Opinion
CIVIL ACTION No. 01-5229
July 15, 2003
MEMORANDUM
This is an action under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., to recover proceeds of a group life insurance plan issued by defendant Prudential Insurance Company, insuring the life of William M. Campbell, plaintiff's decedent. Prudential moves for summary judgment, Fed.R.Civ.P. 56. The motion will be granted.
The facts are summarized in a Memorandum dated March 25, 2002, granting in part and denying in part the 12(b)(6) motions of defendants Prudential and UNUM Provident. Specifically, plaintiff's state law claims were dismissed as preempted by ERISA, and plaintiff was granted leave to amend the ERISA claims as to her exhaustion of administrative remedies. Plaintiff subsequently settled with UNUM, and, by order dated May 17, 2002, Prudential's motion to dismiss the amended complaint was denied to permit plaintiff to initiate administrative proceedings, and the case was placed in civil suspense pending those proceedings.
On March 12, 2003, the case was removed from suspense and on April 8, 2003, plaintiff filed a Third Amended Complaint. A default judgment having been entered against defendant Progressions Institute of Fort Washington Benefits Plan, and plaintiff's claims against UNUM having been settled, what remains is an ERISA claim against Prudential for not advising plaintiff's decedent of his conversion rights.
Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. All evidentiary inferences are drawn in favor of the non-movant.Dun Bradstreet Software services, Inc. v. Grace Consulting, Inc., 307 F.3d 197, 205 (3d Cir. 2002).
Count I of the Third Amended Complaint alleges: "Plaintiff, nor plaintiff's decedent, was ever advised, at any time prior to the institution of the instant lawsuit, that plaintiff and her decedent had the right to continue the Prudential benefits in effect by making their own payment." Complaint, ¶ 31. According to Prudential, only the plan administrator — here, Progressions, as the employer of plaintiff's decedent — can be held liable under ERISA for not informing him of his conversion rights. In a case involving an insurer's non-notification of conversion rights, the Court of Appeals of the Seventh Circuit stated that "an insurer generally will not be held to be a fiduciary with respect to an activity unless the plan documents show that the insurer was responsible for that activity." Plumb v. Fluid Pump Service, Inc., 124 F.3d 849, 854 (7th cir. 1997). That statement of the law appears to be correct. See also 29 C.F.R. § 2520.104b-2 ("The plan administrator of an employee benefit plan subject to the provisions of Part I of Title I shall furnish a copy of the summary plan description and statement of ERISA rights as provided in § 2520.102-3(t), to each participant covered by the plan.").
In a distinguishable case, the District of Columbia Circuit Court of Appeals held that an insurer violated its fiduciary duty to an insured where, after inquiry, it did not give the insured complete and accurate information about his option to convert coverage. Eddy v. Colonial Life Ins. Co. of America, 919 F.2d 747, 752 (D.C. Cir. 1990). Here, in contrast, there is no evidence that plaintiff's decedent requested such information.
Accordingly, the onus was on Progressions, not Prudential, the insurer, to provide the summary plan description and information regarding conversion rights to plaintiff's decedent. This was Progressions' duty under applicable regulations, and it was not altered by a plan document. The only relevant document — the policy itself — outlines Prudential's duty to provide information to its group life insureds as follows: Section G of the Group Insurance Contract states: "Prudential will give the Contract Holder an individual certificate to give each insured Employee. It will describe the Employee's coverage under the Group Contract. It will include (1) to whom Prudential pays benefits, (2) any protection and rights when insurance ends, and (3) claims rights and requirements." Exhibit "A", at 6. Prudential satisfied its obligations under the contract. Eric Putsch, Progressions' insurance broker, testified that he received from Prudential a copy of the summary plan description and the insurance contract. Exhibit "H", at 7, 10. Although he was unable to confirm that summary plan descriptions were given byPrudential to Progressions, Exhibit "H", at 13, this point is irrelevant — (1) there is no evidence that Prudential did not send the plan descriptions to Progressive, and (2) "[a] broker is, by definition, the agent of the insured." Kearns v. Minnesota Mut. Life Ins. Co., 75 F. Supp.2d 413, 422 (E.D. Pa. 1999). Receipt of the plan descriptions by the broker constitutes receipt by the insured.
Plaintiff offers no evidence or authority to support the argument that Prudential was legally required to inform plaintiff's decedent concerning his conversion rights. Moreover, plaintiff does not substantiate the request for imposition of a civil fine under 29 U.S.C. § 1132(c). "To establish an action for assessment of a penalty pursuant to section 1132(c), a participant . . . must establish that he: 1) made a written request; 2) to an administrator of the plan; 3) for information the administrator is required to provide under ERISE, and 4) the administrator failed to honor the request within 30 days." Conowall v. Administrative Committee, 1989 WL 79800 (E.D. Pa., July 7, 1989); 29 U.S.C. § 1024(b)(4) (plan administrator shall furnish materials "upon written request"). There is no evidence that plaintiff or her decedent made a request of any kind to Prudential for information.
The request for imposition of a civil fine is articulated in plaintiff's response to Prudential's motion, the complaint having set forth only a claim for general relief. Also, the response was filed belatedly. While it may be questionable whether the issue has been properly raised, it will be disposed of on the merits.
On the facts presented, Prudential is entitled to summary judgment.