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Owens v. Metropolitan Life Insurance Co.

United States District Court, N.D. Georgia, Gainesville Division

April 14, 2015

LAURA A. OWENS, individually and on behalf of a class of all others similarly situated Plaintiffs,
v.
METROPOLITAN LIFE INSURANCE COMPANY, Defendant.

ORDER

RICHARD W. STORY, District Judge.

This case comes before the Court on Defendant's Rule 12(b)(6) Motion to Dismiss Plaintiff's Complaint [25]. After a review of the record, the Court enters the following Order.

Background[1]

This case arises out of Metropolitan Life Insurance Company's ("MetLife") administration of life insurance death benefits paid on employee benefit plans. On April 17, 2014, Plaintiff Laura Owens, on behalf of herself and of a class of all others similarly situated, brought this action pursuant to the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq .

Plaintiff Laura Owens is the beneficiary of a life insurance policy that provided $95, 000.00 in coverage on her husband's life (the "Policy"). (Compl., Dkt. [1] ¶¶ 7-9.) Owens's husband, Robert F. Owens, was employed prior to his death on April 7, 2012 by CB Richard Ellis, Inc. and was a participant in the CB Richard Ellis Group Insurance Plan (the "Plan"). (Id. ¶ 9.) The Policy provides, "We will pay the Life Insurance in one sum. Other modes of payment may be available upon request." (Id. ¶ 10.)

On or around May 21, 2012, CB Richard Ellis, Inc., submitted a claim for life insurance benefits on Plaintiff's behalf. (Id. ¶ 11.) MetLife approved the claim and established a "Total Control Account" in Owens's name (the "TCA"). (Id. ¶ 12.) MetLife provided a "book of blank drafts" to Plaintiff, which allowed her to withdraw funds from the TCA in increments of $250 or more. (Id.) The TCA accrued interest at a rate tied to one of two indices; the rate fluctuated weekly but the annual effective interest rate was no lower than 0.50%. (Id. ¶ 13.)

MetLife's practice is to hold payable benefits in its own general account until called upon to transfer funds to cover drafts drawn on "Total Control Accounts." (Id. ¶ 15.) This practice extended to the benefits paid on Plaintiff's claim. MetLife established a TCA for Ms. Owens, paying interest at the rate of 0.50%. (Id. ¶ 16.) The funds remained in MetLife's general account, earning interest for MetLife at a higher rate than that paid to Plaintiff. (Id.)

This practice is the basis of Plaintiff's Complaint. Plaintiff alleges that MetLife profited from "investing [Plaintiff's] benefits for its own account." (Id. ¶ 17.) Plaintiff further alleges that MetLife did not disclose that profit or similar profits to Ms. Owens or to the Plan's sponsor or administrator. (Id. ¶ 18.) Plaintiff claims that this conduct constitutes a breach of fiduciary duty.

Plaintiff alleges that MetLife routinely profits in this manner from plan benefits paid on group life insurance policies. (Id. ¶¶ 19-25.) Plaintiff claims that this practice violates the terms of the payment clauses in these policies, which provide "We will pay the Life Insurance in one sum. Other modes of payment may be available upon request." (Id. ¶ 20.) Plaintiff alleges that MetLife's profits as a result of this practice total between $100 million and $300 million annually. (Id. ¶ 25.)

Plaintiff claims she exhausted her administrative remedies when, on or around November 21, 2013, Plaintiff submitted a claim on the Policy to MetLife. (Id. ¶¶ 26-28.) MetLife did not respond to Plaintiff's claim within 90 days, as required by the ERISA addenda to the Plan's Certificates of Insurance. (Id.)

Plaintiff now brings her claims pursuant to ERISA on behalf of herself and the class of others similarly situated.[2] Plaintiff further brings claims on behalf of a subclass of Georgia residents. Plaintiff claims that MetLife functioned as a fiduciary when it engaged in the conduct described above. (Id. ¶ 31.) Further, Plaintiff claims that MetLife is a party in interest to the Plan. (Id. ¶¶ 36-37.) On those bases, Plaintiff brings the following causes of action: breach of the duty of loyalty imposed by ERISA § 404(a)(1)(A) (Count I); breach of the fiduciary duties imposed by ERISA § 406(b)(1) (Count II), § 406(a)(1)(B) (Count III), and § 406(a)(1)(C) (Count IV); declaratory relief regarding coverage by state insurance guaranty funds for the Georgia subclass (Count V); and postmortem interest for the Georgia subclass (Count VI).

Defendants now move to dismiss the Complaint on grounds that Plaintiff does not have standing to sue and that her claims fail as a matter of law (Def.'s Rule 12(b)(6) Mot. to Dismiss Pl.'s Compl. ("Def.'s Mot. to Dismiss"), Dkt. [25]). Plaintiff responds in opposition. (Pl.'s Resp. in Opp'n to Def.'s Mot. to Dismiss ("Pl.'s Resp."), Dkt. [30].) As an initial matter, Defendant's request for oral argument (Def.'s Reply in Supp. of Def.'s Mot. to Dismiss ("Def.'s Reply"), Dkt. [35] at 20) is DENIED. The Court now considers the parties' arguments in turn.

Discussion

I. Legal Standard - Motion ...


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