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Sepulveda-Rodriguez v. MetLife Group, Inc.

United States Court of Appeals, Eighth Circuit

August 23, 2019

Silvia Sepulveda-Rodriguez Plaintiff - Appellee
v.
MetLife Group, Inc., a New York Corporation Defendant Metropolitan Life Insurance Company, a New York Corporation Defendant-Appellant Ford Motor Company, a Delaware Corporation Defendant Silvia Sepulveda-Rodriguez Plaintiff - Appellee
v.
MetLife Group, Inc., a New York Corporation; Metropolitan Life Insurance Company, a New York Corporation Defendants Ford Motor Company, a Delaware Corporation Defendant-Appellant

          Submitted: May 14, 2019

          Appeals from United States District Court for the District of Nebraska - Omaha

          Before COLLOTON, BEAM, and SHEPHERD, Circuit Judges.

          BEAM, CIRCUIT JUDGE.

         Metropolitan Life Insurance Company (MetLife) and Ford Motor Company appeal the district court's award of benefits, costs and attorney fees in this case brought pursuant to the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001, et seq. (ERISA). Silvia Sepulveda-Rodriguez's husband, Jose, the insured and an employee of Ford, died, and while MetLife[1] paid Silvia the basic life insurance benefit, it denied payment of an optional life insurance benefit (OLI). We affirm in part, reverse in part, and remand for proceedings consistent with this opinion.

         I. BACKGROUND

         Jose was employed by Ford as a customer service representative from October 2013 to the time of his death in 2015. At the time his employment commenced, he opted into Ford's basic life insurance plan (which amounted to one and a half times a year's salary, in this case approximately $55, 000). This basic life component was provided as a benefit at no cost to the employee, regardless of medical history. Ford also offered employees the option to apply for OLI, which increased their life insurance coverage, at their own cost, once the employee submitted proof that he was in good health and insurable. The Summary Plan Description (SPD) described the enrollment requirements for OLI as follows: "If you elect coverage or increase your coverage when first eligible, during annual enrollment or due to a Qualified Event, you must provide proof of your good health before the election or increase will be effective." Thus, the SPD clearly states that proof of good health is required before the OLI election is effective. Jose signed up for this OLI benefit which added an additional approximately $92, 000 to the basic salary benefit. At the time of enrollment in 2013, Jose completed an online questionnaire[2] in which he answered "no" to all of the preliminary medical questions asked of him, including the question of whether he had been "diagnosed" or "treated" for high blood pressure. Because Jose passed this OLI initial threshold without any medical flags, Ford did not further underwrite the policy and ostensibly enrolled him in the program. Silvia and Jose believed that he was successfully enrolled in the OLI program, as Ford withheld OLI premiums from Jose's check and sent them to MetLife.

         In contrast to his "no" answer to the online question regarding high blood pressure diagnosis and treatment, after Jose's death, medical records obtained by MetLife indicate that from 2004 to 2009, Jose was diagnosed, treated and given medical advice for high blood pressure, also known as hypertension. In 2004, Jose was treated in the emergency room for chest pain and arm numbness; was given an echocardiogram and stress test; and was prescribed high blood pressure medicine. A year or so later, Jose returned to the doctor, reported that he had stopped taking the blood pressure medication, and complained that his heart was "racing." Several times when Jose saw his physician in 2005, 2006, and 2007, his medical records indicate the diagnosis of hypertension or a refill of the blood pressure medication. In 2008, Jose's physician switched Jose to a different kind of blood pressure medication because Jose was having difficulty complying with his previous blood pressure medication regimen. The last medical notation in the administrative record showing a diagnosis of hypertension or high blood pressure is from December 31, 2009, when Jose was treated for acute bronchitis, but the examiner noted his blood pressure was high that day, that he had "HTN," presumably shorthand for hypertension, was "out of meds," and best we can tell from the dubious handwriting of the physician, that Jose requested a refill of the hypertension medication.

         Jose passed away on June 4, 2015, of "hypertensive and atherosclerotic heart disease." Silvia filed a claim for life insurance benefits in September 2015. While the claim for basic life benefits was paid (in the amount of $55, 616), MetLife began looking into Jose's original application for OLI benefits, and asked for prior medical records. As noted, Jose's records indicated that he was previously treated for hypertension and cardiac issues. With regard to the online questionnaire, while it took some time to discover whether Jose took the online initial assessment tool, and if he did, what his answers to the online questionnaire revealed, MetLife ultimately was told by Ford's HR representatives that Jose had filled out the questionnaire and answered "no" to each health inquiry, including whether he had been treated for high blood pressure.

