[00:00:09] Speaker 03:
Good morning, Your Honors.

[00:00:10] Speaker 03:
May it please the Court, Joe McMillan on behalf of the plaintiff and appellant, Keith MacGyver.

[00:00:15] Speaker 03:
I'd like to reserve two minutes for rebuttal.

[00:00:17] Speaker 03:
uh... this appeal in this case is really all about what is doing what is fair and right equitable under the law uh... mister mcgyver appealed the dismissal of his claim for breach of fiduciary duty and equitable relief uh... that is the focus of his appeal he also appealed the plan benefit claim fiduciary duty is really the focus so this court is really sitting in equity judging what is equitable to do here

[00:00:41] Speaker 03:
And with that in mind, these are the key undisputed facts that the case that the court should consider when deciding what is equitable.

[00:00:51] Speaker 03:
Bonnie MacGyver died after a long bout with stage four liver cirrhosis.

[00:00:56] Speaker 03:
Because of the defendant's careless conduct, her husband Keith MacGyver was left without life insurance coverage on her for which he had paid.

[00:01:04] Speaker 03:
Mr. MacGyver worked for Boeing for 31 years.

[00:01:08] Speaker 03:
About 20 years before Ms.

[00:01:11] Speaker 03:
MacGyver died, they enrolled in the plan's group life insurance, which was funded by MetLife, when they were married.

[00:01:20] Speaker 03:
Shortly before she died, the MacGyvers divorced Amy Acabley after 28 years of marriage.

[00:01:28] Speaker 03:
Mr. MacGyver diligently paid the premiums to Boeing for this group life insurance for decades.

[00:01:35] Speaker 03:
both before and then also after the divorce.

[00:01:39] Speaker 03:
Unknown to Mr. MacGyver under the policy's terms, Mr. Bynum MacGyver's life insurance had ended when they divorced.

[00:01:48] Speaker 03:
That's what the defendant's contention is.

[00:01:50] Speaker 03:
We have some counter-contentions, but that's what their contention is.

[00:01:54] Speaker 03:
Because only his dependents are eligible for the group coverage.

[00:01:59] Speaker 03:
So although Mr. MacGyver properly notified the Boeing defendants of his divorce via Boeing Total Access website, which is what the plan required, Boeing and MetLife continue to take the dependent life premiums without verifying Ms.

[00:02:14] Speaker 03:
MacGyver's eligibility.

[00:02:16] Speaker 04:
So, counsel, when I read this, it seemed to me that this case really turns on that point you just made, is did Mr. MacGyver indeed appropriately or properly notify Boeing of his divorce?

[00:02:31] Speaker 04:
There appears to be some information in the record which suggests that that was not the case.

[00:02:36] Speaker 03:
Yes, I mean, yeah, that's a good point.

[00:02:40] Speaker 03:
But we believe that he did follow the plan's requirements and that's outlined on page 17 of our reply brief has all of our arguments on that.

[00:02:48] Speaker 04:
So he sent a quadro notice to the Boeing Total Access Quadro Division, which is apparently not the same as the Boeing Total Access.

[00:02:58] Speaker 04:
And it had misinformation.

[00:02:59] Speaker 04:
It said he was divorced when he wasn't.

[00:03:01] Speaker 04:
It said his divorce was April 2019.

[00:03:05] Speaker 04:
It wasn't until January 2020.

[00:03:07] Speaker 04:
So I assume your position is if it wasn't

[00:03:10] Speaker 04:
actual compliance with the policy, it was substantial compliance, or it was enough to put them on notice, but it seemed to me that there was a real question in there, whether he had actually notified them properly.

[00:03:23] Speaker 03:
Okay, so that's not our position, and I believe that he did notify them properly, but you are correct that he said he divorced on April 2019, that's what it said in the quadro,

[00:03:35] Speaker 03:
The actual divorce, he petitioned for the divorce in June of 2019.

[00:03:39] Speaker 03:
The divorce was final.

[00:03:41] Speaker 03:
The judgment was entered January of 2020.

[00:03:44] Speaker 03:
He was legally separated at that time.

[00:03:47] Speaker 03:
He mistakenly said he was divorced, but he still told them that he was divorced.

[00:03:51] Speaker 03:
He got the dates wrong.

[00:03:53] Speaker 03:
But there's no plan requirement that it not be in a quadro.

[00:03:58] Speaker 03:
And it was to Boeing total access.

[00:04:01] Speaker 03:
He sent a quadro to Boeing through the Boeing total access website, which is what the summary plan description required.

