Piehl v. Metropolitan Life Insurance Co.

Full title: MICHAEL M. PIEHL, Plaintiff, v. METROPOLITAN LIFE INSURANCE CO. and…

Court: United States District Court, D. Oregon

Date published: Mar 16, 2005

Civil No. 03-669-MO (D. Or. Mar. 16, 2005)

Opinion

Civil No. 03-669-MO.

March 16, 2005

ORDER GRANTING DEFENDANTS' CROSS-MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

MICHAEL MOSMAN, District Judge

Both plaintiff and defendants seek summary judgment on plaintiff's First Amended Complaint demanding benefits under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. ("ERISA").

BACKGROUND

Plaintiff was employed by Raytheon Corporation in Troy, Michigan and became enrolled in the Raytheon Short Term Disability ("STD") Plan and Long Term Disability ("LTD") Plan effective January 1, 1999. (Plaintiff's Concise Statement of Facts, ¶ 1). On or about February 20, 1999, plaintiff alleges that he became disabled and did not return to work because of a bipolar disorder. (Id., ¶ 2). Plaintiff did work, however, as a contract engineer for General Motors from May to July 1999. (Defendants' Concise Statement of Facts, ¶¶ 4 5). Plaintiff signed a settlement agreement and release with Raytheon on October 20, 1999. AR 10055.¹ On December 29, 1999, plaintiff presented his claim for STD and LTD benefits to defendant Metropolitan Life Insurance Company ("MetLife"), the Claims Administrator for both plans. (Plaintiff's Concise Statement, ¶ 3). Defendant MetLife denied plaintiff's claim by letter dated January 14, 2000, based on plaintiff's failure to supply supporting documentation. (Id., ¶ 4).

1 AR refers to the Stipulated Administrative Record filed with the court on September 22, 2004.

Plaintiff submitted his medical records on or about January 19, 2000, and timely appealed MetLife's denial by letter dated January 25, 2000. (Id., ¶ 5). On March 14, 2000, MetLife received from Raytheon a document entitled "Settlement and Release of All Claims." (Id., ¶ 7). By letter dated March 17, 2000, MetLife informed plaintiff that it needed 60 additional days to review his appeal. (Id., ¶ 6). Nearly two years later, on February 8, 2002, MetLife informed plaintiff it was upholding the denial of his claim because it was barred by the Settlement Agreement and because it was not timely filed. (Id., ¶ 9).

STANDARD OF REVIEW

The parties agree that MetLife's delay in issuing a decision on plaintiff's appeal subjects his claim to de novo review. Jebian v. Hewlett-Packard Co., 349 F.3d 1098 (9th Cir. 2003). When applying de novo review, the court does not give deference to the administrator's decision, but instead reviews the evidence and makes its own determination as to the ultimate issue: whether plaintiff is entitled to disability benefits under the terms of the policy. Kearney v. Standard Ins. Co., 175 F.3d 1084, 1095 (9th Cir.), cert. denied, 528 U.S. 964 (1999). The court may evaluate the persuasiveness of conflicting testimony and resolve conflicting issues of fact. Thomas v. Oregon Fruit Products, 228 F.3d 991, 996 (9th Cir. 2000).

DISCUSSION

Both parties have filed motions for summary judgment. Plaintiff argues that he was disabled, MetLife's decision to deny him benefits was erroneous and MetLife did not timely decide the appeal of his claim. Defendants dispute plaintiff was disabled and argue that plaintiff signed a settlement agreement constituting a valid release of his ERISA claims and that plaintiff filed his ERISA demand too late.

There is some efficiency in first answering defendants' question whether plaintiff executed a valid waiver of his ERISA claims and whether those claims are time-barred before turning to whether plaintiff was disabled and whether he submitted a valid claim for benefits.

I. Waiver

The release at issue states:

In consideration for the payments and benefits mentioned above, and by his signature below, Piehl agrees not to make claims of any kind against Raytheon before any agency, court or other forum, and agrees to release Raytheon from any claim, demands, causes of action known or unknown, fixed or contingent, arising in any way from or connected with his employment by, or termination from employment with Raytheon and any other actions taken by Raytheon up to the date of the signing of this Agreement including, without limitation, any claims arising under the . . . Employee Retirement Security Act of 1974 . . . or any other federal, state or local statute or regulation or any applicable collective bargaining agreement and any claim for attorneys fees, expenses or costs of litigation except for the payment of $3,000 for attorney's fees payable to Piehl's counsel as set forth above. (emphasis added).

