Phillips, Joann v. Metropolitan Life Insurance Company & Verizon Employee Benefits
2013 Tex. App. LEXIS 5839
Tex. App.2013Background
- Phillips is a Verizon benefits plan participant; VEBC is Plan administrator and MetLife the claims administrator under ERISA.
- Phillips became eligible for long-term disability benefits in 2008 after ending work in 2007 due to health issues.
- LTD benefit calculation uses annual benefits compensation (ABC) based on base pay plus specified elements; overtime and other extras are excluded.
- MetLife calculated ABC as $33,650 using Verizon electronic records and verification from Verizon; Phillips contends ABC should be $46,037.75 based on check stubs.
- Phillips elected a lump-sum Verizon pension distribution in Nov. 2008 and rolled it into an IRA; MetLife offset her LTD benefits by the pension amount; Phillips appealed.
- Trial court granted summary judgment for MetLife and VEBC; Phillips appealed; the Texas Court of Appeals affirmed, applying de novo review under ERISA standards.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MetLife’s ABC calculation had rational support | Phillips; ABC should be $46,037.75 based on actual check data | MetLife; ABC = $33,650 supported by Verizon records | MetLife’s ABC determination was reasonable and not an abuse of discretion |
| Whether pension rollover constitutes ‘received’ for offset | Phillips contends rollover is not ‘receive’ under the SPD | MetLife’s interpretation that rollover equates to ‘received’ is legally correct | MetLife’s interpretation was legally correct; offset upheld |
| Whether the objections to summary judgment evidence were properly overruled | Phillips objected to certain affidavits and SPD documents | Affidavits and evidence were within record or exceptions; objections improper | Trial court did not abuse its discretion in overruling objections |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (Supreme Court 1989) (establishes deference standard in plan interpretations with discretionary authority)
- Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (Supreme Court 2008) (conflict of interest as a factor in abuse of discretion review)
- Ellis v. Liberty Life Assurance Co. of Boston, 394 F.3d 262 (5th Cir. 2004) (two-step review of plan interpretation; uniform construction and fair reading)
- Wildbur v. ARCO Chem. Co., 974 F.2d 631 (5th Cir. 1992) (two-step analysis for plan interpretation; importance of fair reading)
- Koehler v. Life Ins. Co. of North America, 683 F.3d 182 (5th Cir. 2012) (emphasizes fairness of interpretation and deference under discretion)