NOT RECOMMENDED FOR FULL- TEXT P UBLICA TION File Name: 12 a11 19n. 06 Nos. 1 0-42 97/ 10-4 560 UNITED STA

TES COURT OF A PPE A LS FOR THE SIX TH CIRCUIT

ELFRIE DE W RAY, Plaint if f -Appe llee,

v

. AMERICAN UN IT ED LIFE INSURANCE COMPANY, Def end ant -Appe llant, JAM E S ROBERT FLECK and SCOT T ALL EN FLE CK, Def end ant s. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ON APP EAL FROM T HE UNITE D ST AT ES DIST RICT COURT FOR T HE SOUT HERN DIST RICT OF OHIO

Bef ore: SIL ER, DAUGHT REY, and W HIT E, Circuit Ju dges. MARTHA CRAIG DAUGHTRE Y, Circuit J u d ge

. Def end ant Am erican United Lif e Insu rance Com pan y app eals the judgme nt of the district court rev ersing an adm inistrative det ermin ation tha t plaint if f Elf riede W ray w as not a designat ed ben ef iciary of Jam es M. Fleck’s lif e insu rance po licy w ith A me rican Unite d. Af ter th e district court conclu ded that W ray w as inde ed a prop er ben ef iciary , howev er, the insuran ce com pan y sought leave to f ile a cross-claim against Fleck’s tw o sons, Jam es R. Fleck and Scot t Fleck, in o rd e r to

recover insuran ce proce eds paid to t h e m tha t the court conclu ded shou ld have bee n distribut ed to W ray

. T he district court denied l eave to file the cro ss-claim, a nd Am erican United now also alleges error in that exerci se of the court’s discretion

. W e conclu de tha tNo. 10-4297

W ray v. Am erican United I

nsurance Company the distri ct court fa iled to en gage in the prop er an alysi s i n deciding w het her to permit the cross-claim and , the ref ore, rev erse tha t portio n of the judgme nt and rema nd the case to the district co urt f or f urthe r consid eratio n.

FA CTUA L A ND PROCEDURA L BA CKGROUND

Am erican Unite d s o ld a gr oup life insuran ce policy to T he Coun try ma rk Co-op Memb er Group Ben ef its Plan T rus t

. As senio r v ice-preside nt of Sou thwest Lan dm ark, 1
I n c ., an “insured unit” und er the policy, Jam es M. Fleck w as aut horized to purch a s e li f e insuran ce f rom Am erican United and did so. T he initial app lication f illed out by Fleck w as signed and dat ed on Decem ber 29, 200 0, and did not giv e a n ind ication on the fo rm that
any particu lar perso ns w ere t o b e li s t ed as eithe r “basic and supp lem ent al insuran ce” ben ef iciaries or as “a c c iden tal dea th and dism em berm ent ” ben ef iciaries. Inste ad, a sepa rate, und ate d, unsigned page also app earing in the record listed Fleck’s the n-w if e Lynn, and his tw o sons as prima ry ben e f ic ia ri e s of the basic and supp lem ent al life insuran ce policy and app ortion ed 20 perce nt of the proce eds of the policy to Lynn and 40
perce nt t o e ach of

the son s.

A subse quent app lication signed and dat ed by Jam es M. Fleck on Decem ber 3, 200 2, include d the not ation “See Atta ched ” in the space provided f or listing the prima ry ben ef iciary f or the basic and supp lem ent al life insuran ce proce eds. A shee t, presu ma bly

T h e G r o u p B e n e f i t s P l a n T r u s t a l s o c o n t r a c t e d w i t h T h e H a r t f o r d L i f e a n d A c c i d e n t I n s u r a n c e 1 C o m p a n y t o p r o v i d e a c c i d e n t a l d e a t h a n d d i s m e m b e r m e n t c o v e r a g e t o q u a l i f i e d e m p l o y e e s

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nsurance Company atta ched to the app lication, again lists Lynn, Scot t, and Jam es R. Fleck as prima ry life insuran ce be n e f ic ia ries, but adju sts the perce nta ge portio ns to be received by tho se individuals to 10 pe rcent f or Lynn a nd 45 perce nt f or ea ch o f the two sons.
Finally , on Decem ber 30, 2 0 0 3 , J a m es M. Fleck signed and dat ed the policy
app lication tha t is the f ocus of this litig ation

