CAMPBELL v. WE TRANSPORT INC (2021)

United States Court of Appeals, Second Circuit.2021-05-14No. No. 20-1289

Summary · law.co

Holding. The district court's grant of summary judgment in favor of the defendants was affirmed.

Collette Campbell appealed a summary judgment decision favoring her brother's life insurance company and his former employer in a dispute over policy proceeds. Campbell, as administrator of her brother's estate, claimed she was entitled to the insurance benefits, but the company paid them to his adopted children instead. The court examined three main arguments: whether the insurance company misinterpreted its policy language, whether Campbell received a full and fair review of her claim as required by federal law, and whether the defendants were obligated to file an interpleader action to resolve the dispute.

The appellate court found no merit to any of Campbell's contentions. The insurance company's interpretation of its policy—allowing it to pay benefits to the insured's adopted children when no beneficiary was named—was a rational reading of the policy terms. Additionally, even assuming Campbell had a right to judicial review of the review process itself, remanding the matter for another administrative review would serve no purpose given that all relevant information and records were already available in the litigation. Finally, nothing in federal law required the defendants to initiate an interpleader action simply because they could have done so.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether the insurance company's interpretation of policy language regarding payment of benefits when no named beneficiary exists was rational under the arbitrary and capricious standard
Whether the claimant was entitled to statutory relief for an allegedly inadequate administrative review process
Whether defendants were required to file an interpleader action to resolve the benefits dispute

Procedural posture

Campbell appealed a district court's adoption of a magistrate judge's recommendation granting summary judgment to the defendants in an ERISA benefits dispute.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

SUMMARY ORDER

Plaintiff-Appellant Collette Campbell, proceeding pro se, brought this action alleging that, although she incurred expenses paying for her brothers funeral, she was wrongfully denied payment of the proceeds of his life insurance policy. Campbell filed suit under the civil enforcement provision of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1132, bringing claims against the policy issuer, Defendant-Appellee Unimerica Life Insurance Company of New York (“Unimerica” or “the issuer”), and her brothers former employer, Defendant-Appellee We Transport, Inc. (together, “Defendants”).

In a March 2, 2020 report and recommendation, Magistrate Judge Bloom recommended that the district court grant summary judgment to Defendants. In a March 31, 2020 decision, District Judge Brodie adopted the report and recommendation over Campbells objections and directed that judgment in Defendants’ favor be entered. Campbell now appeals.

This Court reviews de novo the district courts grant of summary judgment. See In re DeRogatis, 904 F.3d 174, 186 (2d Cir. 2018). Because Campbell is proceeding pro se, we liberally construe her submissions and read them “to raise the strongest arguments they suggest.” McLeod v. Jewish Guild for the Blind, 864 F.3d 154, 156 (2d Cir. 2017). In this Order, we assume the parties’ familiarity with the underlying facts, procedural history, and arguments on appeal, to which we refer only as necessary to explain our decision to affirm.

Campbell advances primarily three arguments on appeal. First, she maintains that Unimerica misinterpreted its policy terms to mean that it had discretion to pay her brothers life insurance benefits to his adopted children instead of to his estate, of which she was the administrator. The policy provides in relevant part:

If there is no named beneficiary living at the Covered Persons death, We will pay any amount due to the estate or, at Our option, to his: 1. legal spouse; 2. natural or legally adopted children in equal shares; or 3. estate.

Supp. Appx 17. Campbell argues that Unimerica was not entitled to rely on this provision in support of its payment decision because (1) the provision “applies only where there is ‘no named beneficiary living at the time’ ” of the insureds death, and (2) where, as in her brothers case, no beneficiary was ever named, New York law requires the policy proceeds to be paid to the estate. Appellants Br. 13 (emphasis in original).

Campbell does not dispute that the issuers acts are subject to review under the arbitrary and capricious standard, and that under this standard a court must uphold the issuers interpretation so long as it represents a rational construction of the policy language. See McCauley v. First Unum Life Ins. Co., 551 F.3d 126, 132 (2d Cir. 2008) (explaining that in applying the arbitrary and capricious standard, “[w]here both the plan administrator and a spurned claimant offer rational, though conflicting, interpretations of plan provisions, the administrators interpretation must be allowed to control”). We are not persuaded that Campbell presents a reading of the policy language that is equally plausible to that adopted by Unimerica. But, even if she did, we agree with the district court that Unimericas interpretation of its policy language was rational. Accordingly, its decision to pay Campbells brothers life insurance benefits to his adopted children was not arbitrary and capricious.

Second, Campbell contends that she was denied the “full and fair review” of her claim that is required by 29 U.S.C. § 1133(2) (employee benefit plans must “afford a reasonable opportunity” to any plan participant “for a full and fair review by the appropriate named fiduciary of the decision denying the claim”). Campbell maintains that Unimerica denied her access to key information in reviewing her claim and unfairly denied her a chance to present her case. Even assuming that Campbell, who is not a plan participant, is qualified to seek relief under § 1133(2), we have no doubt that, under the circumstances presented, she is not entitled to obtain the relief she seeks. This Court has explained that the “typical remedy” for a § 1133(2) violation “is remand for further administrative review,” in which the “full and fair review” can be supplied. Krauss v. Oxford Health Plans, Inc., 517 F.3d 614, 630 (2d Cir. 2008). Where the basis for the benefits determination and all relevant records have been provided through subsequent litigation, as they have here, and the Court is satisfied that the challenged benefits determination was made on a rational basis, the typical remedy of remand would serve no purpose and a suit such as Campbells seeking relief under § 1133(2) should be denied as futile. Id. Accordingly, Campbells argument under § 1133(2) lacks merit.

Finally, Campbell urges that Defendants should have begun an interpleader action to resolve her dispute with them over her brothers life insurance benefits. This argument, too, is unavailing. As the district court explained in its decision, the fact that Defendants could have filed an interpleader action does not mean that they violated their statutory obligations under ERISA when they chose not to do so. Campbell identifies no basis in ERISA for requiring Defendants to pursue such an action.

* * *

We have considered Campbells remaining arguments on appeal and find in them no basis for reversal. The district courts judgment is AFFIRMED.