Susan Staropoli v. Metropolitan Life Insurance Co

• Court: Court of Appeals for the Third Circuit
• Decided: February 7, 2023
• Docket: 21-2500
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

________________

No. 21-2500 ________________

SUSAN STAROPOLI, individually and on behalf of SAM STAROPOLI; AVA STAROPOLI, Appellants

v. METROPOLITAN LIFE INSURANCE CO; JP MORGAN CHASE BANK NA; JP MORGAN CHASE US BENEFITS EXECUTIVE,

_____________

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil No. 2:19-cv-02850) District Judge: Honorable Gene E.K. Pratter ________________

Submitted Pursuant to Third Circuit L.A.R. 34.1 on November 7, 2022

Before: JORDAN, SCIRICA, and RENDELL, Circuit Judges.

(Filed: February 7, 2023)

OPINION* ________________

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. SCIRICA, Circuit Judge

This case arises out of Defendants’ failure to pay benefits on a life insurance policy

Susan Staropoli took out for her then-husband. The two later divorced, and Mr. Staropoli

passed away a few years later. The policy’s plain terms do not allow ex-spouses to receive

insurance coverage. As such, we will affirm the District Court’s rejection of Ms.

Staropoli’s many claims for relief.

I.1

Appellant Susan Staropoli was an executive at JPMorgan Chase (“JPMorgan”). As

part of its employee benefits, JPMorgan offered her a life insurance policy. The policy was

issued by MetLife, administered by JP Morgan Chase U.S. Benefits Executive (the

“Benefits Executive”), and subject to ERISA, 29 U.S.C. § 1001.

Soon after Ms. Staropoli started working for JPMorgan, as part of its benefits

package, she took out insurance on the life of her then-husband, Charles Staropoli, with

her children as the beneficiaries. The Staropolis divorced in 2013. At that time, Mr.

Staropoli became ineligible for coverage under the policy, which applied only to current

(not ex-) spouses. Unaware of this restriction, Ms. Staropoli reenrolled Mr. Staropoli in the

policy in the fall of 2015, increasing the benefits from $50,000 to $300,000. She paid more

than $2,000 in premiums for that coverage.

1 We write solely for the parties and so only briefly recite the essential facts.

2 Mr. Staropoli passed away on July 4, 2018. Ms. Staropoli submitted a claim for

benefits to MetLife.2 MetLife denied her claim because Mr. Staropoli was not her spouse

and so was not eligible for coverage. Ms. Staropoli pursued an administrative appeal with

MetLife, which was rejected for the same reason.

Ms. Staropoli then filed suit in the Eastern District of Pennsylvania. She sued

MetLife and JPMorgan, asserting claims under ERISA for the payment of benefits and for

breach of fiduciary duty. The District Court dismissed this complaint “for three reasons.”

Staropoli v. Metro. Life Ins. Co., No. 19-Civ-2850, 2021 WL 2939936, at *1 (E.D. Pa. July

13, 2021). First, the court held that JPMorgan was an improper defendant because the

Benefits Executive—not JPMorgan—was responsible for administering the plan. Staropoli

v. Metro. Life Ins. Co., 465 F. Supp. 3d 501, 510 (E.D. Pa. 2020). Second, the court

dismissed Ms. Staropoli’s benefits claim because the “unambiguous language of the plan”

made Mr. Staropoli ineligible for benefits. Id. at 513. Third, the court concluded that Ms.

Staropoli had failed to state a claim against MetLife for breach of fiduciary duties. Id. at

515-21.

Ms. Staropoli then filed a second amended complaint. She did not renew her claims

against JPMorgan or MetLife. Rather, she asserted a new breach of fiduciary duty claim

against the Benefits Executive. The District Court rejected these claims as well, granting

summary judgment to the Benefits Executive. Staropoli, 2021 WL 2939936, at *8. “[E]ven

2 This claim was submitted on behalf of her children, the supposed beneficiaries of the policy. Ms. Staropoli similarly brought this case on her own behalf and on behalf of her children. Following the District Court’s practice, we refer to Ms. Staropoli and her children collectively as “Ms. Staropoli.” See JA40 n.2.

