The U.S. Court of Appeals for the Fifth Circuit, affirming a decision by the U.S. District Court for the Middle District of Louisiana, has rejected a widow's claim that her husband's unused vacation time extended his life insurance coverage after he had been fired so that she was entitled to benefits under the policy following his death.
The Case
Robert Briscoe's employer offered a group life insurance plan that was insured under a policy issued by Metropolitan Life Insurance Company. Mr. Briscoe enrolled in the plan, and he received basic and supplemental life insurance coverage. MetLife served as the claims administrator of the plan.
Mr. Briscoe's employment was terminated on May 16, 2012. After that, his employer sent him a check for 30.67 hours of accrued but unused vacation time.
Mr. Briscoe died on June 19, 2012, 34 days after his employment had been terminated.
The plan provided that benefits would be paid if an insured died within 31 days after his insurance ends. Mr. Briscoe's widow and beneficiary, Tammy Briscoe, made a claim for benefits, which MetLife denied on the basis that Mr. Briscoe's insurance had ended on May 16, 2012.
Ms. Briscoe sued MetLife, seeking to recover the insurance benefits. She argued, among other things, that Mr. Briscoe's accrued, unused vacation time extended the date that his insurance ended by approximately four days, so that he had died within the 31-day benefits window.
The U.S. District Court for the Middle District of Louisiana granted summary judgment in favor of MetLife, holding that MetLife's interpretation of the plan was legally correct and that it had not abused its discretion in denying benefits.
Ms. Briscoe appealed to the Fifth Circuit.
The MetLife Policy
The MetLife policy provided that if an insured:
die[d] within 31 days after … life insurance end[ed],
MetLife would pay:
the amount You were entitled to convert.
The policy also provided that insurance ended on the earliest of several contingencies, including:
the date Your employment ends; Your employment will end if You cease to be Actively at Work in any eligible class.”
It defined:
Actively at Work
as:
You are performing all of the usual and customary duties of Your job on a Full-Time or Part-Time basis. This must be done at:The Fifth Circuit's Decision• the Policyholder's place of business;
• an alternate place approved by the Policyholder; or
• a place to which the Policyholder's business requires You to travel.
You will be deemed to be Actively at Work during weekends or Policyholder approved vacations, holidays or business closures if You were Actively at Work on the last scheduled work day preceding such time off.
The circuit court affirmed, ruling that MetLife's denial of benefits was “consistent with a fair reading of the plan.”
In its decision, the circuit court found that Mr. Briscoe's unused vacation time did not extend the date his “insurance end[ed]” past the date his employment was terminated. The Fifth Circuit pointed out that “policyholder approved vacation[ ]” was described in the policy as “time off,” reasoning that an employee could not be on approved vacation – i.e., taking time off – after being fired.
Mr. Briscoe's final paycheck included a payout for vacation time already earned but not used; it did not extend the duration he was employed or the date his insurance ended, the circuit court concluded.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].