ERISA-Eleventh Circuit Rules That Plaintiff Is Not Entitled To Life Insurance Benefits As Beneficiary, Since Coverage Ended Before The Employee Died

In Snow v. Boston Mutual Life Insurance Company, No. 13-15067 (11th Cir. 2014), Dorothy Snow (“Snow”), the widow and designated beneficiary under a life insurance policy issued to James Francis Snow (“Mr. Snow”) by Boston Mutual Life Insurance Company (“Boston Mutual”), appeals from the district court’s final order in favor of Boston Mutual and Snow’s former employer, Meadowcraft, Inc. (“Meadowcraft”), in Snow’s case raising claims under ERISA. Snow had alleged that Boston Mutual wrongfully denied payment of approximately $115,000 in life insurance benefits to Snow, and sought equitable relief claiming that Boston Mutual, as plan administrator and claims adjudicator, breached certain fiduciary duties it owed to Snow.

In this case, Boston Mutual issued a group life insurance policy to Meadowcraft to insure the life and death component of Meadowcraft’s long term disability plan (the “Plan”). Meadowcraft paid 100% of the premium for group life insurance coverage as a benefit to its employees, and the Plan included a waiver of premium provision allowing the coverage to continue if an employee became disabled. Mr. Snow worked at Meadowcraft from October 1993 until he because disabled in an industrial accident in May 2002, and he died on August 27, 2009 at the age of 66 years and 9 months. Once the premium is so waived, coverage will generally continue until “Normal Retirement Date”. The Plan defines “Normal Retirement Date” as the “normal retirement date provided for by the Meadowcraft published or accepted personnel practices.”

The issue in this case for the Eleventh Circuit Court of Appeals (the “Court”) was whether Mr. Snow’s Normal Retirement Date preceded his death, so that the Plan’s life insurance coverage had ended before Mr. Snow died. The district court determined that Normal Retirement Date was age 65, so that the coverage had ended. The Court determined that the district court’s determination was not in error. The Court said that, since the Plan defines “Normal Retirement Date” in reference to Meadowcraft’s “published or accepted personnel practices,” it was necessary for the district court to examine extrinsic evidence of Meadowcraft’s personnel practices to determine the Normal Retirement Date. Moreover, not only was the term not ambiguous, but the district court did not clearly err in construing the Normal Retirement Date to be 65 year old. This age was found in a summary of Meadowcraft’s 401(k) plan, which provided that “your normal retirement age is the date you reach age sixty-five,” and in testimony from Meadowcraft human resources employees Larry York and Mary Beth Wilbanks. As such, the Court concluded that the district court did not err in ruling tht Snow was not entitled to any benefits under the Plan, and the Court upheld the district court’s final order.

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