. On t h a t f o rm , the insured checke d a box indicat ing tha t he w ished to chan ge the ben ef iciaries of t h e p o li c y and , in the space s provided on the f orm f or designat ing t he ben ef iciaries of the basic and supp lem ent al life in suran ce policy and the accide nta l dea th and dism em berm ent policy, w rote t h e wo rd “Attach ed. ” As w ith the 200 0 and 200 2 app lications tha t eithe r began coverage or chan ged the perce nta ges to be distribut ed to the ben ef iciaries, the app ellate record cont ains a copy of an add itiona l s h e e t of pap er tha t lists the nam es, add resses, and perce nta ge distribut ions f or the selecte d ben ef iciaries. T he 2 003 app lication atta chm ent , howev er,

remo v ed Lynn Fleck (f rom w hom Jam es M. Fleck w as t h e n divorced) as a ben ef iciary , add ed Elf riede W ray as a prima ry ben ef iciary , and assig ned one-third of the proceed s of the ba sic and sup plem ent al lif e insu rance to W rayan d e ach of his two son s.

Unf ortun ate ly , Jam es M. Fleck died in an auto mo bile acciden t on Jun e 1 6, 2 007

. T hree days later, Gayle W ubb olding, the client serv ices coord inato r f or Em ployee Ben ef it Mana geme n t Co rp oratio n, an ent ity specia liz ing in the serv icing of self -f und ed ben ef it
programs, cont acte d plaint if f W ray by lette r and inf orme d W ray tha t s h e wa s one of the three listed ben ef iciaries on Jam es M. Fleck’s lif e insu rance po licy an d o n h is accide nta l

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nsurance Company dea th and dism e m b e rmen t policy. W ubb olding of f ered to f ile W ray ’s claim f or ben ef its und er the policies once W ray provi ded her w ith tw o certif ied copie s of Jam es M. Fleck’s dea th certif icate, W ray ’s birth dat e and Socia l Secu rity num ber, the birth dat es and Socia l Secu rity num bers of Jam es R. and Scot t Fleck, the police repo rt of Jam es M. Fle c k ’s accide nt, and an y

ne w spap er articles a bou t th e a cciden t.

W ray evidently provided W ubb olding w ith the requeste d inf orma tion beca use three

mo nth s later, W ubb olding sent lette rs to bot h A m e rican United and to T he Hartf ord enclo sing the docu me nta tion nece ssary to secure payme nt of the insuran ce ben ef its to the three ben ef iciaries listed on the policy app lication. In bot h lette rs, W ub b o ld in g f urthe r requeste d tha t the insuran ce com pan ies con tact her sh ould the y “have an y question s or

nee d a ny fu rther inf orma tion” regardin g the cla ims.

Less tha n tw o w eeks later, T he Hartf ord ma iled lette rs to the Fleck broth ers and to W ra y a ppro v ing the ir claims und er the accide nta l dea th policy. T he Hartf ord the n dep osited one -third of the v alue of tha t policy into sepa rate accou nts f or the ben ef it of each of the three individuals. But , W ray ’s dea lings w ith A me rican Unite d were not as troub lef ree. In tw o iden tical lette rs dat ed 11 d a ys apa rt, the def end ant insuran ce com pan y , altho ugh expressing its cond olen ces to W ray “f or [he r] loss,” explained tha t “[b]a sed on inf orma tion subm itted by the e m p lo y er/po licy hold er, [the re] is no signed and dat ed ben ef iciary designat ion. T he proce eds und er the insured ’s gr oup life insuran ce policy are

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nsurance Company payable to t he ‘Estat e o f Jam es Fleck.’” The reaf ter, Ame rican United issued a check fo r the f ull am oun t of

the po licy , plu s inte rest, t o th e “Esta te o f Jam es Fleck” o nly.

In respo nse, W ray f iled an act io n a ga inst Am erican United , Em ployee Ben ef it Ma n a ge m e n t Corporat ion, Jam es R. Fleck, and Scot t Fleck in Ohio state court, seekin g payme nt o f

on e-third o f

the be nef its of

Jam es M. Fleck’s lif e insu rance po licy . T he case

w as eventua lly remo v ed to f ede ral court and t h e Em ployee Ben ef it Mana geme nt Co rporatio n w as dism issed as a def end ant

. Af ter a hea ring, the district court is s u e d a

w ritten orde r tha t first conclud ed tha t W rayhad adequa tely exhauste d her adm inistrative

reme dies in seekin g to overturn th e insu rance com pan y ’s adverse decision

. T he district judge f urthe r ruled tha t W ray w as not equitab ly esto ppe d f rom pursu ing her claim, and tha t the docu me nts subm itted to A m e ri c an United showed conclu siv ely tha t Jam es M. Fleck had inde ed designat ed the plaint if f as a b e n e f iciary of his life insuran ce policy. Conse quently, the district court ent ered judgme nt in f avor of W ray f or one -third of the v alue of the po licy , plu s inte rest f rom the da te o f Fleck’s de ath , an d co sts.

