# Petition for Writ of Certiorari — White v. Metropolitan Life Insurance

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2001
- **Citation:** 534 U.S. 1065

## Text

/\ Supreme Coutt, U.S.
UW FILED

D1 404 SEP 04 2001

No. 01- OFFICE OF Tr Vic

IN THE

Supreme Court of the United States

WILLIE WHITE and CLARENCE MCCURDY, individually
and on behalf of all persons similarly situated,

Petitioners,
v.

METROPOLITAN LIFE INSURANCE COMPANY, INC.,
SEARS ROEBUCK COMPANY, INC. and ALLSTATE
INSURANCE COMPANY INCORPORATION,

Respondents.

On PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

WILLIAM W. SMITH
Counsel of Record
SMITH & ALSPAUGH, P.C.
Attorneys for Petitioners
1100 Financial Center
505 20th Street North
Birmingham, Alabama 35203
(205) 324-8910

169130 g

COUNSEL PRESS
(800) 274-3321 * (800) 359-6859

i

QUESTIONS PRESENTED

The Employee Retirement Income Security Act (“ERISA”)
is a statutory scheme designed to protect employee pensions
and other benefits by providing insurance, specifying certain
plan characteristics in detail and setting forth certain general
fiduciary duties applicable to the management of both
pension and nonpension benefits plans. ERISA further
requires a fiduciary, whether the plan administrator or
employer, to discharge those duties solely in the interest of
the participants and beneficiaries. This Court has interpreted
the provisions of ERISA relating to fiduciary duties to mean
that the fiduciary is obligated to communicate accurate
information to beneficiaries about the terms of the plan,
including terminating and amending the terms, and must not
profit at the expense of the beneficiary.

1. The question presented for review in this regard is
whether the Eleventh Circuit Court of Appeals, in affirming
summary judgment entered by the district court in favor of
the Respondents, failed to heed or apply the principles of
ERISA as interpreted by this Court, when the Respondents
miscommunicated and/or failed to communicate information
about the plan to the Petitioners; altered, amended and
eliminated certain coverage provisions to the detriment of
the Petitioners; and sought to create a substantial financial
hardship on the Petitioners and other similarly situated
persons in the event of total disability.

Rule 56 of the Federal Rules of Civil Procedure provide ————_—
that summary judgment is appropriate only when no genuine
issues of material fact exist. The burden of proof lies with
the movant for a judgment of a matter of law, which is rarely
appropriate when expert testimony is presented to create
factual questions.

il

2. The question presented for review as to this issue is
whether the Eleventh Circuit, in affirming the district court’s
grant of summary judgment in favor of the Respondents,
when the Petitioners submitted an undisputed and
uncontroverted expert opinion demonstrating the multiple
breaches of fiduciary duties by the Respondents in
administering, distributing, altering and eliminating certain
provisions of the long-term disability plan, so far departed
from the well-entrenched rules of federal judicial procedure
that this Court should review the record and the evidence
and reverse the judgment.

ill

LIST OF PARTIES

The parties to this action include Clarence McCurdy and
Willie White, individually, and on behalf of all similarly
situated disabled employees who have received demands
from Metropolitan Life Insuarance Company, Inc. for lump-
sum reimbursements of alleged overpayments of long-term
disability benefits.

———

iv

TABLE OF CONTENTS

Page
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Table of Cited Authorities .................... Vv
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Statement of Jurisdiction ..................... l
Statutory Provisions Involved ................. l
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Reasons for Granting the Writ ................. 9

I. The Decision Below Conflicts With ©
Decisions Of This Court. ............... G

_II. The Decision Below Has So Far Departed
From The Usual Course Of Judicial

Proceedings To Warrant This Court’s

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TABLE OF CITED AUTHORITIES

Page

Cases:
Bragdon v. Abbott, 524 U.S. 624, 118 S. Ct. 2196,

$41 L. Bb. 26 SOO CESS) ow ccc ceccasscnsees 13
Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct.

2548, 91 L. Ed. 2d 265 (1986) ............... 13
Childers v. Morgan County Board of Education, 817

P26 1556 (11 Coe. TSG F) oo cern ccwscenvees 17
City of Tuscaloosa v. Harcros Chemicals, Inc., 158

F.30 S48 (11th Cie. 1996)... .cssvcccccsecss 17
Varity Corporation v. Howe, 516 U.S. 489,-116

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Statutes:
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Cited Authorities
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Rules:
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vil

TABLE OF APPENDICES
Page

Appendix A — Per Curiam Order Of The United
States Court Of Appeals For The Eleventh Circuit
Dated And Filed April 30,2001 ............. la

Appendix B — Memorandum Opinion Of The
United States District Court For The Northern
District Of Alabama, Western Division Granting
Summary Judgment Dated And Filed March 31,

2000 And Entered April 3, 2000 ............. 3a

Appendix C — Per Curiam Order Of The United
States Court Of Appeals For The Eleventh Circuit
Denying Petition For Rehearing Dated And Filed
Jame 6, BOG1 occ ccccccccccscccccccscccscces 12a

I

The Petitioners respectfully petition for a writ of
certiorari to review the judgment of the United States Court
of Appeals for the Eleventh Circuit in this case.