3 construing the facts in the light most favorable to Ms. Staropoli,” the court found that she

failed to show “that the Benefits Executive breached its fiduciary duties, either through

omission or misrepresentation.” Id. This appeal followed.

II.3

Ms. Staropoli challenges many aspects of the District Court’s judgment. Finding no

error, we will affirm.

Ms. Staropoli appeals the dismissal of her claim for benefits under the plan. ERISA

gives her the right to sue for these benefits. See 29 U.S.C. § 1132(a)(1)(B). We review the

District Court’s decision to dismiss this claim de novo. Klotz v. Celentano Stadtmauer &

Walentowicz LLP, 991 F.3d 458, 462 (3d Cir. 2021). To prevail on this claim, Ms. Staropoli

must show that “she has a right to benefits that is legally enforceable against the plan, and

that the plan administrator improperly denied those benefits.” Fleisher v. Standard Ins.

Co., 679 F.3d 116, 120 (3d Cir. 2012) (cleaned up).

The policy at issue delegates to MetLife discretion to construe the terms of the plan

and determine eligibility for benefits. We will therefore set aside MetLife’s determinations

only if they are “arbitrary and capricious” or not “reasonably consistent” with the plan’s

text. Dowling v. Pension Plan for Salaried Emps. of Union Pac. Corp., 871 F.3d 239, 245-

46 (3d Cir. 2017); see also Conkright v. Frommert, 559 U.S. 506, 521-22 (2010) (“[T]he

3 The District Court had jurisdiction under 28 U.S.C. § 1331 and 29 U.S.C. § 1132(e). We have jurisdiction over this appeal from the District Court’s final orders under 28 U.S.C. § 1291.

4 plan administrator’s interpretation of the plan ‘will not be disturbed if reasonable.’”

(quoting Firestone Tire & Rubber Co v. Bruch, 489 U.S. 101, 111 (1989))).

We have little trouble concluding that MetLife’s interpretation of the plan was

reasonable.

The parties agree that the plan does not permit coverage for ex-spouses. See JA98

¶¶ 10-11; JA104 ¶ 30, JA108 ¶ 44. So Ms. Staropoli instead focuses her argument on the

plan’s incontestability clause, which she says precluded MetLife from denying her claim

even though Mr. Staropoli was not eligible for coverage. That clause provides in relevant

part that MetLife “will not use [Staropoli’s] statements which relate to insurability to

contest insurance after it has been in force for 2 years.” JA3095.

MetLife’s decision to deny coverage was not contrary to the plain language of the

incontestability clause. MetLife did not use Staropoli’s “statements” to deny coverage.

Rather, as the complaint itself acknowledges, MetLife relied on public records reflecting

Mr. Staropoli’s divorce to determine his ineligibility. JA101 ¶ 20. Moreover, the

incontestability clause only bars MetLife from using statements “which relate to

insurability” to deny claims. JA3095. MetLife interprets the plan as distinguishing between

“eligibility” and “insurability.” MetLife Br. 20; Staropoli, 465 F. Supp. 3d at 513 n.1. It

determined that the statements underpinning Ms. Staropoli’s claim “concerned eligibility,

not insurability, and thus fell outside the scope of the incontestability clause.” 4 MetLife Br.

4 The policy’s “insurability” requirements relate to “medical” qualifications for receiving insurance. MetLife Br. 20; see Evidence of Insurability, Black’s Law Dictionary 640 (9th ed. 2009) (defining “evidence of insurability” as “[i]nformation – such as medical records or a medical examination – that an insurer may require to establish a potential insured’s

5 20. This is a distinction reflected in Delaware law, which governs the plan. See 18 Del.

