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In re Shafer

United States District Court, S.D. Indiana, Terre Haute Division

November 4, 2014




The Court conducted a bench trial in this action on October 28, 2014 in Terre Haute, Indiana. Pro se Defendants Eleanor Shafer and Rhonda L. Knight both appeared in person.

This action involves a determination of who is entitled to life insurance benefits which became due when James Shafer, an employee of Novelis Corporation ("Novelis"), passed away after a lengthy illness. As is often the case, disputes over the appropriate care of a sick family member can cause turmoil within a family. Such a dispute has given rise to the issues presented to this Court.

This action began when Metropolitan Life Insurance Company ("MetLife") filed a Complaint in Interpleader on November 21, 2013. [Filing No. 1.] MetLife alleged that it funded the Novelis Life Insurance Benefits Plan ("the Plan"), which is an employee welfare benefit plan, through a group life insurance policy it issued. [Filing No. 1 at 2.] MetLife further alleged that James Shafer was an employee of Novelis and a participant in the Plan. [Filing No. 1 at 2.] The two interpleader defendants - Ms. Shafer, who is Mr. Shafer's ex-wife, and Ms. Knight, who is Mr. Shafer's daughter - each claim that they are entitled to the life insurance policy benefits (the "Plan Benefits"), which total $10, 000. [Filing No. 1 at 3-4.] MetLife requested that it be permitted to pay into the Clerk of the Court the Plan Benefits, plus applicable interest, so the Court can determine to whom the Plan Benefits are owed. [Filing No. 1 at 5-6.]

On February 10, 2014, MetLife filed a Motion for Interpleader, requesting that it be permitted to pay the Plan Benefits to the Clerk of the Court and that it be dismissed from the action. [Filing No. 12.] On March 28, 2014, the Court granted MetLife's Motion for Interpleader, finding that "MetLife is merely a stakeholder and claims no beneficial interest in the life insurance benefits payable under the Plan, " and that "MetLife had not voluntarily made payment of the life insurance benefits payable under the Plan because MetLife could not determine the proper beneficiary or beneficiaries without risking exposure of itself, the Plan, or the Plan sponsor to the possibility of multiple payments of the life insurance benefits which are due." [Filing No. 17 at 2.] The Court permitted MetLife to tender the Plan Benefits to the Clerk of the Court, dismissed MetLife from the action, and discharged MetLife, the Plan, and Novelis from any liability to Mr. Shafer, Ms. Shafer, or Ms. Knight. [Filing No. 17 at 2-3.]

The Court held a bench trial on October 28, 2014 to determine who is entitled to the Plan Benefits. The Court now issues its findings of fact and conclusions of law which resulted from the bench trial.



A. Jurisdiction

At the outset, the Court finds that it has subject-matter jurisdiction over this matter. The Plan Benefits that are the subject of the interpleader are governed by the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001, et seq. ("ERISA"). Accordingly, the Court has subject-matter jurisdiction under 29 U.S.C. § 1132 and 28 U.S.C. § 1331. See Life Ins. Co. of North America v. Camm, 2007 WL 2316480, * 2 (S.D. Ind. 2007) (two interpleader actions filed by life insurance company to determine who was entitled to life insurance benefits under plan governed by ERISA were within federal court's federal question jurisdiction "because the disputes are over employee benefits subject to ERISA. This case falls squarely within the court's federal question jurisdiction"); Metro. Life Ins. Co. v. Bryan, 2005 U.S. Dist. LEXIS 6575, *3-4 (N.D. Ind. 2005) ("The Court has federal question jurisdiction in this case. Pursuant to 29 U.S.C. § 1132(a)(3)(B)(ii), a pension plan administrator - who qualifies as an ERISA fiduciary... - may seek to obtain equitable relief to enforce the terms of a plan. Plaintiff in this case filed an interpleader action to determine the rightful recipient of the pension benefits at issue, an equitable procedure").

B. The Initial Beneficiary Designation

MetLife issued a group term life insurance policy with Group Policy Number 6299-G to Novelis. Mr. Shafer was employed by Novelis and, accordingly, was covered by the life insurance policy. On November 17, 1982, Mr. Shaffer designated Ms. Shafer, his then-wife, as the beneficiary of the Plan Benefits under the life insurance policy. This change removed Mr. Shafer's first wife, and the mother of his children, as the policy beneficiary.

