MetLife wins dismissal of beneficiary's lawsuit
A federal judge threw out a lawsuit claiming MetLife Inc. unfairly profited from the account of a policy beneficiary, while saying the company-described money-market account the life insurer uses to pay claims has an "inherently deceptive" name.
Locally, MetLife has operations in Aurora and Downers Grove.
Plaintiff Jamie Clark didn't prove she had a "special or confidential relationship" with the company required to advance the case, U.S. District Judge Larry Hicks in Reno, Nevada, said in a ruling Sept. 10. Clark, who sought class-action status on behalf of other beneficiaries, claimed that MetLife earned a greater return on the money it owed her than what it paid.
"Clark argues that a confidential and special relationship arose between her and MetLife when MetLife undertook to invest her insurance proceeds and pay her all earnings and gains," Hicks wrote. "The court finds that there is no evidence that Clark had any ties with MetLife that could rise to such a special relationship."
The U.S. Department of Veterans Affairs and New York Attorney General Andrew Cuomo started investigations of life- insurance industry practices after Bloomberg Markets reported in July that carriers profit by holding and investing $28 billion owed to beneficiaries. The insurers earn hundreds of millions of dollars a year in investment gains on the death benefits, including those due to families of U.S. military service members killed in combat in Iraq and Afghanistan.
Hicks did determine that MetLife's Total Control Money Market Account Option, used to pay survivors their life insurance proceeds is "inherently deceptive" because it suggests the account is covered by FDIC insurance. MetLife keeps billions of dollars of its life insurance beneficiaries' money in its general account, and sends them "checkbooks" instead of checks as it earns investment gains on their money.
The court said it awarded summary judgment to MetLife on the breach of contract claim because Clark admitted never reading or relying on the MetLife contract, nor understanding what a money market account is. Hicks also found that Clark, of Reno, Nevada, failed to prove damages.
Curtis Coulter, a lawyer representing Clark, didn't return a call seeking comment after regular business hours Sept. 10. Christopher Breslin, a spokesman for New York-based MetLife, also didn't return a call seeking comment.
The case is Jamie Clark v. Metropolitan Life Insurance Co., 3:08-cv-00158, U.S. District Court for Nevada (Reno).