Cehovic-Dixneuf v. Wong
895 F.3d 927
| 7th Cir. | 2018Background
- Georges Cehovic, an employee, had employer-offered group life insurance through ReliaStar: a basic policy ($263,000) and a supplemental policy ($788,000). He named his sister, Emma Cehovic-Dixneuf, as sole primary beneficiary on both.
- After Georges died, his ex-wife Lisa Wong claimed entitlement to the supplemental-policy proceeds for herself and the child she had with Georges.
- Cehovic-Dixneuf moved for summary judgment arguing ERISA governs the supplemental policy and thus controls beneficiary designation; the district court granted judgment for her.
- Wong argued the supplemental policy was not covered by ERISA because Georges paid all premiums personally (allegedly with marital assets) and thus the policy should be severed from the employer plan.
- The court examined the Postma test and the DOL safe-harbor regulation and found the supplemental policy was part of the employer’s ERISA-covered program (employer acted as policyholder and performed administrative functions).
- Wong also raised on appeal evidentiary objections to the admissibility/authentication of plan documents used in the summary-judgment motion; the court rejected those objections as forfeited because she did not timely raise them below.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether supplemental life policy is an ERISA-covered employee welfare benefit plan | Cehovic-Dixneuf: policy is part of employer-established program providing death benefits, so ERISA applies | Wong: policy paid entirely by employee and should be excluded from ERISA (safe-harbor/severability) | ERISA applies; plan satisfies Postma elements and cannot be unbundled from group plan |
| Whether the DOL safe-harbor excludes this group policy | Cehovic-Dixneuf: safe-harbor not met because employer performed substantial administrative functions (policyholder, plan maintenance) | Wong: absence of employer premium contributions and employee-paid premiums trigger safe-harbor exclusion | Safe-harbor not satisfied because employer performed more than ministerial functions; third element fails |
| Whether the supplemental policy can be severed from the group plan | Cehovic-Dixneuf: benefits should not be unbundled; policy is a component of the ERISA plan | Wong: supplemental portion paid by employee should be severable and thus non-ERISA | Court follows Postma and other circuits: do not unbundle; policy remains ERISA-covered |
| Whether Wong may raise evidentiary/authenticity objections on appeal to defeat summary judgment | Cehovic-Dixneuf: summary-judgment record (summary plan description, insurer pleadings) was sufficient and Wong failed to timely object below | Wong: documents were hearsay/unauthenticated and thus insufficient | Court held Wong forfeited these objections by not raising them in response to the summary-judgment motion; Rule 59(e) motion was properly denied |
Key Cases Cited
- Kennedy v. Plan Administrator for DuPont Savings & Investment Plan, 555 U.S. 285 (foundation for enforcing plan documents and beneficiary designations under ERISA)
- Egelhoff v. Egelhoff, 532 U.S. 141 (ERISA preempts state law that interferes with plan beneficiary designation)
- Postma v. Paul Revere Life Insurance Co., 223 F.3d 533 (7th Cir.) (test for ERISA coverage of group insurance and rejecting unbundling/severability)
- Ed Miniat, Inc. v. Globe Life Ins. Group, Inc., 805 F.2d 732 (7th Cir.) (elements defining an employee welfare benefit plan)
- Waks v. Empire Blue Cross/Blue Shield, 263 F.3d 872 (9th Cir.) (converted policy may not be ERISA-covered)
- Demars v. CIGNA Corp., 173 F.3d 443 (1st Cir.) (converted policy and ERISA coverage discussion)
- Baines v. Walgreen Co., 863 F.3d 656 (7th Cir.) (summary-judgment evidence must be admissible if objected to)
- Lardas v. Grcic, 847 F.3d 561 (7th Cir.) (standard limiting Rule 59(e) reconsideration of arguments that could have been made earlier)