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Watson v. Allianz Life Insurance Company of North America

United States District Court, E.D. Michigan, Southern Division

May 30, 2019

LAUREN WATSON, and AVERY BRADLEY, as Conservator, on behalf of L.W., a minor, Plaintiffs,

          Mona K. Majzoub United States Magistrate Judge.


          Paul D. Borman United States District Judge.

         I. BACKGROUND

         This matter involves life insurance benefits allegedly improperly paid to a deceased insured's girlfriend, as opposed to Plaintiffs Lauren Watson and L.W., the insured's only two daughters. Before the Court is Defendant Allianz Life Insurance Company of North America's (“Allianz”) Motion to Dismiss Plaintiffs L.W. (a minor, whose claim is brought by Avery Bradley as conservator) and Lauren Watson's Amended Complaint, (ECF #4), pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF #5.) On December 12, 2018, Plaintiffs initiated this action by filing a one-count Complaint under 29 U.S.C. §1132(a)(1)(B) seeking payment of life insurance benefits under a plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), or declaratory relief as to Plaintiffs' rights to benefits under the plan. (ECF #1.) On January 28, 2019, Plaintiffs filed an Amended Complaint to substitute estate conservators. (ECF #4.) On February 27, 2019, Allianz filed its Motion to Dismiss the Amended Complaint in lieu of an answer. (ECF #5.) Plaintiffs responded on April 19, 2019 (ECF #12), and Allianz filed its Reply on May 9, 2019 (ECF # 18.) The Court held a hearing on the matter on May 28, 2019.

         II. FACTS

         The facts as alleged in the Amended Complaint are taken as true for purposes of the instant Motion. In re Delorean Motor Co., 991 F.2d 1236, 1240 (6th Cir. 1993). Richard B. Watson, who passed away on August 30, 2015, owned various insurance policies offered by his employer, Defendant Allianz, through an employee welfare benefit plan governed by ERISA (“Plan”). (Am. Compl., ECF #4, ¶6, PgID 29, ECF #4-1, PgID 33; Dec. of Melissa Nord, [undated], ECF #7, PgID 148.)[1] Allianz was the Plan Sponsor and Administrator, but the Plan benefits were provided under a group insurance policy issued to Allianz by the Hartford Life and Accident Insurance Company (“Hartford”). (Nord Dec., ECF #7, PgID 148.) The group insurance policy was incorporated into, and formed a part, of the Plan. (Id.) The Plan designated Hartford “as the claims fiduciary for benefits provided under the Policy.” (Id.) Importantly, the Plan “granted [Hartford] full discretion and authority to determine eligibility for benefits and to construe and interpret all terms and provisions of the Policy.” (Id.)

         Watson was insured by a Basic Life Insurance Policy (“Life Insurance Policy”). (Am. Compl., ECF #4, ¶¶6-7, PgID 33.) Watson also had Basic Accidental Death and Dismemberment (“AD&D”) and Optional Life Insurance. (Id. at ECF #4-1, PgID 35.) According to a “Summary of Benefits” attached to the Amended Complaint, the death benefit from the Life Insurance Policy was $718, 000. (Id. at PgID 36-37.)[2] Plaintiffs, Watson's only two children, allege that they were the rightful recipients of the Life Insurance and AD&D Policies' death benefit, as opposed to Laura E. Cooper, who, according to multiple exhibits to the Amended Complaint, was the primary beneficiary of those Policies at the time of Watson's death. (Am. Compl., ECF #4, ¶¶7, 10, PgID 29, ECF #4-1, PgID 36.)

         According to a March 18, 2015 Allianz Beneficiary Confirmation Notice sent to Watson, his beneficiary elections were as follows: 1) “Basic Life Insurance”: Laura E. Cooper as primary beneficiary, and Plaintiffs as 50/50 contingent beneficiaries; 2) “Optional Life Insurance”: Plaintiffs as 50/50 primary beneficiaries; and 3) “Basic AD&D”: Laura E. Cooper as primary beneficiary, and Plaintiffs as 50/50 contingent beneficiaries. (Am. Compl., ECF #4-1, PgID 34-35.)

         The Amended Complaint states that Cooper was Watson's “purported girlfriend” at the time of his death. (Am. Compl., ECF #4, ¶10, PgID 29.) The Summary of Benefits provided by Plaintiffs lists Cooper as Watson's domestic partner. (Am. Compl., ECF #4-1, PgID 37.) The Summary of Benefits also lists Plaintiffs as the contingent beneficiaries and Cooper as the primary beneficiary of the Life Insurance Policy as of Watson's death, making Cooper the payee of the $718, 000 insured amount. (Id.) With regard to their beneficiary status, Plaintiffs allege only that the “policies…provided that upon [Watson's] death, life insurance benefits in the approximate amount of…$718, 000…would be distributed 100% to the co-beneficiaries, the Plaintiffs, who are [Watson's] sole heirs and children….”. (Am. Compl., ECF #4, ¶¶7, 10, PgID 29.)

         Plaintiffs claim that they “made an application for benefits under both policies and were denied” because the benefit had already been disbursed to Cooper on or around November 5, 2015, approximately two months after Watson's death. (Id. at ¶¶9-10, PgID 30.) Plaintiffs do not allege how they applied or what entity denied their application. After their application was denied, Plaintiffs and the Estate Administrator claim that they “repeatedly requested that [Allianz] produce [Watson's] signature evidencing the alleged change in beneficiary designation from [Plaintiffs] to [Cooper] which allegedly occurred just a few months before his untimely death.” (Id. at ¶11.) (Emphasis added.) Plaintiffs aver that at first, Allianz was “uncooperative” but “eventually acknowledged that it does not have any signature…purporting to change [Watson's] beneficiary designation.” (Id. at ¶13.) (Emphasis added.) Notably, the March 18, 2015 Beneficiary Confirmation Notice directs plan participants to designate and/or change beneficiaries via a website or by calling a customer service center, rather than by filling out a hard copy form:

This notice confirms your beneficiary designation(s) on file and is for your records only. Do not mark, revise, or return this form.
If you need to make corrections or make a new a beneficiary designation, please access Your Benefits ResourcesTM website at and make the appropriate change or call the Customer Service Center….

(Am. Compl., ECF #4-1, PgID 34.) (Emphasis in original.)

         However, the Plan requires the following procedure for changing a beneficiary designation:

Beneficiary Designation: How do I designate or change my beneficiary?
You may designate or change a beneficiary by doing so in writing on a form satisfactory to Us and filing the form with the Employer. Only satisfactory forms sent to the ...

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