Smith v. Metropolitan Life Insurance Company, 6:20-cv-02059

Background

Decedent Richard Smith retired from the U.S. Census Bureau on December 2, 2008; FEGLI/OPM communications later reflected $60,000 total coverage (Basic $10k; Option A $10k; Option B $40k) and he paid premiums.
Richard died December 23, 2018; OPM paid Basic and Option A in full but initially paid less than $40,000 for Option B and later explained his Option B was actually $5,000 (the extra payment refunded as premium reimbursement).
Plaintiff (Carmen Smith) sued OPM, the Census Bureau, and Metropolitan Life (MetLife) claiming statutory entitlement to the $40,000 Option B (and alternatively estoppel/laches). OPM and the Census Bureau were dismissed for lack of jurisdiction; MetLife remained.
Central legal question: whether Richard was "erroneously allowed to continue insurance into retirement" (i.e., whether the erroneous $40,000 Option B enrollment occurred before retirement) so that 5 U.S.C. § 8706(h) and 5 C.F.R. § 870.104 render the coverage incontestable.
Plaintiff sought summary judgment but did not conclusively show the erroneous enrollment predated retirement; defendant moved for summary judgment relying on OPM’s finding that the data-entry error occurred after retirement.
The court found a genuine dispute of material fact (notably the April 27, 2009 OPM letter and annuity timing), denied both parties’ summary judgment motions, and ordered the case to proceed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Richard is entitled to $40,000 Option B under 5 U.S.C. § 8706(h) / 5 C.F.R. § 870.104	Richard was enrolled in $40k Option B before retirement, so the incontestability rule protects the coverage	Error occurred after retirement, so incontestability/§8706(h) do not apply	Court: Plaintiff failed to carry initial burden for SJ; but evidence creates a genuine dispute about timing; both motions denied
Whether FEGLI materials / "certification" (48 C.F.R. 2103.570) or "misleading advertising" principles can trump incontestability timing	FEGLI booklet/election docs certify $40k coverage and should be construed for plaintiff	Certification does not override timing limits in 5 C.F.R. § 870.104	Court: Certification argument does not resolve the dispositive timing question; incontestability timing governs
Whether policy/estoppel arguments require honoring the $40k despite procedural defects	Information asymmetry and fairness support honoring erroneous coverage	Policy arguments are directed at OPM, not MetLife; estoppel/promissory-estoppel claim not pursued here	Court: Gives limited weight to policy concerns but they do not supply required evidentiary showing; promissory-estoppel claim not adjudicated
Whether defendant is entitled to summary judgment relying on OPM’s timeline	Plaintiff points to OPM correspondence (Apr. 27, 2009 letter) and annuity start date to challenge OPM’s post-retirement-error timeline	Defendant relies on OPM’s investigation that the $40k entry occurred when direct-remittance coupons were set up after retirement	Court: Plaintiff raised sufficient evidence to create a genuine dispute about when the error occurred; defendant’s SJ denied

Key Cases Cited

Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting rule)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (genuine dispute/materiality standard for summary judgment)
Office of Personnel Management v. Richmond, 496 U.S. 414 (limits on federal payments to amounts authorized by statute)
True v. Office of Personnel Management, 926 F.2d 1151 (Fed. Cir. 1991) (burden on beneficiary to show entitlement by a preponderance)
McCravy v. Metropolitan Life Ins. Co., 690 F.3d 176 (4th Cir. 2012) (persuasive discussion on information asymmetry in benefits disputes)