OPINIONS BELOW

The district court’s opinion (per U.W. Clemon) granting
the Respondents’ summary judgment motion is not
published, but is reprinted and attached to this brief as
Appendix B. The order of the Eleventh Circuit Court of
Appeals (per curiam) affirming the district court is published
as White v. Metropolitan Life Ins., 254 F.3d 75 (11th Cir.
Apr. 30, 2001), and is attached as Appendix A. The order
denying the application for rehearing, entered on June 6,
2001, is not published and is attached as Appendix C.

STATEMENT OF JURISDICTION

On April 11, 2000, the district court entered an amended
and final summary judgment against the Petitioners and in
favor of the Respondents. The Eleventh Circuit upheld the
district court’s decision on April 30, 2001, and denied
rehearing on June 6, 2001. This Petition is timely filed
pursuant to Supreme Court Rule 13 within 90 days thereof.
This Court has jurisdiction to review the decisions of
the Eleventh Circuit Court of Appeals pursuant to 28 U.S.C.
§ 1254(1).

STATUTORY PROVISIONS INVOLVED

The provisions of the Employee Retirement Income
Security Act, 29 U.S.C. § 1100 et seg. (“ERISA”) relevant
to this petition include the following:

2

29 U.S.C. § 1102(21)(A) defines an ERISA fiduciary
with respect to the plan as “someone who has any
discretionary authority over the administration of the plan.”

29 U.S.C. § 1104(a)(I)(A) & (B) provides that

a fiduciary shall discharge his duties with respect
to a plan solely in the interest of the participants
and beneficiaries ... for the exclusive purpose
of. . . providing benefits to participants and their
beneficiaries ... with the care, skill, prudence,
and diligence under the circumstances then
prevailing that a prudent man acting in a like
capacity and familiar with such matters would use
in the conduct of enterprise of a like character
and with like aims.

29 U.S.C. § 1109(a) prescribes remedies for breaches
of fiduciary duties by stating that “any fiduciary who
breaches its responsibilities shall be personally liable to
return any losses incurred as a result of the breach to the
plan.”

STATEMENT OF THE CASE

This case arises from the granting of summary judgment
in favor of the Respondents, Sears, Roebuck and Company,
Inc. (“Sears”), Allstate Insurance Company, Inc. (“Allstate’’),
and Metropolitan Life Insurance Company, Inc. (“MetLife”),
and against the Petitioners, Clarence McCurdy, Willie White
and other similarly situated class members. Mr. McCurdy
and Mr. White contend that a substantial loss of expected
income in the event of disability has occurred as the result
of the Respondents’ unlawful changes in their long-term

° 3

disability policy. It is alleged that these losses in expected
“income have occurred in hundreds of other instances and
will continue to cause substantial losses of disability income
to hundreds, perhaps thousands, of Sears’ employees in the
future.

Review of the Eleventh Circuit’s judgment by this Court
is necessary to ensure that legal precedent, as it relates to
ERISA fiduciaries, is appropriately applied to the facts of
this case and to remedy the Eleventh Circuit’s abandonment
of well-entrenched legal principles of judicial procedure
regarding summary judgment.

_ 1. Petitioners are participants in a long-term disability
policy of insurance issued by their former employer, Sears,
and governed by ERISA. Initially, Sears provided long-term
disability benefits to its employees through a contract of
insurance underwritten by Allstate until MetLife assumed
coverage in January of 1989. Shortly before January 1989,
Sears submitted a notice to all its employees announcing
that MetLife would be the new insurer of the Sears’ long-
term disability plan. This notice provided that “there would
be no changes in the amount of long-term disability
insurance.” Although neither Mr. McCurdy nor Mr. White
recollect receiving this document, the Sears’ personnel
department assured them that there would be no changes in
coverage. '

In contrast to these representations, however, a close
examination of the MetLife Plan reveals several critical

1. In September of 1994, Mr. McCurdy received a letter from
Sears’ Human Resource Center stating that “your long-term
disability benefits will continue as long as you remain totally
disabled and do not exceed the maximum plan benefit.”

4

changes in coverage. For instance, the MetLife policy
provides that if Social Security benefits are received within
the twelve-month period following cessation of long-term
disability benefits, but the Social Security benefits are not
approved retroactive to the exact time long-term disability
benefits were payable, as determined by MetLife, then the
beneficiary can not receive his long-term “total disability”
benefits. This is true even if the beneficiary was “totally
disabled” and has not worked since his disability. If the Social
Security retroactive award of benefits is only slightly later
than MetLife’s deadline of when long-term disability benefits
are payable, then MetLife is not obligated to pay long-term
disability benefits.’

The following table represents a concise comparison of
significant discrepancies between the Allstate and MetLife
policies:

-_—>

ALLSTATE |
POLICY MetLife POLICY

Criteria for Total | Due to illness or Because of illness
Disability during | injury, Participant is | or injury, Partici-
the first 12 unable to perform [or her job, or any
months after the |the material duties | other job for which
waiting period. j|ofhis orheroccu- |{heor she is fit based
pation with Sears. [on education, train-
ing or experience.

2. An affidavit from Social Security Disability Attorney, Darryl
W. Hunt, advises that on average, Social Security Disability
determinations take at least two and a half years to conclude,
although it is not unusual for a claim to be pending for more than
three years.

