United States District Court, E.D. Washington
ELSIE I. LYBECKER, a single woman, Plaintiff,
UNION PACIFIC CORPORATION, Defendants.
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
LONNY R. SUKO, Senior District Judge.
BEFORE THE COURT are the following cross-motions: Defendant Union Pacific Corp.'s ("Union Pacific") Motion for Summary Judgment (ECF No. 46); and Plaintiff's Motion for Summary Judgment (ECF No. 50). A telephonic hearing was held on December 4, 2014. Jaime Cole and Thomas Christina participated on behalf of the Defendant Union Pacific; Arthur Bistline and Mark Ellingsen participated on behalf of Plaintiff Lybecker. At the close of the hearing, the Court took the cross-motions under advisement. The Court has considered the oral and written arguments of counsel.
I. Undisputed Material Facts
Plaintiff brought this action under the Federal Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. Plaintiff's claim is based solely on the statutory penalty provision she asserts against Union Pacific under ERISA §502(c)(1)(B), 29 U.S.C.§1132(c)(1)(B).
Daniel J. Angel ("Angel"), was an employee of Defendant Union Pacific Railroad Company. Prior to 2004, Angel had been married and divorced twice. Prior to 2002 and during all material times thereafter, Angel had four children, two who were biological children (Clayton and Natasha) and two who were adopted children (Roger and Kevin). During the period beginning in 2002 and through at least 2014, both of Angel's former wives were living. Prior to and at the time he went missing, Plaintiff and Angel had a relationship and maintained a residence together in Spokane, although Angel had moved out about six months before his disappearance.
On January 1, 2002, and for a considerable period before that date, Angel was eligible to contribute to the Union Pacific Corporation Thrift Plan ("Thrift Plan"). On September 28, 2002, Angel named Plaintiff the sole death beneficiary of any undistributed portion of his Thrift Plan account. On May 31, 2004, and for a considerable period before that date, Angel was eligible to elect to participate in a variety of welfare benefit plans subject to ERISA under the Flexible Benefits Program for Full Time Salaried and Full-Time Hourly Employees of Union Pacific. One of these welfare benefit plans was the Life and Accident Insurance Program (the "subject plan"), and coverage was issued and administered by Prudential Insurance Company of America ("Prudential"). A benefit of participating in the subject plan was the ability of the participant to secure an insurer's promise to make a payment on account of the participant's death while covered under the plan, and the right of the participant to name the payee at any time before death.
All aspects of claims administration under the subject plan were handled exclusively by Prudential. At the time specified for distribution of the death benefit, the person most recently named to receive the life insurance policy proceeds receives the proceeds. A change of death beneficiary was effective as of the date it was signed if and only if it was made on a form created by Prudential and Prudential receives the signed form.
On May 31, 2004 Angel named Plaintiff as the beneficiary under the Life Insurance Plan, on a Prudential form. Angel had elected to participate in the Life Insurance Plan and the amount of Angel's basic and supplemental life coverage was $481, 000.00. Angel's basic and supplemental Accidental Death coverage was $567, 000.00.
On November 14, 2004, Angel's boat was found drifting on Lake Pend Orielle in Idaho with no one on board. On November 15, 2004, Kootenai County Sheriff's Department interviewed Plaintiff during the course of the investigation. Plaintiff testified that the investigator told her it would take seven (7) years to obtain a death certificate in Idaho. She apparently did not question the accuracy of this information.
On November 16, 2004, the Sheriff's Department placed its investigation into Angel's disappearance on the inactive list and registered Angel as a missing adult on the NCIC database until the fall of 2012.
At all times surrounding the events underlying this action, i.e., after November 14, 2004, Union Pacific's Human Resources Department had a Human Resources Service Center ("the Service Center"). Employees of the Service Center had access to information regarding the identity of death beneficiaries, if any, of the Thrift Plan. Employees of the Service Center, however, did not have access to information regarding the identity of the death beneficiaries, if any, of the Group Life/AD&D Plan.
If a Union Pacific employee's Thrift Plan beneficiary did not contact the Service Center with regard to an employee who had been reported deceased by the employee's coworker, supervisor, or family member, the practice of the Service Center employees was to contact the beneficiary. The purpose of the contact was to inform the beneficiary that he or she was the death beneficiary of the employee's Thrift Plan account.
