IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

KATHRYN M. SLATER, :

:

: No. 4:04-CV-2096

:

Plaintiff : Notice of Removal

: Filed 9/22/04

:

v. : (Judge Muir)

:

NEWELL RUBBERMAID, INC., AND :

UNUM LIFE INSURANCE COMPANY :

OF AMERICA, :

:

Defendants :

ORDER

 July 8, 2005

THE BACKGROUND OF THIS ORDER IS AS FOLLOWS:

On August 20, 2004, Plaintiff Kathryn M. Slater, as

executrix of the estate of Lawrence Slater, and as a putative

beneficiary under an insurance policy on the life of Lawrence

Slater filed a complaint consisting of five counts in the Court

of Common Pleas of Northumberland County, Pennsylvania. The

amount of the insurance policy is $182,000. Named as Defendants

were Newell Rubbermaid, Inc. (“Newell”), and UNUM Life Insurance

Company of America (“UNUM”). On September 22, 2004, UNUM filed a

notice of removal to this Court pursuant to 28 U.S.C. §§ 1331 and

1441. Newell joined in the removal by filing a certificate of

concurrence. 

In count 1 of the complaint Plaintiff advanced the

state law claim of breach of contract against Newell and UNUM. 

In count 2 of the complaint Plaintiff advanced the state law

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claim of promissory estoppel against Newell. In count 3 of the

complaint Plaintiff set forth a claim of negligent

misrepresentation against Newell. Count 4 of the complaint was

entitled “Coverage Under the Policy” and is leveled against UNUM. 

In this count Plaintiff contended “in the alternative” that if

all the steps necessary to secure the insurance policy had been

taken by Lawrence Slater’s employer UNUM would be obligated to

pay the policy proceeds of $182,000 plus interest. Finally,

count 5 of the complaint sets forth a claim against Newell for

the amount of the policy under the Employee Retirement Income

Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001, et seq.

On June 29, 2005, the parties stipulated to the

dismissal of UNUM. The only counts remaining are counts 1, 2, 3

and 5 as they relate to Newell. 

The gist of the remaining claims set forth in the

complaint is (1) Mr. Slater was employed by a division of Newell,

(2) Mr. Slater’s employment was terminated on January 3, 2003,

pursuant to a separation or severance agreement, (3) Mr. Slater

had the option of continuing various benefits, including life

insurance, on an individual basis, (4) Newell failed to notify 

Mr. Slater of his right to elect to continue his life insurance

policy in the face amount of $182,000 on an individual basis in

accordance with the provision of the life insurance benefit plan,

(5) Mr. Slater died on February 6, 2004, and (6) UNUM declined to

pay the life insurance policy because the appropriate paperwork

was not processed in a timely manner. Plaintiff contends she

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suffered monetary loss as a result of Newell’s failure to abide

by the notification provisions of the life insurance benefit

plan.

On June 1, 2005, Newell filed a motion for summary

judgment and a brief in support. A brief in opposition was filed

on June 24, 2005. The motion became ripe for disposition on July

5, 2005, with the filing of Newell’s reply brief. 

The court will consider the motion under the well-known

and accepted standards to be considered in determining whether or

not to grant summary judgment. See Anderson vs. Liberty Lobby,

Inc., 477 U.S. 242, 247-48 (1986); Celotex Corporation vs.

Catrett, 477 U.S. 317, 324 (1986); Matsushita Electric Industrial

Co. vs. Zenith Radio, 475 U.S. 574, 586 (1986). Federal Rule of

Civil Procedure 56(c) requires that the court render summary

judgment "forthwith if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to judgment

as a matter of law." Fed. R. Civ. P. 56(c). If, however, "the

evidentiary matter in support of the motion does not establish

the absence of a genuine issue, summary judgment must be denied

even if no opposing evidentiary matter is presented." Advisory

Committee Notes to Fed. R. Civ. P. 56(e)(1963 Amend.). 

Furthermore, the evidence and inferences therefrom must be viewed

in the light most favorable to the nonmoving party. Matsushita

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Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585

(1986).

