The U.S. District Court for the Western District of Michigan held that a surviving spouse could not recover an additional $250,000 in life insurance benefits because the governing ERISA plan unambiguously prohibited the deceased employee from electing $300,000 in coverage.
The plaintiff sought benefits under his late husband’s supplemental life insurance plan. While employed by the defendant, the employee elected $300,000 in coverage and premiums consistent with that election were withheld from his paycheck. After his death, however, the plan’s claims administrator determined that he had been enrolled for only $50,000 because his salary made him ineligible for the maximum coverage.
The plaintiff alleged that the employer misled the employee into believing he had successfully elected $300,000 in coverage and failed to notify him that he was ineligible. After unsuccessful attempts to obtain relief from the employer, the plaintiff sued under ERISA.
An earlier breach-of-fiduciary-duty theory failed because the requested monetary recovery was not an available equitable remedy from the employer’s general assets. The amended complaint instead sought benefits due under the plan and statutory penalties for the employer’s alleged failure to provide requested plan documents.
The court concluded that the plan documents unambiguously barred an employee earning the decedent’s salary from electing $300,000 in coverage. Precedent did not permit modification of those clear terms absent extraordinary circumstances, which were not present.
The plaintiff also was not entitled to statutory penalties for the employer’s failure to respond to document requests because he had not shown resulting prejudice. The source indicates that the employer failed to appear, but the plaintiff nevertheless was not entitled to the requested relief under either theory.
Relief denied.
The 15-page opinion is Thomas v. UACJ Automotive Whitehall Industries, Inc., Lawyers Weekly No. 03-111335.
