United States District Court, W.D. Louisiana, Lafayette Division
SHARON KIM BEAZLEY, ETAL.
METROPOLITAN LIFE INSURANCE COMPANY AND SCHLUMBERGER TECHNOLOGY CORPORATION
MAURICE HICKS, JR., CHIEF JUDGE
above captioned matter concerns a claim for benefits under a
life insurance policy governed by the Employment Retirement
Income Security Act ("ERISA"), 29 U.S.C. §
1001 et seq., and is before the Court for a decision on the
briefs and stipulated administrative record. For the reasons
assigned herein, all claims are hereby DISMISSED WITH
AND PROCEDURAL BACKGROUND
Sharon Kim Beazley ("Mrs. Beazley"), individually
and on behalf of the minor child LMB, Jordon Kale Beazley,
and Jake Lynfield Beazley filed the instant lawsuit against
Defendants, Metropolitan Life Insurance Company
("MetLife") and Schlumberger Technology Corporation
("STC"), alleging that Defendants improperly denied
a life insurance claim for benefits. See Record
Document 1. Plaintiffs are the wife, sons, and granddaughter
of Greg Lynfield Beazley ("Mr. Beazley") who died
on June 12, 2014. See id. at ¶¶ 3-6.
Beazley is a former employee of STC. See id. at
¶ 7. STC established the Schlumberger Group Life,
Accidental Death & Dismemberment, and Business Travel
Accident Plan ("the Plan"), an employee welfare
plan as defined by ERISA, to provide basic and supplemental
life insurance benefits to its eligible employees.
See Record Document 7 at ¶ 8. MetLife issued
STC a group insurance policy to fund benefits payable under
the Plan. See id. MetLife also served as the claims
administrator for the Plan. See id. at ¶ 9. Mr.
Beazley purchased group life insurance through the Plan.
See Record Document 1 at ¶¶ 8-9.
Plaintiffs allege that Mr. Beazley's life was insured in
excess of $1, 034, 000.00. See id. at¶8.
Beazley's employment with STC ended on May 6, 2014 as
part of a reduction in workforce. See id. at ¶
10. Plaintiffs assert that after his separation from STC, Mr.
Beazley was eligible to port or convert his existing life
insurance coverage. See id. at ¶ 11. Plaintiffs
allege that Mr. Beazley's application period to elect to
continue his coverage was extended by 45 days because of
MetLife's untimely notice of his options under the
policy. See id. at ¶¶ 12-13. On June 12,
2014, Mr. Beazley died before electing to port or convert his
coverage. See id. at ¶¶ 14-15. Mrs.
Beazley filed a claim with MetLife, which was denied. See
id. at ¶ 17. Mrs. Beazley appealed the denial of
her claim, which was also denied. See id. at ¶
allege that MetLife and STC are liable for (1) failing to
timely provide them with notice of their rights under Mr.
Beazley's insurance policies or plans; (2) failing to pay
benefits owed under the policies or plans; and (3) failing to
act as a competent and prudent plan administrator. See
id. at ¶¶ 19-20. Plaintiffs contend that they
are entitled to all amounts due under the policy, judicial
interest, attorney's fees, court costs, and any
applicable penalties under ERISA, 29 U.S.C. § 1001 et
seq. See id at ¶ 21.
state that per the terms of the Plan, Mr. Beazley's
coverage ended with his separation from employment with STC
on May 6, 2014. See Record Document 7 at
¶¶ 7-9. Defendants claim that Mr. Beazley was
provided notice of his portability and conversion rights
under the plan, but he did not port or convert his coverage
prior to his death on June 12, 2014. See id. at
¶¶ 12, 15, 16. Defendants maintain that per the
terms of the Plan, Mr. Beazley's death prohibits the
retroactive exercise of the portability and conversion
privileges afforded by the Plan. See id. at ¶
15. Defendants deny that they acted arbitrarily and
capriciously in the determination of Mrs. Beazley's
claim. See id at ¶ 19.
Court issued an ERISA Case Order setting forth briefing
deadlines applicable to this matter. See Record
Document 9. In response, the parties filed statements
stipulating that the Plan at issue is governed by ERISA, and
ERISA preempts all state law claims as they may relate to the
Plan. See Record Document 10; Record Document 14.
The Defendants provided a full and complete copy of the Plan
and the administrative record concerning Mrs. Beazley's
claim for benefits and subsequent appeal. See Record
Document 12, Ex-1 Your Benefit Plan - Schlumberger Technology
Corporation (herein "SPD"), Ex-2 Administrative Appeal
Record ("AAR"). The parties stipulated that the
administrative record is complete. See Record
Document 14. The matter was placed before the Court for a
decision on the briefs and stipulated administrative record.