Initially, the moving party has the burden of

demonstrating the absence of a genuine issue of material fact. 

Celotex Corporation, 477 U.S. at 323. This may be met by the

moving party pointing out to the court that there is an absence

of evidence to support an essential element as to which the nonmoving party will bear the burden of proof at trial. Id. at 325.

Rule 56 provides that, where a summary judgment motion

is made and properly supported, the adverse party must show by

affidavits, pleadings, deposition, answers to interrogatories,

and admissions on file that there is a genuine issue for trial. 

Fed. R. Civ. P. 56(e). The United States Supreme Court has

commented that this requirement is tantamount to the non-moving

party making a sufficient showing as to the essential elements of

its case that a reasonable judge or jury could find in its favor. 

Celotex Corporation, 477 U.S. at 322-23.

When addressing a motion for such a judgment, our

inquiry focuses on "whether the evidence presents a sufficient

disagreement to require [a trial] or whether it is so one-sided

that one party must prevail as a matter of law." Anderson vs.

Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)(emphasis added).

As summarized by the Advisory Committee on Civil Rules,

"[t]he very mission of the summary judgment procedure is to

pierce the pleadings and to assess the proof in order to see

whether there is a genuine need for trial." Fed. R. Civ. P. 56,

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Advisory Committee Note to 1963 Amendment. In light of these

principles the court will now address Newell’s motion for summary

judgment.

Plaintiff in her brief in opposition has conceded that

Counts 1 through 3 are preempted by ERISA and contends that “this

Court should proceed under ERISA’s civil enforcement provisions”

set forth at 29 U.S.C. § 1132. We will, therefore, grant summary

judgment in favor of Newell on Counts 1 through 3 of the

complaint.

Pursuant to the civil enforcement provisions of ERISA,

specifically 29 U.S.C. § 1132(a)(1)(B), a participant in an

employee benefit plan, such as the life insurance policy involved

in this case, may bring a civil action “to recover benefits due

to him under the terms of his plan, to enforce his rights under

the terms of the plan, or to clarify his rights to future

benefits under the terms of the plan.” This provision has been

interpreted to allow a beneficiary to bring suit for damages

stemming from an employer’s failure to uphold its duties

delineated in the plan. See Kidder v. H & B Marine, Inc., 932

F.2d 347 (5th Cir. 1991)(upholding judgment against former

employer for failure to notify employee of continuation of

benefits).

While employed, Mr. Slater purchased $182,000 of life

insurance coverage under the Newell-sponsored group life

insurance plan underwritten by UNUM. A premium for this coverage

was deducted from Mr. Slater’s January 15, 2003, pay period

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covering his employment through January 3, 2003. The deductions

for Mr. Slater’s coverage stopped under the voluntary group life

insurance plan when Mr. Slater’s employment terminated.

Under the express terms of life insurance benefit plan,

Mr. Slater had two potential options for converting his group

life insurance benefit into an individual policy. One provision

allowed Mr. Slater upon termination of employment to convert his

group life insurance policy to an individual policy without

evidence of insurability Another provision permitted Mr. Slater

to obtain “portable life insurance coverage” which required a

representation that he did not have an injury or sickness which

materially affected his life expectancy. The application for

portable coverage was required to be made within 31 days of

termination of employment. 

At the time of Mr. Slater’s termination, the premium

charged for the portability coverage was $184.44 per quarter. 

Mr. Slater was not diagnosed with cancer until sometime in March

2003. The premium charged for the conversion policy which did not

require evidence of insurability was a lump sum payment of

$4,118.66. 

On May 22, 2003, Ms. Slater completed a “portability

application” noting that Mr. Slater was diagnosed with cancer and

forwarded the application to UNUM with a check in the amount of

$184.44. In a letter dated June 11, 2003, UNUM rejected the

application because of Mr. Slater’s medical condition on the

ground that portability coverage required proof of insurability

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and that the premium was inadequate for a conversion policy. 

