a fiduciary duty to Keith and that neither defendant's actions caused Keith's alleged harm. Each of the defendants therefore achieved some degree of success on the merits. The court therefore concludes that an award of defendants' costs is appropriate.
At the conclusion of trial the court expressed its tentative position that no attorneys' fees would be awarded in this case. Nothing has since persuaded the court to change its view. This dispute involved close questions that were well-suited to a trial on the merits. The result reached by the court was not a foregone conclusion.
If any finding of fact should more properly be characterized as a conclusion of law, it is hereby adopted as a conclusion of law. If any conclusion of law should more properly be characterized as a finding of fact, it is hereby adopted as a finding of fact.
Based on the evidence, the court's credibility determinations, and the court's analysis, the court holds that Keith is not entitled to relief under 29 U.S.C. § 1132(a)(3) The court finds that defendants did not breach any fiduciary duty to White or Keith. Furthermore, if either defendant breached a fiduciary duty to White or Keith, the court finds that Keith provided no evidence that the alleged harm — the loss of benefits — was the result of MetLife's action or Central Bank's inaction.
Consistent with the court's holding and findings, the court will enter a final judgment that Keith take nothing from either defendant. No attorneys' fees will be awarded. Costs will be taxed against Keith.