Criteria for Total
Disability after
the first twelve
months after the
waiting period.

Due to illness or
injury, Participant is
unable to perform
the material duties
of any gainful occu-
pation for which he
or she is reasonably
fit, based on train-
ing, education or
experience.

Due to illness or
injury, Participant
cannot do his or her
job, or any other
job for which he or
she is fit based on
education, train-
ing or experience,
and the Participant
has been approved
to receive Social
Security disability
benefits either
during the first 12
months of LTD
benefits, or (in the
case of a Social
Security disability
benefit approval
that is retroactive
to the first date of
LTD benefit pay-
ments), during the
12 months after the
LTD benefit is
ceased.

Mr. McCurdy was an employee of Sears for eighteen
years until he became totally disabled in April of 1993 as a
result of a brain tumor.’ He had been a participant in, and
paying premiums on the disability plan, either under the

3. Mr. McCurdy has undergone three brain operations since

April, 1993.

ne ee ee ee

6

Allstate of MetLife policies, for approximately twelve years
before his disability. On or about September 16, 1993, Mr.
McCurdy applied for disability benefits under the MetLife
Plan and began receiving payments each month beginning
on or about October 7, 1993, for the next twenty-four months.
On or about October 7, 1993, Mr. McCurdy received a letter
from MetLife stating that MetLife claimed the right to stop
payment of his long-term disability unless he was approved
to receive Social Security benefits by the end of a twenty-
four month, long-term disability period.

At the end of twenty-four months, Mr. McCurdy had
not received his Social Security Disability benefit decision
and MetLife terminated his benefits in September or October
of 1995. It was not until May of 1996, that Mr. McCurdy
received his Social Security Disability award letter.
Therefore, he was without any financial support, either
through Social Security Disability or the MetLife Disability
Plan, for approximately five months. Once his claim for
Social Security Disability was approved, MetLife informed
Mr. McCurdy by letter that his long-term disability benefits
claim was reinstated effective October 1, 1995. However, a
subsequent letter from MetLife advised him that there had
been an overpayment on his claim in the amount of
$31,872.00 and demanded payment in thirty days.

Similarly, Mr. White, who was an employee of Sears
—fornine years before he became totally disabled in September
of 1992, applied for disability benefits on September 29, 1992
and began receiving monthly benefits. On April 29, 1994,
however, MetLife also informed Mr. White that his award |
of Social Security Disability Insurance had resulted in an |
overpayment of benefits and demanded a lump-sum
reimbursement of $15,658.39. MetLife told Mr. White that
future benefits would be withheld until the money was received.

7

In each instance, Mr. McCurdy and Mr. White received
notices from MetLife that their monthly payments were
reduced to less than $100.00 ($35.00 in the case of Mr.
White), upon the granting of Social Security Disability and
that lump-sum reimbursement payments were required. There
are approximately 1,800 disabled employees who received
these demands from MetLife for lump-sum reimbursements
of “overpayments” and approximately 130,000 Sears
employees bound by the changes in the MetLife Plan for
disability benefits. Since January 1, 1989, fifty-three other
Sears employees have filed suits relating to disability benefits
claimed under the MetLife Policy.

2. The Petitioners contend that MetLife, with Sears’
approval, made material and damaging changes to the
Allstate policy which resulted in substantial loss of expected
income in the event of disability. As a consequence, Mr.
McCurdy and Mr. White filed Complaints along with
Petitions for Class Actions in the Circuit Court of Greene
County, Alabama on September 11, 1996. The Respondents
removed the case to the United States District Court for the
Northern District of Alabama on October 23, 1996, where
the Petitioners amended their Complaints to state claims for
violation of and breach of fiduciary duties under ERISA.

The Petitioners also maintain, among other things, that
altering the requirements for disability and the manner in
which disability claims are administered and reviewed and
eliminating any recovery for partial disability benefits make
the MetLife Plan unconscionable. To support their position,
the Petitioners submitted the affidavit testimony of James
A. Hand, who offered his undisputed expert opinion
regarding the multiple provisions of the MetLife Plan that
are unconscionable. The Petitioners also allege that the

8

MetLife Plan is void ab initio due to the failure of the
Respondents to amend the disability plan without following
the prescribed corporate procedures.

3. The district court rejected all of the Petitioners’
claims, holding that the Sears’ long-term disability plan,
whether administered by Allstate or MetLife, reserved the
right for the administrator to alter, amend or terminate the
terms of the plan. The district court also found to be
significant the fact that both the Allstate and MetLife plans
required repayments of Social Security Disability benefits.
Therefore, in response to the Respondents’ counterclaim, the
lump-sum reimbursements were ordered to be paid by the
Petitioners and final summary judgment was granted as to
all claims against the Respondents.

4. On appeal to the Eleventh Circuit, the Petitioners
sought review of the district court’s final order of judgment
on the grounds that the record contained numerous questions
of fact that remained undisputed by the Respondents and
that the district court’s decision disregarded the law
established by this Court as it applies to ERISA fiduciaries
of employee long-term disability benefit plans. After oral
arguments were made, the Eleventh Circuit affirmed the
district court decision, without an opinion. Application for
rehearing was subsequently denied, again with no opinion.

