Geiser v. Securian Life Insurance Company

Background

Cynthia Litzau worked for 3M until her death on May 23, 2020. Through her employment benefits, she had a Securian group life-insurance policy providing $50,000 in basic coverage and $246,376 in additional coverage. The policy provided that benefits would be paid to the beneficiary designated by the insured and allowed changes subject to specified conditions and procedures.

After Cynthia Litzau’s death, 3M gave Securian beneficiary information identifying Timothy Litzau as the 100-percent beneficiary of both types of coverage. Securian paid him $296,530.28 in benefits, plus interest. Selena D. Geiser and Jennifer L. Heldt challenged the payment and alleged that Securian breached its fiduciary duties under the Employee Retirement Income Security Act of 1974. They sought distribution of the additional benefits among Timothy Litzau, the two plaintiffs, and two minor children.

Records obtained from 3M showed that Cynthia Litzau changed the additional-benefit designation on March 28, 2020, to give Timothy Litzau 50 percent, each plaintiff 13 percent, and two grandchildren 12 percent each. The records also showed that she returned to the online portal on May 12, 2020, and changed the designation back to Timothy Litzau as the sole 100-percent beneficiary.

Summary Judgment Standard

The court explained that summary judgment is proper when the evidence shows no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law. The court must view the evidence favorably to the party opposing the motion, but that party must identify specific supporting evidence rather than rely on allegations, speculation, or unsupported assertions.

The policy gave Securian discretionary authority to interpret the group policy and decide policy-related matters. The court therefore reviewed Securian’s decisions under an abuse-of-discretion standard, asking whether a reasonable person could have reached the same decision based on substantial evidence.

Beneficiary Designation

The plaintiffs argued that the March 28 designation reflected Cynthia Litzau’s final intent. They said they had witnessed that change and that Cynthia Litzau lacked the ability or capacity to make the May 12 change because of her computer and portal difficulties, loss of access to her phone, hospitalizations, declining health, and reduced mental and physical ability.

The court rejected the argument that these assertions created a genuine dispute of material fact. The 3M records showed a later change restoring Timothy Litzau as the sole beneficiary, and that information matched what 3M sent to Securian after the death. The court held that Securian properly paid the additional benefits based on the most recent beneficiary designation and that the plaintiffs’ fiduciary-duty claim based on that payment failed as a matter of law.

Fiduciary Function

The plaintiffs argued that Securian acted as a fiduciary because it appeared in the plan documents and was responsible for carrying or paying benefits. Securian argued that it was not acting as a fiduciary with respect to beneficiary designations because it did not manage, administer, or access 3M’s online portal or beneficiary records.

The court agreed with Securian. 3M was responsible for the portal and beneficiary designations, while Securian received the beneficiary information only after the employee’s death and after a claim was submitted. Because Securian did not maintain or manage the beneficiary designations, the court held that it did not perform a fiduciary function concerning the alleged failure to record Cynthia Litzau’s intended changes. Securian therefore was not liable under the employee-benefits law on that theory.

Fiduciary Duty

The plaintiffs also argued that Securian violated its duty of loyalty by paying the benefits contrary to Cynthia Litzau’s alleged final intentions. The court held that Securian did not breach a fiduciary duty by following the governing plan documents. Under the employee-benefits law and the policy, Securian was required to pay benefits according to the beneficiary designation on file. That designation named Timothy Litzau as the 100-percent beneficiary of the additional benefits.

The court relied on the principle that plan administrators must follow the plan’s governing documents. Even if the plaintiffs’ allegations about Cynthia Litzau’s intentions were true, the court concluded that Securian did not abuse its discretion by paying the named beneficiary according to the designation supplied by 3M.

Reformation

The plaintiffs sought reformation, which is a court-ordered correction of a written agreement, arguing that the May 12 beneficiary designation did not reflect Cynthia Litzau’s true intentions because of mutual mistake. The court explained that reformation under the applicable law requires a valid agreement, a written instrument that fails to express the parties’ intentions, and a qualifying mutual mistake or a unilateral mistake accompanied by fraud or inequitable conduct by the other party.

The court held that the reformation claim failed as a matter of law. The employee-benefits law required Securian to distribute benefits according to the designation in the plan documents. In addition, the plaintiffs did not allege wrongful conduct by Securian connected to the May 12 change. Their allegations of fraud, inequitable conduct, and mutual mistake were too speculative to meet the requirements for reformation.

Disposition

The court granted Securian Life Insurance Company’s motion for summary judgment. The order states that judgment should be entered accordingly.