[00:04:09] Speaker 03:
Now, the policy is actually very ambiguous.

[00:04:12] Speaker 03:
It just says you have a duty to notify and it doesn't say, sorry, doesn't say who to notify.

[00:04:18] Speaker 03:
So under the policy, he couldn't have possibly complied with that requirement because it doesn't say who to notify.

[00:04:23] Speaker 04:
But they were planned documents that added a little more information and do not appear to conflict with the policy, so would seem to be an appropriate supplement to the policy.

[00:04:34] Speaker 03:
is trumped by the policy but I agree with you yes the summary plan description does add that you should notify uh... boeing service center through the boeing total access website and that is what he did uh... let me ask you is a legal separation a change of status that would have then uh... alerted boeing and the boeing defendants that there had been this change in narrows that's

[00:05:01] Speaker 03:
A legal separation is a change in marital status.

[00:05:05] Speaker 03:
You're not actually divorced.

[00:05:06] Speaker 01:
Would it then terminate the dependency status?

[00:05:12] Speaker 03:
I'm not sure I understand.

[00:05:15] Speaker 01:
Well, so the provisions that we're talking about, we're talking about a dependent, and a dependent includes a lawful spouse.

[00:05:25] Speaker 01:
So once they're divorced, there no longer is this dependent relationship.

[00:05:32] Speaker 01:
But once there's legal separation, does that impact whether or not someone's a dependent?

[00:05:37] Speaker 03:
OK, I think, yeah, I get your point now.

[00:05:39] Speaker 03:
And I think you have to be divorced before your dependency status changes.

[00:05:43] Speaker 03:
But it's still a marital status change.

[00:05:45] Speaker 01:
But in your case, you're arguing that once the company and the administrators were aware of this legal separation, then they would have been able to figure out that, well, after legal separation is a divorce, and then with the quadro coming thereafter, then that would have been enough.

[00:06:02] Speaker 03:
That is correct, but not only that, he mistakenly said in the quadro, which was the notice, that he divorced.

[00:06:10] Speaker 03:
He apparently didn't understand the difference, but he said he divorced.

[00:06:14] Speaker 03:
So he told them that he divorced.

[00:06:16] Speaker 03:
He was wrong at that time, but he told them that he did.

[00:06:19] Speaker 03:
So that really put them on notice that he was divorced, and they should have been saying, hey, we have a potential ineligible plan participant here, and we should be following our duties under the plan.

[00:06:30] Speaker 04:
But if they—so if they had stopped deducting premiums after they received the quadro notice, and Mr. McIver and his wife were not actually divorced, that you would have sued them then as well.

[00:06:45] Speaker 04:
I mean, then there would still be a problem.

[00:06:47] Speaker 04:
They were deducting premiums from somebody who was still eligible for coverage.

[00:06:51] Speaker 03:
Right.

[00:06:51] Speaker 04:
Or they were stopping—excuse me, stopped deducting premiums for someone who was eligible.

[00:06:55] Speaker 03:
Yeah, I think our position is that they were on notice of the divorce through the proper channels.

[00:07:00] Speaker 03:
He made a mistake and said he was divorced when he really wasn't.

[00:07:04] Speaker 03:
But at that time, their duties under the plan were triggered and

[00:07:08] Speaker 03:
the duties were Boeing had a duty on a daily basis to account for premiums, to verify that the premiums that they were taking were correct.

[00:07:19] Speaker 03:
So if they would have investigated, the Boeing dependents had the duty to make eligibility decisions.

[00:07:27] Speaker 03:
If they would have investigated at that point when they became on notice of the divorce, even though it wasn't divorced yet, they would have talked to him and learned, okay, yeah, they're not actually divorced yet, but they're going to be divorced soon.

[00:07:39] Speaker 03:
He's already petitioned for divorce.

[00:07:41] Speaker 03:
It just hasn't been a final judgment entered yet.

[00:07:43] Speaker 01:
You're not asserting that there's a requirement for the administrator of the fiduciary to, on a daily basis, determine whether or not all of its employees are eligible for the benefits that they're receiving?

[00:07:55] Speaker 03:
I would say that the language of the plan is on a day to day basis that life has a duty to account for premiums.

[00:08:08] Speaker 04:
So that means, and Boeing's a very large company, probably close to 200,000 employees, something like that.

[00:08:14] Speaker 04:
Maybe not quite that many, but it's more than a mom and pop shop with 20 employees.

