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METROPOLITAN LIFE INS. CO. v. POTTER

January 29, 1998

METROPOLITAN LIFE INSURANCE COMPANY, Plaintiff,
v.
DAVID POTTER, Defendant.



The opinion of the court was delivered by: LIFLAND

 LIFLAND, District Judge

 Presently before the Court are cross-motions for summary judgment regarding defendant's entitlement to insurance benefits under an ERISA plan underwritten by plaintiff. For the reasons set forth herein, both motions will be denied.

 BACKGROUND

 On October 17, 1994, plaintiff, Metropolitan Life Insurance Company (hereinafter "plaintiff"), commenced this action against defendant, David Potter (hereinafter "defendant") seeking declaratory relief and restitution of an alleged overpayment of benefits paid to defendant pursuant to the AT&T Life Insurance Program for Management Employees, a group employee welfare benefit plan (hereinafter the "plan"), following the death of defendant's wife, Jacqueline Jolly-Potter (hereinafter "Mrs. Potter" or the "decedent"). Unless otherwise noted, the following facts are undisputed and form the basis of the instant dispute.

 At all times relevant to this action, defendant and the decedent were employed by AT&T and participated in the plan. The plan is experience-rated, thus the premiums charged to AT&T can be adjusted every year based on the claims incurred during the previous year. Affidavit of Robert W. Sheerin (herein "Sheerin Aff."), at P 4. Plaintiff is the claims fiduciary and insurer under the plan. As of October 1993, defendant had coverage for $ 100,000 of dependent accidental loss insurance (hereinafter "dependent AD&D benefits"). At the time of her death, decedent had coverage for $ 44,000 of life insurance, an amount equal to her annual salary, and $ 132,000 of accidental loss insurance (hereinafter "AD&D benefits"), an amount equal to three times her annual salary. See Affidavit of Gary Dygert (hereinafter "Dygert Aff."), at P 3. Decedent had designated her husband, the defendant, as her primary beneficiary under the plan.

 Under the plan, a decedent's beneficiary is entitled to life insurance proceeds no matter how the insured died and independent of entitlement to AD&D or dependent AD& D benefits. Dygert Aff., at P 4. Thus, under no circumstance would a participant or beneficiary entitled to AD&D benefits receive AD&D benefits without also receiving basic life insurance benefits. Dygert Aff., at PP 5, 8.

 The parties dispute which of the following three documents governs defendant's current claims: the Summary Plan Description (hereinafter the "SPD"); Policy No. 18000-G (AD&D Benefits); and Policy No. 26600-G (Dependent AD&D Benefits).

 The SPD

 The SPD, by its very terms, provides a "brief overview" of plan benefits and explains the plan's highlights. See Potter Aff., Ex. A (SPD); Gacek Aff., Ex. A (SPD). The SPD explains that life and AD&D benefits are paid independently of each other. With regard to AD&D coverage, the SPD provides that "accidental loss insurance pays benefits if you die...solely as the result of an accident..." Potter Aff., Ex. A, at 150; Gacek Aff., Ex. A, at 150. The SPD also sets forth a list of exclusions under the heading "What's Not Covered." In that provision, the SPD states that accidental loss insurance does not pay benefits for losses or death caused by, inter alia, "purposely self-inflicted injury." Potter Aff., Ex. A., at 151. The SPD contains no explicit language excluding payment of AD&D benefits for any type of alcohol-related death, or any exclusion for engaging in illegal activities. With regard to dependent AD&D coverage, the SPD states that "the Dependent Accidental Loss Insurance Plan" allows you to cover your dependents for accidental death and the same losses described under [the section governing AD&D benefits]." Potter Aff., Ex. A, at 151.

 The SPD further states that:

 
this summary plan description summarizes the key features of your life insurance program. You can find complete details in the official Plan documents that legally govern the operation of the Plan. All statements made in this summary plan description are subject to the provisions and terms of those documents. Plan documents include the official Plan text, insurance contracts, the annual report and other documents or reports maintained by the Plan....
 