In lig ht of the district court’s ruling, Am erican United mo v ed f or leave to f ile a crossclaim against Jam es R. Fleck and Scot t Fleck f or recou pm ent of the mo ney the insuran ce

com pan y had paid to the Esta te of Jam es M. Fleck instea d of to W ray

. T he district judge den ied t hat m otion , ho w ever, statin g:

T he prop osed cross claim state s at ¶ 10 tha t “B ecau se the ben ef iciary designat ion w as not signed and dat ed as required by the [Am erican United ] policy, [Am erican Unite d ] paid ben ef its to the Esta te of the Deced ent

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nsurance Company T his allegation is incon sistent w ith the law of the case as it prese ntly stan ds. At page 12 of the court’s order date d Sept em ber 14, 201 0, the court state s tha t “Fleck com plete d a designat ion of ben ef iciary f orm w hich he signed and dat ed Decem ber 30, 200 3.” Doc. 52. T he court w ill the ref ore den y def end ant [Am erican United ]’s mo tion f or leave to f ile its cross claim against the Fleck def end ant s on th e gr oun d tha t the prop osed cross claim is incon sistent w ith th e law of the case as it prese ntly stand s.

In tha t sam e orde r, the district court recogniz ed tha t som e of W ray ’s claims had not
y et bee n resolved. Never t h e le ss, beca use app ellate af f irman ce of the court’s ruling on W ray ’s ben ef iciary statu s w ould rend er her claims against Scot t and Jam es R. Fleck mo ot, the district judge certif ie d t h a t issue f or imm edia te app eal pursu ant to the provisi ons of Fede ral Rule of Civ il Proced ur e 54(b ). Moreover, even tho ugh Am erican United ’s
prop osed cross-claim against the Flecks w ould not be mo ote d by af f irman ce of the district court’s ruling, th e d istrict judge n ote d:

Beca use the cross claim is closely relate d to plaint if f ’s cla im a ga in st [Am eric a n Un it e d ], it w ould serv e the intere st of judicial econ om y f or this court to certif

y its orde r den y ing [Am erican United ] leave t o f il e the cross claim and allow the court of app eals to consid er tha t issue at the sam e time it consid ers [Am erican United ]’s app eal of the judgme nt in f avor of pl a in tif f on her cla im a gainst it.

Am eri c a n United now asks this court to overturn the conclu sions reach ed by the district court on tho se two certif ied issu es.

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nsurance Company

DISCUSSIO N

Wra y ’s S tatus A

s A Benefic iary

Am erican Unit e d c hallen ges, on bot h proce dura l and subst ant iv e gr oun ds, the district court’s det ermin ation that W ray w as a nam ed ben ef iciary of Jam es M. Fleck’s life insuran ce policy. T he com pan y f irst asserts tha t the plain t if f did not exhaust her adm inistrative rem e dies beca use W ray never perso nally su bm itted a claim f or ben ef its. In advancing this argume nt, the insuran ce com pan y cont end s t h a t it received no doc u m e n t s directly f rom W ray

. Inste ad, argues the com pan y , it received a request f or payme nt of the policy proce eds only f rom Em ployee Ben ef it Mana geme nt Corporat ion, an ent ity tha t was neith er W ray ’s actu al agen t no r her a ppa rent agent.

Unde r Ohio law , howev er, an agent ma y bind a principa l in the cont ext of app aren t aut hority if the evidence ref lects:
(1) tha t the principa l held the agent out to the pub lic as posse ssing suf f icient aut hority to em brace the particu la r a ct in question , or knowingl y perm itted him to act as having such aut hority, and (2) tha t the perso n dea ling w ith the agent knew o f the f acts and acting in good f aith had reaso n to believe and did b elieve tha t th e a gent p ossesse d th e n ecessa ry au tho rity

.