However, UNUM extended “the conversion time frame” for thirty

days from June 11, 2003 for Mr. Slater to apply for a conversion

policy “which does not require evidence of insurability.”

Thereafter, Mr. Slater did not apply to have the group life

insurance policy converted to an individual policy.

Plaintiff in her brief in opposition to the motion for

summary judgment limits her right to recover to a claim that

Newell failed to (1) comply with the notice requirements of the

plan relating to portable life insurance coverage and (2) failed

to furnish Mr. Slater with the completed portability forms in a

timely manner. See page 15 of Plaintiff’s brief. The argument

apparently is that if Newell would have notified Mr. Slater

within 15 days of his employment termination of his right to

obtain a portable insurance policy he would have applied for such

a policy before he was diagnosed with cancer and would have

obtained such a policy at a premium level of 184.44 per quarter.

 Plaintiff’s claim is not viable, however, because it

is not supported by the provisions of the plan. There is no

provision in the plan requiring Newell to notify Mr. Slater after

his employment was terminated of his right to portable life

insurance coverage.

 Plaintiff has not disputed that Mr. Slater received a

copy of the plan at the time he enrolled in the group life

insurance program. See Doc. 35, Plaintiff’s Appendix in

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Opposition to Newell’s Motion for Summary Judgment, pages 1

through 47. 

The plan is divided into several sections. The

sections that are relevant to our disposition of the pending

motion are entitled “Life Insurance Benefit Information” which

commences on page 24 and “Life Insurance Other Benefit Features”

which commences on page 30. 

The first section sets forth provisions dealing with

conversion of life insurance benefits. Under that section Mr.

Slater and his dependents had the right to convert the group life

insurance policy to an individual policy without evidence of

insurability. This section also contains a provision requiring

the employer to notify the employee of his conversion rights. On

page 27 the plan states as follows:

Your employer must promptly notify each person of their

conversion privileges within 15 days from the date that

person’s life insurance terminates.

If your Employer does not notify that person within 

those 15 days, but does notify that person within

60 days from the date that person’s life insurance

terminates, the time allowed for that person to 

exercise their life conversion privilege will be

extended 15 days from the date that person is notified.

If your Employer does not notify that person within

those 60 days, the time allowed for that person to

exercise that person’s life conversion privilege will

expire at the end of those 60 days.

Immediately after this portion of the plan is a direction to the

employee to “[a]sk your Employer for a conversion application

form which includes cost information” and “complete the

application, send it with the first premium amount to” UNUM. 

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Plaintiff’s claim for damages turns on the question of

whether or not Newell breached a duty under the life insurance 

benefit plan. Plaintiff contends that Newell breached the notice

provision. We are unable to discern any triable issues of

material fact with respect to this question. The notice provision

relied on by Plaintiff is in the section entitled “Life Insurance

Benefit Information” which contains provisions dealing with the

right to convert a group policy to an individual policy without

proof of insurability. 

The section dealing with portable insurance coverage is

entitled “Life Insurance Other Benefit Features” and has no

notice provision. Because there was no duty on the part of

Newell to notify Mr. Slater of his right to obtain a portable

insurance policy after his employment was terminated, Plaintiff’s

claim for damages under ERISA is not viable. Furthermore, Mr.

Slater received a copy of the plan and was on notice of its

provisions. The plan at page 31 required an employee to “apply

for portable coverage for yourself and your dependents and pay

the first premium within 31 days after” termination of

employment. We will, therefore, grant summary judgment in favor

of Newell on Count 5 of the complaint.

NOW, THEREFORE, IT IS HEREBY ORDERED THAT:

1. Newell’s motion for summary judgment (Doc. 25) is

granted.

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2. The Clerk of Court shall enter summary judgment in

favor of Newell and against Plaintiff on Counts 1, 2, 3, and 5 of

the complaint.

3. The Clerk of Court shall close this case.

 

 s/Malcolm Muir ______________________________ MUIR, U.S. District Judge

MM:gs

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