Swain v . N.H. Electric Coop. CV-01-196-M 10/19/01 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Elizabeth Swain, Plaintiff

v. Civil N o . 01-196-M Opinion N o .

New Hampshire Electric Cooperative, Inc.; Metropolitan Life Insurance Company; and National Rural Electric Cooperative Association, Defendants

O R D E R

In this suit, removed from the New Hampshire Superior Court

on the basis of ERISA preemption, Elizabeth Swain seeks

injunctive relief, declaratory judgment, and damages, based upon

her unsuccessful attempt to purchase a policy insuring the life

of her deceased husband, Lawrence Swain (“Swain”), from

Metropolitan Life Insurance Company (“MetLife”). Before the

court is defendants’ motion to dismiss for failure to state a

claim on which relief can be granted. Plaintiff objects. For

the reasons stated below, defendants’ motion to dismiss (document

n o . 15) is granted. Standard of Review

A motion to dismiss for “failure to state a claim upon which

relief can be granted,” F E D . R . C I V . P . 12(b)(6), requires the

court to conduct a limited inquiry, focusing not on “whether a

plaintiff will ultimately prevail but whether the claimant is

entitled to offer evidence to support the claims.” Scheuer v .

Rhodes, 416 U . S . 232, 236 (1974). When considering a motion to

dismiss under F E D . R . C I V . P . 12(b)(6), the court must “accept as

true all well-pleaded allegations and give plaintiffs the benefit

of all reasonable inferences.” Cooperman v . Individual, Inc.,

3 , 46 (1st Cir. 1999) (citing Gross v . Summa Four,

Inc.,

(1st Cir. 1996)). Furthermore,

“[d]ismissal under F E D . R . C I V . P . 12(b)(6) is only appropriate if

the complaint, so viewed, presents no set of facts justifying

recovery.” Cooperman, 171 F.3d at 46 (citing Dartmouth Review v .

Dartmouth College,

3 , 16 (1st Cir. 1989)).

2 Factual Background

The facts of this case, as alleged in plaintiff’s complaint,

and viewed in the light most favorable to her, are as follows.

Plaintiff’s husband, Lawrence Swain, died on December 1 0 ,

1999, shortly after he retired from the New Hampshire Electric

Cooperative, Inc. (“NHEC”). Among his employment benefits was a

group life insurance policy issued by MetLife. But Swain’s

coverage under that policy terminated on November 1 , 1999, the

date of his retirement. Understanding that termination of his

group life insurance coverage was imminent, Swain contacted

Brenda Boisvert (“Boisvert”) of NHEC in October to inquire about

extending the coverage. Boisvert responded by sending to both

Swain and MetLife a form titled “Conversion of Group Life

Benefits to an Individual Policy” (“the form”).

The form is dated October 2 6 , 1999, was received by Swain

sometime in early November, and lists November 1 , 1999, as the

3 termination date for Swain’s employee group life coverage. In

addition, the form contains the following relevant provision:

You may apply for an Individual Life Insurance policy (other than Term Insurance), which will be issued without medical examination by Metropolitan Life Insurance Company (hereafter “MetLife”), if you apply for it and the required premium payment is made within:

• 31 days from the date benefits were terminated, or • 15 days from the date this notice is given, if notice is given more than 15 days from the date benefits were terminated. In no event will this period extend beyond 91 days from the date benefits were terminated.

To apply for an individual policy, visit, telephone, or write to any convenient MetLife Individual Sales Office in your area. Please consult your local telephone directory or call 1-800-MET-LIFE for the office nearest you.

Swain never submitted an application to MetLife for an individual

life insurance policy. He died approximately forty days after

his group life insurance benefits terminated. While going

through her deceased husband’s papers, plaintiff discovered the

form that Boisvert had sent in October, and realized that her

4 husband had not applied for an individual life insurance policy

before he died.

On January 6, 2000, plaintiff and her daughter met with Gary

Cook of MetLife. They asked whether the ninety-one day extension

period referenced in the form allowed them to apply for insurance

on Swain’s life. Cook advised plaintiff to write to MetLife.

The complaint does not allege any further contact between

plaintiff and MetLife,1 although it does allege that NHEC’s

parent company, National Rural Electric Cooperative Association,

declined to help plaintiff obtain coverage and/or benefits from

MetLife.

In this suit, plaintiff asks the court t o : (1) enjoin

defendants from denying coverage and preventing her from making a

claim; (2) declare the existence of coverage and allow her to

1 There is no specific allegation that: (1) plaintiff submitted an application for an individual life insurance policy on Swain’s life, or paid a premium to MetLife; or (2) MetLife declined to issue such a policy.

5 make a claim; and (3) order payment to be made under the terms of

the individual MetLife policy that Swain was entitled to purchase

upon the termination of his group life policy. In addition,

plaintiff makes two claims that appear to assert causes of

action, respectively, for breach of contract and negligence.

