ERISA-Fifth Circuit Upholds Determination by Prudential That Plaintiff Is Not Entitled To Death Benefit From Life Insurance Policy

In Singletary v. United Parcel Service, No. 15-30762 (5th Cir. 2016), Linda Singletary purchased life insurance for herself and her husband through her employer, United Parcel Service. Her husband, Timothy Singletary, was an active-duty soldier in the United States Army. He was killed in a weekend motorcycle accident while off base and not on duty. Prudential Insurance Company of America (“Prudential”), treated as the plan administrator, denied his widow’s claim pursuant to an exclusion in the policy for active-duty servicemen. Mrs. Singletary brought suit, claiming she had no notice of the exclusion and that the exclusion is otherwise unenforceable. The district court granted summary judgment for Prudential and UPS.

The Fifth Circuit Court of Appeals (the “Court”) affirmed the district court’s decision. The Court said that, when reviewing a denial of benefits made by an ERISA plan administrator, the court applies a de novo standard of review, unless the benefit plan gives the administrator discretionary authority to determine eligibility for benefits or to construe the terms of the plan. In this case, the plan gave Prudential, the plan administrator, this discretionary authority. Therefore, the Court reviews Prudential’s decision for abuse of discretion. Further, the Court found that Prudential correctly interpreted the policy’s exclusion as barring the claim. Further, since the instant case is a claim for benefits filed under section 502(a)(1)(B) of ERISA, the Court must only interpret the policy, and the issue of notice of the exclusion does not arise. Nothing renders the exclusion unenforceable, since the applicable Georgia state law is preempted by ERISA. As such, the Court affirmed the district court’s decision.



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