[00:08:18] Speaker 04:
So you're suggesting that MetLife and Boeing had a duty to every day review the policy choices of their employees and decide if they were eligible or if they were receiving premiums correctly?

[00:08:34] Speaker 03:
No, I'm not saying that.

[00:08:35] Speaker 03:
I'm saying that under the case law, for instance, Shields, you have a duty to make a decision within a reasonably proximate time after taking those premiums and being on notice of the divorce.

[00:08:52] Speaker 03:
And I think the language of Skelton

[00:08:57] Speaker 03:
was that you have a duty to continuously monitor and verify.

[00:09:01] Speaker 03:
So I don't know if you would have to do it on a day to day basis, but just putting your head in the sand by doing bulk billing so you don't even know who the premiums are coming from.

[00:09:10] Speaker 04:
But didn't they delegate eligibility to Boeing?

[00:09:15] Speaker 04:
So MetLife receives the premiums, and then they step back in when there's a claim, and they determine whether the claim is payable.

[00:09:23] Speaker 03:
I think that's partly correct, because there, MetLife's duty under the plan

[00:09:29] Speaker 03:
They were the service representative and delegated to them was the duty to make benefit decisions.

[00:09:34] Speaker 03:
But in that same paragraph of the plan, it also says you have a duty to account for premiums on a day-to-day basis.

[00:09:41] Speaker 04:
But what does that mean?

[00:09:43] Speaker 04:
It could mean a lot of things.

[00:09:45] Speaker 04:
It could just mean to account for the fact that premiums have arrived and have been properly deposited in an account as opposed to now you're going to check every day and make sure thousands of employees have paid their premiums properly.

[00:09:57] Speaker 03:
Well, they drafted the documents.

[00:09:59] Speaker 03:
If they drafted ambiguous documents, it's their duty to draft clear documents.

[00:10:04] Speaker 01:
Let me ask you, as to representations by the fiduciaries, I believe part of your theory is that whenever the fiduciaries accepted these premium payments and processed them, that there was a representation of sorts.

[00:10:25] Speaker 01:
Is that right?

[00:10:27] Speaker 03:
That is one of our theories.

[00:10:29] Speaker 03:
I think the Northern District of California decision in Harris said that just accepting premiums relying on the McRavy case from the Fourth Circuit alone

[00:10:38] Speaker 03:
is in effect a misrepresentation of coverage.

[00:10:41] Speaker 03:
But I think our stronger arguments are the Shields and Skelton decisions.

[00:10:46] Speaker 03:
It says if you have plan duties ascribed to you to determine eligibility, then you have to make a decision about the right to take premiums that you're taking within a reasonable time of taking those premiums.

[00:11:01] Speaker 03:
And then Skelton is kind of that too, but it's going on to more of the procedures.

[00:11:05] Speaker 01:
But those are more questions in terms of enrollment on the front end here.

[00:11:10] Speaker 01:
We're not talking about that.

[00:11:12] Speaker 01:
We're talking about actually terminating one form of benefit of the slap insurance policy and then converting it to another, correct?

[00:11:20] Speaker 03:
No, not totally, because the Shields decision relied on the Cravey.

[00:11:26] Speaker 03:
and it quoted it, and McCravey was a situation seven years later after initial enrollment, and it talks about that, and then the skeleton.

[00:11:34] Speaker 01:
But neither Shields or Skeleton dealt with the kind of situation that you're referring to in, is it McCravey?

[00:11:40] Speaker 03:
McCravey, yeah.

[00:11:41] Speaker 01:
But going back to my initial question about the representation, so did you also assert that there were express representations made by Boeing with respect to coverage

[00:11:54] Speaker 03:
We did not assert that.

[00:11:55] Speaker 03:
We're basically going on the premium deductions and then the plan duties.

[00:12:00] Speaker 00:
I have a question about the allegations in the complaint.

[00:12:03] Speaker 00:
My understanding is that the allegation is that the plan administrator had discretionary authority over eligibility and benefit determinations and then delegated that authority to Boeing, and then Boeing delegated a piece of that authority regarding benefits to MetLife.

[00:12:18] Speaker 00:
My question is, if a delegation has happened, does the delegating party

[00:12:24] Speaker 00:
and the party receiving the delegation both have discretionary authority, or does all of the discretionary authority move with the delegation?

[00:12:34] Speaker 03:
I believe that the plan administrator who delegated authority to Boeing would still retain that ultimate authority.

[00:12:44] Speaker 03:
I think they both had authority.

[00:12:45] Speaker 00:
Do you have legal authority for that?

