Tyll v. Stanley Black & Decker Life Insurance Program

          RULING RE: CROSS-MOTIONS FOR SUMMARY JUDGMENT (DOC. NOS. 58 & 59)

          Janet C. Hall, United States District Judge

         Plaintiff, Lori T. Tyll (“Mrs. Tyll”), individually and as the Executrix of the Estate of Michael A. Tyll (“Mr. Tyll”), brought this action, arising under the Employee Retirement Income Security Act of 1974 (“ERISA”), against the Stanley Black & Decker Life Insurance Program (“Plan”) and Federal Insurance Company (“Federal Insurance”) (collectively “defendants”). See Complaint (“Compl.”) (Doc. No. 1) at 1. Mrs. Tyll seeks payments of benefits under the Plan that she alleges have been withheld in violation of the Plan terms. Id. Mrs. Tyll also seeks to recover interest, costs and attorneys' fees. Id. at 2. Before the court are the parties' Cross-Motions for Summary Judgment. See Defendants' Motion for Summary Judgment (Doc. No. 58); Plaintiff's Motion for Summary Judgment (Doc. No. 59).

         For the reasons stated below, both the plaintiff's and the defendants' Motions for Summary Judgment are granted in part and denied in part.

         I. STANDARD OF REVIEW

         A. Summary Judgment

         On a motion for summary judgment, the burden is on the moving party to establish that there are no genuine issues of material fact in dispute and that the party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); Wright v. N.Y. State Dep't of Corr., 831 F.3d 64, 71-72 (2d Cir. 2016). Once the moving party has met its burden, the nonmoving party “must set forth specific facts showing that there is a genuine issue for trial, ” Anderson, 477 U.S. at 256, and present “such proof as would allow a reasonable juror to return a verdict in [its] favor, ” Graham v. Long Island R.R., 230 F.3d 34, 38 (2d Cir. 2000). “An issue of fact is genuine and material if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Cross Commerce Media, Inc. v. Collective, Inc., 841 F.3d 155, 162 (2d Cir. 2016).

         In assessing the record to determine whether there are disputed issues of material fact, the trial court must “resolve all ambiguities and draw all inferences in favor of the party against whom summary judgment is sought.” LaFond v. Gen. Physics Servs. Corp., 50 F.3d 165, 175 (2d Cir. 1995). “Where it is clear that no rational finder of fact ‘could find in favor of the nonmoving party because the evidence to support its case is so slight,' summary judgment should be granted.” F.D.I.C. v. Great Am. Ins. Co., 607 F.3d 288, 292 (2d Cir. 2010) (quoting Gallo v. Prudential Residential Servs., Ltd. P'ship, 22 F.3d 1219, 1224 (2d Cir. 1994)). On the other hand, where “reasonable minds could differ as to the import of the evidence, ” the question must be left to the finder of fact. Cortes v. MTA N.Y. City Transit, 802 F.3d 226, 230 (2d Cir. 2015) (quoting R.B. Ventures, Ltd. v. Shane, 112 F.3d 54, 59 (2d Cir. 1997)).

         When, as here, both parties come before the court on cross-motions for summary judgment, the court is not required to grant judgment as a matter of law for either side. See Ricci v. DeStafano, 530 F.3d 88, 109-10 (2d Cir. 2008). “Rather the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.” Id. at 110.

         B. ERISA Claims

         ERISA-regulated plans are construed in accordance with federal common law. See Aramony v. United Way of Am., 254 F.3d 403, 411 (2d Cir. 2001). “ERISA federal common law is largely informed by state law principles, ” and courts “apply familiar rules of contract interpretation in reading an ERISA plan.” Lifson v. INA Life Ins. Co. of New York, 333 F.3d 349, 352-53 (2d Cir. 2003) (per curiam). Unambiguous language in an ERISA plan must be enforced according to its plain meaning. Aramony, 254 F.3d at 412. “Language is ambiguous when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement.” Id. In determining whether language in a plan is ambiguous, “reference may not be had to matters external to the entire integrated agreement.” Id. Where, as here, de novo review applies, ^[1] ambiguities in the language of an insurance policy that is part of an ERISA plan are to be construed against the insurer. See Critchlow v. First UNUM Life Ins. Co. of Am., 378 F.3d 246, 256 (2d Cir. 2004).