Braina rd v. Am

. S ka n d ia L ife Assuran ce Corp. , 432 F.3d 655 , 662 -63 (6th Cir. 200 5) (q uot ing Master Conso l. Corp. v. Ban cOhio Nat’ l Ban k , 575 N.E.2 d 817 , 822 (Ohio 199 1)). Conse quently, “[t]he app aren t power of an agent is to be det ermin ed by the act of the

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nsurance Company principa l and

not by the acts of the age nt .

. . [.]” Id. at 663 ( bracke ts in origi nal) (q uot ing Master Con sol. Corp

. , 57 5 N.E .2d at 822 ).

Plaint if f W ray has satisf ied bot h pron gs of the app a re n t aut hority test out lined in Braina rd

. First, the very f act t hat W ray did not f ile an insuran ce claim herse lf , but rathe r

re li e d upo n W ubb olding to do so on her beh alf af ter providing W ubb olding w ith th e

nece ssary inf orma tion to supp ort the claim, is strong evidence tha t W ray had designat ed Em ployee Ben ef it Mana geme nt Corporat ion as her agent f or this limited purp ose. Seco nd, it i s equally clear tha t Am erican United treat ed W ubb olding as posse ssing the nece ssary aut hority to f ile a claim f or ben ef its on W ray ’s beh alf

. Ind eed , af ter receivi ng the claim f iled by W ubb olding requesting payme nt to W ray , to Scot t Fleck, and t o J a me s R. Fleck, Am erican United evaluate d the request as a prop erly -f iled claim. Moreover, the insuran ce

com pan y ’s claim-de nial lette rs w ere sent to W ray , une quiv ocally indicat ing the com pan y ’s belief tha t the plaint if

f had f iled a request f or payme nt throu gh W ubb olding, w ho w as also copie d o n th e d enia l not if ication

.

W ray clearly relied upo n W ubb olding to f ile her ben ef its claim f or her, and Am erican United clearly treated tha t request by W ubb olding as a claim on W ray ’s beh alf . Had the

com pan y not consid ered W ubb olding’s lette r of Sep tem b e r 1 3 , 200 7, as a request f or payme nt by W ray , the re w ould have bee n no justif ica tion f or the insuran ce com pan y ’s lette rs of Sep tem ber 27 and Octob er 8, 200 7, inf ormin g W ray tha t she w as not consid ered

a prop er ben ef iciary of the policy by Am erican United . T he record bef ore this court thu s

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nsurance Company

une quiv ocally supp orts the district court’s conclu sion tha t W ray did, in f act, f ile a claim f or ben ef its und er Jam es M. Fleck’s lif e in s u ra n ce policy. W e reject Am erican United ’s assertio n to the con trary ou t-of -han d.

In a corollary to its exhaustio n argume nt, the def end ant in surer also alleges tha t W ray shou ld have bee n equ it a b ly esto ppe d f rom pursu ing payme nt of ben ef its und er Jam es M. Fleck’s life insuran ce policy beca use Am erican United det rimen tally relied upo n the plaint if

f ’s f ailure to f ile a claim f or ben ef its in det ermin ing tha t only Scot t and Jam es R. Fleck w ere prope r ben ef iciaries. Had W rayactu ally f iled a cl aim for ben ef its, arg ues the def end ant , the insura n ce com pan y could have proce ede d to det ermin e w ho the prop er ben ef iciaries of the policy w ere. T he com pan y thu s cont end s tha t W ray , af t e r re c e iv ing not if ication t h a t she w ould not be paid und er the policy, shou ld have cont este d tha t det ermin ation by pursu ing add itiona l rev iew by Am erican Unite d

. I m p o rtant ly , howev er, Am erican United ’s den ial lette rs of Sep tem ber 27 and Octob er 8, 200 7, never explained to the plaint if

f the nece ssity of seekin g such rev iew , how such rev iew could occur, or even tha t such rev iew w as possib le. In lig ht of the insurer’s f ailure to out line the step s required to dispu te an adverse claim det ermin ation , Am erican United cann ot successf ully cont end tha t the co mp any det rimen tally relied upo n W ray ’s inactio n or tha t her f ailure to continu e to p ursue revi ew of

w hich sh e was not aware som eho w preju diced Am erican United

. Advancing tw o prima ry argume nts, Am erican United also challen ges the di s t rict court’s subst ant iv e ruling in this ma tter tha t Jam es M. Fleck prop erly designat ed W ray as

