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Olsen v. Standard Insurance Co.

United States District Court, D. Minnesota

August 20, 2014

Michael D. Olsen, Personal Representative of the Estate of Tamara Hjelle Olsen, Plaintiff,
v.
Standard Insurance Company, Defendant

For Plaintiff: John M. Nichols, Gregory R. Merz, Gray, Plant, Mooty, Mooty & Bennett, P.A., Minneapolis, Minnesota.

For Defendant: Terrance J. Wagener, Molly R. Hamilton, Messerli & Kramer, P.A., Minneapolis, Minnesota.

Page 1110

MEMORANDUM OPINION AND ORDER

SUSAN RICHARD NELSON, United States District Judge.

I. INTRODUCTION

This matter is before the Court on the parties' cross-motions for summary judgment. For the reasons stated below, the Court grants Defendant's Motion for Summary Judgment [Doc. No. 30] and denies

Page 1111

Plaintiff's Motion for Summary Judgment [Doc. No. 36].

II. BACKGROUND

A. The Life Insurance Policy

Defendant Standard Insurance Company issued Group Life Insurance Policy No. 148624-A (the " Policy" ) to the law firm of Gray, Plant, Mooty, Mooty & Bennett, P.A. (" Gray Plant" ) on January 1, 2010. (Haines Aff., Ex. A [Doc. No. 27], at 6.)[1] The Policy provided for maximum basic life insurance coverage of $100,000. (Id. at 12.) In December 2010, Gray Plant requested an increase to $500,000 in basic life insurance for Principals of the firm. (Id. at 195.) The requested amendment, which was " subject to the Active Work Provisions," became effective on January 1, 2011. (Id. at 3.) The Active Work provisions state:

If you are incapable of Active Work because of Sickness, Injury or Pregnancy on the day before the scheduled effective date of your insurance or an increase in your insurance, your insurance or increase will not become effective until the day after you complete one full day of Active Work as an eligible Member.
Active Work and Actively At Work mean performing the material duties of your own occupation at your Employer's usual place of business. You will also meet the Active Work requirement if:
1. You were absent from Active Work because of a regularly scheduled day off, holiday, or vacation day;
2. You were Actively At Work on your last scheduled work day before the date of your absence; and
3. You were capable of Active Work on the day before the scheduled effective date of your insurance or increase in your insurance.

Id. at 28-29.) Under the Policy:

You are a Member if you are:
1. An active Partner or shareholder or employee of the Employer excluding Counsel and Principal Emeritus; and
2. Regularly working at least 20 hours each week.
You are not a Member if you are:
1. A temporary or seasonal employee.
2. A leased employee.
3. An independent contractor.
4. A full time member of the armed forces of any country.

(Id. at 10.) The Policy grants Defendant " full and exclusive authority to control and manage the Group Policy, to administer claims, and to interpret the Group Policy and resolve all questions arising in the administration, interpretation, and application of the Group Policy." (Id. at 39.)

B. Plaintiff's Claim for Benefits

Tamara Olsen was employed at Gray Plant beginning in 1986 and, at all times relevant to this lawsuit, was a Principal and Shareholder of the firm. (Id. at 130, ¶ 4.) She became the firm's Managing Officer

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and Chair of the Board of Directors in April 2007. (Id.) Ms. Olsen was diagnosed with cancer in August 2010 and was treated through surgery, radiation, and chemotherapy in the months that followed. (Compl. ¶ 14.)

On February 16, 2011, Ms. Olsen submitted a claim for long-term disability benefits. (See Haines Aff., Ex. A, at 707-11.) In the " Employee's Statement," Ms. Olsen listed August 21, 2010 as the " [d]ate [she] became unable to work at [her] occupation as a result of disability." (Id. at 709.) In the " Employer's Statement," Gray Plant listed Ms. Olsen's " [l]ast day of work before disability commenced" as August 20, 2010, but noted that Ms. Olsen " had two full days of work since then, October 25, 2010 [and] January 10, 2011." (Id. at 714.) Gray Plant also stated that " Claimant is Firm's managing partner. She will utilize remote access and other alternatives when and if she is able." (Id.) On March 23, 2011, Defendant approved Ms. Olsen's claim. (Id. at 671-72.)

Ms. Olsen remained the Managing Officer at Gray Plant until April 14, 2011. (Id. at 130, ¶ 4.) As the Managing Officer, one of her job duties was to supervise the development and implementation of Gray Plant's new strategic plan. (Id. ¶ 8.) She attended meetings of the firm's Strategic Planning Committee on January 10, 2011, and April 12, 2011. (Id. ¶ 7.) Gray Plant's records reflect that Ms. Olsen was in Gray Plant's offices for at least eight hours on each of those days. (Id. at 134, 142.) In addition, Ms. Olsen continued in her role as Chair of the Board of Directors and maintained an office at the firm's Minneapolis location until her death on July 4, 2011. (Id. at 134, ¶ 4.)

On August 24, 2011, Gray Plant submitted a claim for life insurance benefits on Plaintiff's behalf. (See id. at 348-49.) Gray Plant asserted that Ms. Olsen was covered by the basic Policy in the amount of $500,000 and enclosed copies of her time records to demonstrate that she had been " actively at work" several times between January 1, 2011, and June 30, 2011. (Id. at 348.) Defendant found that Plaintiff was entitled to $100,000 in basic life insurance, but not to the additional $400,000. (See id. at 51, 337.) By letter dated October 5, 2011, Defendant explained that, " while Ms. Olsen was at work after January 1, 2011, the Group Policy states that one must 'complete one full day of Active Work as an eligible Member.'" (Id. at 52-53.) According to Defendant, " Ms. Olsen ceased to be a Member on August 21, 2010, given that she no longer regularly worked 20 hours each week." (Id. at 52.) In addition, Defendant asserted that " Ms. Olsen continued to meet the ...


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