United States District Court, E.D. Pennsylvania
ESTATE OF RICHARD G. LUTZ, JR., Deceased and SHEREE NORDALL, Plaintiffs,
SANDRA LUTZ, et al. Defendants.
J. PAPPERT, J.
Estate of Richard Lutz and Sheree Nordall sued Sandra Lutz
and the Standard Insurance Company, among others, to recover
life-insurance benefits Sandra received as the sole
beneficiary of her late ex-husband Richard's
ERISA-governed life insurance policy. Before the Court is
Standard's Motion for Summary Judgment. (ECF No. 53.) For
the reasons that follow, the Court grants the motion.
and Sandra Lutz were married on May 18, 1985. (Pl.'s
Stmt. of Facts (“Pl.'s Stmt.”), ¶ 32,
ECF No. 54.) The marriage eventually deteriorated and in
March 2012 Richard hired an attorney to file a divorce
complaint against Sandra in the Berks County Court of Common
Pleas. (Id. ¶ 39.) The couple entered into a
Marriage Settlement Agreement (“the Agreement”)
on August 28, 2012 to divide their marital assets.
(Id. ¶ 41.) The Agreement provides that
“[t]he parties agree that each may maintain or dispose
of any existing life insurance policies and may choose
beneficiaries to any such policies as they see fit.”
(Admin. R., at 00005, ECF No. 53-1.) A divorce decree was
entered in the Common Pleas Court on September 6, 2012.
(Pl.'s Stmt. ¶ 41.) Richard died on September 26,
2012. (Id. ¶ 46.)
time of his death, Richard had a life insurance policy
governed by the Employee Retirement Income Security Act of
1974 (“ERISA”). (Id. ¶ 35.) The
ERISA Plan was an employee welfare benefits plan sponsored by
Cargill Inc., the parent company of Richard's employer,
the Wilbur Chocolate Company. (Def.'s Stmt. of Undisputed
Facts (“Def.'s Stmt.”), ¶¶ 1, ECF
No. 53.) The benefits under the Plan were funded by a group
life insurance policy issued by Standard to Cargill.
(Id. ¶¶ 2-4.) The Plan provides that
benefits “will be paid to the Beneficiary you
name” and according to established Plan procedures.
(Id. ¶ 13; Admin. R., at 00225-26, ECF No.
53-3.) Sandra Lutz was the sole beneficiary listed on
Richard's policy; Richard never removed her or added any
other beneficiaries. See (id. ¶¶
10-11; Admin. R., at 000072.)
Plan procedures require a claimant seeking benefits to submit
a “proof of loss” form-written proof that a loss
for which the policy provides benefits-to Standard within
ninety days of the date of the loss. (Admin. R., at 000222.)
The procedures also provide for administrative review of any
denial of a claim for benefits. (Id. at 000224.) On
October 5, 2012 Standard received a “proof of
loss” by way of a “Proof of Death Claim
Form” stating that Richard died on September 26, 2012.
(Id. at 000071.) Standard corresponded with Sandra
about her “claim for Life Insurance benefits” by
October 8, 2012. See (id. at 000070).
Standard requested Richard's certified death certificate
from Sandra, which her attorney provided on January 16,
2013. (Id. at 000053.) On February 19,
2013, Standard issued to Sandra the $44, 819.55 death benefit
under Richard's policy. (Def.'s Stmt. ¶ 17.)
payment is at the heart of the Plaintiffs' claim against
Standard. Ms. Nordall called Standard on December 20, 2013
claiming that she believed Sandra was not the proper
beneficiary of Richard's policy. (Admin. R., at 000005.)
On November 18, 2014 Standard received a letter from the
Estate's attorney also stating that Sandra should not
have received the benefits under Richard's policy.
(Def.'s Stmt., ¶¶ 19; Admin. R., at 000021.)
The letter noted that Richard and Sandra were divorced at the
time of his death, (Def.'s Stmt., ¶ 20; Admin. R.,
at 000021), though Standard already had notice of that fact,
(Admin. R., at 000058). Because the ninety-day window to
submit a claim had closed, and because Standard already paid
the policy benefits to Sandra, the Plaintiffs neither
submitted a claim for benefits nor requested an
administrative review of Standard's decision to pay the
benefits to Sandra. See (Def.'s Stmt. ¶ 21;
Pl.'s Stmt. of Facts, ¶ 21-22).