5. This petition for a writ of certiorari followed.

9

REASONS FOR GRANTING THE WRIT

The petition should be granted for two reasons. First,
the Eleventh Circuit's judgment is in conflict with the holding
of this Court and second, the entry of summary judgment
when the Petitioners presented an uncontroverted expert
affidavit in opposition to the motion, runs afoul of the rules
of federal judicial procedure.

I. The Decision Below Conflicts With Decisions Of This
Court.

MetLife ceased Mr. McCurdy’s benefits for a period of
five months. This right to terminate benefits is in conflict
with the provision describing the maximum benefit period,
which indicates that monthly benefits will be paid
continuously up to a maximum benefit period of age sixty-
two or sixty-five, with no indication that there might be gaps
in the coverage during which benefits would be suspended
because an award of Social Security benefits had not been
obtained.

In Varity Corporation v. Howe, 516 U.S. 489, 116
S. Ct. 1065 (1996), the United States District Court for the
Southern District of lowa (per Donald E. O’Brien, Chief
Judge) entered a preliminary injunction requiring the
defendants to reinstate portions of terminated employee
welfare benefit plan. The district court found that the
employer and owner, acting as ERISA fiduciaries, harmed
plan beneficiaries through deliberate deception. The Court
of Appeals (Lay, Chief Judge) affirmed in part and reversed
in part and subsequently affirmed as modified (per Arnold,
Chief Judge).

10

In Varity, a group of-beneficiaries of a firm’s ERISA ;
benefit plan sued their employer who was acting in the |
Capacity as plan administrator. The employees claimed that
the employer deceived them and led them to voluntarily
withdraw from the ERISA plan and relinquish their plan
benefits. Originally, the employees were beneficiaries of a
plan administered by Massey-Ferguson, a subsidiary of

--~- WVarity Corporation. During a reorganization program, Varity
transferred Massey-Ferguson’s money-losing divisions into
a newly formed subsidiary called the Massey Combines.

During reorganization, Varity induced the Massey-
Ferguson employees to voluntarily “switch employers”,
thereby substituting the new Massey Combines’ benefit plan—
for the former Massey-Ferguson plan in which the employees
were previously enrolled. During a special meeting, Varity
told the employees that in “switching” plans, their benefits
would remain secure and essentially unchanged. It was not
revealed to these employees that from its creation, Massey
Combines was insolvent.

This Court (per Justice Breyer) granted certiorari and
held that: (1) the employer was acting as an ERISA fiduciary
when it misled employees regarding the security of their
benefits if they transferred; (2) the employer violated
fiduciary obligations of ERISA in misleading employees;
and (3) ERISA authorized lawsuits for individualized
equitable relief. With specific reference to the issue of
fiduciary responsibility of a plan administrators, this Court
commented:

ERISA requires a “fiduciary” to “discharge his
duties with respect to a plan solely in the interest
of the participants and beneficiaries.” ERISA

11

§ 404(a). To participate knowingly and significantly
in deceiving a plan’s beneficiaries in order to save
the employer money at the beneficiaries expense
it not to act “solely in the interest of the
participants and beneficiaries.”

Varity, supra, at 1074-75 (citations omitted).

In determining and administering benefits under the
policy in the case at hand, the Respondents were required to
do so in a manner consistent with the best interest of the
plan beneficiaries. Mr. White and Mr. McCurdy were
informed about the new MetLife plan, however, the substance
of this information mistakenly assured that there would be
no change in coverage. The misrepresentation about the
coverage available under the disability plan destroys any
mutuality of agreement between the plan beneficiaries and
plan administrator rendering the MetLife policy void and
the Respondents in breach of their fiduciary duties.

Additionally, the terms of the MetLife policy relating
to the recovery of long-term disability benefits have been
declared ambiguous and confusing to both the plan
administrators and insurance industry experts. The videotape
presented to the Sears’ employees subject to the disability
policies demonstrates the deceptive and misleading tactics
utilized in reference to the reduction of benefits due to
set-offs. The provisions relevant for this appeal were
substantively changed and not appropriately communicated
to Mr. White and Mr. McCurdy, resulting in an ineffective
and unenforceable policy and constitute a violation of the
Respondents’ fiduciary obligation.

12

Furthermore, the undisputed evidence reveals that the
changes in the MetLife insurance policy benefited the
insurance at the expenses of the plan beneficiary. For
example, by recovering the set-offs from Social Security and
Workers’ Compensation, the employee, who is solely
responsible for premium payments to the policy, receives
no meaningful benefit for the years of monthly contributions
to fund the full cost of the benefits. Not only is there little or
no risk to the insurance company because it is guaranteed a
virtual complete recovery of benefits paid, but the lump-sum
payment requirement of the modified MetLife plan imposes
an undue and unjust hardship to the recipient of disability
benefits.

Again, despite the duty to act in the best interest of the
plan beneficiary, the evidence discloses that the Respondents
were aware that these changes in the MetLife policy resulted
in financial difficulties to Sears’ employees. This blatant
disregard of the welfare and security is a violation of ERISA
and unconscionable according to every legal principle of
contract creation and administration and in direct conflict
with the legal principles set forth by this Court in Varity and
its progeny.