         II. FACTS^[2]

         On September 25, 2014, Mr. Tyll died while on board a commercial flight from Paris to New York. Defendants' Local Rule 56(a)(2) Statement of Facts in Opposition (“Def. SOF”) (Doc. No. 65-1) ¶ 3. On the date of Mr. Tyll's death, his salary was greater than $ 1 million per year. Id. ¶ 9. Stanley Black & Decker (“Stanley”) provided Mr. Tyll various forms of insurance through the Plan, including life insurance, business travel insurance, and accidental death and dismemberment insurance. Id. ¶ 6. Mr. Tyll was an active, full-time employee of Stanley at the time of his death and was therefore a Class 1 Insured Person under the Plan. Id. ¶ 12.

         The Plan is comprised of “component benefit programs, ” see Administrative Record (“AR ___.”) 4. The component program at issue in this litigation is the Business Travel Accident Insurance Program (“the Policy”). See AR 18. Principal sum is defined in the Policy as “the amount of insurance appearing in Section IV-A of the Schedule of Benefits applicable to each Class.” AR 52. For Class 1 Insured Persons, the Principal Sum under the Policy is “Five (5) times Salary subject to a Minimum of $100, 000 and a Maximum of $1, 000, 000.” AR 78. Salary is defined as “a Primary Insured Person's Annual Benefits pay from the Policyholder at the time of the Accident, excluding overtime and incentive payments.” AR 54.

         On October 9, 2014, Stanley filed a claim with Federal Insurance naming Mrs. Tyll as the beneficiary of Mr. Tyll. Def. SOF ¶ 15. On December 11, 2014, Federal sent Mrs. Tyll a denial letter. Id. ¶ 33. Mrs. Tyll appealed the denial on June 12, 2015 and, on April 12, 2017, Federal Insurance informed Mrs. Tyll's attorney that it would pay the claim. Id. ¶¶ 34, 73. On May 16, 2017, Mrs. Tyll appealed Federal Insurance's decision to pay $1 million on the claim instead of $5 million, as well as the decision not to pay accrued interest under Connecticut law. Id. ¶ 78.

         III. DISCUSSION

         Mrs. Tyll seeks two things: first, she seeks payment of the additional benefits she argues she is entitled to under the Plan, in the amount of $4 million, plus attorneys' fees, interest, and cost of litigation. See Compl. at 11 ¶¶ 1-2. Second, she seeks prejudgment interest pursuant to ERISA and Connecticut law. See id. ¶ 1. As to the claim for additional benefits, the defendants argue that the Plan unambiguously provides for a benefits cap of $1 million. See Defs.' Mem. in Supp. at 6. As to the claim for prejudgment interest, the defendants argue first, that the Plan is not subject to the Connecticut law under which Mrs. Tyll seeks prejudgment interest, id. at 8, and second, that even if the law were applicable, ERISA precludes its application, id. at 8-9.

         The Plan and Policy identify nine classes of insured persons. AR 78. Those classes are: (1) All active full time U.S. and International Employees of the Policyholder; (2) All active part time and temporary U.S. and International Employees of the Policyholder; (3) Designated business guests, prospective employees, dependent employees, consultants, and audit staff; (4) All pilots; (5) All employees covered by relevant collective bargaining agreements; (6) All active non-employee officers and non-officer directors; (7) Spouses and domestic partners of primary insured persons; (8) Dependent children of primary insured persons; and (9) All expatriates of the policyholder. AR 78. Mr. Tyll was a Class 1 Insured Person under the Plan. Def. SOF ¶ 12.

         Two questions determine whether Mrs. Tyll is entitled to the payment of additional benefits. First, the court must determine whether the Plan language in question, which language defines the principal sum payable under the Plan, is ambiguous. If the language unambiguously comports with the defendants' proffered interpretation, then Mrs. Tyll would not be entitled to any benefits beyond the $ 1 million already paid under the Plan. If, however, the language is ambiguous, the court must determine whether Mrs. Tyll's reading of the statute is reasonable. If the language is ambiguous and Mrs. Tyll's reading is reasonable, the language must be construed in her favor. See Critchlow, 378 F.3d at 256. Mrs. Tyll would then be entitled to the $4 million she seeks.

         A. Ambiguity

         The language at issue is found under the heading “PRINCIPAL SUM” in the Policy. See AR 78. The section defines “principal sum” as follows, with each numeral in the left-hand column referencing a class of insured persons:

B) PRINCIPAL SUM

1 Five (5) times Salary subject to a Minimum of $100, 000 and a Maximum of $1, 000, 000

2 $100, 000

3 $100, 000

4 Two (2) times Salary subject to a Minimum of $100, 000 and a Maximum ...