Opinion
CV 2:18-144
08-05-2019
Linda Lee BROCKWELL, Plaintiff, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant.
Amanda Fordham Williams, Amanda F. Williams Law, Brunswick, GA, for Plaintiff. Aaron E. Pohlmann, Womble, Carlyle, Sandridge & Rice, LLP, Elizabeth J. Bondurant, Womble, Bond, Dickinson (US) LLP, Atlanta, GA, for Defendant.
Amanda Fordham Williams, Amanda F. Williams Law, Brunswick, GA, for Plaintiff.
Aaron E. Pohlmann, Womble, Carlyle, Sandridge & Rice, LLP, Elizabeth J. Bondurant, Womble, Bond, Dickinson (US) LLP, Atlanta, GA, for Defendant.
ORDER
HON. LISA GODBEY WOOD, JUDGE This matter is before the Court on Defendant Metropolitan Life Insurance Company's ("MetLife") Motion for Summary Judgment. Dkt. No. 40. The Parties prepared and have consented to entry of this Consent Order. Dkt. No. 42. For the reasons provided below, Defendant's Motion for Summary Judgment is GRANTED.
BACKGROUND
This case is governed by the Federal Employees' Group Life Insurance Act ("FEGLIA"), 5 U.S.C. § 8701 et seq. Plaintiff brought this action seeking a declaratory judgment that she is entitled to 100% of the benefits payable under the Federal Employees' Group Life Insurance Program ("FEGLI Program") by reason of the death of Plaintiff's ex-husband, William B. Brockwell ("the Decedent"). Dkt. No. 26. The Decedent, a retired federal employee, was covered under the FEGLI Program for life insurance benefits totaling one hundred twenty-five thousand dollars ($125,000) ("the FEGLI benefits"). Dkt. No. 40-9 ¶ 6.
Pursuant to the Parties' Consent Motion for Summary Judgment, the facts set forth in MetLife's Statement of Material Facts, dkt. no. 40-9, are uncontroverted and are thus admitted.
The Office of Federal Employees' Group Life Insurance ("OFEGLI"), an administrative unit of MetLife, is responsible for administering claims for benefits under the FEGLI Program, pursuant to a contract ("the FEGLI Contract") with the United States Office of Personnel Management ("OPM"). Id. ¶ 1. MetLife approved and paid one-third of the FEGLI benefits to Plaintiff based on the Decedent's February 4, 2014 beneficiary designation, which named Plaintiff and the Decedent's minor children, J.B. and L.B., equal one-third beneficiaries of the FEGLI benefits. Id. ¶¶ 18, 19. Plaintiff claims, however, to be the "sole beneficiary" of the FEGLI benefits under the Final Judgment and Decree entered in her divorce from the Decedent. Dkt. No. 26 ¶ 10.
Although one of the Decedent's children now may have reached the age of majority, in an abundance of caution only the initials of the children are used here.
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MetLife filed a counterclaim against Plaintiff, seeking a declaratory judgment that:
(1) Plaintiff's claim for 100% of the FEGLI benefits is barred by FEGLIA;
(2) MetLife is strictly bound by FEGLIA's statutory order of precedence to pay benefits under the FEGLI Program in accordance with the beneficiaries designated by the Decedent in a signed and witnessed writing, received by or filed with OPM before his death;
(3) The Final Judgment and Decree on which Plaintiff relies to claim entitlement to 100% of the FEGLI benefits was not received by or filed with OPM before the Decedent's death, and. therefore, does not comply with the requirements for payment of such benefits to persons other than as set forth in FEGLIA's statutory order of precedence;
(4) The Final Judgment and Decree fails to expressly provide for payment of 100% of the FEGLI benefits to Plaintiff as the sole beneficiary, and therefore, does not comply with the requirements for payment of such benefits to persons other than as set forth in FEGLIA's statutory order of precedence; and
(5) The FEGLI benefits are payable in accordance with the Decedent's February 4, 2014 beneficiary designation form.
