District Court Upholds MetLife’s Denial of Life Insurance Benefits Where Coverage Lapsed Despite Continued Premium Payments

In New v. Metropolitan Life Insurance Company, No. CV 1:24-00212, 2025 WL 2263007 (S.D.W. Va. Aug. 7, 2025), on cross-motions for summary judgment, West Virginia Southern District Chief Judge David A. Farber granted judgment in favor of Metropolitan Life Insurance Company (“MetLife”), finding that life insurance coverage for the deceased had lapsed under the terms of his employer’s group policy.

Troy New was employed by Cleveland-Cliffs Princeton Coal, Inc. as a continuous miner operator and was covered under a group life insurance policy administered by Cleveland-Cliffs and insured by MetLife. On April 1, 2022, Troy sustained a workplace injury and began receiving workers’ compensation benefits. He never returned to work and tragically died in an ATV accident on June 29, 2023—over a year after ceasing active employment.

Plaintiff Tyler New, Troy’s son and beneficiary, claimed life insurance benefits under the group policy. The employer supported Tyler’s claim and had continued paying premiums asserting that West Virginia law prohibited termination of benefits while Troy was receiving workers’ compensation. However, MetLife denied coverage, citing lapse under the policy terms, which limited continuation of coverage for employees on leave to six months unless otherwise reactivated. The instant action ensued. The central issue was whether Troy was still covered at the time of his death. Plaintiff argued that the plan was ambiguous and that Cleveland-Cliffs’ ongoing premium payments and interpretation of the policy should control. The court rejected both arguments.

Although Cleveland-Cliffs was the plan administrator and had fiduciary authority to interpret the plan within its scope of responsibility, the policy expressly granted MetLife the authority to review and decide benefit claims. Under ERISA, a fiduciary’s decision is entitled to deferential review when the plan grants discretionary authority. Applying an abuse of discretion standard, the court found that MetLife reasonably determined that Troy’s coverage terminated six months after he ceased active work, as defined by the plan. The court emphasized that Cleveland-Cliffs’ support of the claim did not bind MetLife or override its policy interpretation. The court also declined to find ambiguity in the continuation provision, explaining that while the policy allowed Cleveland-Cliffs to extend coverage for employees on leave “up to six months,” it did not grant indefinite extension rights based on employer discretion.

Plaintiff also argued that West Virginia Code § 23-5A-2—which prohibits cancellation of medical insurance during receipt of workers’ compensation—barred termination of Troy’s life insurance. The court summarily dismissed this argument, holding that the statute was inapplicable because it governs medical and not life insurance coverage.

Plaintiff further contended that MetLife failed to notify Troy of his right to convert the group policy to an individual policy, effectively preventing him from securing continuing coverage. However, the court found this argument misdirected under the applicable provision of ERISA. Such a claim, the court held, must be brought under ERISA § 1132(a)(3) as a breach of fiduciary duty—not under § 1132(a)(1)(B) as a denial of benefits. Importantly, the court found no evidence that MetLife was even aware that Troy’s coverage had lapsed, as Cleveland-Cliffs had continued paying premiums and apparently misinterpreted the policy. Without notice of the lapse, no duty to notify of conversion rights had yet been triggered on MetLife’s part. Ultimately, because coverage had lapsed, and MetLife acted reasonably under its delegated authority, the court upheld the denial. If MetLife or your insurer has denied or otherwise limited your ERISA benefits claim, contact us for assistance.