.... The insurance carrier shall serve as the final review committee under the Plan and shall have the sole and complete discretionary authority to determine conclusively for all parties, and in accordance with the terms of the documents or instruments governing the Plan, any and all questions arising from administration of the Plan and interpretation of all Plan provisions, determination all questions relating to...eligibility for benefits, determination of all relevant facts, amount and type of benefits payable to any participant, spouse or beneficiary, and construction of all terms of the Plan....Decisions by the insurance carrier...shall be conclusive and binding on all parties and not subject to further review.

 Potter Aff., Ex. A, at 163, 167.

 Policy No. 18000-G:

 Group Policy No. 18000-G provides, inter alia, the specifics of life and accidental death coverage. With regard to life insurance benefits, the Insuring Clause provides that the insurance company will pay benefits upon receipt of "satisfactory proof" of the insured's death. Burzynski Aff., Ex. M Policy No. 18000-G), at 15. With regard to AD&D benefits, the Insuring Clause provides:

 
Upon receipt of notice and satisfactory proof, as required herein, that any Employee, while insured hereunder for Accidental Death of or Dismemberment Insurance, shall have sustained accidental bodily injuries, and within ninety days thereafter shall have suffered any of the losses specified [herein] as a result of such bodily injuries independently of all other causes, the Insurance Company shall pay, subject to the terms and limitations hereof, the amount of insurance specified for such loss...provided, however, that in no case shall any payment be made for death or any other loss which is...
 
(4) caused by or resulting from...intentionally self-inflicted injury.

 Burzynski Aff., Ex. M, at 17-18.

 On December 2, 1993, pursuant to the provisions of Policy No. 18000-G, plaintiff amended the policy (hereinafter "amendment number 7"). See Burzynski Aff., Ex. Q (amendment number 7). The amendment purported to terminate Policy No. 18000-G, effective October 31, 1992, and to discontinue all employee coverage thereunder. The amendment further provided that the insurance discontinued under the amendment would be replaced by similar coverage under Group Policy No. 35083-G. In the provision governing AD&D benefits, Policy No. 35083-G entitles a claimant to benefits only where "the accident is the sole cause of the injury," a determination to be made by plaintiff upon receipt of proof that is "satisfactory to [MetLife]." Second Suppl. Burzynski Aff., Ex. C.

 Though Policy No. 35083-G was not executed until June 25, 1997, AT&T identified Policy No. 35083-G in its 1993 and 1994 federal tax returns as the governing insurance policy for AD&D benefits. See Second Supplemental Affidavit of Irwin P. Burzynski, (hereinafter "Second Suppl. Burzynski Aff."), Ex. C (Policy No. 35083-G); Burzynski Aff., Ex. S (1993 and 1994 Annual Return/Report of Employee Benefit Plan). Despite the purported termination of Policy No. 18000-G and the discontinuation of coverage thereunder, between the date of amendment number 7 and the execution of Policy No. 35083-G, plaintiff continued to amend Policy No. 18000-G several times through August 1995. See Burzynski Aff., Ex. T (amendments made in 1994 and 1995). Notwithstanding the purported discontinuance of Policy No. 18000-G, plan premiums continue to be calculated in accordance with the formulae set forth in the relevant sections of the policy. Sheerin Aff., at P 2.

