Knopick v. Metropolitan Life Insurance Co.

10-4707-cv
Knopick v. Metropolitan Life Insurance Co.

UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1,
2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.

1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Daniel Patrick Moynihan
3 United States Courthouse, 500 Pearl Street, in the City of
4 New York, on the 19th day of January, two thousand twelve.
5
6 PRESENT: DENNIS JACOBS,
7 Chief Judge,
8 RICHARD C. WESLEY,
9 SUSAN L. CARNEY,
10 Circuit Judges.
11
12
13
14 DILLON A. KNOPICK, STEFANI L. KNOPICK,
15
16 Plaintiffs-Appellees,
17
18 -v.- 10-4707-cv
19
20 METROPOLITAN LIFE INSURANCE COMPANY,
21
22 Defendant-Appellant,
23
24 ADSPACE NETWORKS, INC.,
25
26 Defendant.
27
28
29
 1 FOR APPELLANT: ARIADNE STAPLES, Metropolitan Life Ins.
2 Co., New York, N.Y. (Clifford Scott,
3 Metropolitan Life Ins. Co., New York,
4 N.Y.; Christian J. Soller, Hodgson Russ
5 LLP, Albany, N.Y., on the brief).
6
7 FOR APPELLEES: ASHLEY D. HAYES, Hancock Estabrook, LLP,
8 Syracuse, N.Y.
9
10 Appeal from a judgment of the United States District
11 Court for the Northern District of New York (Hurd, J.).
12
13 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED

14 AND DECREED that the judgment of the district court be

15 REVERSED. The case is REMANDED to the district court to

16 enter summary judgment in favor of Metropolitan Life

17 Insurance Company.

18 Appellant Metropolitan Life Insurance Company

19 (“MetLife”) appeals from a judgment of the United States

20 District Court for the Northern District of New York (Hurd,

21 J.), which granted Plaintiffs-Appellees Dillon and Stefani

22 Knopick’s (“Knopick Beneficiaries”) motion for summary

23 judgment. We assume the parties’ familiarity with the

24 underlying facts, the procedural history, and the issues

25 presented for review.

26 BACKGROUND

27 MetLife provided a group insurance policy to Adspace

28 Networks, Inc. (“Adspace”) to fund its ERISA-governed

2
1 employee benefit plan. MetLife delivered the group insurance

2 policy to Adspace’s human resources director under cover of

3 a letter dated May 7, 2008; the group policy’s effective

4 date was April 1, 2008. The group policy provided that

5 “[MetLife] . . . will pay the benefits specified in the

6 Exhibits of this policy subject to the terms and provisions

7 of this policy.” JA 113 (emphasis added). As is relevant

8 here, the group policy incorporated the Certificate of

9 Insurance (“the Certificate”), effective April 1, 2008,

10 which contained the substantive terms of the policy.

11 The Certificate stated that an employee would only be

12 insured for those benefits for which he was eligible, for

13 which he elected, and that were in effect. It allowed an

14 employee to elect up to the lesser of $500,000 or five times

15 basic annual earnings in supplemental life benefits, with

16 $100,000 of those benefits going into effect without need to

17 provide any evidence of the employee’s good health (“Non-

18 Medical Issue Amount”). For amounts elected over the Non-

19 Medical Issue Amount, the employee had to submit “evidence

20 of insurability” satisfactory to MetLife. If MetLife

21 determined that the “evidence of insurability” provided by

22 the applicant was satisfactory, the supplemental life

3
1 benefits in excess of the Non-Medical Issue Amount would

2 take effect on the date identified by MetLife in writing, so

3 long as the employee was actively at work on that date.

4 On April 1, 2008, Roger Knopick, an employee of

5 Adspace, filled out MetLife’s Enrollment Form for Group

6 Insurance; he requested $420,000 in supplemental benefits.

7 Because he elected benefits in excess of the Non-Medical

8 Issue Amount, Knopick completed MetLife’s Small Market

9 Medical Underwriting Form (“Statement of Health”). He also

10 executed an authorization form permitting MetLife to obtain

11 his medical records and other personal information.

12 Although it is clear that Adspace sent Knopick’s paperwork

13 to Adspace’s New York office on the evening of April 3,

14 2008, and eventually on to MetLife, it is unclear exactly

15 when MetLife received that paperwork.

16 Knopick died on April 8, 2008. The Knopick

17 Beneficiaries submitted claims for benefits in May 2008.

18 Adspace then sent the beneficiaries’ paperwork to MetLife on

19 June 3, 2008. MetLife denied the Knopick Beneficiaries’

20 claims for benefits in excess of the Non-Medical Issue

21 Amount on the basis that MetLife had not approved Knopick’s

22 Statement of Health.

4
1 The Knopick Beneficiaries sued MetLife in New York

2 State court to recover the benefits in excess of the Non-

3 Medical Issue Amount; MetLife removed the action to federal

4 court. After a period of limited discovery, the Knopick

5 Beneficiaries moved for “judgment on the record,” and

6 MetLife cross-moved for summary judgment.

7 Judge Hurd construed the Knopick Beneficiaries’ motion

8 as one for summary judgment and granted it. The court

9 determined that the appropriate standard of review of

10 MetLife’s decision to deny benefits was “abuse of

11 discretion” based on the court’s conclusion that “the Plan

12 gives MetLife discretion to determine eligibility for

13 benefits.” In addition, Judge Hurd looked past the

14 certified administrative record, based on MetLife’s

15 “conflict of interest” and MetLife’s purportedly shoddy

16 review process.