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nsurance Company a bene f iciary

of his li f e insurance policy

. W hen a policy v ests discretion aryautho rity i n a ben ef it-plan adm inistrato r to ma ke eligibili ty decision s, w e rev iew tho se decisi o n s u n der the highly def eren tial “arbitrary and capriciou s” stan dard

. Moos v. Squ are D Co. , 72 F.3d 3 9 , 4 1 (6th Cir. 199 5). W hen , as here , howev er, no such discretion is accord ed t h e decision -make r, a rev iew ing court examine s ben ef its det ermin ation s de novo

. See Metro. L if e I n s

. Co

. v. Glenn , 554 U.S. 105 , 111 (200 8) (citing Firestone Tire & Rubb er Co. v. Bruch , 48 9 U.S . 10 1, 1 15 (198 9)).

Am erican United ’s f irst argume nt to circumvent the district court’s interpret ation of the docu me nts subm itted to the c o m p a n y w ould require us to read into the relevant insuran ce policy add itiona l language tha t the drafters of the provisi on did not include

. T he partie s do not dispu te t hat Se ction 13 of Jam es M. Fleck’s life insuran ce policy p rov ided tha t an insured ma y chan ge ben ef iciaries “at any time by w ritten request” if the request is “(a) signed and dat ed; (b) f iled through the Group Policy hold er; and (3) sent i mm edia tely to [Am erican United ’s] Hom e Of f ice by the Group Policyholder.” T here is also no dispu te tha t Jam es M. Fleck’s f orm to chan ge ben ef iciaries w as signed by Fleck and dat ed Decem ber 30, 200 3. Am erican United insists, neverthe less, tha t the add itiona l page tha t listed the ben ef iciaries of the policy w as not signed and dat ed and , thu s, tha t the policyholder f ailed to com ply w ith the policy term s. Now here in the policy, howev er, did the

com pan y insert la n gu a ge requiring tha t every pag e of a chan ge-of -ben ef iciary f orm be signed and dat ed. Rathe r, the policy requires only tha t the c h a n ge f o rm som ewhere cont ain the signature of the policyholder and the dat e on w hich the chan ge w as requeste d. - 10

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W ray v. Am erican United I

nsurance Company Hence , the c h a n ge -o f -ben ef iciary f orm subm itted by Jam es M. Fleck on Decem ber 30, 200 3, f ully

satisf ied t he policy’s r equireme nts.

Am erican United w ould have this court believe tha t the f ailure of an insured to sign and dat e every shee t of a chan ge f orm, desp ite the abse nce of any cont ractua l obligation to do so, ma kes it imp ossible f or the com pan y to det ermin e w het her a designat ed secon d shee t w as actu ally atta ched to the f orm. Alth ough co nced ing that the district court “may be correct” tha t the chan ge-of -ben ef iciary f orm w ith the w ord “Attach ed” w ritten on it “ref ers to so me oth er do cum ent , [th e co mp any cont end s tha t] th ere is n oth ing in the record tha t

ma kes it ‘app aren t’ [that the sepa rate shee t li sting the ben ef iciaries and the percenta ges of the proce eds the y

w ere t o rece iv e] is in f act Mr. Fleck’s b ene f iciary de signation. ”

T he district court ma de a f actu al det ermin ation tha t the shee t of pap er subm itted by the plaint if

f as the li s t o f ben ef iciaries of the policy w as inde ed the atta chm ent to w hich Fleck ref erred on the pre-printe d ben ef iciary inf orma tion f orm

. A s wit h oth er f actu al det ermin ation s by a district court, w e mu st a c c e pt tho se f indings unle ss the y are clearly

errone ous. See , e.g

. , Roach v. United Sta tes , 106 F.3d 720 , 723 (6 t h Ci r. 199 7) (citing And erson v. City of Besse m er City , 470 U.S

. 5 6 4 , 5 7 3 (1 985 )). Far f rom bein g clearly

errone ous, the f actu al f inding of the district court in this regard is the only logical conclu sion
supp orted by the evidence in th e reco rd.

T he f orm itself indicat es tha t the re ason the docu me nt w as bein g subm itted to Am erican United w as to cha nge be nef iciaries. T o have subm itted the f orm w ithou t a list - 11

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W ray v. Am erican United I

nsurance Company of the “new” ben ef iciaries w ould , the ref ore, have bee n usele ss. Beca use t h e space provided on the f orm to list the p ri m a ry b e n ef iciary of the basic and supp lem ent al life insuran ce policy cont ains the w ord “Attach ed, ” it ma kes logical sense to conclu de tha t an add itiona l shee t of

pa per would a lso ha v e b een provided.

