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Roberta Jean Champlin appealed an order of the United States Court of Federal Claims dismissing for lack of subject matter jurisdiction her claim that the United States must pay damages for failure to pay life insurance proceeds from her deceased ex-husband’s Federal Employees Group Life Insurance policy.
IN Roberta Jean Champlin v. United Statesno. 2022-1402, United States Court of Appeals, Federal Circuit (April 10, 2023) Ms. Champlin sought payment of a Federal Employees’ Group Life Insurance (FEGLI) policy after his ex-husband died because her divorce decree granted her one-half ownership in the policy.
The Federal Employees’ Group Life Insurance Act (FEGLIA) establishes a group life insurance program for federal employees. The United States Office of Personnel Management (OPM) is responsible for administering FEGLI policies and has contracted with Metropolitan Life Insurance Company (MetLife) to provide insurance to federal employees.
FEGLI proceeds shall be paid in the following order of priority: (1) designated beneficiaries; (2) widowed husband; (3) children or descendants; (4) parents of deceased; (5) executor or executor; and (6) relatives.
The preference order may be overridden “if and to the extent expressly provided in the terms of a court order of divorce, annulment or legal separation” but only if that order or decree “is received . . . before the date of the death of the covered employee, by the employment agency or, if the employee has separated from the service, of [OPM].” When these circumstances are met, the revenue “shall be paid (in whole or in part) by [OPM]” to the person entitled to the proceeds according to the court order.
Facts & procedural background
Lewis Dean Champlin had life insurance during and after his marriage to Ms. Champlin through a FEGLI policy. In September 2012, the Champlins divorced. As part of their divorce proceedings, Ms. Champlin an award from the Alaska Divorce Court.[ed Ms. Champlin] the option to continue to retain a half interest in that policy. . . [while Mr. Champlin] have[d] the ability to pay the other half of the insurance and c[ould] appoint whoever he chooses to be the beneficiary of the other half of the insurance benefits.” Ms. Champlin paid for half of the insurance thereafter.
On January 3, 2016, Champlin died. Ms. Champlin did not receive half of the proceeds from his life insurance policy. Instead, the proceeds were paid to Mr. Champlin’s designated beneficiary at the time of his death – Marilyn Susano.
Champlin sued the United States in the Court of Federal Claims, claiming that she is entitled to half of Champlin’s issued life insurance coverage and further sought a judgment directing the United States to pay her half of the FEGLI proceeds, along with costs and attorneys’ fees. Unfortunately for Ms. Champlin, the complaint failed to allege a statutory or judicial basis for jurisdiction for her claim.
The government moved to dismiss Champlin’s claim for lack of subject matter jurisdiction on the grounds that FEGLI-related claims cannot be brought against the United States because the government has not waived its sovereign immunity for such claims.
OPM authorized MetLife to provide life insurance and MetLife established an administrative office responsible for administering FEGLI claims. The Court of Federal Claims noted that it found that Ms. Champlin’s complaint did not allege breach of a statutory duty, only a claim to obtain money under the FEGLI policy.
The Court of Federal Claims’ decision that it lacked subject matter jurisdiction over Ms. Champlin’s claim for life insurance proceeds from Mr. Champlin’s FEGLI policy was correct.
The Federal Circuit concluded that the Court of Federal Claims is a court of specific jurisdiction and can only resolve those claims for which the United States has waived sovereign immunity.
The government’s obligations under the statute are limited to contracting with and managing private insurance companies that issue FEGLIA-compliant insurance to federal employees, and to implementing regulations to support FEGLIA’s statutory mandate.”
Because the United States’ obligations under FEGLIA and relevant regulations do not extend to claims for proceeds payable under a FEGLI policy, Ms. Champlin failed to establish that the United States breached any duty when the insurance proceeds were allegedly due.
Ms. Champlin sought money she believes is due to her under the policy because she complied with the divorce court’s order. The fact that the policy had already been paid to another beneficiary before Champlin became aware of his alleged injury had no effect on the application of the statute. The Court affirmed the Court of Federal Claims’ dismissal for lack of jurisdiction.
Champlin sued the wrong party. The United States had no obligation under the FIGLIA statute and did not waive its sovereign immunity. She could have sued MetLife but didn’t. Alaska’s court order could not compel the US to do anything and if anything her case is against her ex-husband’s estate for not complying with the Alaska order making her a designated beneficiary. The payment was made to a designated beneficiary so MetLife did what it was required to do. A person can only sue the government if it waives its sovereign immunity. Since it didn’t, she didn’t have a case.
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Barry Zalma, Esq., CFE, now limits his practice to serving as an insurance consultant specializing in insurance coverage, insurance claims management, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims attorney and more than 54 years in the insurance industry. He can be reached at http://www.zalma.com and firstname.lastname@example.org
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