Edmonson v. Lincoln Nat'l Life Ins. Co., No. 12-1581 (3d Cir. 2013)Annotate this Case
Edmonson’s husband was insured under a Lincoln group life insurance policy, established under an Employee Retirement Income Security Act employee benefit plan. When her husband died, Edmonson was entitled to a $10,000 benefit. The policy states that benefits, “will be paid immediately after the Company receives complete proof of claim.” It does not state that Lincoln will pay benefits using a retained asset account. Edmonson submitted a Lincoln claim form that stated that Lincoln’s usual method of payment is to open a SecureLine Account in the beneficiary’s name. Lincoln set up an interest-bearing SecureLine Account in Edmonson’s name in the amount of $10,000, and sent her a checkbook. In using retained asset accounts, an insurance company does not deposit funds, but merely credits the account; when a beneficiary writes a check on the account, the insurer transfers funds to cover the check. Three months after Lincoln set up the account, Edmonson withdrew the full amount. Lincoln paid $52.33 in interest. Edmonson contends that the profit Lincoln earned from investing the retained assets was greater than that amount and that Lincoln made $5 million in profit in 2009 by investing retained assets. Edmonson brought an ERISA claim claiming violation of fiduciary duties, 29 U.S.C. 1002(21)(A). The district court granted Lincoln summary judgment, concluding Lincoln was not acting in a fiduciary capacity when it took the challenged actions. The Third Circuit affirmed.