Defendants filed a Supplemental Answer and Cross Claim for
Interpleader. See Record Document 21. As
Cross-claimants in Interpleader, MetLife and STC named Jared
Beazley as Defendant in Interpleader upon their belief that
Jared Beazley is another biological child of Mr. Beazley who
was not made a party of the original complaint. See
id. at ¶ 5. Mr. Beazley designated Mrs. Beazley,
Jake Beazley, Jordan Beazley, and LMB as primary
beneficiaries under his basic life insurance policy. See
id. at ¶¶ 8-10. However, Mr. Beazley did not
name a beneficiary for his supplemental policy. See
id. As such, any payment under the supplemental policy
would follow the Plan's provision concerning the death of
a participant without a designated beneficiary. See
id. at ¶ 11. MetLife and STC contend that because
the position of Plaintiffs and Jared Beazley are adverse, a
ruling in favor of the Plaintiffs could potentially expose
them to multiple liabilities. See id. at
¶¶ 13-14. In response, Jared Beazley asserts a
claim that as a natural born son of Mr. Beazley he is also a
proper beneficiary. See Record Document 24 at
¶¶ 16-17. Jared Beazley agreed to all stipulations
in this case. See Record Document 27.
parties have submitted trial briefs in support of their
respective positions based on the stipulated administrative
record. See Record Document 28; Record Document 31;
Record Document 34. The parties also submitted supplemental
briefs at the request of the Court. See Record
Document 41; Record Document 42; Record Document 45; Record
Document 47; Record Document 48. Accordingly, this matter is
ripe for a determination.
Standard of Review Under ERISA
"ERISA was enacted to promote the interests of employees
and their beneficiaries in employee benefit plans and to
protect contractually defined benefits." Schadler v.
Anthem Life Ins. Co.. 147 F.3d 388, 393 (5th Cir. 1998)
(citation omitted). ERISA authorizes a civil action by a plan
participant or beneficiary "to recover benefits due to
him under the terms of the plan." 29 U.S.C. §
1132(a)(1)(B). The standard of review in an ERISA case is
governed by the language of the plan at issue. Generally, a
denial of benefits under an ERISA plan is reviewed de novo.
See Firestone Tire & Rubber Co. v. Bruch, 489
U.S. 101, 115, 109 S.Ct. 948, 956 (1989). However, courts
must apply an abuse of discretion standard when "the
benefit plan gives the administrator or fiduciary
discretionary authority to determine eligibility for benefits
or to construe the terms of the plan." Id. at
115. In this case, the policy specifically and expressly
conferred discretionary authority upon MetLife. See
SPD 084. Therefore, the abuse of discretion
standard applies. Additionally, regardless of the
administrator's ultimate authority to determine benefit
eligibility, factual determinations made by the administrator
during the course of a benefits review should be reviewed for
an abuse of discretion. See Chacko v. Sabre Inc.,
473 F.3d 604, 610 (5th Cir. 2006); McCall v. Burlington
Northern/Santa Fe Co., 237 F.3d 506, 512 (5th Cir.
"administrator abuses its discretion where the decision
is not based on evidence, even if disputable, that clearly
supports the basis for its denial." Holland v.
Int'l Paper Co. Ret. Plan, 576 F.3d 240, 246 (5th
Cir. 2009). "If the plan fiduciary's decision is
supported by substantial evidence and is not arbitrary or
capricious, it must prevail." Schexnavder v.
Hartford Life & Ace. Ins. Co.. 600 F.3d 465, 468
(5th Cir. 2010). "Substantial evidence is more than a
scintilla, less than a preponderance, and is such relevant
evidence as a reasonable mind might accept as adequate to
support a conclusion." Anderson v. Cvtec Indus.,
Inc., 619 F.3d 505, 512 (5th Cir. 2010). The
administrator's decision is arbitrary "only if made
without a rational connection between the known facts and the
decision or between the found facts and the evidence."
Holland, 576 F.3d at 246-247. Under the abuse of
discretion standard, a court's "review of the
administrator's decision need not be particularly complex
or technical; it need only assure that the
administrator's decision fall somewhere on a continuum of
reasonableness - even if on the low end." Id.,
at 247 (quoting Corry v. Liberty Life Assur. Co. of
Boston, 499 F.3d 389, 398 (5th Cir. 2007)).
cases where the insurance provider is also the claims
administrator, there exists an inherent conflict of interest.
See Metropolitan Life Ins. Co. v. Glenn, 554 U.S.
105, 114, 128 S.Ct. 2343, 2349 (2008). However, the Fifth
Circuit has joined the majority of other circuits in finding
that such a conflict does not change the standard of review.
See Holland, 576 F.3d at 248. Rather, the conflict
is "but one factor among many that a reviewing judge
must take into account." ]d. (quoting Glenn,
554 U.S. at 116). A reviewing court may give more weight to
such a conflict "where the circumstances surrounding the
plan administrator's decision suggest procedural
unreasonableness." Crowell v. CIGNA Group Ins.,
410 Fed.Appx. 788, 793-94 (5th Cir. 2011) (quoting
Schexnayder, 600 F.3d at 469). "Procedural
unreasonableness" exists when a plan administrator
employs an unreasonable method in making the benefits
decision. See Davis v. Aetna Life Ins. Co.. 699
Fed.Appx. 287, 293 (5th Cir. 2017).