Moreover, bot h the com pan y ’s prep rinted f orm and the typew ritten “atta ched ” shee t listing the prima ry ben ef iciaries, the ir add resses, and the perce nta ge of ben ef it s t o be received by the m w ere stam ped “RECEIVED BY GROUP LIFE CLAIM S ” o n t h e sam e dat e -- Sep tem ber 18, 200 7. Beca use the secon d piece of pap er listed Jam es M. Fleck’s

sons as ben ef iciaries, beca use the preprinted form i ndica ted that ano the r shee t of pap er

w ould be atta ched , and beca use bot h shee ts of pap er w ere received by Am erican United

a t t h e s am e time , it w as not clearly errone ous f or the district court to conclu de tha t t h e designat ion of W ray as a one -third ben ef iciary of J a m e s M. F leck’s life insuran ce policy

w as p art o f

a signed an d d ate d d ocum ent tha t com plied w ith th e te rms o f the po licy

.

Add itiona l f acto rs also supp ort the f actu al det ermin ation of the district court tha t the und ate d, unsigned portio n of the subm ission w as part and p a rc e l of the chan ge-of

ben ef iciary f orm. For instan c e , Am erican United ’s prep rinted f orm allows the insured to

nam e a person or perso ns as a prima ry be nef iciary . Th e fo rm, howev er, conta ins space f or only one nam e and one add ress. Conse quently, if an insured w ished to have mu ltiple prima ry ben ef iciaries, he or she w ould , by nece ssity , be required t o atta ch add itiona l shee t s o f pap er to the f orm. Furthe rmore , the atta ched shee t subm itted to Am erican

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W ray v. Am erican United I

nsurance Company Un it ed by Fleck include s the sam e hea dings – “primary ben ef iciary (ies)” and “basic a n d
supp lem ent al life ” – as doe s the signed and dat ed f orm w hen designating the i ndividuals ent itled to ben ef its und er the policy. For all the se reaso ns, it ma kes perf ect sense tha t the district court w ould conclu de tha t the shee t designat ing W ray , Jam es R. Fleck, and Scot t Fleck as one -third ben ef iciaries und er the life insuran ce p o li c y wa s inde ed a part of the signed a nd dat ed f orm subm itted to Am erican United

.

Am erican United ’s secon d argume nt in supp ort of its int er pr et at i on of the docu me nts
prese nte d to it prop oses tha t Jam es M. Fleck’s Decem ber 30, 200 3, chan ge-of -ben ef iciary f orm could not have bee n inten ded to provide ben ef its to W ray beca use a later 200 5 f orm did not list the plaint if

f as a recipien t of insuran ce proce eds. W hat Am erican United convenien tly ignores, howev er, is the self -e vid e n t f a c t tha t the 200 5 f orm on w hich the def end ant relies f or its argume nt w as not a f orm f or designat ing Jam es M. Fleck’s life insuran ce bene f iciaries. Inste ad, the hig hlighted 200 5 f orm tha t has no li sting of pri ma ry basic and supp lem ent al life insuran ce b e n e f ic ia ries is clearly den om inate d as a f orm to

w aive life insuran ce coverage on Jam es M. Fleck’s dep end ent s

. Beca u se Fleck’s sons

w ere, at tha t time , app rox ima tely 2 0 and 30 y ears of age and no longer his dep end ent s, Jam es M. Fleck had no f urthe r nee d to pay prem ium s f o r d e p end ent life insuran ce. In short, the ref ore, the f orm on w hich Am erican United relies to supp ort t h is argume nt is

com plete ly irrelev ant to t h e is s u e on app eal. T he district court thu s did not err in conclu ding tha t the insura nce com pan y m istaken ly

de nied be nef its to plaint if f W ray as a ben ef iciary

of Jam es M. Fleck’s lif e insu rance po licy

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W ray v. Am erican United I

nsurance Company Denial Of Lea v e To Fil e Cross -Claim

Af ter the distri ct court ruled tha t Elf riede W ray w as ent itled to one -third of the
proc e e d s f ro m Jam es M. Fleck’s life insuran ce policy, Am erican United sought leave to

am end its an sw er to W ray ’s com plaint in o rder to assert a cross-claim against Ja me s R. Fleck and Scott Fleck f or return of the insuran ce proce eds tha t shou ld have bee n paid to W ray but tha t w ere inste ad divi ded bet w een the tw o sons. In para gr aph 10 of the
pr opo sed cross-claim, Am erican United alleged, “Becau se the ben ef iciary designat ion w as not signed and dat ed as required by the [Am erican United ] policy, [Am erican United ] paid ben ef its to the Esta te of the Deced ent

. . . .” Viewi ng tha t state me nt as “inconsiste nt w ith the law of the case as it prese ntly stan ds,” the district court den ied Am erican United leave to f ile the cross-claim f or th at re ason

.