The Respondents have made no attempt to distinguish
the Varity opinion. In the present case. the Eleventh Circuit
did not consider or apply the authority established in Varity,
which has been recognized and followed by the majority of
circuits, including the Eleventh Circuit. Therefore, the
judgment of the Eleventh Circuit as it relates to the
responsibilities and obligations of fiduciaries in
administering and determining long-term disability benefits
merits a review by this Court and reversal.

13

Il. The Decision Below Has So Far Departed From The
Usual Course Of Judicial Proceedings To Warrant
This Court’s Supervisory Power.

Summary judgment is proper only if there are no genuine
issue of material fact and the moving party is entitled to a
judgment as a matter of law. Rule 56(c), Federal Rules of
Civil Procedure; Celotex Corp. v. Catrett, 477 U.S. 31 7, 323,
106 S. Ct. 2548, 2552-53, 91 L. Ed. 2d 265 (1986). The
burden rests upon the movant to show there are no genuine
issue of material fact. As this Court has provided, in
reviewing a summary judgment, the unchallenged testimony
provided by the Petitioners must be taken as true. See
Bragdon v. Abbott, 524 U.S. 624, 118 S. Ct. 2196, 2207,
141 L. Ed. 2d 540 (1998).

In this case, the Petitioners submitted undisputed expert
testimony regarding the patently unconscionable provisions
in the MetLife disability policy and lend further support for
the proposition that the Respondents acted in violation of
ERISA by breaching their fiduciary responsibilities.
Specifically, James A. Hand, a certified life underwriter and
insurance consultant with over forty years of experience with
long-term disability contracts, provided his opinions in
opposition to the Respondents’ summary judgment motion.
Based upon his experience, background and training, Mr.
Hand’s conclusions, excerpted in part from his affidavit,
include the following:

1. Even though the printed notices that were
allegedly communicated to the Sears’ employees
indicated that there would be no substantial
change in the policies or benefits when the long-
term disability policy was assumed by MetLife

14

from Allstate, there were substantial and material
changes as follows:

a. MetLife changed the definition
of “Total Disability”.

b. MetLife eliminated any partial
disability benefits.

c. MetLife changed the way in
which the disability claims were
administered in that the Allstate policy
provides that they had the right to
recover excess payments by applying all
or part of future payments until the
excess was recovered MetLife contract
provides that any overpayment must be
made in a lump sum. This difference
could work a substantial hardship on |
employees who had to make
reimbursements. Again, none of this
was ever explained to empioyees until
a claim arose.

2. Further, the communication, in general, to
the higher personnel about the long-term disability
changes were completely inadequate. A letter
from JoAnne Cunningham to Human Resources
Manager, dated 7/9/92, admits confusion, even
at this higher level of communications, about the
effective date of the Social Security off-set
handling.

15

3. Another example of the hardships
perpetrated against the employees, as a result of
the changes made by MetLife, are indicated in a
letter from Marsha Dalton to Human Resources
Manager, dated 5/27/92, wherein it was admitted
that the MetLife system of claim paying caused
the Sears’ employees financial difficulties.

4. Further, the contract involving the MetLife
long-term disability plan is unconscionable for a
number of reasons. The plan is more or less an
obsolete type of plan in that the wording is
ambiguous and confusing to a layman and in many
ways the benefits are illusory because the off-sets
from Social Security and Worker’s Compensation
practically eliminate any meaningful benefit
($35.00 per month minimum is included in the
plan) to employees who are not in a high income
category. The fact that this policy is entirely paid
for by the employee (and no contributions by the
employer) make it further unconscionable because
the employee is paying for something that he
thinks he has (i.e., wage replacement) but because
of the off-sets, he receives virtually nothing and
there is very little risk, if any, to the defendant
insurance companies involved. Therefore, it is my
opinion, that if the employees knew and
completely understood these off-sets and other
provisions, it is highly unlikely that the employees
would pay insurance premiums for such coverage.

5. Another indication of how unconscionable
the MetLife contract is, and one in which the
public good was ignored, is evidenced by the fact

16

that in the custom, trade, and business of writing
long-term disability insurance policies, the usual
practice is for the insurance companies to be paid
back out of future payments in the event that there
is an off-set from Social Security or Worker’s
Compensation. Such was not the case in the
MetLife contract.

6. Additionally, the Allstate contract was
unconscionable because the plan is also obsolete
in that the wording is ambiguous and confusing
and the Worker’s Compensation and Social
Security offsets practically eliminate any
meaningful benefits to employees who are not in
a high income category. Again, the fact that the
employees pay the full cost to fund the benefits
(which are practically eliminated in some cases)
makes the plan unconscionable.

7. Further, in observing and evaluating a
video tape purportedly shown to employees that |
participated in both Allstate and MetLife long-
term disability policies, the portion of the tape
that deals with long-term disability is misleading
and/or confusing with reference to the reduction
of benefits after receiving Social Security
Disability Benefits. Although barely touched upon
in the film, one would conclude that the reduction
in long-term disability would only occur after
Social Security Retirement benefits after the age
sixty-two or sixty-five. Even though this film was
shown to employees who had MetLife policies
issued after 1989, they were not informed of the
changes. The MetLife long-term disability

17

contract is also unconscionable because of the
material changes which MetLife attempted to
make. The MetLife long-term disability contract
is misleading in that, after representing in notices
to the Sears’ employees, that there would be “no
change in the amount of long-term disability
insurance”, it was “gutted” by material changes
as set forth above.