[00:12:49] Speaker 03:
I don't.

[00:12:52] Speaker 04:
You're really close to your two minutes.

[00:12:54] Speaker 04:
Did you want to reserve?

[00:12:55] Speaker 03:
Yes.

[00:12:55] Speaker 03:
Thank you.

[00:12:59] Speaker 04:
We're hearing from Mr. Matheson first or Mr. Hess.

[00:13:09] Speaker 05:
Good morning.

[00:13:10] Speaker 05:
I'm Robert Hess and I represent Metropolitan Life Insurance Company.

[00:13:14] Speaker 05:
I'll jump right into the notice issue that the court raised.

[00:13:18] Speaker 05:
First of all, MetLife does not agree that Mr. McIver gave proper notice of the divorce to any defendant.

[00:13:25] Speaker 05:
But even if he had given notice to the Boeing defendants, he specifically alleges that MetLife not only did not know about the divorce, but had no reason or ability to know about the divorce.

[00:13:37] Speaker 00:
I have a question about that.

[00:13:39] Speaker 00:
Was MetLife involved in the splitting of the retirement account?

[00:13:44] Speaker 05:
in the in the quadro process not at all that that involved a pension plan so the quadro related to the pension plan we're dealing with the life plan here and the court should hold Mr. McIver accountable for his actual allegations in this complaint and in this complaint he does not allege the MetLife knew about the divorce the only case that cited was cited by the McIver brief relating to

[00:14:13] Speaker 05:
imputing knowledge was the Salyers case, and in that case the court found an agency relationship between MetLife and the employer that doesn't exist here.

[00:14:23] Speaker 05:
In Salyers, most importantly, the plan delegated fiduciary authority and control over eligibility to MetLife under the terms of that plan.

[00:14:33] Speaker 05:
That's not the case here.

[00:14:34] Speaker 05:
The plan here does not give MetLife that authority or control.

[00:14:39] Speaker 05:
And it was based on an apparent authority that the employer was acting on MetLife's behalf by which this court found that the knowledge of the employer was imputed to MetLife.

[00:14:51] Speaker 05:
Those facts simply don't exist here.

[00:14:53] Speaker 05:
turning to the breach of fiduciary duty claim.

[00:14:57] Speaker 05:
So Mr. McIver points to two alleged fiduciary duties in support of that claim.

[00:15:03] Speaker 05:
One relates to premium collections and the other relates to eligibility determinations.

[00:15:08] Speaker 05:
And on the premium collection issue, it's well established that in order to support a viable breach of fiduciary duty claim, the alleged wrongful conduct must occur during the performance of a fiduciary function.

[00:15:23] Speaker 05:
And it's that touchstone of fiduciary function that is central to the evaluation of a fiduciary's role.

[00:15:30] Speaker 05:
So you can have a fiduciary under ERISA.

[00:15:33] Speaker 05:
But that doesn't mean that any and all conduct by that entity can give rise to fiduciary liability.

[00:15:40] Speaker 05:
And with respect to the collection of premium allegations, that's exactly what we have here, where MetLife's mere receipt of premiums delivered to it in bulk billing fashion did not involve the requisite discretionary control or authority sufficient to support

[00:15:58] Speaker 05:
or constitute a fiduciary function.

[00:16:02] Speaker 05:
MetLife wasn't involved in deciding when or where or how to collect the premiums.

[00:16:07] Speaker 05:
And even in the cases cited by McIver, including Skelton versus Radisson, courts have acknowledged that an insurer's mere receipt of premiums does not constitute a fiduciary function.

[00:16:19] Speaker 00:
Can I move you to the denial of benefits part of this?

[00:16:24] Speaker 00:
So the allegation in the complaint, to the extent I understand it, is that

[00:16:28] Speaker 00:
MetLife made the initial determination to deny benefits.

[00:16:32] Speaker 00:
And then there was a challenge to that and an appellate process, essentially an administrative review process.

[00:16:38] Speaker 00:
And then I believe Boeing and maybe Boeing and the plan administrator gave direction to MetLife about a final denial decision that you should deny this because the plan doesn't cover this.

[00:16:51] Speaker 00:
At that moment, does MetLife have the ability to ignore Boeing's direction?

