Does a last in time divorce decree or a beneficiary designation made at the time of the application years ago prevail when it comes time to make a claim? The answer is set forth in a cautionary tale of beneficiary designations told in the recent case of Boyd v. Metropolitan Life Insurance Company, 2:09-cv-03325-CWH (4th Circuit, 2011).
Emma C. Boyd had her estranged husband, Robert Alsager, sign a separation and property-settlement agreement to release him from any claims to her estate or property. Or so she thought.
Emma was an employee of Delta Airlines, Inc., and was covered by a Metropolitan Life Insurance Company insurance plan governed by ERISA. In 2001, Emma submitted forms designating Alsager as the primary beneficiary of her MetLife plan and her mother as a contingent beneficiary, meaning Emma’s mother would receive the life insurance benefits if Alsager refused to take them.
Around 2007, Emma and Alsager separated. Although Alsager signed a separation agreement, Emma did not remove him as the primary beneficiary under her MetLife plan—a designation she made while they were still married.
When Emma passed away in 2008, her mother and son (“the Boyds”) filed a claim with MetLife to obtain Emma’s life insurance benefits. So did Alsager. Relying on the plan documents on file, MetLife paid Emma’s insurance plan proceeds to her estranged husband.
The Boyds sent a letter to MetLife appealing its decision to pay the proceeds to Alsager, but MetLife denied their claim. The Boyds then brought suit in district court, but to no avail. Their appeal to the appellate court ended with the same result,