(AR 10029). The release further provided that plaintiff was terminated from his employment on February 26, 1999, and for the purposes of resolving his Family Medical Leave Act and Americans with Disabilities Act claims, "Raytheon will characterize Mr. Piehl's separation from the Raytheon Systems Company as a layoff effective October 18, 1999." (AR 10028). The agreement goes on to state:

Piehl will be eligible to participate in company sponsored medical, dental, vision, healthcare reimbursement plans and the company paid life insurance plan for a 26-week period commencing October 18, 1999 pursuant to the terms of the plan.

Piehl acknowledges and agrees that he is not entitled to nor will assert any claim for compensation, pay or benefits from Raytheon for the period February 26, 1999 to October 18, 1999.

(AR 10029). In sum, plaintiff agreed to relinquish all compensation and make no claims for ERISA benefits (against Raytheon) in exchange for limited participation in certain companysponsored benefit plans. The long and short-term disability plans are not among the benefits expressly preserved or waived, though plaintiff did waive his right to bring an ERISA claim, such as this one, against Raytheon.

Plaintiff argues that he did not explicitly waive any claims against MetLife or the Raytheon LTD plan. While the settlement agreement does appear to release only claims against Raytheon, the STD and LTD plans are compensation or benefits provided out of his employment with Raytheon. The only case from this circuit discussing whether a general settlement release waived disability benefits found:

Examination of the totality of the circumstances demonstrates that plaintiff knowingly and voluntarily released her claims to employee disability benefits in the Settlement. This conclusion is reinforced by the fact that the Settlement specifically exempted vested pension benefits, which shows that the parties discussed at least one employee benefit plan and knew how to exclude it from the general release in crafting the settlement. The exclusion of pension benefits demonstrates that the parties did not regard employee benefits as being outside the scope of the settlement unless expressly excluded. Thus, the parties knew that other employee benefits would be released by the settlement.

Bennett v. CNA Ins. Co., 2001 WL 30533 (N.D. Cal. 2001). Likewise here, certain employee benefits were excluded from the release while others, including ERISA benefits, were explicitly released. While plaintiff did not bring this ERISA claim against Raytheon, it is seeking a Raytheon benefit — short and long-term disability payments — explicitly waived in the settlement agreement. Further, plaintiff waived any claim for compensation, pay or benefits from Raytheon for the period of February 26, 1999 to October 18, 1999. Plaintiff's request for disability benefits seeks benefits for this time period. The result, therefore, is that plaintiff seeks benefits from Raytheon (short and then long-term disability benefits) that are administered by defendant Metlife. To hold otherwise would exalt form over substance. It would allow plaintiff to gain all the benefits of the settlement agreement but escape all its compromises through the expediency of naming Metlife as a defendant in a suit that effectively seeks the Raytheon benefits he bargained away. Plaintiff may not seek recovery for these disability benefits from Metlife because they were released in his settlement with Raytheon.

While the court finds that plaintiff did execute a valid waiver effective February 26, 1999, plaintiff ceased working on February 20, 1999, and sought benefits for the period of February 20, 1999, forward. Under the terms of the short-term disability plan, plaintiff had to wait seven days before receiving benefits. Consequently, as plaintiff seeks benefits from February 20, 1999, he would not be eligible for benefits short-term disability benefits until February 27, 1999, which is during the period plaintiff executed a valid waiver of benefits. Also, under the terms of the long-term disability plan, plaintiff must exhaust short-term benefits, which he cannot do given the valid waiver and seven-day waiting period.

The result is that plaintiff is not eligible for short or long-term disability benefits and, therefore, defendants' motion for summary judgment is granted.

CONCLUSION

As the court finds that plaintiff executed a valid release of his ERISA claims and did not preserve his right to collect short and long-term disability, summary judgment favoring defendants is GRANTED. Plaintiff's motion for summary judgment is, consequently, DENIED.

IT IS SO ORDERED.