Estate and Nordall sued Standard and others in the Lancaster
County Court of Common Pleas on March 7, 2016. (ECF No. 1-1.)
The defendants removed the case to this Court on March 30,
2016, (ECF No. 1). Standard filed its motion for summary
judgment on December 29, 2016, (ECF No. 52), the Plaintiffs
responded on January 19, 2017, (ECF No. 54), and Standard
filed its reply on January 26, 2017, (ECF No. 55). The Court
held oral argument on the motion on February 13, 2017, (ECF
No. 57), and has thoroughly reviewed the administrative
judgment is appropriate “if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). A dispute is genuine
if the evidence is such that a reasonable factfinder could
return a verdict for the nonmoving party. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 254 (1986). Summary
judgment is granted where there is insufficient record
evidence for a reasonable factfinder to find for the
plaintiff. Id. at 252. “The mere existence of
a scintilla of evidence in support of the plaintiff's
position will be insufficient; there must be evidence on
which the jury could reasonably find for the
case concerning an ERISA plan administrator's benefits
determination, the Court's review must be based on the
administrative record. See Howley v. Melon Fin.
Corp., 625 F.3d 788, 793 (3d Cir. 2010) (holding that
courts must decide ERISA summary judgment motion based on
“the materials that were before the administrator when
it made the challenged decision”). Though it was not
the case here, to the extent that a claim for breach of a
fiduciary duty necessarily implicates evidence extrinsic to
the administrative record, the Court may consider relevant
admissible evidence outside the administrative record.
Creelman v. Carpenters Pension & Annuity Fund of
Phila. & Vicinity, 945 F.Supp.2d 592, 594 (E.D. Pa.
review a denial of benefits in ERISA cases “under a
de novo standard unless the benefit plan gives the
administrator or fiduciary discretionary authority to
determine eligibility for benefits or to construe the terms
of the plan, ” in which case courts review a denial of
benefits for abuse of discretion. Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989);
Doroshow v. Hartford Life and Acc. Ins. Co., 574
F.3d 230, 234 (3d Cir. 2009). The administrator here had
discretionary authority to determine eligibility for
benefits. See (Admin. R., at 000224). This abuse of
discretion standard in the ERISA context is
“essentially identical” to an arbitrary and
capricious standard. Miller v. Am. Airlines, Inc.,
632 F.3d 837, 845 n.2 (3d Cir. 2011). Thus, a court may
overturn a plan administrator's denial of benefits only
if it is without reason, unsupported by substantial evidence
or erroneous as a matter of law. Doroshow, 574 F.3d
at 234. A decision is supported by substantial evidence if
“there is sufficient evidence for a reasonable person
to agree with the decision.” Courson v. Bert Bell
NFL Player Ret. Plan, 214 F.3d 136, 142 (3d Cir. 2000).
civil enforcement provisions are found at 29 U.S.C. §
1132(a). Two subsections of § 1132(a) are relevant here:
First, § 1132(a)(1)(B) permits a participant or
beneficiary to bring a civil suit “to recover benefits
due to him under the terms of his plan, to enforce his rights
under the terms of the plan, or to clarify his rights to
future benefits under the terms of the plan.”
Id. § 1132(a)(1)(B). Second, § 1132(a)(2)
permits civil suits “by the Secretary, or by a
participant, beneficiary or fiduciary for appropriate
relief under [§ 1109].”
Id. § 1132(a)(2) (emphasis added).
1109 establishes a fiduciary's personal liability:
Any person who is a fiduciary with respect to a plan who
breaches any of the responsibilities, obligations, or duties
imposed upon fiduciaries by this subchapter shall be
personally liable to make good to such plan any losses to the
plan resulting from each such breach, and to restore to such
plan any profits of such fiduciary which have been made
through use of assets of the plan by the fiduciary, and shall
be subject to such other ...