Interpretation of the Plan
Plaintiffs contend that MetLife improperly denied Mrs.
Beazley's claim for benefits. See Record
Document 28. In support thereof, Plaintiffs have provided the
Court with a timeline of the relevant factual events. See
id. at 3. Mr. Beazley, while employed by STC, was on
medical leave from September 2013 through April 2014. See
id. On May 6, 2014, Mr. Beazley was separated
from his employment with STC due to a reduction in workforce.
See id; AAR 124. Plaintiffs state that on the same
date, another company hired Mr. Beazley. See Record
Document 28 at 3. On May 18, 2014, while traveling on
job-related business for his new employer, Mr. Beazley
experienced health problems and was admitted to a hospital in
Dallas, Texas. See Id. On May 30, 2014, Mr. Beazley
was released from the hospital and returned home to Breaux
Bridge, Louisiana. See id. Mr. Beazley's health
deteriorated, and Mrs. Beazley took care of him on a full
time basis. See id. In the interim, on May 27, 2014,
MetLife generated a letter addressed to Mr. Beazley entitled
"Notice of Group Life Insurance Portability and
Conversion Privileges - Schlumberger." See id.;
AAR 029. The letter was postmarked May 29, 2014. See Record
Document 28 at 3; AAR 101. The letter contained information
regarding Mr. Beazley's option to continue life insurance
coverage through porting and/or converting his policy.
See AAR 053-074. The letter also included the
necessary application forms. See id.
12, 2014, thirteen days after his release from the hospital,
and thirty-seven days after his separation from STC, Mr.
Beazley died. See Record Document 28 at 3; AAR 007.
The next day, Donna Latiolais ("Ms. Latiolais"), a
close family friend, contacted MetLife on behalf of Mrs.
Beazley. See Record Document 28 at 3; AAR 015. Ms. Latiolais
advised MetLife of Mr. Beazley's death, and requested
information about his benefits. See id. The
administrative record reflects that Ms. Latiolais advised
MetLife that Mrs. Beazley received MetLife's letter on or
about June 2, 2014, but did not open the mail until June 13,
2014, the day after her husband died. See AAR 015.
Beazley filed a claim for benefits with the assistance of an
attorney. See AAR 001-010. By letter dated June 2,
2015, MetLife denied the claim. See AAR 079-081. Therein,
MetLife noted that Mr. Beazley's coverage ended on May 6,
2014, the date his employment with STC was terminated.
See id. MetLife explained that per the terms of the
Plan, for coverage to be in place, MetLife must have received
a completed conversion application from Mr. Beazley within
thirty-one days from the date his coverage ended. See
id. Because Mr. Beazley died more than thirty-one days
from the date his coverage was terminated, MetLife concluded
that no coverage was in effect at the time of his death.
See id. The Court notes that MetLife's initial
denial did not address the issue of porting coverage.
Beazley appealed the decision with the assistance of her
attorney. See AAR 107-123. By letter dated September
3, 2015, MetLife upheld its denial of Mrs. Beazley's
claim. See AAR 129-132. Therein, MetLife again noted
that Mr. Beazley's life insurance coverage ended with the
date of his termination, May 6, 2014. See Id.
MetLife stated: "[t]he extension period provided to Mr.
Beazley due to the late written notice of the option to
continue his life insurance did not extend the group life
insurance itself; it extends the application period
only." See id. MetLife concluded that because
Mr. Beazley did not submit an application to port his
coverage, no coverage was in effect at the time of his death.
Language of the Plan
provisions of the Plan relevant to MetLife's denial of
Mrs. Beazley's claim are as follows:
ELIGIBILITY PROVISIONS: INSURANCE FOR YOU DATE YOUR
insurance will end on the earliest of:
For all coverages:
1. the date the Group policy ends; or
2. the date insurance ends for Your class; or
3. the end of the period for which the last premium has been
paid for You; or
4. the date Your employment ends; Your employment will end if
You cease to be Actively at Work in any eligible class,
except as stated in the section entitled CONTINUATION OF
INSURANCE WITH PREMIUM PAYMENT;
Please refer to the section entitled LIFE INSURANCE:
CONVERSION OPTIONS FOR YOU for information concerning the
option to convert to an individual policy of life insurance
if Your Life Insurance ends.
In certain cases insurance may be continued as stated in the
section entitled CONTINUATION OF INSURANCE WITH PREMIUM
section entitled "CONTINUATION OF INSURANCE WITH PREMIUM
PAYMENT" establishes the terms and conditions for
porting coverage. It states in pertinent part:
CONTINUATION OF INSURANCE WITH PREMIUM PAYMENT
AT YOUR OPTION: PORTABILITY