[00:16:55] Speaker 05:
I'm just trying to figure out in that moment like who actually has decision-making authority this relates to my delegation question and like once a delegation happens like do multiple people have authority like what's happening in that moment with respect to responding to the claim for life benefits it's met met life's has the authority to respond to that claim so the eligibility comes into play because there was a question was she eligible for coverage as a former

[00:17:21] Speaker 05:
spouse and the answer is no but MetLife simply applied the fact that the McIvers were divorced and that fact came not from a statement regarding insurability that would trigger the incontestability clause as McIver alleges that fact came from the divorce decree and the death certificate and based on that fact applied to the plain terms of the plan

[00:17:43] Speaker 05:
which say that a former spouse is not a dependent, MetLife denied the claim on that basis.

[00:17:49] Speaker 00:
But I'm not sure you're getting at my question.

[00:17:50] Speaker 00:
What if Boeing, after the administrative challenge process, had said, you know, it's a longtime employee and we feel bad for the situation and we did collect the premiums, so pay this.

[00:18:01] Speaker 00:
Would MetLife have to do that?

[00:18:03] Speaker 00:
I don't believe so.

[00:18:03] Speaker 05:
I believe the authority to deny or respond to the claim lies with the claims administrator, which is MetLife.

[00:18:10] Speaker 05:
in response to the claim.

[00:18:12] Speaker 05:
But getting back to the incontestability clause that I just touched upon, again, plaintiff's argument that that clause is triggered here has no merit.

[00:18:23] Speaker 05:
And they made the exact same argument in a case plaintiff's council filed in Pennsylvania, Starr-Pauley versus MetLife, where the district court and then the Third Circuit Court of Appeals soundly rejected it, and this court should do so as well.

[00:18:38] Speaker 01:
Wasn't the underlying reasoning for that that there was this automatic automatically generated kind of acknowledgement of the receipt of certain papers or certain notice and so there was a question about notice itself and at the motion for summary judgment stage

[00:18:55] Speaker 01:
the court found that there was no showing that the insurance company had been notified, that somebody had read it, that there would be somebody that would have been able to process this.

[00:19:09] Speaker 05:
I believe with respect to the Starr-Pauley case and the incontestability clause, no, it was the same issue that that clause really protected.

[00:19:18] Speaker 05:
Okay.

[00:19:20] Speaker 05:
Getting back to the eligibility issues and allegations raised by plaintiffs.

[00:19:26] Speaker 05:
this plan does not confer to met life fiduciary responsibility or authority to determine eligibility and that's why this case is distinguishable from shields and skeleton and so many of the other cases plaintiff relies upon where the plan

[00:19:43] Speaker 05:
conferred such authority to the insurer that isn't the case here and plaintiff is not alleged otherwise plaintiff instead argues that met life assumed discretionary control and authority over making eligibility decisions but that argument is based on the fact that met life in its role as a claims administrator

[00:20:04] Speaker 05:
denied the claim because an ex-spouse is not a dependent.

[00:20:08] Speaker 05:
It does not impose a basis or I should say it is not a basis to impose upon MetLife a pre-claim fiduciary responsibility to determine eligibility and to verify eligibility.

[00:20:26] Speaker 04:
McIver's argument that the policies say that MetLife has the responsibility to account for the premiums day-to-day.

[00:20:36] Speaker 04:
What is that provision about?

[00:20:39] Speaker 05:
That's a misreading of the summary plan description.

[00:20:41] Speaker 05:
The summary plan description says

[00:20:42] Speaker 05:
met life as a claims administrator shall be responsible for certain day-to-day activities of the plan it doesn't say day-to-day accounting of premiums it then includes accounting for premiums but under the circumstances of this case that's not a fiduciary function remember this case isn't about

[00:20:59] Speaker 05:
A mishandling of assets that meant like did something wrong with the premiums once received the focus of plaintiffs premium collection Allegations is an alleged wrongful decision in the first instance to collect those benefits not met life's after the fact receipt of those benefits So I'll wrap up here

[00:21:21] Speaker 05:
in some plaintiff's claims against MetLife fail as a matter of law.

[00:21:27] Speaker 05:
With respect to the claim for plan benefits, the plain terms of the plan say that an ex-spouse is not covered and MetLife was right to deny the claim on that basis.

[00:21:38] Speaker 05:
And with respect to the breach of fiduciary duty claim, plaintiff failed to adequately allege that MetLife engaged in and performed a remediable wrong.

[00:21:49] Speaker 05:
That is that while performing a fiduciary function, MetLife engaged in wrongful conduct.

[00:21:55] Speaker 05:
And under those circumstances, Judge Carter correctly dismissed the claims against MetLife and this court should affirm that decision.

[00:22:03] Speaker 05:
Thank you.

[00:22:04] Speaker 05:
Thank you.