Code § 3114 (providing that incontestability clauses do not “preclude the assertion at any

time of defenses based upon provisions in the policy which relate to eligibility for

coverage”). So we cannot say that it was arbitrary for the insurer to draw the distinction

here. Because MetLife’s decision to deny coverage was consistent with the plan’s

language, it was not arbitrary and capricious, and we will affirm.

III.

A.

The District Court concluded that MetLife and the Benefits Executive did not breach

their fiduciary duties to Ms. Staropoli. We review its grant of summary judgment de novo

and will affirm. See Lawrence v. City of Phila., 527 F.3d 299, 310 (3d Cir. 2008).

The core of Ms. Staropoli’s claim is that Defendants breached their fiduciary duties

to her by accepting premiums for insurance that she did not have “even though they

consistently told her” the opposite. Staropoli Br. 35. In particular, Ms. Staropoli argues that

the Benefits Executive misled her into believing that Mr. Staropoli was covered in two

ways: “first, by withdrawing premiums from her paycheck” for Mr. Staropoli’s supposed

coverage, and “second, by listing Mr. Staropoli as a covered dependent on the company’s

‘Benefits Web Portal.’” JA52.5

qualification for a particular insurance policy”). Its “eligibility” requirements relate to “non-medical issues,” such as whether an employee works a certain number of hours per week, or whether their dependent is a “lawful spouse.” MetLife Br. 24. 5 Ms. Staropoli advanced a variety of theories before the District Court. It is unclear which she is renewing here. But all fall victim to the same fundamental defect—it was

6 In order to survive summary judgment on this claim, Staropoli must show that her

reliance on these supposed misrepresentations was reasonable. Shook v. Avaya Inc., 625

F.3d 69, 73 (3d Cir. 2010). She cannot. Ms. Staropoli acknowledges that she received many

official disclosures which told her that ex-spouses were not eligible dependents. And she

agrees that she was required to certify that she was responsible for understanding these

rules and following them.

Given these facts, our precedent forecloses Ms. Staropoli’s claim. Her reliance on

the Benefits Web Portal and her paycheck was “unreasonable as a matter of law” because

her interpretation of these sources “cannot be reconciled with the unqualified” plan

language. In re Unisys Corp. Retiree Med. Ben. ERISA Litig., 58 F.3d 896, 907 (3d Cir.

1995); see also Talasek v. Nat’l Oilwell Varco, L.P., 16 F.4th 164, 169 (5th Cir. 2021)

(“Our precedent clearly indicates that an employee cannot reasonably rely on informal

documents in the face of unambiguous terms in insurance plans.”). As such, Defendants

were “entitled to judgment as a matter of law” on this claim, and so the District Court was

correct to grant them summary judgment. See Fed. R. Civ. P.56(a).

B.

In addition to her claims for affirmative misrepresentation, Ms. Staropoli also argues

that Defendants breached their fiduciary duties through their omissions. More specifically,

she says that Defendants knew that she was mistaken about Mr. Staropoli’s coverage and

therefore had a duty to correct her misconception. But she provides no basis for overturning

not reasonable for her to rely on various informal representations when the plan documents unambiguously said the opposite.

7 the trial judge’s determination that the Benefits Executive lacked actual knowledge of Mr.

Staropoli’s ineligibility. See Staropoli, 2021 WL 2939936, at *6-7. Ms. Staropoli instead

directs most of her argument at the court’s use of an “actual knowledge” standard, which

she regards as “unworkable.” Staropoli Br. 48; see Staropoli, 2021 WL 2939936, at *4-5.

This standard is well-grounded in our precedent, and Ms. Staropoli does not persuade us

to deviate from it. See, e.g., In re Unisys Corp. Retiree Med. Ben. “ERISA” Litig., 242 F.3d

497, 509 (3d Cir. 2001); see also Daniels v. Thomas & Betts Corp., 263 F.3d 66, 76 (3d

Cir. 2001) (distinguishing between affirmative misrepresentation claims, which do not

require “actual knowledge” of confusion, and claims for omissions, which do).

