May 9, 2013
Authored by: Kathy Sherby and Stephanie Moll
The U.S. District Court in Minnesota, in Hall v. Metropolitan Life Insurance Company, D. Minn., No 0:11-cv-01269-DWF-LIB, 1/15/13, declined to give any effect to the fill in the blank form Will completed at the direction of Dennis Hall (the “Decedent”) by the Decedent’s daughter that attempted to dispose of the proceeds of the group term life insurance policy provided through the Decedent’s employment.
The Decedent had designated one of his four children as the beneficiary of his employer-provided life insurance policy in 1991. He then married Jane in 2001, but did not change the beneficiary of this life insurance policy. In early 2010, Decedent was diagnosed with cancer. Sometime after being diagnosed with cancer, Decedent notified his employer that he wanted to change his beneficiary, and his employer-provided him with a change of beneficiary form, but Decedent never returned the form to his employer.
In early 2011, while attending a routine medical appointment at the Mayo Clinic, the Decedent was informed that he had only a very short time to live. He requested that his daughter obtain a form will from the bank and gave her instructions as to how to complete the form to carry out his wishes. Decedent signed the completed form Will that provided “Any and all life insurance and benefits shall be distributed to Jane Marie Hall.” Decedent died later the same day.
After Decedent’s death, Jane notified his employer and claimed the proceeds of the insurance policy pursuant to the Will provision. Jane’s counsel then wrote to Met Life stating that due to the sudden nature of his death, Decedent did not have an opportunity to sign a Change of Beneficiary form, and that Decedent provided for the change of beneficiary in his Will. MetLife denied Jane’s claim, explaining that the employer-provided life insurance was subject to ERISA, and that the benefits must be administered in accordance with the plan documents, which required a duly executed Change of Beneficiary form to change beneficiaries of the policy so that a “Will has no bearing on a Group Life Insurance benefit due to the plan provision set in place regarding beneficiaries.”
Several months later, Jane provided MetLife with a Beneficiary Designation form that had been signed by Decedent in late 2010, naming her as the primary beneficiary, again claiming the proceeds of the policy. MetLife again denied her claim on the same basis, explaining that the “latest beneficiary designation on file was completed by the decedent on July 18, 1991 and does not name your client as the beneficiary…”
The Court found that the life insurance policy was governed by ERISA, which gave discretion to MetLife to determine eligibility for benefits. Accordingly, the Court noted that an “abuse of discretion standard” would apply to their review, whereby the test was whether MetLife’s decision “was reasonable”—that is, it “must be supported by substantial evidence.” The Court noted that the MetLife Plan required participants to provide the employer with a signed Change of Beneficiary form satisfactory to MetLife within 30 days of signing the form. Consequently, the Court ruled that it was not “unreasonable” for MetLife to deny Jane’s claim to the insurance proceeds, as no signed Change of Beneficiary form had been provided to the employer within that time frame.