THOMAS W. VANDER LUITGAREN, Plaintiff, Appellant,
SUN LIFE ASSURANCE COMPANY OF CANADA, Defendant, Appellee, SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) AND SUN LIFE FINANCIAL, INC., Defendants
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. Hon. F. Dennis Saylor, IV, U.S. District Judge.
Stuart T. Rossman, with whom Arielle Cohen, The National Consumer Law Center, John C. Bell, Jr., Lee W. Brigham, Bell & Brigham, M. Scott Barrett, and BarrettWylie LLC were on brief, for appellant.
Byrne J. Decker, with whom Catherine R. Connors, Gavin G. McCarthy, and Pierce Atwood LLP were on brief, for appellee.
Before Torruella and Selya, Circuit Judges, and McAuliffe,[*] District Judge.
SELYA, Circuit Judge.
Our system of justice is precedent-based. Once we have decided a legal question and articulated our reasoning, there is usually no need for us to repastinate the same soil when another case presents essentially the same legal question. So it is here.
In Merrimon v. Unum Life Insurance Co., 758 F.3d 46, (1st Cir. 2014) [Nos. 13-2128, 13-2168, slip op.], we recently held that an insurer, acting in the place and stead of a plan administrator, properly discharges its duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § § 1001-1461, when it pays a death benefit by establishing a retained asset account (RAA) as long as that method of payment is called for by the terms of the particular employee welfare benefit plan. This case and Merrimon are fair congeners; and for the most part, this case can be decided on the basis of our opinion in Merrimon. We write separately only to cover points not squarely addressed in Merrimon.
To assure the reader that this case and Merrimon are cut from the same cloth, we briefly sketch the largely undisputed facts. Plaintiff-appellant Thomas Vander Luitgaren is the beneficiary of an employee welfare benefit plan (the Plan) sponsored by his late brother's employer. The employer funded the Plan by arranging with defendant-appellee Sun Life Assurance Company of Canada for group life insurance. The employer, as the Plan administrator, delegated authority to Sun Life to make claim determinations.
Following his brother's demise, the appellant submitted a claim for death benefits to Sun Life, which promptly approved the claim and paid the death benefit. Its method of payment lies at the heart of this case: through a contractor, Sun Life established an RAA at State Street Bank; credited the full amount of the death benefit ($151,000) to that account; and mailed the appellant a book of drafts that he could use to withdraw the credited funds.
The RAA funds earned interest for the appellant at a rate of two percent per annum -- an interest rate set by Sun Life. As long as the funds remained unliquidated, Sun Life kept them in its general account and invested them to its own behoof.
As in Merrimon, it is uncontroverted that the appellant had the right to withdraw all or any part of his RAA funds at any time or times; provided, however, that no withdrawal could be for less than $250. Sun Life retained the right to close the RAA if the balance dipped below $250. In that event, it was obligated to remit the balance to the appellant.
The appellant's RAA proved fleeting: within a matter of days, the appellant withdrew the ...