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Home > Blog > Blog > Life Insurance > Ninth Circuit Revives Breach of Fiduciary Duty Claims Against Boeing for Failing to Investigate Dependent Life Insurance Coverage

Ninth Circuit Revives Breach of Fiduciary Duty Claims Against Boeing for Failing to Investigate Dependent Life Insurance Coverage

In McIver v. Metropolitan Life Insurance Company, et al., No. 23-55306, 2024 WL 4144075 (9th Cir. Sept. 11, 2024), an unpublished decision, the Ninth Circuit reversed and remanded this case involving allegations that the Boeing Company, Employee Benefit Plans Committee (“EBPC”), and Metropolitan Life Insurance Company breached their fiduciary duties with respect to Plaintiff’s denied claim for dependent life insurance policy benefits for his deceased ex-wife. The court held that Plaintiff plausibly alleged that Boeing and EBPC breached their fiduciary duties by failing to investigate Plaintiff’s ex-wife’s continued eligibility for dependent life insurance coverage, but Plaintiff did not plausibly allege that MetLife had a fiduciary duty to monitor the eligibility of Boeing employees and their dependents for insurance coverage on a daily basis. The court further held that the life insurance policy’s incontestability clause does not apply to Plaintiff’s statements regarding his change in marital status.

Plaintiff worked for Boeing and enrolled his wife in the company’s life insurance program. He continued to pay premiums for her coverage after they divorced and Defendants continued to charge, deduct, and accept premiums for her coverage even though she was no longer eligible due to their divorced status. Plaintiff alleged that Defendants breached their fiduciary duties and sought equitable relief under 29 U.S.C. § 1132(a)(3)(B). He also sought payment of life insurance benefits under 29 U.S.C. § 1132(a)(1)(B) against MetLife. The district court granted Defendants’ motion to dismiss Plaintiff’s operative complaint for failing to state a claim under Rule 12(b)(6) and Plaintiff appealed.

On appeal, Plaintiff argued that Defendants breached their fiduciary duties by continuing to charge, deduct, and accept premiums for his ex-wife because they knew he and his ex-wife were divorced and she was ineligible for coverage. The court found that to the extent that Plaintiff challenges Boeing’s and EBPC’s conduct of solely calculating and collecting life insurance premiums, those actions were ministerial and do not support a breach of fiduciary duty claim under ERISA.  However, to the extent that Plaintiff alleges that EBPC, as a Plan fiduciary, and Boeing, as a functional fiduciary, were performing fiduciary functions when they continued to charge and collect premiums after receiving Plaintiff’s Qualified Domestic Relations Order notice stating that he was divorced, Plaintiff plausibly alleged that they were acting as fiduciaries when they continued to collect premiums. The court also found that he plausibly alleged that Boeing and EBPC breached their fiduciary duties by failing to investigate Plaintiff’s ex-wife’s continued eligibility after they received the QDRO stating that they were divorced. The court reversed the dismissal of these claims. On remand, the district court must consider in the first instance whether Plaintiff provided sufficient notice to trigger any fiduciary duties owed by Boeing and the EBPC, and if so, whether they breached those duties.

The court concluded that MetLife did not have a fiduciary duty to monitor the eligibility of Boeing employees and their dependents on a daily basis and Plaintiff did not plausibly allege that MetLife had notice or knowledge of his divorce when it continued to accept premiums from Boeing for her coverage. Lastly, the court affirmed the dismissal of Plaintiff’s ERISA Section 502(a)(1)(B) claim for recovery of life insurance benefits. The court rejected Plaintiff’s argument that the incontestability clause bars MetLife from denying his claim because that clause applies to statements regarding insurability at the time of a new application or enrollment, not to later statements regarding change in marital status. For these reasons, the Ninth Circuit reversed and remanded in part, and affirmed in part.

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*Please note that this blog is a summary of a reported legal decision and does not constitute legal advice. This blog has not been updated to note any subsequent change in status, including whether a decision is reconsidered or vacated. The case above was handled by other law firms, but if you have questions about how the developing law impacts your ERISA benefit claim, the attorneys at Roberts Disability Law, P.C. may be able to advise you so please contact us.

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