 Policy No. 26600-G:

 Group Policy No. 26600-G provides, inter alia, the specifics of dependent insurance. See Burzynski Aff., Ex. O (Policy No. 26600-G). Section 14 of the policy states that "this Policy and the application of the Employee constitute the entire contract between the parties." Like the SPD, the benefits booklet annexed as an exhibit to, and incorporated by reference in, Policy No. 26600-G states that the benefits booklet contains only the highlights of the plan, and that plan details are "contained in the master Dependent Group Life Insurance contract issued by Metropolitan Life Insurance Company which legally governs the operation of the plan." Burzynski Aff., Ex. P (Benefits Booklet), at 5. In the section entitled "Requesting a Review of Claims Denied in Whole or in Part," the booklet states that "the Metropolitan Life Insurance Company has the exclusive right to interpret the provisions of the Plan, so its decision is conclusive and binding." Burzynski Aff., Ex. P, at 6. Although Policy No. 26600-G does not explicitly state that it governs claims for dependent AD&D benefits, the dependent claim form for Policy No. 26600-G has a space for AD&D claims. See Burzynski Aff., Ex. V (Dependent Life Insurance Claim Statement Group Policy No. 26600-G) An amendment to the SPD, effective January 1, 1993, incorporates by reference Policy No. 26600-G (referred to in other AT&T documents as "Number 528"). AT&T's 1993 and 1994 federal tax returns for the plan identify Policy No. 26600-G as the contract or identification number. See Burzynski Aff., Ex. X (1993 and 1994 Annual Return/Report of Employee Benefit Plan).

 The Collision

 On October 6, 1993, Mrs. Potter died from injuries sustained when she struck a utility pole while driving her vehicle on the shoulder of a roadway. No other vehicles were involved in the collision. At the time of her death, the decedent was wearing a seatbelt. The sole eyewitness to the incident reported that Mrs. Potter appeared to be driving in a normal manner and seated in a normal driving position moments before the collision. The police report of the scene shows that the decedent veered off the roadway and struck a utility pole on the shoulder located approximately four feet from the edge of the road when she failed to negotiate a left hand curve in the road. See Burzynski Aff., at Ex. C (motor vehicle accident description and diagram); Affidavit of Cindy Gacek (hereinafter " Gacek Aff."), at P 7 and Ex. B (motor vehicle accident description and diagram). It appears that decedent's vehicle may have struck a pothole, which may have redirected the vehicle toward the pole. See Burzynski Affidavit (hereinafter "Burzynski Aff."), at Ex. I (Report of defendant's expert, Dwight H. McLean, P.E.).

 The police report also states that the decedent had an odor of alcohol on her breath. See Burzynski Aff., Ex. C; Gacek Aff., Ex. B. A preliminary blood alcohol content sample taken by hospital staff showed a blood alcohol content of .289%. Burzynski Aff., at Ex. C; Gacek Aff., at P 7 and Ex. C. The police report states that the collision was considered alcohol-related due to the preliminary blood alcohol reading. The autopsy revealed "a positive toxicological finding of ethyl alcohol" in decedent's blood. See Gacek Aff., at Ex. C (autopsy report). The toxicology report states that the decedent had a premortem blood alcohol content of .314% and a postmortem blood alcohol content of .250%. See Gacek Aff., Ex. D (toxicology report). The Medical Examiner's Office stated that the cause of death was a lacerated heart and liver with extensive chest cavity bleeding. See Burzynski Aff., at Ex. C. The autopsy report declared the cause of death "accidental." Gacek Aff., at Ex. C.

 On October 21, 1993, defendant submitted separate Claimant's Statements for accidental death benefits (hereinafter "AD&D benefits") under the decedent's participation in the plan, and for dependent AD&D benefits under his own participation. Plaintiff's claims file contains a dependent life insurance claim statement in which AT&T's benefits supervisor certified that defendant was eligible for $ 100,000 in dependent AD&D benefits. See Burzynski Aff., at Ex. G. Though defendant's claims under his wife's policy did not specify the amount defendant sought to recover, Plaintiff's Death Claim Worksheet sets forth defendant's claim for $ 44,000 in life insurance benefits and $ 132,000 in AD&D benefits. In the section marked "Action" following each of these two claims, the letter "A" appears, apparently indicating approval of defendant's claims. See Burzynski Aff., at Ex. H (Plaintiff's Death Claim Worksheet). In early November 1993, plaintiff paid defendant $ 132,000. See Gacek ...


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