Pertinent Terms of the FEGLI Program
Section 1.3(a) of the FEGLI Contract incorporates the provisions of FEGLIA and its associated regulations as follows:
The applicable provisions of (1) chapter 87 of title 5 United States Code; (2) OPM's Regulations as contained in part 870, title 5 of the Code of Federal Regulations; and (3) chapters 1 and 21 of title 48 of the Code of Federal Regulations; ... constitute part of this Contract as if fully set forth herein, and the other provisions of the contract shall be construed so as to comply therewith.
Dkt. No. 40-9 ¶ 3. Under the heading "beneficiaries," section 2.12 of the FEGLI Contract states:
Designations of Beneficiaries and the order of precedence for payment to Beneficiaries shall be as specified in the Act [FEGLIA] and Regulations. The Contractor [MetLife] shall rely on information provided by OPM and/or any employing agency with respect to Beneficiary designations ....
Id. ¶ 4.
FEGLIA, 5 U.S.C. § 8705, incorporated into the FEGLI Contract, provides the following statutory order of precedence:
(a) Except as provided in subsection (e), the amount of group life insurance and group accidental death insurance in force on an employee at the date of his death shall be paid, on the establishment of a valid claim, to the person or persons surviving at the date of his death, in the following order of precedence:
First, to the beneficiary or beneficiaries designated by the employee in a signed and witnessed writing received before death in the employing office .... For this purpose, a designation, change, or cancellation of beneficiary in a will or other document not so executed and filed has no force or effect....
(e)(1) Any amount which would otherwise be paid to a person determined under the order of precedence named by subsection (a) shall be paid (in whole or in part) by the Office [of Personnel Management] to another person if and to the extent expressly provided for in the terms of any court decree of divorce, annulment, or legal separation, or the terms of any court order or court-approved property settlement agreement incident to any court decree of divorce, annulment, or legal separation.
(2) For purposes of this subsection, a decree, order, or agreement referred to in paragraph (1) shall not be effective unless it is received, before the date of the covered employee's death, by the employing agency or, if the employee has separated from service, by the Office [of Personnel Management] ....
(4) The Office [of Personnel Management] shall prescribe any regulations necessary to carry out this subsection, including regulations for the application of this subsection in the event that two or more decrees, orders, or agreements, are received with respect to the same amount.
Further, 5 C.F.R. § 870.801, "Order of precedence and payment of benefits," incorporated into the FEGLI Contract, states:
(a) Except as provided in paragraph (d) of this section and § 870.802(g)(2), benefits are paid according to the order of precedence stated in 5 U.S.C. 8705(a), as follows:
(1) To the designated beneficiary (or beneficiaries);
(2) If none, to the widow(er);
(3) If none, to the child, or children in equal shares, with the share of any deceased child going to his or her children ....
(d) (1) If there is a court order in effect naming a specific person or persons to receive life insurance benefits upon the death of an insured individual, Basic insurance and Option A and Option B insurance will be paid to the person or persons named in the court order, instead of according to the order of precedence.
(2) To qualify a person for such payment, a certified copy of the court order must be received in the appropriate office before the death of the insured....
Finally, the FEGLI Program Handbook promulgated by OPM similarly provides:
Order of Precedence
When you die, OFEGLI will pay benefits in a particular order, as set by law:
• If you assigned ownership of your life insurance by filing an Assignment, Federal Employees' Group Life Insurance (RI 76-10), OFEGLI will pay benefits:
First, to the beneficiary(ies) designated by your assignee(s), if any;
Second, if there is no such beneficiary(ies), to your assignee(s).
• If you did not assign ownership and there is a valid court order on file, OFEGLI will pay benefits in accordance with that court order.
• If you did not assign ownership and there is no valid court order on file, OFEGLI will pay benefits:
• First, to the beneficiary(ies) you validly designated;
• Second, if no such beneficiary (ies), to your widow or widower;
• Third, if none of the above, to your child or children in equal shares, and the descendants of any deceased children;
• Fourth, if none of the above, to your parents in equal shares, or the entire amount to the surviving parent;
• Fifth, if none of the above, to the court-appointed executor or administrator of your estate;
• Sixth, if none of the above, to your other next of kin entitled under the laws of the State where you lived ....