C.

Ms. Staropoli also argues that the Benefits Executive was MetLife’s agent, and that

as a result the Benefits Executive’s supposed knowledge of her divorce is attributable to

MetLife. But Ms. Staropoli did not allege facts sufficient to establish an agency

relationship, and so the District Court was right to reject her claim.

To support her claim that the Benefits Executive was MetLife’s agent, Ms. Staropoli

directs us to “the facts as alleged in the First Amended Complaint.” Staropoli Br. 28-29.

But this complaint does not mention the Benefits Executive.6 See JA96-121. Instead, it

alleges that JPMorgan—a separate entity—was MetLife’s agent. JA98-100, 104-05. Ms.

6 Ms. Staropoli did allege that “each of the defendants was the agent, representative, co- conspirator, successor-in-interest, assignee or employee of each remaining defendant. . . .” JA97. We “must eliminate” such “conclusory allegations from the complaint,” and accordingly decline to consider them. Sweda v. Univ. of Pa., 923 F.3d 320, 330 (3d Cir. 2019).

8 Staropoli admits as much in her brief, arguing only that her statements about JPMorgan

“also apply to” the Benefits Executive. Staropoli Br. 28 n.3. But she cites no support for

this theory, and in any case it was not presented to the district court. Ms. Staropoli has

waived her arguments on this point and we will not consider them. CPR Mgmt., S.A. v.

Devon Park Bioventures, L.P., 19 F.4th 236, 244 n.9 (3d Cir. 2021).

IV.

Finally, Ms. Staropoli says that the District Court erred by failing to address her

“claims for surcharge, waiver, and estoppel.” Staropoli Br. 52.

Ms. Staropoli faults the District Court for not addressing her claim for surcharge.

Id. But she presented no such claim below. Rather, in her pleadings before the District

Court, Ms. Staropoli presented surcharge only as a possible remedy, not an independent

claim for relief. JA1229, 1234, 1237. She was right to do so—surcharge is a remedy, not a

cause of action. See CIGNA Corp. v. Amara, 563 U.S. 421, 442 (2011). Besides, ERISA

authorizes the award of equitable relief only “to redress violations” of the ERISA statute

or “the terms of the plan.” Amara, 563 U.S. at 438 (citing 29 U.S.C. § 1132(a)(3)). Without

an underlying violation, Ms. Staropoli’s claims for equitable relief cannot be maintained.

Unlike surcharge, equitable estoppel is an independent ERISA cause of action. To

succeed on such a claim, Ms. Staropoli was required to show that she reasonably relied on

some statement made by the Defendants. Curcio v. John Hancock Mut. Life Ins. Co., 33

F.3d 226, 235 (3d Cir. 1994). As discussed previously, see Part III, supra, Ms. Staropoli’s

reliance on Defendants’ informal statements cannot be reasonable in light of the plan’s

9 unambiguous terms, which excluded ex-spouses from coverage. Thus, her equitable

estoppel claim must be rejected as well.

Finally, Ms. Staropoli claims that Defendants “waived” their “right to insist on

compliance with the requirement that Mr. Staropoli be [Ms.] Staropoli’s husband.”

Staropoli Br. 53. This claim is meritless. “Under Delaware law,” which governs the plan,

“waiver is the intentional relinquishment of a known right.” Manti Holdings, LLC v.

Authentix Acquisition Co., 261 A.3d 1199, 1210 (Del. 2021) (cleaned up). “The standards

for proving waiver under Delaware law are quite exacting, and the facts relied upon to

prove waiver must be unequivocal.” Id. at 1211 (cleaned up). Ms. Staropoli points to

nothing which establishes an unequivocal, intentional relinquishment of Defendants’ right

to enforce the plan according to its plain terms.

***

We will AFFIRM the judgment of the District Court.