[00:22:06] Speaker 04:
Mr. Matheson, you have seven minutes.

[00:22:21] Speaker 02:
it please the court eric matheson on behalf of defendants the bowling company and the employee benefits plans committee your honors i'd like to talk about first your question what want to talk about the notice issue it's a little bit different than the questions you've asked about circle back to that in a minute because

[00:22:38] Speaker 02:
One of the things that has been overlooked by, I think, on purpose by Mr. McIver is he did not comply in multiple ways.

[00:22:48] Speaker 02:
He did not comply with the requirements of the summary plan description and the policy in providing notice.

[00:22:54] Speaker 02:
You touched on one of them, whether the quadro submission to the quadro service

[00:23:00] Speaker 02:
entity was appropriate.

[00:23:02] Speaker 02:
But the other one that there is absolutely no question and absolutely no allegation that he did is he had another change in status.

[00:23:10] Speaker 02:
So there was a legal separation that he alleges he put on the plan on notice through his quadra submission.

[00:23:19] Speaker 02:
There was another legal change in status when the actual divorce took place.

[00:23:25] Speaker 02:
That didn't occur till January of 2020.

[00:23:28] Speaker 00:
So Mike, when did the retirement account separation happen?

[00:23:33] Speaker 02:
When was it split between the two parties?

[00:23:35] Speaker 02:
We don't have an exact, because we're based on their pleadings, they don't identify a specific date, but it was submitted to the Quadro service group in or about September.

[00:23:47] Speaker 02:
And what we understand, and I think there's no dispute, is that that took place sometime shortly thereafter, but before the actual divorce, yes.

[00:23:56] Speaker 00:
I guess that was my question in terms of even if the plaintiff didn't sort of do everything exactly right.

[00:24:05] Speaker 00:
if Boeing had sort of practical notice anyways, evidenced by the fact that you were splitting retirement accounts and you're only going to do that when marital status changes.

[00:24:15] Speaker 02:
It suggests that based upon the, so the quadro was the, you know, it's a domestics relations order from the state court.

[00:24:22] Speaker 02:
And it apparently indicated that that was to be done prior to the dissolution of the marriage.

[00:24:29] Speaker 02:
But let me continue about the, what is significant about the fact that undisputedly, and there's no allegations,

[00:24:35] Speaker 02:
that he had a response there was a again there was another legal change of status when the divorce actually took place in January of 2020 at that point the only place that he would have had any reason to submit that to is where the plan says the Boeing service center

[00:24:52] Speaker 02:
because there was no longer a quadro involved.

[00:24:54] Speaker 02:
You wouldn't have sent it to the quadro group.

[00:24:56] Speaker 02:
He had an obligation at that point to provide notice pursuant to the plan terms to the Boeing Service Center.

[00:25:03] Speaker 02:
They would have then known what the purpose of that was, that he was divorced, that the status of his dependents changed, and that his wife was now an ex-wife and no longer entitled to coverage.

[00:25:14] Speaker 04:
But he's suggesting that he put Boeing on notice, and that triggered a duty to investigate that his marital status was changing or about to change or had changed.

[00:25:28] Speaker 04:
And because we're talking about a motion to dismiss, he needs to make plausible allegations, right?

[00:25:33] Speaker 04:
So isn't that sufficient for him to plausibly allege that Boeing had this duty to investigate?

[00:25:41] Speaker 02:
No, because he tries to combine where he was supposed to provide notice.

[00:25:49] Speaker 02:
And it specifically says, it's the title repeatedly, the Boeing Service Center.

[00:25:54] Speaker 02:
Where he sent the quadro was to the, and it says right on the quadro where it's going to go.

[00:25:59] Speaker 02:
It's the Quadro Service Center.

[00:26:01] Speaker 02:
And that makes sense, because to your point, they have almost 200,000 employees in 65 countries.

[00:26:07] Speaker 02:
If we just had one input for everything, absolutely nothing would get done.

[00:26:12] Speaker 02:
So the Quadro went to the people that handle the Quadros.

[00:26:17] Speaker 02:
And it's very similar to the idea that the court talked about in Stara Poli that

[00:26:22] Speaker 02:
there, JP Morgan Chase, 300,000 employees, and that the idea that you can, they use the term hive mind, that providing some notice to one group or one individual puts the entire organization on notice is not plausible, it's not reasonable, and it doesn't impose those kind of duties on their risks.

[00:26:42] Speaker 02:
Same thing here.

