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Rachel Younger v. Zurich American Insurance Company

March 26, 2012

RACHEL YOUNGER,
PLAINTIFF,
v.
ZURICH AMERICAN INSURANCE COMPANY, ET AL.,
DEFENDANTS.



OPINION

Plaintiff Rachel Younger brought this suit after UBS Financial Services, Inc. denied her a death benefit under its employee benefits plan. Plaintiff brings three claims that seek the payment of benefits under UBS's employee benefits plan. The first relies on the terms of the plan as currently written, the second seeks reformation of the plan, and the third alleges a breach of fiduciary duty. Defendants move to dismiss the Second and Third Claims, arguing that both are duplicative of the First Claim for monetary benefits.

The motion is denied.

THE COMPLAINT

The following facts are drawn from plaintiff's amended complaint and are assumed to be true for purposes of this motion.

The Parties

Plaintiff is the mother of Nathaniel Younger, a deceased former employee of UBS. Plaintiff is the administrator of her son's estate.

UBS is a global financial services institution that operates an employee benefit plan for its employees. Zurich American Insurance Company is the insurance company that serves as claims administrator under UBS's employee benefit plan.

The Dispute

On or about December 2, 2008, Younger died in Jersey City, New Jersey. The Jersey City Registrar's Office issued a Death Certificate indicating that the "Manner of Death" was "Accident." The New Jersey State Medical Examiner's Office determined that the cause of death was "acute cocaine and alcohol toxicity," and that the manner of death was "Accidental."

As an employee of UBS, Younger was a party to two insurance policies issued by defendants. These policies were issued as part of UBS's employee benefits plan and are governed by the Employee Retirement Income Security Act ("ERISA"), 29 USCS §§ 1002 et seq. The first was a business travel accident insurance policy, numbered GTU 3514164, which would provide coverage of up to ten times the amount of the employee's base earnings or salary in the event of his death. The second policy was a policy of personal accident insurance, numbered GTU 3514165. It provided for $100,000 in the event of death. Younger did not name a beneficiary under either of these policies and thus the default beneficiary was his estate.

After Younger's death, plaintiff, as administrator of Younger's estate, submitted claims for benefits under both insurance policies. Zurich American denied these claims on the grounds that there was an exclusion or limitation in the policies for "Suicide, attempted suicide, or a purposeful self-inflicted wound" (the "suicide exclusion"). Plaintiff appealed this determination.

In its July 7, 2010 affirmation of the denial of Younger's benefits, the Review Committee relied not only on the suicide exclusion, but also on another exclusion for losses "caused by, contributed to or resulting from . . . the Covered Person's participation in the commission or attempted commission of a felony" (the "felony exclusion"). The Review Committee determined that possession of cocaine was a felony under New Jersey law, and that Younger's death resulted from that felony.

Although the exclusion for losses caused by participation in the commission of a felony is in the personal accident insurance policy, plaintiff claims that such an exclusion does not exist in the business travel accident insurance policy.

The Summary Plan Description ("SPD"), which is a summary of plan terms that is given to all UBS employees who are covered by its employee benefits plan, did not mention an exclusion of benefits for losses ...


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