17 Untethered from the certified administrative record,

18 Judge Hurd reviewed both the May 7, 2008 cover letter from

19 MetLife to Adspace informing Adspace of the effective date

20 of Adspace’s group coverage and a copy of the group policy.

21 Judge Hurd determined that the letter and group policy “must

22 be construed as writings from MetLife” accepting coverage

5
1 for Knopick for the entirety of supplemental life benefits

2 for which he applied and providing an effective date of

3 April 1, 2008. As a result, Judge Hurd found that MetLife’s

4 denial of the Knopick Beneficiaries’ claim for supplemental

5 life benefits in excess of the Non-Medical Issue Amount was

6 “arbitrary and capricious” and granted summary judgment in

7 favor of the Knopick Beneficiaries. MetLife now appeals.

8 DISCUSSION

9 This Court reviews a district court’s decision granting

10 summary judgment in an ERISA action de novo and generally

11 applies the same legal standard of review employed by the

12 district court. McCauley v. First Unum Life Ins. Co., 551

13 F.3d 126, 130 (2d Cir. 2008). “Summary judgment is

14 appropriate only where the parties’ submissions show that

15 there is no genuine issue as to any material fact and the

16 moving party is entitled to judgment as a matter of law.”

17 Id. (quoting Fay v. Oxford Health Plan, 287 F.3d 96, 103 (2d

18 Cir. 2002)).

19 A denial of benefits under an ERISA plan “is to be

20 reviewed under a de novo standard unless the benefit plan

21 gives the administrator or fiduciary discretionary authority

22 to determine eligibility for benefits or to construe the

6
1 terms of the plan.” Firestone Tire & Rubber Co. v. Bruch,

2 489 U.S. 101, 115 (1989). Where the plan provides

3 discretionary authority to the fiduciary or administrator to

4 make certain determinations but does not provide blanket

5 discretion to construe other plan terms, we review those

6 determinations committed to the discretion of the fiduciary

7 or administrator to ensure that they are not arbitrary or

8 capricious; otherwise, we review the fiduciary or

9 administrator’s determinations de novo. Fay, 287 F.3d at

10 104. The district court may expand its review beyond the

11 administrative record, but only for good cause shown. See,

12 e.g., DeFelice v. Am. Int’l Life Assurance Co. of N.Y., 112

13 F.3d 61, 66-67 (2d Cir. 1997); see also Zervos v. Verizon

14 N.Y., Inc., 277 F.3d 635, 646-47 (2d Cir. 2002).

15 We have concerns both as to whether Judge Hurd was

16 correct when he applied the arbitrary and capricious rather

17 than the de novo standard to review MetLife’s benefits

18 determination and as to whether he properly expanded the

19 scope of his review beyond the administrative record.

20 However, we do not resolve those concerns here, because even

21 under a de novo review where all of the documents extraneous

22 to the certified administrative record are considered,

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1 reversal of Judge Hurd’s grant of summary judgment to the

2 Knopick Beneficiaries is required.

3 A claim for benefits under ERISA is the assertion of a

4 contractual right. See Feifer v. Prudential Ins. Co. of

5 Am., 306 F.3d 1202, 1210 (2d Cir. 2002). When interpreting

6 an ERISA plan, this Court applies federal common law of

7 contract, which is often embodied by the “familiar rules of

8 contract interpretation,” which are in turn “informed by

9 state [contract] law principles.” Lifson v. INA Life Ins.

10 Co. of N.Y., 333 F.3d 349, 352-53 (2d Cir. 2003) (per

11 curiam). We review the plan as a whole and strive to give

12 terms their plain meanings. Fay, 287 F.3d at 104. On de

13 novo review, ambiguities in the plan—language that a person

14 of reasonable intelligence would find susceptible to more

15 than one interpretation—are construed in favor of the

16 beneficiary. Id.

17 The crux of this case is whether MetLife stated, in

18 writing, that Knopick’s supplemental life benefits in excess

19 of the Non-Medical Issue Amount were in effect, as the

20 Certificate requires. It did not. The evidence in the

21 administrative record suggests that MetLife never determined

22 that Knopick was insurable. Even if MetLife had received

8
1 Knopick’s Statement of Health prior to Knopick’s death,

2 which is doubtful, it had not sent the Statement of Health

3 to underwriting before his death.1

4 The evidence extraneous to the certified administrative

5 record that Judge Hurd considered—the May 7, 2008 letter

6 from MetLife to Adspace’s director of human resources and

7 the enclosed group policy listing Adspace as

8 policyholder—does not suggest otherwise. Judge Hurd

9 incorrectly concluded that because the letter and

10 accompanying group policy failed to distinguish between the

11 Non-Medical Issue Amount and supplemental life benefits

12 exceeding that amount, MetLife effectively stated in writing

13 that all of the coverage Knopick applied for was effective

14 on April 1, 2008. Putting aside the fact that Judge Hurd

15 appears to have conflated the group policy with the

16 Certificate, that reading of the May 7, 2008 cover letter

17 and enclosures is unreasonable. The May 7, 2008 materials

18 reflect only that Adspace’s group policy was in effect as of

19 April 1, 2008; they do not constitute MetLife’s statement,

20 in writing, that Knopick’s supplemental life benefits in

21 excess of the Non-Medical Issue Amount were in effect.

1
We note that the record contains no suggestion that Adspace or MetLife
intentionally delayed in fulfilling its obligations under the Plan.

9
1 For the foregoing reasons, the judgment of the district

2 court is hereby REVERSED. The case is REMANDED to the

3 district court to enter summary judgment in favor of

4 MetLife.

5
6 FOR THE COURT:
7 Catherine O’Hagan Wolfe, Clerk

10