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McFarland v. Ups Ground Freight, Inc.

United States District Court, Tenth Circuit

October 29, 2013

UPS GROUND FREIGHT, INC., et al., Defendants.



In this removed action, plaintiff asserts claims under the Employee Retirement Income Security Act (“ERISA”), challenging the denial of life insurance benefits pursuant to 29 U.S.C. § 1132(a)(1)(B), and seeking to recover a penalty for defendants’ failure to comply with the disclosure requirements of 29 U.S.C. § 1132(c). This matter is before the Court on the following motions: (1) Defendants United Parcel Services, Inc.’s And UPS Ground Freight, Inc.’s Motion For Summary Judgment (Doc. #47) filed March 18, 2013, and (2) The Prudential Insurance Company Of America’s Joinder In UPS’ Motion For Summary Judgment (Doc. #55) filed April 25, 2013.[1] For the following reasons the Court overrules both motions.

Legal Standards

Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. See Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Vitkus v. Beatrice Co., 11 F.3d 1535, 1538-39 (10th Cir. 1993). A “genuine” factual dispute is one “on which the jury could reasonably find for the plaintiff, ” and requires more than a mere scintilla of evidence. Liberty Lobby, 477 U.S. at 252. A factual dispute is “material” only if it “might affect the outcome of the suit under the governing law.” Id. at 248.

The moving party bears the initial burden of showing that there are no genuine issues of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Justice v. Crown Cork & Seal Co., 527 F.3d 1080, 1085 (10th Cir. 2008). Once the moving party meets its burden, the burden shifts to the nonmoving party to show that a genuine issue remains for trial with respect to the dispositive matters for which she carries the burden of proof. Nat’l Am. Ins. Co. v. Am. Re-Ins. Co., 358 F.3d 736, 739 (10th Cir. 2004); see Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). As to these matters, the nonmoving party may not rest on her pleadings but must set forth specific facts. Fed.R.Civ.P. 56(e)(2); Matsushita, 475 U.S. at 586-87; Justice, 527 F.3d at 1085. Conclusory allegations not supported by evidence are insufficient to establish a genuine issue of material fact. Jarvis v. Potter, 500 F.3d 1113, 1120 (10th Cir. 2007); see Kidd v. Taos Ski Valley, Inc., 88 F.3d 848, 853 (10th Cir. 1996).

When applying this standard, the Court must view the factual record in the light most favorable to the party opposing the motion for summary judgment. Duvall v. Ga.-Pac. Consumer Prods., L.P., 607 F.3d 1255, 1260 (10th Cir. 2010); see Ricci v. DeStefano, 557 U.S. 557, 586 (2009). Summary judgment may be granted if the nonmoving party’s evidence is merely colorable or is not significantly probative. Liberty Lobby, 477 U.S. at 250-51. Essentially, the inquiry is “whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law.” Id. at 251-52.


The following facts are uncontroverted or presented in the light most favorable to plaintiff:

Plaintiff’s husband, Toli Fuimaono, Jr., was an employee of UPS Ground Freight, Inc., formerly Overnite Transportation Company, a company of United Parcel Services, Inc. As an employee of UPS, Fuimaono was entitled to basic life insurance benefits at no cost to him and to supplemental life insurance benefits, which he paid for through automatic payroll deductions. Beginning in or before December of 2004, Fuimaono participated in the UPS supplemental life insurance plan that offered “basic plus 2 times pay, ” which means that benefits under the plan were equal to one year of decedent’s salary plus twice that amount. Fuimaono continued to participate in the supplemental life insurance plan, with no changes in his election, for the remainder of his employment with UPS (which was coterminous with his death on January 31, 2007).

Fuimaono was injured on the job in February of 2006, and for quite some time he was on workers compensation and medical leave. Physicians released him to return to work for about one week in August of 2006 and again for the last week or two before his death. He remained a UPS employee throughout his leave, but during that time neither he nor his wife received any communication from defendants about his supplemental life insurance benefits, including direct billing for premium payments or notice of lapsed coverage. Likewise, Fuimaono received no such notice during the short periods in which he returned to work, and his wife did not receive notice following his death.[2] Plaintiff and Fuimaono shared the task of opening and reviewing mail which they received at home.

Fuimaono was entitled to prior notice of any impending lapse of his supplemental life insurance coverage, even when he was on workers compensation or medical leave, to give him the opportunity to pay the premiums himself.

After Prudential paid plaintiff $42, 922.20 in life insurance benefits – the amount of the “basic life” plan – plaintiff asked UPS why she had not received benefits from Fuimaono’s supplemental life insurance. In February of 2007, UPS told plaintiff that Fuimaono’s supplemental life insurance had lapsed for nonpayment of premiums in either August or November of 2006. Plaintiff received no additional details about when or why the coverage lapsed. Plaintiff asserts that if Fuimaono had received the notice of impending lapse to which he was entitled, he would have paid the premium because he knew that his lung cancer was terminal.

In a letter dated August 29, 2010, plaintiff through counsel made demand upon UPS and Aetna FSA for payment of Fuimaono’s supplemental life insurance benefits in the amount of $84, 000 plus interest.[3] Doc. #50-3. Neither addressee responded to the letter. Nearly one year later, plaintiff and her counsel sent a second letter to the Overnite Benefits Department and to Jennifer Brummett at Prudential Life Insurance Company. Doc. #50-4. This letter likewise demanded payment of the supplemental life insurance benefits. For Ms. Brummett’s benefit, counsel enclosed a copy of his first letter, explaining that “UPS Overnite Benefits Department informed me that this letter should have been sent to Prudential Life Insurance of America, and not Aetna FSA mentioned in the Overnite Employee Benefits Materials.” Id. at 2. In addition, plaintiff and her counsel made a request pursuant to 29 U.S.C. § 1132(c) for information and documents relating to those benefits, including the identity and contact information for the plan administrator, enrollment and premium payment documents, plan documents including the summary plan description (“SPD”) and all cancellation correspondence and notice.

In a letter dated September 16, 2011, Prudential told plaintiff that it had no enrollment and eligibility records because it relied on a third-party administrator, Hewitt Associates, to provide such records for UPS. Prudential gave no contact information for Hewitt Associates. Prudential explained that it had received notice of Fuimaono’s death in February of 2007 from Hewitt Associates and that it had paid $42, 922.20 to plaintiff in April of 2007 in response to a claim for basic benefits. The letter further explained that Fuimaono had no supplemental life insurance coverage when he died because it had lapsed on August 17, ...

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