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Hocknell v. Metropolitan Life Insurance Co.

United States District Court, D. New Jersey

September 6, 2017

JUDITH L. HOCKNELL, Plaintiff,
v.
METROPOLITAN LIFE INSURANCE COMPANY, Defendant.

          DONALD L. MASTEN MICHAEL J. NAPUDA MASTEN AND RAY PENNSVILLE, N.J. 08070 On behalf of Plaintiff

          RANDI F. KNEPPER MCELROY, DEUTSCH, MULVANEY & CARPENTER, LLC On behalf of Defendant

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         This is an ERISA matter concerning the denial of life insurance benefits to the decedent's niece who held her uncle's power of attorney. Currently pending are the parties' cross-motions for summary judgment. For the reasons expressed below, Defendant's motion will be granted, and Plaintiff's motion will be denied.

         BACKGROUND

         Plaintiff, Judith L. Hocknell, is the niece of Douglas W. Saul, who held a group term life insurance policy through Defendant, Metropolitan Life Insurance Company (“MetLife”), as part of his employment with Mannington Mills, Inc. (“Mannington”). On June 3, 2015, Plaintiff forwarded an insurance beneficiary designation form to Mannington's human resources department naming herself as the sole beneficiary of the MetLife policy because her uncle was under hospice care and his life expectancy was short. Plaintiff believed, apparently mistakenly, that the beneficiary designation needed to be revised to remove as a beneficiary Plaintiff's sister, who had died a year before.[1] (Docket No. 7-5 at 28-29.)

         On October 27, 2015, Saul passed away. There were several miscommunications between Plaintiff, Mannington's human resources department, and MetLife, as well as missing documentation, including a page from Saul's durable power of attorney. Eventually Plaintiff received a letter from MetLife denying her claim for benefits on April 7, 2016.

         MetLife denied Plaintiff's claim because it determined that the durable power of attorney did not permit Plaintiff to change the designation of beneficiary to herself.[2] (Id.) MetLife also determined that because Saul had no designated beneficiaries, it was required to apply the Plan's Line of Succession provision, which awarded benefits to Saul's spouse or civil union partner, child, parent, or siblings, and if no such persons survived him, the estate. (Id.) MetLife denied benefits to Plaintiff under the Line of Succession provision because she was Saul's niece and did not qualify as a lineal heir. (Id. at 84.)

         Plaintiff appealed that decision, arguing that the durable power of attorney did allow her to designate herself as a beneficiary.[3] (Docket No. 7-5 at 85-87). She cited to several provisions in the document, including Paragraph 1, General Grant of Power, Paragraph 2, Powers of Collection and Payment, Paragraph 3, Life Insurance, and Paragraph 25, Good Faith Reliance. (Id.; see also Docket No. 7-5 at 56-65.)

         MetLife denied her appeal, stating that the power of attorney “may not be read to include the power to designate a beneficiary of life insurance unless that power is specifically listed on the executed form, ” and “the Power of Attorney does not specifically state that the Attorney-in-Fact has power to designate or change a life insurance beneficiary.” (Docket No. 7-5 at 95.)

         Plaintiff filed the instant suit against MetLife, [4] claiming that MetLife illegally denied her claim for the life insurance benefits[5] because the durable power of attorney clearly grants Plaintiff the power to designate herself as a beneficiary, citing to Paragraph 1, the General Power “to exercise or perform any act, power, duty, right, or obligation whatsoever, ” and Paragraph 2, Power of Collection and payment, “to forgive, request, demand, sue for, recover, collect checks, drafts, accounts, deposits, legacies, bequests, annuities and pensions.” (Docket No. 7-5 at 111.)

         Both parties have moved for summary judgment in their favor. MetLife argues that under the arbitrary and capricious standard of review that must be applied to its benefit determinations under the Plan, its denial of Plaintiff's claim was based on a reasonable interpretation of the Plan and the governing documents. MetLife argues that a New Jersey statute, N.J.S.A. 46:2B-8.13a, controls and precludes an attorney-in-fact from gratuitously transferring property of the principal to herself without express and specific authority. Because MetLife determined that the durable power of attorney did not provide Plaintiff with that authority, MetLife argues that its denial of Plaintiff's claim to benefits cannot be deemed arbitrary and capricious.

         In response, Plaintiff argues that Paragraph 20 in the durable power of attorney, a “Gifts” provision which allows the attorney-in-fact to make gifts to certain enumerated classes of people, satisfies N.J.S.A. 46:2B-8.13a, and therefore MetLife's denial of her claim was an abuse of discretion.

         DISCUSSION

         A. Subject matter jurisdiction

         Defendant removed Plaintiff's complaint from state court on the basis that the Court has federal question subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331, and specifically under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq., as amended.

         B. Standard for Cross-Motions for Summary Judgment

         Summary judgment is appropriate where the Court is satisfied that the materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations, admissions, or interrogatory answers, demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986); Fed.R.Civ.P. 56(a). If review of cross-motions for summary judgment reveals no genuine issue of material fact, then judgment may be entered in favor of the party deserving of judgment in light of the law and undisputed facts. See Iberia Foods Corp. v. Romeo Jr., 150 F.3d 298, 302 (3d Cir. 1998) (citation omitted).

         C. Standard of Review under ERISA

         There is no dispute that the Plan meets the test to qualify as an ERISA plan. ERISA provides that a plan participant or beneficiary may bring a 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.” 29 U.S.C. § 1132(a)(1)(B). The statute, however, does not specify a standard of review ...


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