Designation of Beneficiary
You must designate a beneficiary if:
• You want benefits to be paid to a person, firm, organization, or other legal entity not listed in the order of precedence;
• You want benefits to be paid in a different order than the order of precedence; or
• You want benefits to be paid to a trust you have established for your minor children ....
Completing a Designation of Beneficiary (SF 2823) is the preferred way for you to make a designation of your FEGLI benefits. Your signature must be witnessed (signed) by two persons who are not named as beneficiaries. Your employing office (or OPM, if you are an annuitant or compensationer) must receive the form before you die. IMPORTANT: If you have a designation on file, keep it current in the event of family status changes. Make sure it accurately reflects your intentions ....
Court Orders
FEGLI benefits must be paid in accordance with the terms of a valid court order, regardless of whether you actually complete a Designation of Beneficiary (SF 2823) form. The valid court order supersedes any of your prior designations (and the rest of the order of precedence), if the appropriate office receives a certified copy of the court order before your death. For employees, your employing agency is the appropriate office.
For retirees, the appropriate office is OPM.
Dkt. No. 40-9 ¶ 5.
Plaintiff's Claim for the FEGLI Benefits
The Decedent was covered under the FEGLI Program for life insurance benefits totaling $125,000. Dkt. No. 40-9 ¶ 6. The Decedent died in Thailand on March 15, 2018. Id. ¶ 7. OPM certified to MetLife that the last beneficiary designation form on file for the Decedent, signed, witnessed, and notarized on February 4, 2014, designated Plaintiff and the Decedent's minor children, J.B. and L.B., equal one-third beneficiaries of the FEGLI benefits. Id. ¶ 9.
Through counsel, Plaintiff submitted a claim to OPM for the FEGLI benefits on June 27, 2018. Id. ¶ 11. Also enclosed with the June 27, 2018 letter was a certified copy of the Final Judgment and Decree, pursuant to which Plaintiff's attorney claimed Plaintiff was the "sole beneficiary" of the FEGLI benefits. Id. ¶ 13. OPM certified to MetLife that the Final Judgment and Decree was not provided by Plaintiff and was not otherwise received by or filed with OPM before the Decedent's death on March 15, 2018. Id. ¶ 17. MetLife determined that Plaintiff was not entitled to 100% of the FEGLI benefits, but rather, was entitled to one-third of the benefits in accordance with FEGLIA and the February 4, 2014 beneficiary designation. Id. ¶ 18. Accordingly, Plaintiff was paid one-third of the FEGLI benefits. Id. ¶ 19.
Plaintiff contended that the following language of the Final Judgment and Decree supported her claim to 100% of the FEGLI benefits as the Decedent's sole beneficiary:
The Plaintiff/Husband has life insurance that he is to leave the Defendant/Wife as the beneficiary of said policy until March 29, 2018. On March 29, 2018, the husband has indicated to the Court that said policy would reduce to $10,000.00. If and when the Plaintiff/Husband provides proof of said reduction in insurance to the Defendant/Wife and her counsel, the Plaintiff/Husband may make any changes in the beneficiary as he desires on March 29, 2018 or after.
Id. ¶ 15.
LEGAL STANDARD
The federal Declaratory Judgment Act provides in relevant part that "[i]n a case of actual controversy within its jurisdiction, ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." 28 U.S.C. § 2201(a). "Federal courts long have held that an insurance company seeking determination of its liabilities under an insurance contract could utilize the Declaratory Judgment Act for such a purpose." GE Life & Annuity Assurance Co. v. Barbour, 191 F. Supp. 2d 1375, 1382 (M.D. Ga. 2002) (quoting State Farm v. Bates, 542 F. Supp. 807, 817 (N.D. Ga. 1982) ). "Disposition of a summary judgment motion in a declaratory judgment action is governed by the same basic principles that generally rule the grant or denial of such a motion." Bingham, Ltd. v. United States, 724 F.2d 921, 924 (11th Cir. 1984). The Court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).
