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Frye v. Metropolitan Life Insurance Co.

United States District Court, E.D. Arkansas, Jonesboro Division

March 30, 2018



          D.P. Marshall Jr. United States District Judge


         Tammy Frye worked for American Greetings. The company sponsored an ERISA-governed plan for its employees. AR 94. American Greetings's Benefits Advisory Committee was the plan administrator. AR 95 & 98. But the Committee delegated almost all plan administration to MetLife, who was also the claims administrator. AR 98. In late 2012, Frye enrolled her son, Brent Gyngard, as a dependent for medical coverage. AR 302-303. As required, she provided his date of birth and other information. AR 305. She also named Gyngard as a dependent beneficiary on the life and accidental-death-and-dismemberment coverage that the plan provided on her life. And she elected some optional coverage: life and AD&D benefits for her dependents on their lives. All this was done through the website. AR 26. MetLife and the Committee didn't ask for any particulars about dependents for purposes of their life and AD&D coverage. AR 428-430. All of Gyngard's coverage began in 2013. American Greetings withheld Frye's premiums from her wages. AR 314-327. During the open enrollment period for the 2014 plan year, American Greetings sent Frye a Benefits Enrollment Worksheet that listed Gyngard as her sole dependent. AR 311-312. Frye took no action and the coverage rolled over into 2014. In March 2014, though, Gyngard turned twenty-three. Frye didn't alert American Greetings or MetLife. And neither of them alerted Frye that Gyngard had aged out of coverage. In late 2014, American Greetings sent Frye another Benefits Enrollment Worksheet that listed Gyngard as a dependent. Frye took no action. And Gyngard was again rolled over as her sole dependent, this time into the 2015 plan year. AR 180-181. Then, in October 2015, he died in a car crash. AR121.

         Frye filed a claim for benefits based on Gyngard's death: $10, 000 (the basic amount of life insurance for dependents) and, because he died in an accident, an AD&D benefit (set at 20% of Frye's elected AD&D coverage on her own life, which was four times her annual salary). The record is unclear on exactly what this second amount would be. Acting as the plan's claims administrator, MetLife denied Frye's claim. AR156-158. MetLife explained that the life insurance and AD&D policy only covered dependents less than twenty-three years old. AR 156-157. Gyngard had turned twenty-three on 17 March 2014. AR 182. Therefore, MetLife said, Gyngard had been ineligible for coverage during the 2015 plan year. Through a salary credit, American Greetings refunded Frye's premiums for that year, and perhaps for April-December of 2014, though the parties scuffle about that partial year refund. AR 178. Frye appealed, arguing that she thought she had insurance; she had never been told about the age cut-off; American Greetings and MetLife knew about her son's age because of his medical coverage; and neither MetLife nor American Greetings had sent her any information about conversion. AR 154. On this point, the plan provided that the life insurance on an aged-out dependent could be converted to an individual policy if that change was elected within a fixed period and the premium was paid. AR 42-43. MetLife denied Frye's appeal, pointing to plan language that explained age restrictions for life and AD&D coverage. AR 163-164; see also AR 4 & 85.

         In response, Frye filed this case against American Greetings and MetLife. She pleaded a short and plain statement of facts, requesting relief for alleged violations of ERISA. She cited, among other provisions, 29 U.S.C. § 1132(a), but didn't specify what subparts entitled her to relief. She pleaded generally that this ERISA case was "to recover benefits due under an employee benefit plan, to redress breaches of fiduciary duties under ERISA, and to recover costs and attorneys' fees as provided by ERISA.'' No. 1at 1. She included a specific count for wrongful denial of benefits, which cited 29 U.S.C. § 1132, explained the facts, and sought the life insurance and AD&D benefits. No. 1 at 3-5. Another count sought attorney's fees and costs. No. 1 at 6. And her prayer for relief sought three things: (1) benefits; (2) fees/costs; and (3) other just and proper relief. Ibid.

         American Greetings and MetLife deny liability. It's common ground that MetLife is a fiduciary because it administers claims in particular and the plan in general. 29 U.S.C. § 1002(21)(a); Varity Corp. v. Howe, 516 U.S. 489, 502 (1996). The American Greetings Benefits Committee shares in plan administration. To the extent the Committee's work moves beyond the ministerial to the discretionary, the Committee is a fiduciary, too. Silva v. Metropolitan Life Insurance Co., 762 F.3d 711, 716 n. 8 (8th Cir. 2014). The parties don't dwell on whether there's any daylight between the Committee and the named defendant, American Greetings Corporation. The Court will follow suit, and simply refer to American Greetings from here on. American Greetings and MetLife rely on the plan language, Frye's obligation to read it, and her obligation to report that her son aged out of coverage. They say it's clear that Gyngard wasn't covered and that Frye should have known he wasn't.

         Everyone agrees that one side or the other is entitled to judgment as a matter of law. There are cross-motions for summary judgment. No. 16 & 23. The Court held the parties' papers while they engaged in additional discovery and developed a supplemental record. No. 41. That record is now in, and the parties have filed supplemental briefs. No. 51, 52, 53 & 54. The Court has permitted much of this helpful supplementary work to be done under seal to protect what American Greetings and MetLife say are proprietary policies. No. 50. Those materials will stay sealed.

         Benefits Claim.

         American Greetings and MetLife didn't abuse their discretion in denying Frye's claim. Frye argues that MetLife's dual role created a conflict of interest. Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 114-16 (2008). It did. MetLife was charged with determining eligibility, construing the terms of the plan, and evaluating claims. AR98. MetLife must also pay any benefits owed. It insures the plan. Notwithstanding this conflict, the plan terms still control. This plan gives MetLife discretion to "determine eligibility[.]" AR 98. It also states - clearly and unambiguously - that dependents age out no later than when they turn twenty-three. AR 74 & 85. Here are the plan's words:

The associate's natural child, adopted child (including a child from the date of placement with the adopting parents until the legal adoption), child of same -sex partner, or stepchild who resides with the associate, who is:
• Under age 19 unmarried and supported by the associate; or
• Under age 23* and who is:
• a full-time student at an accredited school, college or university that is licensed in the jurisdiction ...

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