The Eleventh Circuit itself has embraced the principle
which discourages summary judgment in cases where expert
testimony is relied upon to illuminate the issues of fact in
the case. See Childers v. Morgan County Board of Education,
817 F.2d 1556 (11th Cir. 1987); City of Tuscaloosa v.
Harcros Chemicals, Inc., 158 F.3d 548, 551 (11th Cir. 1998).
In fact, in the present case, there is not a conflict of expert
testimony that creates questions of fact, rather, the
Respondents have offered no evidence or testimony to rebut
or dispute any of Mr. Hand’s findings or conclusions.

In consideration of the spirit and application of the
Federal Rules of Procedure with regards to judgments as a
matter of law, the evidence in the record submitted by the
Petitioners is more than sufficient to defeat the Respondents’
motion for summary judgment. If Mr. Hand’s opinions are
taken to be true and viewing the evidence in a light most
favorable to the Petitioners, as the law requires the Court to
do, the entry of summary judgment was improvidently
granted by the district court and affirmed by the Eleventh
Circuit. Such a departure from the fundamentals of judicial
procedure merits a review and examination of the evidence
by this Court.

=

18

CONCLUSION

In consideration of the above and foregoing reasons, the
petition for a writ of certiorari should be granted.

Respectfully submitted,

WILLIAM W. SMITH

Counsel of Record

SMITH & ALSPAUGH, P.C.
Attorneys for Petitioners
1100 Financial Center

505 20th Street North
Birmingham, Alabama 35203
(205) 324-8910

APPENDIX

la &

APPENDIX A — PER CURIAM ORDER OF THE
UNITED STATES COURT OF APPEALS FOR THE
ELEVENTH CIRCUIT DATED
AND FILED APRIL 30, 2001

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

No. 00-15505

D. C. Docket Nos. 96-02781-CV-C-W
96-02782-CV-C-W

WILLIE WHITE, individually and on behalf of
all persons similarly situated,

Plaintiff-Counter-defendant-Appellant,
CLARENCE MCCURDY,

Plaintiff-Appellant,
versus

METROPOLITAN LIFE INSURANCE
COMPANY, INC., a corporation,

Defendant-Counter-claimant-Appellee,

SEARS ROEBUCK COMPANY, INC., a corporation,
ALLSTATE INSURANCE COMPANY
INCORPORATION, a corporation,

— Defendants-Appellees,

LINDA TUCKER, an individual citizen of the State of
Alabama, DEBRA WILLIAMS, an individual
of the State of Alabama,

Defendants.

2a

Appendix A

Appeal from the United States District Court
for the Northern District of Alabama

(April 30, 2001)

Before DUBINA and KRAVITCH, Circuit Judges,
DUPLANTIER’, District Judge.

PER CURIAM:
AFFIRMED. See 11th Cir. R. 36-1.'

* Honorable Adrian G. Duplantier, U.S. District Judge for the
Eastern District of Louisiana, sitting by designation.

1. 11th Cir. R. 36-1 provides:

When the court determines that any of the following
circumstances exist:

(a) judgment of the district court is based on
findings of fact that are not clearly erroneous;

(b) the evidence in support of a jury verdict is
sufficient;

(c) the order of an administrative agency is
supported by substantial evidence on the
record as a whole;

(d) summary judgment, directed verdict, or
judgment on the pleadings is supported by the
record;

(e) judgment has been entered without a reversible
error of law; and an opinion would have no
precedential value, the judgment or order may
be affirmed or enforced without opinion.

3a

APPENDIX B — MEMORANDUM OPINION OF THE
UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ALABAMA, WESTERN
DIVISION GRANTING SUMMARY JUDGMENT
DATED AND FILED MARCH 31, 2000
AND ENTERED APRIL 3, 2000

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
WESTERN DIVISION

CV-96-C-2782-W
CLARENCE McCurpy, individually, and on behalf
of all persons similarly situated,
Plaintiff,
VS.
METROPOLITAN LIFE INSURANCE COMPANY, INC.,
a corporation, et al.,
Defendants.
CV-96-C-2781-W
WILLIE WHITE, individually, and on behalf of
all persons similarly situated,
Plaintiff,
VS.
METROPOLITAN LIFE INSURANCE COMPANY, INC.,
a corporation, et al.,

Defendants.

4a

Appendix B

MEMORANDUM OPINION GRANTING
SUMMARY JUDGMENT

I. Jntroduction

In this putative class action under the Employee
Retirement Income Security Act, 29 U.S.C. § 1100 et seq.
(“ERISA”), the named plaintiffs Clarence McCurdy and
Willie White essentially claim that to their detriment, Defendant
Metropolitan Life Insurance Company (“MetLife”) and their
former employer, Defendant Sears, Roebuck & Company,
Inc. (“Sears”) made unilateral changes in the Long Term
Disability (“LTD”) Benefit Plan when Sears switched to
MetLife from Defendant Allstate Insurance Company
(Allstate), as its carrier. At the core of the Complaint is the
contention that the monthly disability benefits of the
Plaintiffs are now subject to reduction by the amount of
Social Security disability income received as a result of their
disability. Defendants have moved for summary judgment.
Based on the undisputed facts, the motion is due to be
granted.