[00:26:43] Speaker 04:
So we're dealing with ERISA, and in some instances, ERISA imports state law.

[00:26:49] Speaker 04:
And I think under California law, we would look for substantial compliance.

[00:26:53] Speaker 04:
So I guess my question is, one, does California law apply to set that standard?

[00:26:58] Speaker 04:
And was this not substantial compliance?

[00:27:04] Speaker 02:
this plan is it so the master plan is a self-funded plan.

[00:27:07] Speaker 02:
There's parts that are insured and parts that are not.

[00:27:10] Speaker 02:
I do not think that this would be substantial compliance your honor because again the whole purpose of designating

[00:27:16] Speaker 02:
the a particular entity, the Boeing Service Center, is so that it in fact gets to the right people so that they could then make the indication that he was no longer entitled, his life is no longer entitled to coverage.

[00:27:29] Speaker 01:
But here the EBPC, the administrator, they were responsible for both retirement benefits and processing of quadros,

[00:27:40] Speaker 02:
The overall plan administrator was the same for the 401k plan as well.

[00:27:44] Speaker 01:
And Mr. MacGyver started the Quadro process by obtaining the Quadro from this Boeing Total Access website, correct?

[00:27:52] Speaker 01:
Correct.

[00:27:53] Speaker 01:
And then he filled it out and he sent it to the EBPC, who was the administrator of these types of benefits, but the care of Boeing Quadro Service Center.

[00:28:03] Speaker 01:
And just because there was this additional kind of filtering or funneling to the

[00:28:10] Speaker 01:
Bowen Quadro Service Center, does it erase the fact that the EBPC was made aware of this?

[00:28:17] Speaker 01:
Sure.

[00:28:18] Speaker 02:
You know, Your Honor, I think that what we know is that the Quadro folks were made aware of that.

[00:28:25] Speaker 02:
I don't think, again, this idea that notice is some group puts notice to everybody.

[00:28:31] Speaker 01:
But it's the administrator.

[00:28:32] Speaker 01:
The administrator's being placed on notice.

[00:28:34] Speaker 01:
Isn't that basically

[00:28:36] Speaker 01:
That's what you talk about in terms of substantial compliance.

[00:28:39] Speaker 02:
I'm sorry good They were being placed on notice that there was a quadro and what the reason for that is is they had to start Effectuating the distribution of the 401k plan is separating it.

[00:28:49] Speaker 02:
It was it has a singular purpose It wasn't there to advise of a divorce and the other thing we know so there was a whole eligibility process in the plan if he really thought that put them on notice and that they should have

[00:29:03] Speaker 02:
either called him or if they should have stopped taking out premiums.

[00:29:08] Speaker 02:
He saw that the premiums were continuing to be taken out.

[00:29:11] Speaker 02:
There was a process that he calls the Boeing Service Center at that point.

[00:29:16] Speaker 02:
Ask questions.

[00:29:17] Speaker 02:
If he wasn't satisfied, then you go through a formal claim process.

[00:29:21] Speaker 02:
And then there would actually be an appeal process.

[00:29:24] Speaker 02:
As Judge Carter said, he can't complain about the process being improper when he didn't engage it.

[00:29:30] Speaker 02:
He didn't engage it by properly following it with a quadra submission.

[00:29:34] Speaker 02:
And he didn't engage it undisputably by actually submitting when he was divorced, which even if there was a mistake previously, which we don't say there was, that would have remedied it.

[00:29:45] Speaker 02:
And we wouldn't be here if he had just followed those requirements.

[00:29:48] Speaker 00:
I understand your argument, and it's a perfectly logical argument.

[00:29:52] Speaker 00:
The pushback that I have, and I think maybe my colleagues have, is if you're giving a plan administrator notice of something that needs to happen that is traceable only to one event, which is a marital change, why does it make sense that the plan administrator can be like, well, I don't really know that there's a marital change.

[00:30:12] Speaker 00:
All I know is that you're trying to split this retirement account, when that's the only reason we split the retirement account.

[00:30:18] Speaker 02:
But as you've noted, if they would have taken that, so I guess arguably the idea is treat that as a divorce.

[00:30:28] Speaker 02:
And as your honors ask, should they have stopped withholding premiums at that point?

[00:30:35] Speaker 02:
If they did, we would hear about a different lawsuit if she had happened to die a few months earlier.

[00:30:40] Speaker 00:
the or it could be some less than that could be instead of just stopping premiums automatically it could be the quadro group informing the payroll group or whatever hey this is happening it looks like there might be a marital status change and maybe you should inquire maybe you should do something about this

[00:30:56] Speaker 02:
And that's where Stereopoly is instructed because what happened there is the person told the HR, they told the HR person, I'm getting divorced.

