Graber v. Metropolitan Life Insurance

Citations: 855 F. Supp. 2d 673; 2012 WL 42914; 2012 U.S. Dist. LEXIS 2363Docket: Case No. 3:11 CV 20

Court: District Court, N.D. Ohio; January 8, 2012; Federal District Court

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Plaintiff Steven Graber is pursuing a lawsuit against several defendants, including the United States and Met Life, claiming entitlement to the Federal Employees’ Group Life Insurance (FEGLI) policy proceeds of his late wife, Barbara Ann Graber. The United States has filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The court grants this motion.

The FEGLIA, established in 1954, provides low-cost life insurance for federal employees, with the former Civil Service Commission purchasing insurance from Met Life, which created the Office of Federal Employees Group Life Insurance (OFEGLI) to manage claims. Federal employees can designate beneficiaries via a SF 2823 form submitted to their employing office, which maintains these records in the employee's Official Personnel Folder (OPF). Upon retirement, these records are forwarded to the Office of Personnel Management (OPM). 

For a beneficiary designation to be effective, it must be received by the employing office before the employee's death, as mandated by 5 U.S.C. 8705(a). In this case, Barbara Ann Graber designated her brother, Bruce T. Jones, as the sole beneficiary in a SF 2823 form received on February 6, 1996. Following her retirement on September 1, 1998, her OPF contents were sent to OPM. After her death in 2010, OPM sent her beneficiary forms to OFEGLI, which confirmed the effectiveness of the 1996 designation and processed the policy accordingly, as verified by an affidavit from OPM's Retirement Operations Center.

Ellenberger confirmed that the decedent's retirement case file contains only photocopies of two beneficiary forms: one from 1996 and another from 1969, with no additional Federal Employees Group Life Insurance (FEGLI) designation forms present. Ellenberger also checked the decedent’s Official Personnel Folder (OPF), which similarly contained only the same two forms. She stated that no other official locations for retaining FEGLI designation forms exist beyond the OPF and retirement case file. In contrast, the Plaintiff asserts that the decedent executed a new beneficiary designation form in 2008, naming Plaintiff as the sole beneficiary, and that the decedent retained a copy indicating the form was mailed on April 16, 2008. Following the decedent's death, Plaintiff's claim for benefits was processed with Defendant Jones listed as the beneficiary, prompting Plaintiff to file a lawsuit on January 4, 2011, alleging that the United States failed to maintain the 2008 beneficiary form. The United States moved to dismiss the case, citing lack of subject matter jurisdiction due to sovereign immunity regarding negligence claims related to FEGLIA records. The Court agreed, granting the motion to dismiss based on the absence of consent to be sued, and therefore did not address the motion based on failure to state a claim. The dismissal was categorized as a facial attack on subject matter jurisdiction, requiring the Court to accept the Plaintiff’s allegations as true for the purposes of the motion.

The motion challenges the sufficiency of the Plaintiff's Complaint regarding subject matter jurisdiction without questioning the truthfulness of the allegations. The United States contends that the Complaint fails to demonstrate a waiver of sovereign immunity necessary to establish jurisdiction, referencing the case Safe Air for Everyone v. Meyer. A distinction is made between a factual attack, which disputes the truth of allegations, and a facial attack, which argues that the allegations are insufficient to invoke federal jurisdiction.

Sovereign immunity protects the United States from lawsuits unless there is a clear waiver of this immunity. The Federal Employees' Group Life Insurance Act (FEGLIA) allows district courts to have jurisdiction over civil actions against the United States related to this statute. Both parties acknowledge that under FEGLIA, the United States has consented to be sued for breaches of legal duty. However, there is disagreement on whether the responsibility to maintain FEGLI records, including beneficiary designations, constitutes such a legal duty.

The Plaintiff seeks to align with the Fifth Circuit's ruling in Metro. Life Ins. Co. v. Atkins, which implies that the United States has a duty to maintain beneficiary forms entrusted to it. In contrast, the United States cites five other cases indicating that its only duty under FEGLIA is to ensure correct policy issuance, emphasizing that liability arises only from failure in that role. The courts referenced suggest that actions against the government are permissible only if it can be shown that the government did not fulfill its duty to issue the insurance contract correctly.

The United States contends that the Frerichs case references the Fifth Circuit’s Atkins decision as the sole instance wherein a court has expanded the United States' responsibilities under the Federal Employees Group Life Insurance Act (FEGLIA) to include maintaining beneficiary forms. The Court concurs, asserting that the only obligation imposed on the United States by FEGLIA is to ensure the correct negotiation and issuance of FEGLI policies. This interpretation is supported by the prevailing case law, which indicates that Congress intended to impose only limited duties under FEGLIA. Consequently, the Court refuses to broaden FEGLIA to encompass the maintenance of beneficiary forms, despite the Fifth Circuit's ruling. As a result, the Plaintiff fails to establish a waiver of sovereign immunity, leading the Court to conclude it lacks subject matter jurisdiction over the Plaintiff's claims against the United States. The United States' motion to dismiss is therefore granted. Furthermore, the Office of Personnel Management (OPM) only retains photocopies of beneficiary designation forms sent to the Office of Federal Employees Group Life Insurance (OFEGLI) after a retiree's death. The Plaintiff's argument regarding the Railsback case is deemed unpersuasive, as Railsback does not address FEGLIA in the context of beneficiary designation forms, but rather illustrates that FEGLIA's limited duties exclude the maintenance of such forms.