United States District Court, E.D. Pennsylvania
BARBARA GALANTE, individually and as Executrix of the Estate of John A. Galante Plaintiff
FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC., et al. Defendants
I. QUIÑONES ALEJANDRO, U.S.D.C. J.
this Court are cross-motions for summary judgment filed
pursuant to Federal Rule of Civil Procedure
(“Rule”) 56 by Defendant Sun Life Assurance
Company of Canada (“Sun Life”), [ECF 38], and by
Plaintiff Barbara Galante (“Plaintiff”), [ECF
These cross-motions stem from a complaint filed by Plaintiff,
in her own name and as Executrix of the Estate of John A.
Galante (“Galante”), under the Employment
Retirement Income Security Act of 1974, as amended,
(“ERISA”), 29 U.S.C. § 1101, et
seq. [ECF 1].
complaint, Plaintiff asserts under 29 U.S.C. §
1132(a)(3)(B) a breach of fiduciary duty claim against Sun
Life in relation to the denial of her beneficiary claim under
an insurance welfare benefit plan (the “Plan”),
established, maintained, and sponsored by the Financial
Industry Regulatory Authority, Inc., (“FINRA”),
Galante's employer. The Plan provides short- term and
long-term disability benefits, and life insurance coverage to
FINRA's participating employees.
Life, as the insurer and claim administrator of the Plan,
disputes Plaintiff's allegations and argues that when
Galante died, he was no longer insured and, therefore, there
was no breach of any fiduciary duties in administering the
Plan or in denying coverage.
issues raised in the parties' respective motions have
been fully briefed and are ripe for disposition. For the
reasons set forth, Sun Life's motion for summary judgment
is granted, and Plaintiff's motion for summary judgment
is denied. Consequently, summary judgment is entered in favor
of Sun Life.
is a federal statute that establishes the minimum standards
for most voluntarily established pension and health plans in
private industry to protect individuals participating in
these plans. ERISA requires plans to provide participants
with important plan information, such as the plan features
and funding; provides fiduciary responsibilities for those
who manage and control plan assets; requires plans to
establish a grievance and appeals process for participants to
get benefits from their plans; and gives participants the
right to sue for benefits and breaches of fiduciary duty.
See 29 U.S.C. §§ 1001-1461.
provide context to the parties' cross-motions for summary
judgment, a digest of the relevant facts is appropriate;
In 2005, John A. Galante (“Galante”) commenced
his employment with FINRA. (Pl.'s Br. [ECF 40-3] at 4).
As part of his employment benefits, Galante maintained a
“basic” group life insurance policy of $173,
000.00, at no cost to Galante, with an “optional”
supplemental group life coverage of $260, 000.00, (the
“Policy”),  for which Galante paid monthly premiums
by payroll deduction. (Id.). The Policy was issued
by Sun Life, and Barbara Galante (Plaintiff), Galante's
spouse, was the named beneficiary. (Sun Life's Mot. [ECF
38] at ¶ 4).
FINRA was Galante's employer and sponsor of Sun
Life's group insurance plan, which is governed by ERISA
and is self-administered. Sun Life is the claims
administrator and a fiduciary of the Plan. The Plan is
subject to Maryland law.
On March 3, 2013, Galante, then sixty-five years old, was
diagnosed with a congestive heart failure condition and
stopped working. (Pl.'s Br. at 4). Under the terms of the
Policy, because he was sixty-five years old when he stopped
working, his insurance coverage continued for twelve months
with the payment of premiums. (Policy at 30). Galante died on
July 28, 2015. (Pl.'s Br. at 6).
After leaving his employment and prior to his death, Galante
continued to remit his monthly insurance premium payments to
FINRA. FINRA forwarded the premium payments owed by all
covered employees to Sun Life in a monthly gross lump
payment. (Id. at 5).
Galante did not exercise his option to convert his group
insurance policy to an individual policy.
After Galante died, Plaintiff filed a claim for the life
insurance proceeds she believed were owed to her. Sun Life
denied the claim on the grounds that when Galante stopped
working on March 3, 2013, he was sixty-five years of age, and
that pursuant to the terms of the Policy, his insurance
coverage ceased on March 3, 2014, when Galante failed to
convert the expired group insurance policy to an individual
insurance policy. [ECF 38-4, 38-6].
Plaintiff filed an unsuccessful administrative appeal of the
denial of benefits. On September 30, 2016, Plaintiff filed
this civil action asserting a claim for breach of fiduciary
duty against Sun Life. [ECF 1].
parties do not dispute that Galante was eligible for coverage
under the Policy while employed by FINRA and, at a minimum,
for an additional twelve months after he stopped working due
to illness. The parties disagree, however, on whether Sun
Life breached its fiduciary duties to Galante in its
administration of the Plan, interpretation of the Policy, and
in denying Galante coverage, particularly in regards to
notifying Galante of his right to convert the group policy to
an individual policy prior to the group policy's
expiration. As noted, Galante died almost sixteen months
after his group coverage terminated in March 2014 pursuant to
the terms of the Policy.
Policy provisions relevant to this dispute provide:
Termination of Employee's Insurance
An employee will cease to be insured on the earliest of the
the end of the month in which employment terminates. Ceasing
to be Actively at Work will be deemed termination of
the Policyholder may continue the insurance by paying the
required premiums, subject to the following:
* * *
For Life Insurance-insurance may be continued for up to 12
months after an Employee is absent from work due to Injury or
Sickness. However, if an Employee is under age 65, the
Employer may continue an Employees insurance until the
earlier of  the date the Employee attains age 70; or  the
date the Employee is no longer receiving Long Term Disability
benefits under the Employer's plan.
(Policy at 30).
convert from group coverage to individual coverage, the
If all or part of an Employee's Life Insurance ceases or
reduces due to:  termination of his employment; or 
termination of his membership in an Eligible Class . . . then
the Employee may apply for an individual policy on his own
life up to the amount that ceased.
(Policy at 19).
convert to an individual policy, a:
written application must be made to Sun Life along with
payment of the first premium, within the 31 day period (the
31 day conversion period) following the date the insurance
ceases or reduces. If the Employee is not given notice by the
Employer of this conversion privilege within 15 days
following the date his insurance ceases or reduces, the
Employee shall have an additional 15 days to exercise this
conversion privilege. In no event will this conversion
privilege be extended beyond 60 days following the 31 day
(Id. at 20).
stopped working on March 3, 2013, due to an illness and
commenced receiving disability benefits. (Pl.'s Br. at
4). Under the specific terms of the Policy, described above,
because Galante was sixty-five years old when he stopped
working, Galante was permitted to continue paying for and
receiving his group insurance coverage for a period of twelve
months, or until March 3, 2014. Thereafter, Galante had, at
most, ninety-one days from March 3, 2014 to convert his group
policy to an individual policy. (Sun Life's Mot. ¶
20; Compl. Ex. F). There is no dispute that Galante did not
convert his group policy to an individual policy.
relevant to our analysis are provisions of the Administrative
Services Agreement (the “Agreement”), between
FINRA and Sun Life, which delineated the parties'
responsibilities for administrative services. [ECF 38-3].
Therein, FINRA agreed, inter alia, to:
a. Provide Sun Life with a weekly report listing all Plan
participants and dependents whose coverage has terminated, in
whole or in part, under the Policy (collectively, “Plan
Participants”) who may be eligible to apply for the
Conversion and ...