Mitchell Anderson v. Emc National Life Company

• Court: Court of Appeals of Iowa
• Decided: May 25, 2016
• Docket: 15-0210
• Status: Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 15-0210 Filed May 25, 2016

MITCHELL ANDERSON, Plaintiff-Appellant,

vs.

EMC NATIONAL LIFE COMPANY, Defendant-Appellee. ________________________________________________________________

Appeal from the Iowa District Court for Cerro Gordo County, Christopher

C. Foy, Judge.

Mitchell Anderson appeals an order granting summary judgment in favor

of defendant EMC National Life Company on Mitchell’s action for breach of

contract and denying his own motion for summary judgment. AFFIRMED.

Brian R. McPhail of McPhail Law Firm, P.L.C., Osage, for appellant.

Todd A. Strother and Catherine M. Lucas of Bradshaw, Fowler, Proctor

& Fairgrave, P.C., Des Moines, for appellee.

Considered by Doyle, P.J., Mullins, J., and Blane, S.J.*

*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2015). 2

BLANE, Senior Judge.

Mitchell Anderson, once the designated beneficiary of his father Brian

Anderson’s group term life insurance policy, appeals an order granting summary

judgment in favor of defendant EMC National Life Company (EMC) on Mitchell’s

action for breach of contract and denying his own motion for summary judgment.

Because we find the district court did not commit an error of law in ruling on the

cross summary judgment motions, we affirm.

It is undisputed1 that, prior to December 8, 2010, Mitchell was Brian’s

designated beneficiary for the life insurance policy at issue. That policy was

maintained by Brian’s employer, Opportunity Village. On December 8, 2010,

Brian and his fiancée, Debra Kopp, completed forms changing their respective

beneficiaries to each other. Those completed forms, however, remained on file

with agents of EMC.

On February 28, 2011, Brian died. Shortly thereafter, a representative

from Opportunity Village contacted EMC to inquire about the proper beneficiary

on Brian’s policy. At that point, the December 2010 beneficiary change form was

provided to Opportunity Village. Based on that information, EMC paid Debra

$90,189.87 in policy proceeds.

Mitchell filed suit, alleging he was the correct beneficiary on the policy. He

alleged EMC’s failure to pay him constituted breach of contract. Mitchell and

EMC filed cross motions for summary judgment. The district court granted

1 EMC attempted to introduce evidence to dispute this fact with its unfiled reply brief to the district court. The district court properly declined to consider this evidence. See Iowa R. Civ. P. 1.981(3). For our purposes, therefore, this fact is undisputed in the record. 3

summary judgment to EMC and denied Mitchell’s motion. Mitchell filed this

timely appeal.

Our review of orders granting summary judgment is for correction of errors

at law. Green v. Racing Ass’n of Cent. Iowa, 713 N.W.2d 234, 238 (Iowa 2006).

Summary judgment is warranted only where there is “no genuine issue of

material fact and . . . the moving party is entitled to a judgment as a matter of

law.” Iowa R. Civ. P. 1.981(3).

The life insurance policy at issue, provided by Brian’s employer, is an

“employee welfare benefit plan” under the Employee Retirement Income Security

Act (ERISA). See 29 U.S.C. § 1002(1). ERISA supersedes state law relating to

such plans. See 29 U.S.C. § 1144(a). “ERISA itself ‘is silent on the matter of

which party shall be deemed beneficiary among disputing claimants.’” Sun Life

Assurance Co. of Canada v. Wasko, 939 F. Supp. 2d 944, 953 n.5 (S.D. Iowa

2013) (citation omitted). Thus, we look to the federal common law and its

doctrine of substantial compliance.

The substantial compliance doctrine applies in situations where an insured

attempts to change a policy’s beneficiary but fails to comply with all of the plan’s

technical requirements for a beneficiary change. Id. at 952-53. Specifically, the

insured employee must (1) evidence his or her intent to make the beneficiary

change in dispute, and (2) take affirmative action to effectuate the beneficiary

change for all practical purposes similar to the action required by the applicable

provisions of the governing insurance plan. Id. at 953. Here, Brian completed

paperwork to change his beneficiary and gave it to agents of the insurer, but for

whatever reason, the record of his attempted change did not reach his employer 4

until after his death. We agree with the district court that Brian substantially

complied with the requirements for a beneficiary change.

Mitchell argues the substantial compliance doctrine is no longer good law,

and it has been replaced by the “plan documents rule,” which, unsurprisingly,

requires parties to adhere to their plan’s documents. At the time of Brian’s death,

Mitchell was the designated beneficiary on all plan documents on file with

Opportunity Village. Upon Brian’s death, Mitchell contends his benefits vested.

“At that point, the contract is no longer executory and must be performed in

accordance with the terms then in existence.” Member Servs. Life Ins. Co. v.

Am. Nat’l Bank & Trust Co., 130 F.3d 950, 956 (10th Cir. 1997). Mitchell,

therefore, submits he is entitled to payment.

Mitchell finds support primarily from two cases: Kennedy v. Plan

Administrator for DuPont Savings & Investment Plan, 555 U.S. 285 (2009), and

Matschiner v. Hartford Life & Accident Insurance Co., 622 F.3d 885 (8th Cir.

2010). These cases, he argues, supplant the substantial compliance doctrine

with the plan documents rule. We disagree. “Kennedy and Matschiner stand for

the proposition that the plan documents control ERISA-governed beneficiary

changes, not that the plan documents must be strictly complied with by a

participant who attempts to change a beneficiary . . . .” Sun Life, 939 F. Supp. 2d

at 952. In both Kennedy and Matschiner, too, the plan participant did not

attempt to change a beneficiary. Without that prerequisite—an unsuccessful

attempt—to trigger analysis of the substantial compliance doctrine in either case,

we fail to see how it could be overruled. See generally Sun Life, 939 F. Supp. 2d

at 951-53. 5

The substantial compliance doctrine remains good law. We agree with the

district court there was substantial compliance in this case. We therefore affirm

the judgment of the district court.

AFFIRMED.