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Heng v. Metropolitan Life Insurance Co.

United States District Court, N.D. California

July 27, 2017

PETRA HENG, Plaintiff,
v.
METROPOLITAN LIFE INSURANCE COMPANY, Defendant.

          ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT DOCKET NO. 27

          EDWARD M. CHEN United States District Judge

         I. INTRODUCTION

         Thomas Heng worked at DecisionView, Inc. (DecisionView) from August 31, 2011 until June 30, 2012 and was co-employed by TriNet Group, Inc. (TriNet), which provided DecisionView with payroll and benefits services. Heng ceased to be a TriNet employee after June 30, 2012, when DecisionView terminated its contract with TriNet, effective July 1, 2012. On July 25, 2012, Heng died in a hiking accident.

         Decedent Thomas Heng is survived by his wife, Plaintiff Petra Heng. Plaintiff submitted a claim for basic life benefits, basic accidental death and dismemberment (AD&D) benefits, and Voluntary AD&D benefits. Defendant Metropolitan Life Insurance Co. (MetLife) paid Plaintiff basic life benefits but denied AD&D claims. Plaintiff filed this lawsuit against Defendant MetLife, seeking the AD&D benefits. Docket No. 1.

         Pending before the Court is Defendant MetLife's motion for summary judgment. Docket No. 27. The Court grants the motion.

         A. Background

         1. Background to the Claim for AD&D Benefit

         Plaintiff was married to Thomas Heng, a system administrator for DecisionView. Docket No. 27 at 1. DecisionView had contracted with TriNet, an entity that contracts with other business to manage their payroll and benefits services. Id. Pursuant to an agreement between TriNet and DecisionView, TriNet was Decedent's co-employer, beginning in August 31, 2011. Id. at 6. Heng participated in TriNet's Employee Benefit Insurance Plan (the Plan), which is an employee welfare benefit plan governed by the Employee Retirement Income Security Act of 1974, as amended (ERISA), 29 U.S.C. § 1001, et seq. Id. at 1. He elected to supplement the basic plan of term life insurance and AD&D insurance in the flat amount of $20, 000 by adding voluntary AD&D coverage of $750, 000 at a cost to him of $7.50 per each day period. Docket No. 29 at 2. This premium payment was deducted from Decedent's semi-monthly paycheck, and he made his first premium payment on September 15, 2011. Id. Heng designated his wife Petra as his sole beneficiary. Id.

         DecisionView terminated its agreement with TriNet, effective July 1, 2012. AR[1] 164, 528. Its employees, including Heng, were no longer co-employed by TriNet after June 30, 2012. Id. Decedent's June 30, 2012 paycheck included the last deduction for his semi-monthly AD&D premium contribution. AR 527-28. TriNet sent Decedent a COBRA packet that addressed how to continue life insurance, but TriNet has no record of Decedent contacting it about COBRA or converting his basic life insurance coverage under the Plan to an individual policy. AR 528.

         Around July 22, 2012, Heng died while hiking. AR 195. As Decedent's beneficiary, Plaintiff submitted a claim for basic life, basic AD&D, and Voluntary AD&D benefits dated August 6, 2012, along with a death certificate indicating that death was the result of a mountain hiking accident. AR 177-79. Defendant MetLife, the Plan's claim administrator, paid the basic life claim on the basis that Decedent died within the conversion period, but determined that Plaintiff did not qualify for either basic or voluntary AD&A benefits because coverage had terminated on June 30, 2012 and did not convert. AR 186, 206-08. On February 11, 2013, Plaintiff appealed the denial of her claim. AR 237-42. MetLife affirmed its denial on October 1, 2013, which Plaintiff appealed on February 10, 2014. AR 538-41, 565-67. On October 23, 2014, MetLife responded to Plaintiffs appeal by upholding the denial of the claim. AR 578-82.

         On July 22, 2016, Plaintiff filed this suit. Docket No. 1.

         2. The MetLife Group Policy

         MetLife issued Group Insurance Policy No. 1164937-1-G (the Policy) to TriNet to fund the life and AD&D benefits under the Plan. AR 1-137. TriNet served as the Plan's administrator and sponsor. AR 48, 134. MetLife served as the Plan's claim administrator. Docket No. 27 at 2. The Plan provides basic life and AD&D coverages, AR 1-47, and supplemental life, dependent life, and voluntary AD&D coverages, AR 52-133. While co-employed by TriNet, Decedent was covered under the plan for certain benefits, including basic life insurance in the amount of $20, 000, basic AD&D coverage in the amount of $20, 000, and Voluntary AD&D coverage in the amount of $750, 000. AR 164, 185.

         a. Basic Life and Basic AD&D

         The Plan pays Basic Life benefits in the amount of $20, 000, AR 23, and Basic AD&D benefits, in its full amount, “equal to [the participant's] Life Insurance, ” AR 24.

         The Plan's Basic Life and Basic AD&D section entitled “DATE YOUR INSURANCE ENDS” states:

Your insurance will end on the earliest of:
for all coverages
1. the date the Group Policy ends; or
2. the date insurance ends for Your class; or
3. the end of the period for which the last premium has been paid for You; or
for Basic Life Insurance
4. the last day of the calendar month in which Your employment ends; Your employment will end if You cease to be Actively at Work in any eligible class, except as stated in the section entitled CONTINUATION OF INSURANCE WITH PREMIUM PAYMENT; or
5. the last day of the calendar month in which You retire in accordance with the Policyholder's retirement plan; or
for Accidental Death and Dismemberment Insurance
6. the last day of the calendar month in which Your employment ends; Your employment will end if You cease to be Actively at Work in any eligible class, except as stated in the section entitled CONTINUATION OF INSURANCE WITH PREMIUM PAYMENT; or
7. the last day of the calendar month in which You retire in accordance with the Policyholder's retirement plan.

AR 28-29 (emphasis in original). The Plan further advises the participant to “refer to the section entitled LIFE INSURANCE: CONVERSION OPTION FOR YOU for information concerning the option to convert to an individual policy of life insurance if Your Life Insurance ends.” AR 29.

         The section entitled “LIFE INSURANCE: CONVERSTION OPTION FOR YOU” provides:

If Your life insurance ends for any of the reasons stated below, You have the option to buy an individual policy of life insurance (“new policy”) from Us during the Application Period in accordance with the conditions and requirements of this section. This is referred to as the “option to convert”. Evidence of Your insurability will not be required.
When You Will Have the Option to Convert
You will have the option to convert when:
• Your life insurance ends because:
• You cease to be in an eligible class;
• Your employment ends;
• this Group Policy ends, provided You have been insured for life insurance for at least 5 continuous years; or
• this Group Policy is amended to end all life insurance for an eligible class of which You are a member, provided You have been insured for at least 5 continuous years.
Application Period
If You opt to convert Your Life Insurance for any of the reasons stated above, We must receive a completed conversion application form from You within 31 days after the date Your Life Insurance ends.
Option Conditions
The option to convert is subject to the following:
D. the new policy will be issued without an accidental death and dismemberment benefit, an accelerated benefit option, a waiver of premium benefit or any other rider or additional benefit . . . .
Maximum Amount of the New Policy
If Your life insurance ends for any other reason, the maximum amount of insurance that You may elect for the new policy is the amount of Your life insurance which ends under this Group Policy.
If You Die Within 31 Days After Your Life Insurance Ends
If You die within 31 days after Your life insurance ends, Proof of Your death must be sent to Us. When We receive such Proof with the claim, We will review the claim and if We approve it will pay the Beneficiary. The amount We ...

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