On December 16, 2004, Union Pacific wrote to Plaintiff indicating that she was the beneficiary of Angel's Thrift Plan, but that to process the account, she needed a death certificate. Plaintiff contends that Union Pacific did not inform her that she was the beneficiary of Angel's life insurance policy nor that Prudential was the insurance company that provided the life insurance policy. Union Pacific notes that only Prudential had information about death beneficiaries of life/AD&D coverages, because beneficiary designation forms and beneficiary designation change forms were effective only if received by Prudential and employees were not required to send these forms to Prudential through Union Pacific.
According to Plaintiff, after Angel's disappearance, Prudential refused to inform Lybecker of the identity of the beneficiary of Angel's life insurance policy because no death certificate had been issued for Angel.
In 2009, a Union Pacific employee Mary Estrada spoke with Plaintiff by telephone about the letter she (Mary Estrada) had sent to Plaintiff dated September 18, 2009. This letter was written to inquire why Plaintiff had not applied for a distribution of Angel's Thrift Plan Account. Plaintiff told Mary Estrada that she could not get a death certificate until seven years after Angel's disappearance. Plaintiff testified that Union Pacific called her each year about Angel's Thrift Plan account "[b]ecause I was the executor of the estate."
Plaintiff states she called Union Pacific, although the dates are not certain, to discuss the 2009 correspondence. Plaintiff states Shawna Smith from Union Pacific would not disclose any information, though, because there was no death certificate.
It is undisputed that Plaintiff did not make any written request to Union Pacific for information or documents relating to the subject plan until after she obtained counsel in the fall of 2012. ECF No. 65 at 21. The record provides that Plaintiff allegedly made two oral requests, however, in November and December 2004.
On June 14, 2012, Plaintiff filed a Petition in the District Court for the First Judicial of Idaho (In the Matter of Daniel James Angel), consistent with earlier information regarding the 7 year time frame to obtain a death certificate. Plaintiff requested a judgment declaring Angel deceased after seven and a half years missing.
On August 15, 2012, Plaintiff retained counsel. On August 21, 2012, Plaintiff's counsel's paralegal sent an email to Union Pacific to follow up with an email to Shawna Smith regarding Angel's 401(k) distribution for Plaintiff. On September 11, 2012, Plaintiff's counsel's paralegal emailed Shawna Smith at Union Pacific requesting assistance on receiving policy details as she had a "dilemma with Prudential and MetLife."
On September 11, 2012, an Amended Petition for Declaratory Relief was filed on Plaintiff's behalf in Matter of Angel in Idaho state court. In the Amended Petition, Plaintiff named Prudential as a defendant, alleging that Prudential "is an insurance company who issued a life insurance policy on Daniel James Angel."
On or about September 17, 2012, Shawna Smith from Union Pacific informed Plaintiff's counsel that Prudential was the life insurance provider. On October 15, 2012, the Idaho state court entered its original Order on the merits in Matter of Angel. On October 23, 2012, the Idaho state court entered an amended order declaring Angel legally dead.
On or about October 29, 2012, Ms. Shawna Smith of Union Pacific communicated with Plaintiff's counsel that Union Pacific would accept the Declaratory Judgment in place of the death certificate to process Angel's account.
In fall of 2012, Plaintiff submitted her claim to Prudential for the life insurance and accidental death benefits. On or about October 30, 2012, Plaintiff's counsel obtained Thrift Plan account balance information from Union Pacific. On November 6, 2012, Plaintiff authorized the distribution of Angel's account balance under the Thrift Plan. On November 14, 2012, a copy of the Death Certificate for Angel was forwarded to Ms. Shawna Smith of Union Pacific.
On November 14, 2012, Prudential received the beneficiary form, death certificate, sheriff's investigation records, and the obituary of Angel. ECF. No. 48-7 at 5.
On November 29, 2012, Prudential informed Plaintiff that it received a Group Life Accidental Insurance Claim. Prudential further indicated that it could not make a determination of the cause of Angel's death because the death certificate state "undetermined." Prudential stated that the file was being transferred to Prudential's Special Investigation Unit and that a determination should be made within thirty (30) days. Id.
On December 5, 2012, Prudential made the Basic Life and Optional Life benefits of the policy available to Plaintiff in the amount of $405, 000. Id.
On December 6, 2012, Plaintiff's counsel received notice directly from Rebecca Wanner (Senior Client Services Specialist for Prudential in Record Keeping Services)that Prudential had paid Plaintiff Basic Life and Optional Life Benefits on December 5, 2012, but that the ...