F e d e ra l Rule of Civ il P roced ure 15(a )(2) p rov ides tha t, at such a late stage in the
proce edin gs, a party ma y am end its plea dings only w ith the conse nt of the partie s or w ith the court’s leave. T he rule also provides, howev er, tha t the court shou ld “f reely giv e leave

w hen justice so requires.” Fed. R. Civ

. P. 15(a ). “W e generally rev iew f o r a b u se of discretion the de nial o f a m otion f or lea v e to am end

. . ., b ut we revi ew de no v o a district court ’s d e t e rm inatio n tha t am end me nt w ould be f utile.” Ind ah v. U.S. Sec. and Exch. Com m ’ n , 661 F.3d 914 , 924 n.6 (6th Cir. 201 1) (citing Yuh asz v. Brush W ellm an, Inc. , 341 F.3d 55 9, 5 69 (6th Cir. 200 3)).

In d ete rmining whethe r to grant a m otion to am end : - 14

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W ray v. Am erican United I

nsurance Company Undu e dela y in f iling, lack of not ice to the opp osing party, bad f aith by the mo v ing party, repe ate d f ailure to cure def iciencies by previous am end me nts, u n d u e prejud ice to the opp osing party, and f utility of am end me nt are all f acto rs w hich ma y af

f ect the decision

. Delay by itself is not suf f icient reaso n to den y a mo tion to am end

. Notice and subst ant ial prejud ice to the opp osing party are critical f acto rs in det ermin ing w het her an am en d m e n t s hou ld be gr ant ed.

W ade v. Kno xville Utils. Bd. , 259 F.3d 452 , 458 -59 (6th Cir. 200 1) (q uot ing Head v. Jellico Hous. Aut

h. , 870 F.2d 111 7, 1 1 2 3 (6 th Cir. 198 9)). Moreover, “[w ]he n am end me nt is sought at a late stage in the litig ation , the re is an increase d burd en to show justif ication f or f ailing to m ove earlier.” Id. at 459 (citation om itted ).

In this case, the district c o u rt d id not engage in a reaso ned examina tion of the f acto rs tha t w e have iden tif ied as essen tial to assisting our rev ie w of a decision to den y leave to am end a plea ding. Inste ad, the court simp ly f ocuse d upo n one para gr aph of the
prop osed cro ss-claim tha t iden tif ied the reaso n Am erican United chose to den y ben ef its to the plaint if

f and decla red tha t it w as against the law of the case. T hat the district court’s claime d justif ication is insuf f icient doe s not , howev er, esta blish tha t leave to am end shou ld be den ied. I n o rd e r t o a ll ow f or a mo re reaso ned evaluation of the me rits of Am erican United ’s mo tion, the district court’s ruling regarding the request to am end mu st be rev ersed and the m atte r rema nde d f or recon siderat ion in light of this co urt’s sta tem ent s in W ade

.

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W ray v. Am erican United I

nsurance Company

CONCLUSION

An examina tion of the docu me nts subm itted on the plaint if f ’s beh alf f or payme nt of life insuran ce ben ef its esta bl ishes tha t Jam es M. Fleck ade quately inf orme d Am erican United of his inten t to chan ge his ben ef iciary designat ion to provide Elf riede W ray w ith one third of the proce eds of his life insuran ce policy. W e the ref ore AFFIRM tha t portio n of the d is t rict court judgme nt rev ersing the adm inistrative decision tha t den ied life insuran ce ben ef its to plaint if

f W ray

. How ever, beca use the district court f ailed to e x am ine f acto rs iden tif ied by this court as crucial to det ermin ing w het her t o gr a n t a mo tion to am end a plea ding, w e f ind it nece ssary to REVERSE the district court’s den ial of Am erican United ’s

mo tion f or leave to f ile a cross-claim a nd REMAND the ma tter to the district court f or f urthe r consid eratio n o f tha t m atte r.

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