Stewart v. Metropolitan Life Insurance Company

Background

Alverta Stewart brought a proposed class action against Metropolitan Life Insurance Company, which the opinion calls MetLife. She alleged that MetLife breached the Federal Employees’ Group Life Insurance contract by failing to follow the payment order in 5 U.S.C. § 8705(a).

Stewart’s sister, Arvenell Flowers, died on October 3, 2019. The complaint alleged that Flowers had a $12,000 federal employee life-insurance policy; that her designated beneficiary had died before her; that she was not married and had no children; that both parents had died; and that no estate had been opened. Stewart alleged that, as Flowers’s sister and next of kin under Texas law, she was entitled to benefits under the statute’s sixth payment category. She assigned $8,055 of the proceeds to a funeral home and retained an alleged interest of approximately $3,945.

Stewart alleged that MetLife demanded that she open an estate and initiate probate proceedings rather than pay her as the next of kin. She claimed that this requirement violated the statutory order of precedence and the FEGLI contract. She also alleged that MetLife failed to pay her within one year after Flowers’s death, which she contended triggered a statutory rule treating people higher in the order of precedence as having died first.

After the complaint was filed, MetLife sent Stewart a check for $3,984.45, including interest, and sent another check to Lincoln Factoring, LLC, the funeral home’s assignee. Stewart rejected her check, describing it as an offer to settle her individual claim, and said she intended to continue pursuing the case for the proposed class.

MetLife’s Motion

MetLife moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), arguing that the payment made Stewart’s claim moot, and under Rule 12(b)(6), arguing that the complaint did not plausibly allege a breach of contract.

A moot claim is one for which the court can no longer provide effective relief. The court explained that an unaccepted settlement offer generally does not make a case moot. It also considered whether MetLife’s check was actual payment made in the ordinary course of administering the claim rather than a settlement offer.

Mootness Ruling

The court held that MetLife had not shown that the check made Stewart’s claim moot at the motion-to-dismiss stage. The parties disputed why MetLife sent the check and whether it was ordinary payment or a settlement offer. Their submissions also contained conflicting declarations about MetLife’s payment practices.

The court stated that it could not resolve those factual disputes on a motion to dismiss. It further concluded that, even as a legal matter, the uncashed post-complaint check did not moot Stewart’s claim, particularly because she had brought a proposed class action. The court reasoned that treating the check as automatically ending the case could allow a defendant to defeat proposed class litigation through a tactical payment.

Breach-of-Contract Ruling

Applying New York contract-law pleading standards, the court found that Stewart had adequately alleged the required elements: a contract, her performance by submitting a claim, MetLife’s alleged breach by failing to pay benefits in the required manner, and damages consisting of the unpaid proceeds.

The complaint plausibly alleged that Stewart was a next of kin covered by the sixth category of the statutory payment order and that she submitted a claim with a certified death certificate. The court also found that the complaint plausibly alleged a breach based on MetLife’s demand that Stewart open an estate and begin probate proceedings.

The court declined to consider an obituary offered by MetLife to suggest that other relatives might have claims to the proceeds. The obituary was not attached to or incorporated into the complaint, and the court found that MetLife had not established a basis for taking judicial notice of its contents for their truth. The court also noted that MetLife had demanded an estate and probate proceeding rather than requesting information about Flowers’s other siblings and their descendants.

Because the complaint plausibly alleged at least one breach-of-contract theory, the court did not decide whether 5 U.S.C. § 8705(b) required payment to Stewart one year after Flowers’s death.

Disposition

Judge Paul G. Gardephe denied MetLife’s motion to dismiss. The court directed the clerk to terminate the motion and scheduled a case-management conference for October 22, 2025. The opinion did not decide whether Stewart will ultimately prevail, whether a class will be certified, or whether MetLife breached the contract on the unresolved one-year-payment theory.