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Justice v. Reliance Standard Life Insurance Co.

United States District Court, E.D. Tennessee, Greeneville

March 13, 2017

ROBERT JUSTICE, Plaintiff,
v.
RELIANCE STANDARD LIFE INSURANCE COMPANY, Defendant.

          ORDER

          J. RONNIE GREER, UNITED STATES DISTRICT JUDGE

         This matter is before the Court to address the plaintiff's objections, [Doc. 52], to a Report and Recommendation of the magistrate judge dated January 27, 2017, [Doc. 51]. The defendant has responded, [Doc. 53], and the matter is ripe for disposition.

         In this Employee Retirement Income Security Act of 1974 (“ERISA”) matter the plaintiff alleges that the defendant improperly terminated his long-term disability (“LTD”) benefits in violation of the terms of an employee welfare benefits plan. The plaintiff was an hourly employee of Berkline, a company which has since gone out of business, from March 10, 2004, until he became disabled on May 15, 2008. The plaintiff, with the assistance of Berkline, applied for and received LTD benefit payments until May 22, 2014. The defendant, Reliance Standard Life Insurance Company (“Reliance Standard”), is the insurance company that administers Berkline's employee benefits plan. On May 22, 2014, the defendant discontinued Plaintiff's LTD benefit payments because the defendant discovered that Plaintiff, as an hourly employee, was not covered for LTD benefits under Berkline's plan and that the defendant has mistakenly been paying LTD benefits which the plaintiff was not entitled to receive.

         In the Report and Recommendation, the Magistrate Judge recommended that the defendant's motion for summary judgment be granted and the plaintiffs' motion for summary judgment be denied. [Doc. 51 at 21]. The plaintiff made two claims for ERISA relief. In the first, the magistrate judge held that the plaintiff had no claim for breach of fiduciary duty against the defendant because Berkline, not Reliance Standard, was the defendant's fiduciary responsible for making the initial administration of the policy for the benefit of the participants. [Id. at 7]. The plaintiff does not raise any objection to this holding. However, the plaintiff objects to the Magistrate Judge's findings and analysis that the plaintiff's claim of equitable estoppel is without merit.

         The Court will review the Report and Recommendation de novo as the magistrate judge resolved dispositive motions. Fed.R.Civ.P. 72(b)(3). The Court has previously held that the plan administrator's decision should be reviewed under the highly deferential arbitrary and capricious standard. [Doc. 25]. To the extent that the plaintiff objects to this standard of review, the Court will not review this determination again.

         The plaintiff's objection to the Report and Recommendation is essentially that the Magistrate Judge erred in rejecting his promissory estoppel claim. The plaintiff's arguments are the same arguments made before the Magistrate Judge in his motion for summary judgment and in response to the defendant's motion for summary judgment. The plaintiff argues that because he paid premiums to his employer, Berkline, for group disability insurance benefits, and because Reliance Standard paid benefits for years, he is entitled to continue to receive those benefits, notwithstanding the fact that he clearly is not eligible for LTD benefits under the plain language of the plan. Instead, the plaintiff simply disagrees with the Magistrate Judge's analysis, citing the same arguments made in his motion.

         The plaintiff, in neither his original arguments for summary judgment nor in his objection, attempts to address or distinguish a number of the cases cited by the Magistrate Judge that are seemingly dispositive of the issues. The elements of an estoppel claim are as follows:

(1) there must be conduct or language amounting to a representation of material fact;
(2) the party to be estopped must be aware of the true facts;
(3) the party to be estopped must intend that the representation be acted on, or the party asserting the estoppel must reasonably believe that the party to be estopped so intends;
(4) the party asserting the estoppel must be unaware of the true facts; and
(5) the party asserting the estoppel must reasonably or justifiably rely on the representation to his detriment.

Sprague v. Gen. Motors Corp., 133 F.3d 388, 403 (6th Cir. 1998) (en banc). The plaintiff must meet all five elements of the claim to be eligible for relief. Id.

         As an initial matter, a plaintiff “cannot recover under an estoppel theory for misrepresentations which contradict unambiguous, written plan terms because their reliance on the subsequent representation would be unreasonable.” Moore v. Lafayette Life Ins. Co., 458 F.3d 416, 428-29 (6th Cir. 2006) (citing Sprague, 133 F.3d at 403). The plaintiff does not argue that the term limiting plan eligibility to salaried workers is ...


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