In Salyers v. Metropolitan Life Ins. Co., No. 15-56371 (9th Cir. 2017), a panel of the Ninth Circuit Court of Appeals (the “Panel”) reversed the district court’s judgment in favor of the defendant, insurer MetLife, following a bench trial in an ERISA action concerning life insurance.
In this case, the plaintiff bought a $250,000 life insurance policy on her husband, but, when he died, MetLife paid out only $30,000 because the plaintiff had not submitted evidence of insurability with her coverage election, as required under the ERISA-governed benefits plan offering the policy. The Panel held that MetLife waived the evidence of insurability requirement because it did not ask the plaintiff for a statement of health, even as it accepted her premiums for $250,000 in coverage. The Panel further held that, under the federal common law of agency, MetLife could not claim that it did not know the pertinent facts, because the knowledge and conduct of the policyholder-employer could be attributed to MetLife. The Panel remanded the case to the district court with instructions to enter judgment in favor of the plaintiff for the amount of the $250,000 policy that remained unpaid.