Merrill Haviland v. Metropolitan Life Ins. Co.
730 F.3d 563
| 6th Cir. | 2013Background
- GM sponsored an ERISA-governed salaried employee life insurance Plan; MetLife issued the group policy and sent retirees periodic letters about their "continuing life insurance" amounts.
- Plan/SPD language repeatedly reserved GM’s right to amend, modify, suspend, or terminate the Plan; some Plan versions also stated continuing life insurance would continue "until the death" of the employee (with variations across years).
- MetLife letters to retirees stated reduced continuing life insurance amounts "will remain in effect, without cost to you, for the rest of your life."
- In GM’s 2009 bankruptcy, GM’s salaried retirees’ continuing life insurance was reduced to $10,000; plaintiffs sued MetLife asserting ERISA and state-law claims alleging misrepresentation, promissory estoppel, breach of fiduciary duty, and related remedies.
- The district court dismissed the ERISA claims on Rule 12(b)(6) grounds; the Sixth Circuit majority affirmed the dismissal; Judge Stranch concurred in part and would have reversed as to promissory estoppel and fiduciary duty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Promissory estoppel — can MetLife’s letters bind plan despite reservation-of-rights language in Plan/SPD? | Plaintiffs: letters promising lifetime, no-cost continuing life insurance were material representations on which retirees reasonably relied; plan language ambiguous in some years so estoppel applies. | MetLife: Plan and SPDs unambiguously reserve GM’s right to amend/terminate; reliance on letters was unreasonable as a matter of law (Sprague). | Affirmed dismissal: Plan reservation unambiguous; Sprague controls — estoppel cannot vary clear plan terms. |
| Breach of fiduciary duty — did MetLife (as fiduciary) materially mislead retirees? | Plaintiffs: MetLife acted as fiduciary in issuing notices and omitted material fact (GM’s reservation), materially misleading retirees and breaching §1132 fiduciary duties. | MetLife: Plaintiffs failed to allege fiduciary role or misrepresentation; letters accurately described then-existing plan and did not state benefits were vested. | Affirmed dismissal: no actionable misrepresentation; representations matched then-existing plan and do not breach fiduciary duty under Sprague. (Concurring judge would reverse.) |
| Breach of Plan terms / MetLife’s exercise of discretionary authority | Plaintiffs: MetLife abused discretion/failed to act in good faith when advising lifetime coverage while knowing premiums and future payment by GM conditioned benefits. | MetLife: Contract/plan-law arguments are preempted by ERISA; plaintiffs did not plausibly state a breach of plan terms cognizable under ERISA. | Affirmed dismissal: state-law contract claims preempted and plaintiffs did not state a plausible ERISA breach-of-plan claim. |
| Unjust enrichment / equitable restitution | Plaintiffs: MetLife unjustly benefited by retaining premiums or by failing to provide promised coverage; seek disgorgement/remedies. | MetLife: Plaintiffs did not pay premiums to MetLife; MetLife provided coverage for periods paid; disgorgement implausible. | Affirmed dismissal: plaintiffs failed to plausibly allege entitlement to disgorgement or unjust enrichment. |
Key Cases Cited
- Sprague v. General Motors Corp., 133 F.3d 388 (6th Cir.) (promissory-estoppel and fiduciary-duty principles; reservation-of-rights language precludes estoppel where plan unambiguous)
- Varity Corp. v. Howe, 516 U.S. 489 (U.S.) (ERISA fiduciary duty and liability for deceptive communications)
- Krohn v. Huron Mem. Hosp., 173 F.3d 542 (6th Cir.) (fiduciary duty to provide complete and accurate information in response to participant inquiries)
- James v. Pirelli Armstrong Tire Corp., 305 F.3d 439 (6th Cir.) (clarifies Sprague; fiduciary breach where plan administrator affirmatively provides materially misleading information)
- Bloemker v. Laborers' Local 265 Pension Fund, 605 F.3d 436 (6th Cir.) (limited exception permitting estoppel against unambiguous pension plan terms under extraordinary circumstances)
- Price v. Bd. of Trustees of Ind. Laborer’s Pension Fund, 707 F.3d 647 (6th Cir.) (distinguishing pension vesting requirements from welfare benefits)
- In re Unisys Corp. Retiree Med. Benefit ERISA Litig., 58 F.3d 896 (3d Cir.) (employer communications creating belief in lifetime benefits can support fiduciary breach)
- Devlin v. Empire Blue Cross & Blue Shield, 274 F.3d 76 (2d Cir.) (SPDs and inconsistent plan documents can create triable estoppel issues)
- CIGNA Corp. v. Amara, 131 S. Ct. 1866 (U.S.) (§1132(a)(3) equitable remedies for misrepresentations about plan benefits)