United States District Court, E.D. Michigan, Southern Division
NOR-COTE, INC. and STANLEY GROUSE, Plaintiffs,
RELIANCE STANDARD LIFE INSURANCE COMPANY and TMTA INSURANCE AGENCY, LLC, Defendants.
OPINION AND ORDER GRANTING PLAINTIFF'S MOTION FOR
JUDGMENT AND DENYING DEFENDANT'S MOTION FOR
BERNARD A. FRIEDMAN, SENIOR UNITED STATES DISTRICT JUDGE.
matter is presently before the Court on cross-motions for
judgment on the administrative record [docket entries 14 and
15]. Each side has responded to the other's motion and
replied. Pursuant to E.D. Mich. LR 7.1(f)(2), the Court shall
decide these motions without a hearing.
case concerns disputed coverage under a group life insurance
policy issued by Reliance Standard Life Insurance Company
(“Reliance”) to Nor-Cote, Inc.
(“Nor-Cote”) for the benefit of its employees.
Barbara Grouse, a co-owner and officer of Nor-Cote, died in
January 2018. Plaintiff, Barbara Grouse's spouse and
designated beneficiary, filed a claim for the death benefit
(Administrative Record, hereinafter “AR, ” at
85). On March 1, 2018, defendant denied the claim on the
grounds that the decedent was not a full-time employee, as
required by the policy (AR 70-72). On March 7, 2018,
plaintiff appealed on the grounds that Barbara Grouse, as a
co-owner and officer of the company, “worked 30 to 40
hours per week and did not punch a time card” (AR at
87). On May 8, defendant reaffirmed its decision that
“Ms. Grouse did not satisfy the definition of
‘Fulltime,' she was not in a class
eligible for insurance, and therefore, no insurance coverage
under the Policy was in effect at the time of her
death” (AR at 77; emphasis in original). Plaintiff then
brought the instant action in state court for breach of
contract. Pursuant to Metropolitan Life Ins. Co. v. Gen.
Motors Corp., 481 U.S. 58 (1987), defendant timely
removed the case to this Court, as plaintiff's claim
seeks benefits under an employee benefit plan and is
therefore preempted by ERISA. See 29 U.S.C. §
Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d
609, 619 (6th Cir. 1998) (Gilman, J., concurring), the Sixth
Circuit held that when deciding a case such as this, the
Court “should conduct a de novo review based
solely upon the administrative record, and render findings of
fact and conclusions of law accordingly.” As this Court
has noted, “[c]ourts do not use summary judgment
procedures for deciding [ERISA] benefit claim denials;
rather, parties can file cross motions for judgment on the
administrative record . . . .” Zack v. McLaren
Health Advantage, Inc., 340 F.Supp.3d 648, 655 (E.D.
parties agree that the Court's review is de
novo. See Def.'s Br. at 8 (PageID.94),
Pl.'s Br. at 10 (PageID.164). “When conducting a
de novo review, the district court must take a
‘fresh look' at the administrative record but may
not consider new evidence or look beyond the record that was
before the plan administrator.” Wilkins, 150
F.3d at 616. This standard of review applies “with
respect to both the plan administrator's interpretation
of the plan and the plan administrator's factual
findings.” Id. The review “is without
deference to the decision or any presumption of correctness,
based on the record before the administrator.”
Perry v. Simplicity Eng'g, 900 F.2d
963, 966 (6th Cir. 1990). Further,
[w]hen interpreting ERISA plan provisions, general principles
of contract law apply; unambiguous terms are given their
“plain meaning in an ordinary and popular sense.”
Farhner v. United Transp. Union Discipline Income
Protection Program, 645 F.3d 338, 343 (6th Cir. 2011)
(quoting Williams v. Int'l Paper Co., 227 F.3d
706, 711 (6th Cir. 2000)). Where plan language is ambiguous,
extrinsic evidence may be considered to discern the purpose
of the plan as the average employee would have reasonably
understood it. Kolkowski v. Goodrich Corp., 448 F.3d
843, 850 (6th Cir. 2006).
Lipker v. AK Steel Corp., 698 F.3d 923, 928 (6th
History and Record Evidence
policy at issue provides life insurance for “active,
Full-time employee[s]” who fall within one of four
“eligible classes” (AR at 7). The parties agree
that if Barbara Grouse worked full-time she fell within Class
1, which encompasses officers “who had supplemental
life and accidental death and dismemberment insurance
coverage with the prior carrier on June 30, 2006 . . .
.” Id. The parties disagree as to whether she
was “active, Full-time.” The policy does not
define “active” by itself, but it does state,
“Actively at work” and “active work”
means the person actually performing on a Full-time basis
each and every duty pertaining to his/her job in the place
where and the manner in which the job is normally performed.
This includes approved time off such as vacation, jury duty
and funeral leave, but does not include time off as a result
of injury or illness.
(AR at 9). The policy also states that
“‘Full-time' means working for you for a
minimum of 30 hours during a person's regularly scheduled
work week.” Id.
claim form plaintiff submitted on January 31, 2018, he
indicated that Barbara Grouse died on January 15, 2018; that
her “Occupation/Title/Position” was
“owner/secretary”; that her “Salary on Last
Benefit Change Date Per Policy” was $10, 000; that her
employment status was “active”; that the
“Number of Hours Employee Scheduled to Work Per Week in
the Place Where the Job is Normally Performed” was
“10”; that the ...