C. Mr. Shafer's Health Begins to Decline

Mr. Shafer retired and was eventually diagnosed with Parkinson's Disease and Alzheimer's Disease. The parties submitted various medical records relating to treatment beginning in August 2011, including:

• August 10, 2011: Mr. Shafer was seen in the hospital by Dr. John Hubbard for "confusion." Dr. Hubbard noted that Mr. Shafer had "[q]uestionable acute to subacute left-sided posterior limb internal capsule lacunar infarct. With age related involutional changes, findings compatible with chronic microvascular white matter ischemic change."
• August 26, 2011: Mr. Shafer was examined by Dr. Todd Carpenter. Dr. Carpenter stated that Mr. Shafer "was admitted on 8/10/2011 with increased confusion, falls, and restlessness. He has a history of Parkinson's disease and Alzheimer's dementia. He is considering signing power of attorney for financial matters over to his daughter. Consequently, a competency evaluation was requested." Mr. Shafer scored 13 on the Folstein Mini-Mental Status Exam, and a normal range for an individual of his age with a high school education is between 27 and 30. Dr. Carpenter noted that the score of 13 "indicat[ed] significant cognitive impairments." Dr. Carpenter stated "James Shafer is displaying significant cognitive impairments in multiple domains. For instance, significant impairments were found in his immediate, recent and remote memory, general fund of knowledge, attention, and constructional abilities. He was disoriented and displayed severe memory difficulties. For instance, he thought the year was 1013, believed he was at Anthony's Hospital, ' did not know his date of birth, and was unable to recall how many children he had. It is my opinion, at this time, that: 1. He lacks the capacity to fully understand information relevant to this decision regarding power of attorney, and 2. He does not grasp the potential ramifications of his choices, but simply what he has been told by family. Consequently, it is felt that he is unable to make an informed decision at this time due to his severe cognitive impairments. However, he can be evaluated again at a later date if it is felt that his cognitive functioning has improved."
• September 9, 2011: Dr. Hans Andreasen examined Mr. Shafer in the hospital and summarized his history, stating "The patient is a well known, 79-year-old white male who has been declining with Parkinson's disease and vascular dementia despite outpatient treatment. He had been in with a question of a small cerebral vascular accident but mostly exacerbation of Parkinson's symptoms with extrapyramidal reactions from his medications. He was on Medical Rehabilitation Unit and would have periods of confusion and agitation, but he went to [a nursing home] and did very poorly there. He became agitated, combative. He was sedated and sent to the emergency room. He ended up at [a mental health facility]. There, despite medication changes he became worse and he was sent to the Emergency Room at Regional Hospital. They observed him overnight, but when he needed hospitalization he was transferred here to our care. Here, with all of his sedative medications held, he has improved, although he still has significant Parkinson's symptoms and gets confused and mild agitation at night." Dr. Andreasen also noted "[h]e had reached the point where it was felt that he could continue receiving care at the nursing home. Arrangements will be made for him to be discharged to the nursing home...."
• September 15, 2011: Dr. Steven Maynard wrote a letter stating "Mr. Shafer has a medical condition in which he is not capable of making financial or other decisions on his own behalf."
• September 19, 2011: Dr. Lingan Sidda stated in a report that Mr. Shafer was being examined for "altered mental status, " and that he had "[a]ge related brain atrophy with small vessel ischemic changes in both periventricular and deep white matter. If symptoms persist, MRI would be of benefit for further evaluation."
• September 21, 2011: Dr. Maynard wrote a letter stating "Mr. Shafer has a diagnosis of Alzheimer's Disease. As a result [of] this condition, he is not capable of making financial or other decisions on his own behalf as of February 2011."
• September 24, 2011: Dr. Andreasen examined Mr. Shafer in the hospital and stated "[h]e was taken out of the nursing home by his family to an outing where he had a syncopal episode where he became weak. He was found to be bradycardic with a heart rate down in the 30's with observation." The record reflects that Mr. Shafer received a pacemaker, and was discharged to a nursing home.

The decision was made to place Mr. Shafer in a nursing home, and Ms. Knight suggested the particular facility, with Ms. Shafer's agreement. Ms. Knight soon came to regret her choice. While Mr. Shafer was a resident at the nursing home, Ms. Knight and Ms. Shafer disagreed regarding the quality of care that he was receiving and whether he should remain there.[2] Ms. Shafer did not believe she could take care of him on her own, so wanted him to rehabilitate in the nursing home first. Ms. Knight did not think Mr. Shafer was receiving adequate care in the nursing home, and offered either to move in with Mr. and Ms. Shafer, or to have Mr. Shafer move in to her house so she could care for him. Ms. Shafer refused Ms. Knight's offers, and believed he should stay at the nursing home until he had improved. Mr. Shafer's other children, like Ms. Knight, also believed that he was not receiving ...

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