Skelton v. Radisson Hotel Bloomington

Skelton v. Radisson Hotel Bloomington

Opinion

BENTON, Circuit Judge.

Corey Skelton sued Reliance Standard Life Insurance Company for mishandling his wife's enrollment for supplemental life insurance and then declaring her ineligible for it after she died. The district court¹ granted him summary judgment, finding the company violated the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq. Having jurisdiction under 28 U.S.C. § 1291, this Court affirms.

Corey Skelton was married to Beth M. Skelton ("Skelton"), a corporate group sales manager at Davidson Hotels LLC.

Davidson operated a welfare benefits plan ("Plan") that provided dental, health, life and long-term disability [*2]  benefits for employees. Davidson's documents identified it as the "Plan Administrator" with general "discretionary authority to interpret the Plan," and determine eligibility for coverage and eligibility for claims.

Davidson entered a policy contract ("Policy") with Reliance Standard Life Insurance Company to provide life insurance for the Plan. Reliance "serve[d] as the claims review fiduciary with respect to the [life] insurance policy and the Plan." The Policy granted it "final and binding" "discretionary authority to interpret the Plan . . . and to determine eligibility for benefits."

Reliance also had sole discretion to determine eligibility for supplemental life insurance under various circumstances, including when an employee sought it more than 31 days after starting employment. In this circumstance, the employee was required to submit an Evidence of Insurability ("EOI"), demonstrating "proof of good health." Insurance would not become effective until Reliance "approve[d] [that] required proof of good health."

However, if an applicant for supplemental life insurance was changing coverage amounts within 31 days of "a life event change (such as marriage, birth, or specific changes [*3]  in employment status)," then the applicant was not required to submit an EOI and receive Reliance's approval.

Davidson collected premiums from employees and remitted them to Reliance in one monthly check for all the premiums due, along with a worksheet listing only the total number of employees insured. This is called "bulk billing." Reliance's system did not collect information that would allow it to assess whether Davidson sent mistakenly billed premiums to Reliance.

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