[00:31:03] Speaker 02:
They actually changed the tax withholdings as a result of that.

[00:31:07] Speaker 02:
But then they let that individual still go ahead and have supplemental dependent life insurance.

[00:31:14] Speaker 02:
And the court said the idea that telling the HR person and even making a change in the system there, that didn't impose the kind of requirements and notice on the rest of the organization.

[00:31:25] Speaker 02:
I think that's the same situation here.

[00:31:27] Speaker 02:
I know my time is up.

[00:31:28] Speaker 02:
I'm happy to answer any further questions.

[00:31:32] Speaker 04:
Thank you very much.

[00:31:32] Speaker 02:
Thank you.

[00:31:36] Speaker 04:
Mr. McMillan.

[00:31:50] Speaker 01:
Are you familiar with any case that allows eligibility or that allows a plaintiff to recover based upon this idea of substantial compliance with the notice requirements?

[00:32:02] Speaker 03:
I'm not, Your Honor.

[00:32:04] Speaker 01:
Thank you.

[00:32:06] Speaker 03:
But I think there was substantial compliance and I think the point you were latching on to.

[00:32:11] Speaker 04:
But that begs the question, what is the standard?

[00:32:14] Speaker 04:
Is it a standard that the person has to strictly comply with the notice or is substantial compliance good enough?

[00:32:20] Speaker 04:
And I'm sure you have a position, but do you have authority to support it?

[00:32:26] Speaker 03:
Well, I don't right now, but I think that there was

[00:32:30] Speaker 03:
complete compliance because they put them on notice.

[00:32:35] Speaker 03:
EBPC is the same plan administrator for both plans.

[00:32:39] Speaker 03:
The only, and it was through, the plan documents say Boeing Total Access.

[00:32:43] Speaker 03:
That's what he did.

[00:32:44] Speaker 03:
He submitted this through Boeing Total Access.

[00:32:47] Speaker 03:
The fact that he put EBPC in care of Quadro Service Center instead of Boeing Service Center, one word difference,

[00:32:56] Speaker 04:
But is it actually a different destination.

[00:32:59] Speaker 03:
It's through the plan says give it through the Boeing total access website and that's what he did.

[00:33:07] Speaker 03:
And the Boeing actually the plan documents say that Boeing total access website is a direct connection with the Boeing service center.

[00:33:14] Speaker 03:
And that's what the plan said that you have to submit it to Boeing Service Center through the Boeing Total Access website.

[00:33:21] Speaker 03:
So that's what he did.

[00:33:22] Speaker 03:
He might be mistakenly put, you know, or added the Quadro word in there, but it still said Boeing Quadro Service Center.

[00:33:29] Speaker 03:
So I think that there was compliance.

[00:33:31] Speaker 03:
I don't know the answer to the court's question about whether substantial compliance is good enough.

[00:33:36] Speaker 04:
So we're, I think, assuming in this analysis that a quadro would only occur when there's a divorce.

[00:33:44] Speaker 04:
But that's not what happened here.

[00:33:46] Speaker 04:
Mr. McGriver had a quadro order from the state court, and he wasn't divorced.

[00:33:51] Speaker 04:
He was legally separated.

[00:33:53] Speaker 04:
So are there instances where you can have a quadro in anticipation of a divorce?

[00:33:57] Speaker 04:
You start splitting retirement funds, your 401K, and then maybe the parties reconcile and they don't divorce.

[00:34:05] Speaker 03:
So he was in the process of divorce.

[00:34:08] Speaker 03:
They legally separated in April of 2019.

[00:34:12] Speaker 03:
June of 2019, he files a petition for divorce.

[00:34:15] Speaker 03:
September of 2019 is when the quadro form is filed, and then the judgment of divorce wasn't final until January of 2020.

[00:34:25] Speaker 03:
I'm not an expert on quadros or family law, but I'm assuming, I mean, you have to do it prior to the actual judgment being entered, I would assume.

[00:34:38] Speaker 04:
We have taken you over time.

[00:34:40] Speaker 04:
Do my colleagues have any more questions?

[00:34:43] Speaker 04:
All right, thank you.

[00:34:44] Speaker 04:
Thank you.

[00:34:45] Speaker 04:
Counsel, thank you all for your arguments this morning.

[00:34:46] Speaker 04:
They were very helpful, and this case is submitted.