II. The Undisputed Facts

1. Plaintiffs McCurdy and White were participants in a
long-term disability benefits plan administered by their Sears.

2. Until December 31, 1988, Allstate served as the claims
administrator and insurer of the Sears LTD Benefits Plan.

3. Under the LTD Plan administered by Allstate,
it is expressly provided, in the bold section entitled,

Pe

Sa

Appendix B

“PLAN AMENDMENT AND TERMINATION,” that
“Although Sears intends to continue the Plan, the Company
necessarily reserves the right to modify, amend, suspend, or

terminate it at any time.” See Court File Document 50,
Exhibit D.

4. The Allstate-administered Plan also contains the
following provision:

AMOUNT OF MONTHLY BENEFIT
WHILE TOTALLY DISABLED

“The monthly benefit payable from the Plan while
you are Totally Disabled will not be less than $35
unless Allstate has made payments in excess of
the amount actually payable under these LTD
Provisions. Then Allstate has the right to
recover the excess by applying all or part of
future monthly benefits until the excess has
been recovered.”

See Court File Document 50, Exhibit D.

5. As of January 1, 1999, MetLife became the insurer
and administrator of the Sears Plan.

6. The Sears Plan, as administered by MetLife, provides,
inter alia:

“REHABILITATIVE EMPLOYMENT

For dates of disability beginning on or after March
1, 1989,

6a
Appendix B

(A) The amount of Monthly Benefits
[shall be] the lesser of

— 50% of the first $12,500 of Monthly
LTD Covered Earnings, less 50% of any
Rehabilitation Earnings, if any, or

— 60% of your Monthly LTF Covered
Earnings, less (a) any Other Income
to which you are entitled and (b) 50%
of your Rehabilitation Earnings, if any.

If the sum of your monthly benefit and your Other
Income and/or Rehabilitation Earnings is greater
than your Monthly LTD Covered Earnings at the
time that you became disabled your Monthly
Benefit will be reduced so that the sum will not
exceed your Monthly Covered LTD Earnings.”

See Rider to MetLife Policy entitied “Notice of Changes to
Sears Group Long-Term Disability Insurance,” Document
50, Ex. “C.” (emphasis added).

7. The changes in the Sears Plan accompanying its
switch to MetLife were distributed in 1989 to all of the Plan’s
participants, including Plaintiffs.

8. Plaintiff White applied to the Sears Plan for LTD
benefits on September 29, 1992. His application was
approved on October 18, 1992 effective retroactively to
September 8, 1992. He began receiving the full formula
amount of those benefits immediately.

7a

Appendix B

9. White also applied for Social Security disability
benefits. On March 15, 1994, the Social Security
Administration determined that White was disabled; and it
awarded him $15,148 retroactively and $968 thereafter in
monthly benefits.

10. After White’s Social Security award, MetLife
reduced his Plan benefits and sought reimbursement from
the retroactive Social Security award.

11. Plaintiff McCurdy filed his application for LTD
benefits with MetLife on September 16, 1993. His application
was subsequently approved; and his LTD benefits
commenced in September of 1993.

12. In February of 1996, the Social Security
Administration determined that McCurdy became disabled
on April 20, 1993. It awarded him $37,050 in retroactive
benefits and $1,196 monthly thereafter.

13. After McCurdy’s Social Security award, MetLife
reduced his Plan benefits and sought reimbursement from
his retroactive Social Security award.

14. When Plaintiffs separately applied for Sears LTD
benefits, each of them signed a MetLife agreement to this
effect:

I understand that the plan provides that the amount
of Social Security benefits, as described in the
Group Plan, for which I or any of my dependents
may be eligible, are to be deducted from the
benefits payable under the plan.

8a

Appendix B

I agree to send a copy of any award or declination
letter received from the Social Security
Administration to the Metropolitan Life Insurance
Company and will reimburse such Company in
the amount due, upon commencement of benefits
awarded to me under the Social Security Act. Such
reimbursement shall cover the period from the
date of entitled benefits to and including the date
of benefits last paid to me.

See “Reimbursement Agreements,” Def. Metropolitan Life
Ins. Co.’s and Allstate Ins. Co.’s Supp. Mem. in Support of
Mot. for Summ. J. Ex. 1. (emphasis added).

II. Controlling Legal Principles
A. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate where there are no
genuine issues as to any material fact and the moving party
is entitled to judgment as a matter of law. Fep. R. Civ. P.
56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

The moving party bears the initial burden of showing
that there is an absence of a genuine issue of material fact.
For issues on which the non-movant bears the burden of proof
at trial, the moving party simply may show that there is an
absence of evidence to support the non-moving party’s case.
Alternatively, the moving party may support its motion for
summary judgment with affirmative evidence demonstrating
that the non-moving party will be unable to prove its case.
See Sherman v. Helms, 80 F.Supp.2d 1365, 1369 (M.D. Ga.

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9a

Appendix B

2000) (citing Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1116
(11th Cir. 1993)).

