Frost v. Metropolitan Life Ins. Co.

635 So. 2d 706, 1994 WL 140847
CourtLouisiana Court of Appeal
DecidedApril 8, 1994
DocketCA 93 0753
StatusPublished
Cited by1 cases

This text of 635 So. 2d 706 (Frost v. Metropolitan Life Ins. Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frost v. Metropolitan Life Ins. Co., 635 So. 2d 706, 1994 WL 140847 (La. Ct. App. 1994).

Opinion

635 So.2d 706 (1994)

Romulus FROST
v.
METROPOLITAN LIFE INSURANCE COMPANY, John E. Schmidt, George Laviolette, Hardy Theriot, Gabriel Fortier, Berwick Moore, Christine Romero and Mike Muffoletto.

No. CA 93 0753.

Court of Appeal of Louisiana, First Circuit.

April 8, 1994.

*708 R. Hamilton Davis, Lafayette, for appellee, Romulus Frost.

J. Louis Gibbens, New Iberia, Michael A. Patterson, Baton Rouge, for appellants, Metropolitan Life Ins. Co., et al.

Before CARTER, GONZALES and WHIPPLE, JJ.

GONZALES, Judge.

This is an appeal by Metropolitan Life Insurance Company from a judgment against it for firing one of its employees, Romulus J. Frost, in violation of the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001-1461. Because we find that the factual determinations of the trial court are not clearly erroneous, we affirm.

FACTS

In February of 1960, Romulus J. Frost (Frost) began employment at Metropolitan Life Insurance Company (Metropolitan) as an insurance sales representative. In 1963, Frost moved to Morgan City, Louisiana, where he sold insurance for over thirty years for Metropolitan as part of its Lafayette, Louisiana sales district. Frost had a very successful sales career and received numerous company awards for sales excellence.

During the course of his employment at Metropolitan, Frost engaged in certain practices which were technically against Metropolitan policy, but which were regularly used by many persons on the sales force of the Lafayette district, and which were known to and allowed by management. The first of these practices is referred to as "piggybacking" which consists of removing the cash proceeds from an insured's policy and using it to purchase a larger policy for that insured. A second practice, "brokering," occurs when a representative employed by one insurance company obtains insurance for a customer from another company with whom the representative also has a license.

In June of 1983, John E. Schmidt (Schmidt) became the district sales manager of the Lafayette district. During his tenure, Schmidt advised the sales force that the levels of piggybacking and brokering had to decrease in order to conform with limits acceptable to Metropolitan policy. The record reflects that Schmidt and Frost had at least one individual meeting, in March of 1985, to discuss ways to reduce the high percentages of piggybacking in Frost's accounts; but there is no evidence in the record that the two men ever specifically discussed Frost's brokering practices. When given the option, certain Lafayette district sales representatives resigned or retired from Metropolitan rather than give up their licenses with other companies, whereas others chose to give up all other licenses and to sell exclusively for Metropolitan. It is notable, however, that piggybacking and brokering did not cease entirely.

In April of 1985, Frost severely injured his ankle in a non-employment related accident and was required to take disability leave, which lasted for approximately one year. While on disability, Frost continued to generate insurance sales for Metropolitan, as well as for other companies with which he was licensed. Shortly before returning from disability leave, Frost was approached by Alfred Buteau (Buteau), a Metropolitan sales manager, who asked Frost to give up his licenses with other insurance companies, and to transfer to Buteau's sales staff from his current position on another sales manager's staff. Frost agreed to the arrangement, and on February 6, 1986, letters were sent to Old Republic Life Insurance Company, National Fidelity Life Insurance Company, Life of Virginia, and American Agency Life Insurance Company, requesting that Frost's licenses be canceled immediately. Because Frost made a decision to retire from Metropolitan rather than return to work, he never actually transferred to Buteau's staff.

Before returning from disability leave, Frost contacted the district office and told *709 Schmidt's secretary, Deann Trahan (Trahan), that he wanted to take some accrued vacation leave. By letter dated April 25, 1986, Schmidt denied Frost's request due to the length of time he had been out on disability leave. Frost then wrote a letter to Schmidt indicating his desire to retire from Metropolitan effective April 14, 1986. In response, Schmidt notified Frost, on May 2, 1986, that because all vacation had to be exhausted prior to retirement, he was approving Frost's prior request for vacation as of April 14, 1986.

During the week of April 28, 1986, and at the request of Schmidt, an audit and special investigation of the accounting and underwriting activities of Frost was completed by Dannie R. Holland (Holland), a general supervisor of accounts with Metropolitan. According to Holland's audit report, Frost had replaced several Metropolitan policies with policies from other insurance companies. Additionally, while on disability, Frost placed several universal life policies with Metropolitan, but did so in such a manner as to avoid restrictions on the amount of commission he would receive from the transaction. On April 30, 1986, Schmidt telephoned Frost and requested that he come in to discuss the audit; however, Frost refused.

By letter dated June 12, 1986, Schmidt informed Bill Goggans, an agency vice-president in Metropolitan's New Orleans regional office, of the results of the Frost audit and requested that Frost be terminated rather than allowed to retire. By letter dated July 15, 1986, Frost was notified of his termination. By letter dated August 13, 1986, Frost requested an explanation for his termination. In his response dated August 25, 1986, Schmidt informed Frost that his employment had been terminated "because [he] replaced Metropolitan insurance with insurance issued by another insurance company."

Because Frost was fired rather than allowed to retire, the pension benefits he received upon leaving Metropolitan were substantially reduced. According to the testimony of Leonard Biederman, a senior benefits consultant with Metropolitan, because Frost was fired, his monthly benefits were lower, he was no longer eligible for certain life insurance and medical benefits provided by Metropolitan to retired employees, and his spouse was no longer eligible for monthly survivor income benefits in the event of Frost's death.

ACTION OF THE TRIAL COURT

After being fired, Frost filed suit against Metropolitan and several individuals in the Sixteenth Judicial District Court, Parish of St. Mary, Louisiana, seeking to recover his full pension benefits, punitive damages, and damages for defamation and slander. His benefits claim was based on § 1140 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq.[1] Metropolitan reconvened to collect amounts lost as a result of Frost's piggybacking and brokering activities while employed at Metropolitan. At the close of his case at trial, Frost dismissed all claims except the ERISA claim against Metropolitan.

After a trial conducted on October 25, 1991 and December 3, 1991, the record remained open for depositions and the filing of post-trial briefs until July 27, 1992.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Singletary v. State Farm Fire & Cas. Co.
982 So. 2d 216 (Louisiana Court of Appeal, 2008)

Cite This Page — Counsel Stack

Bluebook (online)
635 So. 2d 706, 1994 WL 140847, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frost-v-metropolitan-life-ins-co-lactapp-1994.