Discussion

Defendants move to dismiss on grounds that no application

for an individual life insurance policy was ever submitted to

MetLife within the time allowed for conversion from the group

policy. Plaintiff counters that the ninety-one day period

referenced on the form creates, at the very least, an ambiguity

that should be resolved in her favor – effectively affording her

ninety-one days from November 1 , 1999, the termination date of

her husband’s group policy, to convert the group policy to an

individual life insurance policy. The court cannot agree.

To begin, because plaintiff is seeking to collect benefits

extended under an employee welfare plan (i.e., conversion of the

6 employee group life policy to an individual life insurance

policy), the Employee Retirement Security Income Act of 1974

(“ERISA”) (the basis for removal from the Belknap County Superior

Court) governs disposition of this case. See

(a)(1)(B); see also

(a) (“Except as provided

in subsection (b) of this section, the provisions of this

subchapter . . . shall supersede any and all State laws insofar

as they may now or hereafter relate to any employee benefit plan

. . .”). Although it is an open question, the court will assume

that plaintiff has exhausted available administrative remedies

under the plan, and will consider the merits of her claim. See

Tomkins v . United Healthcare of New England, Inc.,

0 ,

94 (1st Cir. 2000) (citing Terry v . Bayer Corp.,

8 , 35-

36 (1st Cir. 1998) (emphasizing that “a prerequisite to obtaining

judicial review . . . is that the claimant have [sic] exhausted

the administrative remedies available to him.”)). Furthermore,

while the pleadings indicate that plaintiff never actually

applied for the benefit she now seeks, the court will assume that

she applied for that benefit, and was denied, thus bringing this

7 case within the scope of

(a)(1)(B). However,

even making the favorable assumptions outlined above, and

applying a de novo standard of review – the most favorable

standard of review available to a plaintiff making an ERISA

claim, see Firestone Tire & Rubber C o . v . Bruch,

(1989); Terry,

7 , it is still apparent from the

pleadings that neither plaintiff nor plaintiff’s decedent meet

the eligibility criteria for the benefit plaintiff seeks to

collect.

Swain did not apply for an individual life insurance policy

within the time period specified. Plaintiff contends that the

ninety-one day period referenced on the form governs, and that

she took effective action to convert her husband’s group policy

within that time.

The form that Boisvert sent to Swain, describing the

eligibility requirements for obtaining individual life insurance

coverage, plainly indicates two events that trigger an employee’s

8 right to issuance of an individual life insurance policy upon

retirement: (1) termination of group coverage; and (2) submission

of an application for an individual policy (and payment of the

required premium), within thirty-one days from the date that

benefits were terminated (here, November 1 ) , or within fifteen

days from the date notice was given to the (former) employee of

his right to obtain an individual policy (here, “early November),

if notice was given more than fifteen days after benefits were

terminated, but in no event later than ninety-one days from the

date that benefits were terminated.

According to plaintiff’s complaint, her husband received

notice of his right to apply for an individual life insurance

policy in “early November.” If that is the case, and he received

notice before November 1 5 , then he got notice within fifteen days

from the termination of his group life benefits, and, therefore,

had thirty-one days from November 1 , or until December 2 , to

apply for an individual life insurance policy and pay the

required premium. However, assuming Swain received notice as

9 late as November 25 (which cannot fairly be called “early

November), he would have had fifteen days from that date, or

until December 1 0 , to apply for an individual life insurance

policy. Plaintiff does not assert that an application for an

individual life insurance policy was submitted on or before

December 1 0 . Indeed, the first contact plaintiff had with

MetLife concerning her husband’s option to purchase individual

life insurance to replace his group coverage occurred in January

of 2000. Thus, plaintiff fails to allege facts that, if true,

would entitle her to recover, even if she did have a right, under

the plan, to obtain an insurance policy on her husband’s life

after his death, but during the conversion period described on

the notice form he received.

Finally, the ninety-one day period described on the form is

facially inapplicable to the facts pled in this case. That

provision places an outer limit on the period during which an

individual policy may be applied for – i.e., not more than

ninety-one days after the group life benefit terminated. S o , for

10 example, if notice was given eighty days after benefits

terminated, the plan beneficiary would have to apply and pay a

premium for an individual life insurance policy within eleven

days. Since Swain received notice in “early November,” less than

fifteen days from the date his benefits were terminated, the

ninety-one day outer limit provision is not relevant.

(It probably should also be noted, parenthetically, that as

of December 1 0 , when Swain died, there was no longer an insurable

interest to which an individual life insurance policy could

attach. After that date, absent at least a prior submission of

an application, the conversion benefit was no longer available.

Implicit in a request to obtain life insurance is the existence

of a life to insure.)

Conclusion

For the reasons given, plaintiff has not alleged facts

which, if true, would entitle her to recover under ERISA, even

assuming an otherwise proper claim for benefits, denial, and

11 exhaustion of administrative remedies. Of course, the asserted

state causes of action are preempted by ERISA. Accordingly,

defendants’ motion to dismiss (document no. 15) is granted. The

Clerk of Court shall enter judgment in accordance with this order

and close the case.

SO ORDERED.

Steven J. McAuliffe United States District Judge

October 1 9 , 2001

cc: Alvin E . Nix, Jr., Esq. William D. Pandolph, Esq.

12