If a moving party makes a prima facie showing that no
genuine issue of material fact exists, then the burden shifts
to the non-movant to overcome that showing by presenting
substantial evidence in support of its motion. See Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986). All evidence and reasonable factual inferences drawn
therefrom are viewed in the fight most favorable to the party
opposing the motion. See Glitz v. Compagnie Nationale Air
France, 129 F.3d 554, 556-57 (11th Cir. 1997).

B. OTHER PRINCIPLES

ERISA is a comprehensive and reticulated statute that
created a framework for the administration and maintenance
of private employee benefit plans. See Nachman Corp. v.
Pension Benefit Guaranty Corp., 446 U.S. 359, 361 (1980).
Although the statute delineates a myriad of detailed
procedural requirements for a plan’s implementation and
administration, one principle is unequivocally clear: ERISA
maintains no minimum substantive content for employee
welfare benefit plans, and therefore a district court has no
authority to draft the substantive content of such plans.
See Hunt v. Hawthorne Associates, Inc., 119 F.3d 888, 911
(11th Cir. 1997) (citing Hamilton v. Air Jamaica Ltd., 945
F.2d 74,78 (3rd Cir. 1991). Congress sought to discourage
judicial entanglement with the substantive features of
ERISA-regulated welfare benefit plans because presumably
parties retain a greater degree of freedom to contract between
themselves to determine the type and amount of benefits,

10a

Appendix B

and the conditions under which these benefits will be
provided under the plan. See Jordan v. Reliable Life Ins.
Co., 694 F. Supp. 822, 832 (N.D. Ala. 1998) (citing Vogel v.
Independence Fed. Sav. Bank, 728 F. Supp. 1210,1229
(D. Md. 1990)).

Federal courts at every level have consistently held that
it is outside the province of the judiciary to regulate the
substantive terms of a welfare benefit plan. See generally
Metropolitan Life Ins. Co. v. Travelers Ins. Co., 471 U.S.
724, 736 (1985); Curtiss-Wright Corp. v. Schoonejongen,
514 U.S. 73 (1995); First Capital Life Ins. Co. v. AAA
Communications, Inc., 906 F. Supp. 1546, 1555 (N.D. Ga.
1995). ea

III. Analysis

Assuming that Sears and MetLife made unilateral
changes in the Sears LTD Plan, ERISA does not empower
this Court to grant the relief which Plaintiffs seek. The Plan
itself confers on Sears the unilateral right not simply to
change its terms, but to terminate the Plan itself!

But more important is the consideration that the
operative provision did not change. Under the Sears LTD
Plan, whether administered by Allstate or by MetLife,
beneficiaries must reimburse for payments covered by a
subsequent retroactive Social Security award. In that key
respect, nothing has changed.

As a last ditch effort to avoid summary disposition,
Plaintiffs contend they were “unaware” that benefits paid

Wee tahini aaa odachsviis int 01S deg NOM GMI A aki MLGP aL IA senna ek ee tas

lla

Appendix B

by the insurance company would be reduced by the amount
of Social Security benefits subsequently paid to them.
See McCurdy Aff. at 2 and White Aff. at 2. The documents
signed by Plaintiffs belie this assertion. See infra, fn. 1. And
it is now well established under Alabama law that a party
has the affirmative duty to read and inspect any document
which might affect that person’s legal rights or liabilities.
See Ramp Operations Inc. v. Reliance Ins. Co., 805 F.2d
1552, 1556 (11th Cir. 1986).

Because Plaintiffs applied for and received social
security benefits, the outcome of this case has been
preordained by the signed reimbursement contracts. It
follows that MetLife may recoup the LTD benefits it paid
Plaintiffs while their social security applications were
pending.

V. Conclusion

For the foregoing reasons, Defendants’ Motion for
Summary Judgment will be granted by separate order.

DONE this 31st day of March, 2000.

s/ U.W. Clemon

UNITED STATES DISTRICT
JUDGE

U.W. CLEMON

12a

APPENDIX C — PER CURIAM ORDER OF THE
UNITED STATES COURT OF APPEALS FOR THE
ELEVENTH CIRCUIT DENYING PETITION FOR
REHEARING DATED AND FILED JUNE 6, 2001

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

No. 00-15505-DD =

WILLIE WHITE, individually and on behalf of
all persons similarly situated,

Plaintiff-
Counter-defendant-
Appellant,

CLARENCE MCCURDY,

Plaintiff-Appellant,

versus

METROPOLITAN LIFE INSURANCE
COMPANY, INC., a corporation,

Defendant-
Counter-claimant-
Appellee,

SEARS ROEBUCK COMPANY INC., a corporation,
ALLSTATE INSURANCE COMPANY
INCORPORATION, a corporation,

Defendants-Appellees,

13a

Appendix C

On Appeal from the United States District Court for the
Northern District of Alabama

BEFORE: DUBINA and KRAVITCH, Circuit Judges,
DUPLANTIER%, District Judge.

PER CURIAM:

The petition(s) for rehearing filed by Appellants Willie
White, et al. is DENIED.

ENTERED FOR THE COURT:

s/ Phyllis Kravitch
UNITED STATES CIRCUIT JUDGE

* Honorable Adrian G. Duplantier, U.S. District Judge for the
Eastern District of Louisiana, sitting by designation.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_2423%3A1. Public record. Not legal advice.