DISCUSSION
I. Plaintiff is not Entitled to 100% of the FEGLI Benefits
As the Supreme Court has stated, in enacting FEGLIA "Congress established a clear and predictable procedure for an employee to indicate who the intended beneficiary of his life insurance shall be." Hillman v. Maretta, 569 U.S. 483, 495, 133 S.Ct. 1943, 186 L.Ed.2d 43 (2013). "FEGLIA evinces Congress' decision to accord federal employees an unfettered freedom of choice in selecting the beneficiary of the insurance proceeds and to ensure the proceeds would actually belong to that beneficiary." Id. (internal quotation marks and citation omitted). "An employee's ability to name a beneficiary acts as a guarantee of the complete and full performance of the contract to the exclusion of conflicting claims," and "[w]ith that promise comes the expectation that the insurance proceeds will be paid to the named beneficiary and that the beneficiary can use them." Id. at 494, 133 S.Ct. 1943 (internal quotation marks and citation omitted). Thus, "Congress intended to establish ... an inflexible rule that the beneficiary designated in accordance with the statute would receive the policy proceeds, regardless of other documents or the equities in a particular case." O'Neal v. Gonzalez, 839 F.2d 1437, 1440 (11th Cir. 1988). FEGLIA "allows the proceeds to be paid to someone other than the named beneficiary, but if and only if the requisite documentation is filed with the Government, so that any departure from the beneficiary designation is managed within, not outside, the federal system." Hillman, 569 U.S. at 496, 133 S.Ct. 1943.
Here, it is undisputed that the Final Judgment and Decree, pursuant to which Plaintiff claims to be the sole beneficiary of the FEGLI benefits, (1) was signed by the Superior Court judge on February 21, 2018, and filed with the Superior Court of Gwinnett County on February 26, 2018, but (2) was not provided by Plaintiff, and was not otherwise received by or filed with OPM before the Decedent's death on March 15, 2018. Rather, the Final Judgment and Decree was provided to OPM as an enclosure to Plaintiff's attorney's June 27, 2018 letter submitting Plaintiff's claim for the FEGLI benefits.
Under FEGLIA's order or precedent, the Decedent's FEGLI benefits "shall be paid ... [f]irst, to the beneficiary or beneficiaries designated by [the decedent]" in his beneficiary designation form on file with OPM. 5 U.S.C. § 8705(a). Even though the Final Judgment and Decree from Plaintiff and the Decedent's divorce was entered by the Superior Court prior to the Decedent's death, because the Final Judgment and Decree was not received by or filed with OPM prior to the Decedent's death, it "shall not be effective." Id. § 8705(e)(2). Thus, the beneficiary designation form on file with OPM controls, and Plaintiff is not entitled to 100% of the FEGLI benefits. Rather, Plaintiff is only entitled to one-third of the Decedent's FEGLI benefits, and the Decedent's minor children, J.B. and L.B., are each entitled to one-third of the Decedent's FEGLI benefits.
CONCLUSION
For the reasons provided above, MetLife's Motion for Summary Judgment, dkt. no. 40, is GRANTED. The Clerk is DIRECTED to close this case. The Court hereby DECLARES the following:
(1) MetLife is strictly bound by FEGLIA's statutory order of precedence to pay benefits under the FEGLI Program in accordance with the beneficiaries designated by the Decedent in a signed and witnessed writing, received by or filed with OPM before his death;
(2) The Final Judgment and Decree on which Plaintiff relies to claim entitlement to 100% of the FEGLI benefits was not received by or filed with OPM before his death, and therefore, does not comply with the requirements for payment
of such benefits to persons other than as set forth in FEGLIA's statutory order of precedence;
(3) The FEGLI benefits are payable in accordance with the Decedent's February 4, 2014 beneficiary designation form; and
(4) Plaintiff's claim for 100% of the FEGLI benefits is barred by FEGLIA.
SO ORDERED, this 5th day of August, 2019.