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Cole v. American Heritage Life Insurance Co.

United States District Court, N.D. Indiana, South Bend Division

April 18, 2018

NOVEMBER COLE on behalf of Th. C., Tr. C., and C.C., Plaintiff,



         Plaintiff November Cole brought this ERISA action on behalf of her minor children to recover life insurance benefits under a group insurance policy purchased by her late husband, Thomas H. Cole, Sr., through his employer. Mr. Cole tragically died by suicide on January 2, 2016 and the Plaintiffs filed a claim for benefits under the group policy. Their claim was denied pursuant to the group policy's suicide exclusion.

         What appears to be a fairly straightforward case is complicated by the timeline of events. Mr. Cole originally began paying into a policy offered by a different insurance company on January 1, 2014. That policy did not contain a suicide exclusion and he paid into that policy until January 1, 2016. Sometime prior to that date, Mr. Cole's employer contracted with a new insurance company to provide this particular employee benefit effective January 1, 2016. The policy of the new company, Defendant American Heritage Life Insurance Company, contained a suicide exclusion limiting the benefit amount to the premiums paid if the insured committed suicide within 2 years of the certification date. The new policy went into effect on January 1, 2016, one day before Mr. Cole took his own life.

         The issue to be decided is whether the second policy was merely an extension of the first policy or whether it stands alone. The Coles argue that the two policies should be read together and the alleged ambiguities that result should be interpreted in favor of coverage. American Heritage argues that its denial was reasonable and appropriate. It asks, why should American Heritage be held responsible under some other insurer's policy language? The parties filed cross motions for summary judgment on the issue of coverage. For the reasons discussed below, I find that American Heritage's denial of the Coles' claim pursuant to the policy's suicide exclusion was reasonable and, therefore, grant American Heritage's motion for summary judgment.


         Thomas H. Cole, Sr. was the husband of November Cole and the father to three children. [DE 29 at 2.] Mr. Cole was an employee at Forest River, Inc. in Elkhart, Indiana. [Id.] Beginning on January 1, 2014, Mr. Cole enrolled in, and began paying premiums for, an optional $100, 000 life insurance policy through Forest River's employee plan provided by the Lincoln National Life Insurance Company. [Id.] At some point in 2015, Forest River terminated its group policy with Lincoln National and purchased a group policy from American Heritage that was set to go into effect on January 1, 2016. [DE 35-2 at ¶1.]

         Forest River's full-time active employees were eligible to participate in its ERISA benefit plan, including the American Heritage Group Policy. [DE 35-2 at ¶2.] American Heritage's Group Term Life Insurance Certificate explains the “Certificate Date” as “[t]he effective date of coverage under this certificate and the date from which the certificate, years, anniversaries and premium due dates are determined. The certificate date is shown on the Certificate Specifications page.” [DE 35-1 at ¶9; DE 35-1 at 53.] The Certificate Specifications page for the American Heritage Group Policy states “Certificate Dated: January 1, 2016.” [DE 35-1 at ¶9; DE 35-1 at 51.] The Certificate also contains a “Suicide Exclusion” that explains, “[i]f the insured commits suicide, while sane or insane, within 2 years after the certificate date, the death benefits is limited to the premiums paid.” [DE 35-1 at ¶11; DE 35-1 at 56.] The American Heritage Group Policy contains the same exclusion. [DE 35-1 at ¶11; DE 35-1 at 17.]

         Mr. Cole died by suicide on January 2, 2016, one day after the American Heritage Group Policy's Certificate Date. [DE 35-2 at ¶12.] Mrs. Cole notified American Heritage of the death via telephone call on March 28, 2016 and, after two written requests by American Heritage, submitted a death certificate and claim form on May 4, 2016. [Id. at ¶¶13-15.] The death certificate reported the cause of death as a self-inflicted gunshot to the chest and the manner of death as suicide. [DE 35-2 at ¶17; DE 29 at 6.] By a letter dated May 19, 2016, American Heritage issued a denial letter to Mrs. Cole based on the Suicide Exclusion under the Group Policy and Certificate. [DE 35-2 at ¶20; DE 29 at 7.] The letter also noted that there were no premiums paid for coverage under the Group Policy. [DE 35-2 at ¶20; DE 29 at 7.]

         Mrs. Cole retained counsel who contacted American Heritage requesting copies of the Group Policy, Certificate, and American Heritage's coverage determinations and asking for a written articulation for any coverage denial. [DE 35-2 at ¶21; DE 29 at 7.] American Heritage sent counsel copies of the requested information and noted that if the Coles had any additional information that was not previously considered in support of their claim or would like to appeal the claim, they should send the information to the attention of the author of the letter. [DE 35-2 at ¶22; DE 29 at 7; DE 35-1 at 91.] The Coles sought reconsideration of the denial but American Heritage stuck by its initial decision of no coverage. [DE 29 at 7.]

         The Coles filed this lawsuit in state court seeking a declaratory judgment against American Heritage and the matter was timely removed to this Court. The Coles eventually amended their Complaint dropping all of their state law claims and asserting only an ERISA benefit claim pursuant to 29 U.S.C. § 1132(a)(1)(B). The Parties now have moved for summary judgment on the dispositive issue in this case-coverage. The question to be answered is whether or not Mr. Cole's death by suicide is covered by the American Heritage Group Policy.


         Summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A genuine dispute about a material fact exists only “if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A nonmoving party is not entitled to the benefit of “inferences that are supported by only speculation or conjecture.” Argyropoulos v. City of Alton, 539 F.3d 724, 732 (7th Cir. 2008) (citations and quotations omitted).

         With respect to an employee benefit plan governed by ERISA, a plaintiff may bring an action “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C. §1132(a)(1)(B). In interpreting an ERISA plan, I apply general principles of contract law consistent with federal common law on ERISA claims. See Cheney v. Standard Insurance Company, 831 F.3d 445, 450 (7th Cir. 2016); see also Ruttenberg v. U.S. Life Ins. Co., 413 F.3d 652, 659 (7th Cir. 2005) (citing Bock v. Computer Assocs. Int'l, Inc., 257 F.3d 700, 704 (7th Cir. 2001)). In a case such as this one, where there are no ERISA cases squarely on point with the facts of the case, I may look to guidance in the federal common law and rely on federal and state case law discussing the relevant issues, as the Parties did in their briefs and I do below. See Berger v. AXA Network LLC, 459 F.3d 804, 808 (7th Cir. 2006); Young v. Verizon's Bell Atlantic Cash Balance Plan, 667 F.Supp.2d 850, 885 (N.D. Ill. 2009).

         I consider the denial of benefits de novo unless the plan grants the plan administrator discretionary authority to construe policy terms. Cheney, 831 F.3d at 849, citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Here there is a dispute regarding whether the American Heritage Group Policy granted discretionary authority. “[D]eferential review is exceptional, authorized only when the contracts that establish the . . . plan confer interpretive discretion in no uncertain terms.” Comrie v. IPSCO, Inc., 636 F.3d 839, 842 (7th Cir. 2011). While there are no “magic words” determining the scope of judicial review of decisions to deny benefits, there must be ...

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