         On February 9, 2016, Silvia alleges she was informed by a MetLife representative that the OLI claim was going to be paid, but that payment was pending "some sort of approval from Ford Credit." Less than a week later, on February 15, 2016, Silvia was informed via a letter that the claim would be denied. MetLife asserted that the reason for the denial was that Jose "should have answered yes to one or more of the medical questions." If he had, further inquiry would have taken place. Accordingly, the letter stated that OLI coverage did not go into effect under the terms of the plan. Silvia appealed in April 2016, and asked MetLife for documents, including the SPD. In May 2016, the appeal was denied, and while MetLife provided Silvia the claim file, the SPD was not provided to Silvia. Silvia retained counsel, and in June 2016 her counsel further requested documents, including the SPD. In August, Silvia's counsel repeated the request for the SPD from MetLife. In response, MetLife revealed for the first time that Silvia would need to obtain the SPD from Ford. Silvia's counsel then requested the SPD from Ford on September 1, 2016, and Ford received the request on September 7. Ford eventually mailed Silvia a copy of the SPD in late October 2016. Ford asserts that the SPD was always available online, but Silvia asserts she had no knowledge of this, nor knowledge of how to access Jose's online account.

         Silvia filed the present ERISA action November 15, 2016. The administrative record was filed with the district court, and both parties moved for summary judgment. The district court granted judgment in favor of Silvia, finding that she was entitled to statutory penalties in the amount of $2, 090 for Ford's delay in providing the SPD. Further it found the denial of OLI coverage was an abuse of MetLife's discretion because it found the policy contained vague and inconsistent language. As previously stated, the district court made specific findings about the adequacy of the proof regarding the online assessment form that Jose purportedly filled out at the time of enrollment, noting that the documents were inadequate to show that Jose misrepresented his prior medical history. Thus, the court awarded benefits in the amount of $92, 694. Alternatively, the court found that benefits would have been appropriately awarded under an equitable estoppel theory. Finally, the district court awarded Silvia attorney fees in the amount of $27, 045 and costs in the amount of $420. Ford and MetLife appeal all aspects of the district court's order.

         II. DISCUSSION

         Because of the plan language giving Ford and MetLife the discretionary authority to construe the terms of the plan, the district court was required to apply an abuse of discretion standard of review to the decisions made by Ford and MetLife in this case. Donaldson v. Nat'l Union Fire Ins. Co. of Pittsburgh, 863 F.3d 1036, 1039 (8th Cir. 2017) (standard of review). When reviewed for an abuse of discretion, an administrator's decision is upheld if it is reasonable, i.e., supported by substantial evidence. Silva v. Metro. Life Ins. Co., 762 F.3d 711, 717 (8th Cir. 2014). To determine whether a plan administrator's interpretation of policy terms is reasonable, we examine whether the interpretation: (1) is consistent with the goals of the plan; (2) renders any language of the plan meaningless or internally inconsistent; (3) conflicts with the substantive or procedural requirements of ERISA; (4) is consistent with past decisions; and (5) is contrary to the clear language of the plan. Donaldson, 863 F.3d at 1039. Substantial evidence is more than a scintilla, but less than a preponderance, of evidence. Johnson v. United of Omaha Life Ins. Co., 775 F.3d 983, 989 (8th Cir. 2014). This is a restrictive standard of review of the administrative decision, and does not permit a court to "weigh the evidence anew" and render its own decision. Waldoch v. Medtronic, Inc., 757 F.3d 822, 834 (8th Cir. 2014) (quotation omitted). "If substantial evidence supports the decision, it should not be disturbed even if a different, reasonable interpretation could have been made." Johnson, 775 F.3d at 989 (quoting McGee v. Reliance Standard Life Ins. Co., 360 F.3d 921, 924 (8th Cir. 2004)). Because MetLife is both the insurer and the claims administrator, we take into account the possible conflict of interest created by those dual roles and give the possibility some weight when determining whether MetLife has abused its discretion. Manning v. Am. Republic Ins. Co., 604 F.3d 1030, 1038-39 (8th Cir. 2010). We review the district court's grant of summary judgment in this ERISA case de novo. Id. at 1038.

         A.Merits of the Denial of ...


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