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Metropolitan Life Insurance Co. v. Hensley

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

May 29, 2018

METROPOLITAN LIFE INSURANCE COMPANY, Plaintiff,
v.
GREGORY HENSLEY, J.M.H., K.G.H., and PATRICIA S. FROST, Defendants.

          Debra C. Poplin Magistrate Judge

          MEMORANDUM OPINION

          TRAVIS R. McDONOUGH UNITED STATES DISTRICT JUDGE

         Before the Court are: 1) Plaintiff Metropolitan Life Insurance Company's (“MetLife”) motion to interplead funds and for dismissal with prejudice (Docs. 9, 16);[1] 2) Defendants Gregory B. Hensley (“Hensley”), J.M.H., and K.G.H.'s (together, the “Hensley Defendants”) motion for disbursement of funds (Doc. 12); and 3) the Hensley Defendants' motion for default judgment (Doc. 18). For the following reasons, MetLife's motion to interplead funds and for dismissal with prejudice (Docs. 9, 16) and the Hensley Defendants' motion for disbursement of funds (Doc. 12) and motion for default judgment (Doc. 18) will be GRANTED.

          I. BACKGROUND

         The Federal Employees Group Life Insurance Act (“FEGLIA”), 5 U.S.C. § 8701 et seq., provides group term life insurance for certain federal employees. Pursuant to a contract between the United States Office of Personnel Management and MetLife, an office within MetLife administers life-insurance benefits under the FEGLIA. (Doc. 1, at 1.)

         Tricia F. Hensley (the "Decedent"), a former employee of the United States Postal Service, was covered under the FEGLIA. (See Doc. 16-1, at 2.) The Decedent completed her most recent "Designation of Beneficiary" in 2007. (Id.) The form included an example page to guide the insured's designation of beneficiaries. (Id. at 3.) To designate a contingent beneficiary, which the fomi explains as "[s]omeone to receive the benefits if the person you designate dies before the Insured dies, " the following example is provided (hi relevant part):

First name, middle initial, and last name of each beneficiary

Relationship

Percent or fraction designated

John M. Parrish, if living

Father

100%

Otheiwise to Susan A. Parrish

Sister

100%

(Id.) On the Decedent's fomi, she designated the following as beneficiaries (in relevant part):

First name, middle initial, and last name of each beneficiary

Relationship

Percent or fraction designated

Gregory B. Hensley

Husband

100%

[J.M.H.]. if living

Son

50%

[K.G.H.1. if living

daughter

50%

Patricia S. Frost, otherwise to

mother

100%

(Id. at 2.) The Decedent and two witnesses signed the designation-of-beneficiary form. (Id.)

         The Decedent passed away on January 14, 2017. (Doc. 1-2.) Upon her passing, $316, 200.00 became payable under the Decedent's FEGLIA policy (the "FEGLI Benefits"). (Doc. 1, at 3.) Hensley and Frost filed competing claims for the FEGLI Benefits. (Docs. 16-2, 16-3, 16-4.) Based on the Decedent's designation-of-beneficiary form, Hensley asserted he was entitled to 100% of the FEGLI Benefits, while Frost asserted she was entitled to one-thud.[2] (Docs. 16-3, 16-4.) Upon reviewing the designation-of-beneficiary form, MetLife determined that it is ambiguous as to the proper distribution of the FEGLI Benefits. (Doc. 1, at 4.)

         In 2017, Hensley filed a declaratory-judgment action in state court seeking a declaration regarding the FEGLI Benefits, but voluntarily dismissed it after Frost's counsel indicated that she would withdraw her claim. (Id.; Doc. 12, at 2.) MetLife asked Frost to sign a general release and renunciation of rights (the “Release”) before it paid the FEGLI Benefits to Hensley. (Doc. 1, at 5; Doc. 12 at 3.) Under the Release, Frost agreed “that the FEGLI benefits are properly payable to Gregory B. Hensley in accordance with the decedent's designation of beneficiary form . . . .” (Doc. 12-2, at 2.) Further, the Release provided:

IT IS UNDERSTOOD AND AGREED THAT ANY AND ALL PAST, PRESENT AND FUTURE CLAIMS AND CAUSES OF ACTION RELATED TO THE FEGLI ACCIDENTAL DEATH BENEFITS AND THE [STATE-COURT] LAWSUIT . . . ARE FULLY AND FOREVER RELEASED AND EXTINGUISHED.

(Id. at 5.) Frost signed the Release. (Id.) When she returned the Release to MetLife, she included a letter that continued to dispute the distribution of the FEGLI Benefits to Hensley, but stated that she “[does not] have ...


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