{ "id": 171722, "name": "FUNERAL FINANCIAL SYSTEMS, LTD., Plaintiff-Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant-Appellee", "name_abbreviation": "Funeral Financial System, Ltd. v. Metropolitan Life Insurance", "decision_date": "2001-06-29", "docket_number": "No. 1\u201499\u20141984", "first_page": "1133", "last_page": "1140", "citations": [ { "type": "official", "cite": "323 Ill. App. 3d 1133" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "5 U.S.C. \u00a7 8716", "category": "laws:leg_statute", "reporter": "U.S.C.", "year": 1994, "opinion_index": 0 }, { "cite": "5 U.S.C. \u00a7 8337", "category": "laws:leg_statute", "reporter": "U.S.C.", "pin_cites": [ { "page": "(a)" } ], "opinion_index": 0 }, { "cite": "841 F. Supp. 432", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 11290906 ], "weight": 6, "year": 1993, "pin_cites": [ { "page": "437-38" }, { "page": "437-38" }, { "page": "437-38" }, { "page": "437-38" }, { "page": "437-38" } ], "opinion_index": 0, "case_paths": [ "/f-supp/841/0432-01" ] }, { "cite": "496 U.S. 414", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 12123658 ], "weight": 12, "year": 1990, "pin_cites": [ { "page": "434" }, { "page": "405" }, { "page": "2476" }, { "page": "434" }, { "page": "405" }, { "page": "2476" }, { "page": "434" }, { "page": "405" }, { "page": "2476" } ], "opinion_index": 0, "case_paths": [ "/us/496/0414-01" ] }, { "cite": "304 U.S. 64", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 10687 ], "year": 1938, "opinion_index": 0, "case_paths": [ "/us/304/0064-01" ] }, { "cite": "5 U.S.C. \u00a7 8709", "category": "laws:leg_statute", "reporter": "U.S.C.", "weight": 3, "pin_cites": [ { "page": "(d)(1)" }, { "page": "(d)(1)" }, { "parenthetical": "authorizing OPM to purchase group policy from private life insurance companies" } ], "opinion_index": 0 }, { "cite": "979 F.2d 575", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10515384 ], "weight": 3, "year": 1992, "pin_cites": [ { "page": "578" }, { "page": "579" }, { "page": "579" } ], "opinion_index": 0, "case_paths": [ "/f2d/979/0575-01" ] }, { "cite": "430 U.S. 519", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 12125732 ], "weight": 3, "year": 1977, "pin_cites": [ { "page": "525" }, { "page": "614" }, { "page": "1309" } ], "opinion_index": 0, "case_paths": [ "/us/430/0519-01" ] }, { "cite": "505 U.S. 504", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1481129 ], "weight": 12, "year": 1992, "pin_cites": [ { "page": "516" }, { "page": "422-23" }, { "page": "2617" }, { "page": "516" }, { "page": "423" }, { "page": "2617" }, { "page": "516" }, { "page": "423" }, { "page": "2617" }, { "page": "522" }, { "page": "426" }, { "page": "2620" } ], "opinion_index": 0, "case_paths": [ "/us/505/0504-01" ] }, { "cite": "68 L. Ed. 2d 576", "category": "reporters:federal", "reporter": "L. Ed. 2d", "case_ids": [ 6192088 ], "weight": 2, "year": 1981, "pin_cites": [ { "page": "595" }, { "page": "2128-29" } ], "opinion_index": 0, "case_paths": [ "/us/451/0725-01" ] }, { "cite": "451 U.S. 726", "category": "reporters:federal", "reporter": "U.S.", "year": 1981, "pin_cites": [ { "page": "746" } ], "opinion_index": 0 }, { "cite": "4 L. Ed. 579", "category": "reporters:federal", "reporter": "L. Ed.", "case_ids": [ 4702 ], "year": 1819, "pin_cites": [ { "page": "606-07" } ], "opinion_index": 0, "case_paths": [ "/us/17/0316-01" ] }, { "cite": "5 U.S.C. \u00a7 8701", "category": "laws:leg_statute", "reporter": "U.S.C.", "weight": 2, "year": 1994, "pin_cites": [ { "page": "et seq." } ], "opinion_index": 0 } ], "analysis": { "cardinality": 806, "char_count": 17164, "ocr_confidence": 0.797, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.006736300070004081 }, "sha256": "0494d2a84fefc0a37493995164d6dec279f07a9601265a8b2a83f6402141adce", "simhash": "1:b2dafd02f98ebf96", "word_count": 2791 }, "last_updated": "2023-07-14T16:00:03.625992+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "FUNERAL FINANCIAL SYSTEMS, LTD., Plaintiff-Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant-Appellee." ], "opinions": [ { "text": "JUSTICE BUCKLEY\ndelivered the opinion of the court:\nThis appeal arises out of the assignment of proceeds payable under a federal employees\u2019 group life insurance policy issued by defendant Metropolitan Life Insurance Company (MetLife) to the United States Office of Personnel Management (OPM) pursuant to the Federal Employees\u2019 Group Life Insurance Act (FEGLIA) (5 U.S.C. \u00a7 8701 et seq. (1994)). Plaintiff Funeral Financial Systems, Ltd. (FFS), an assignee finance company, brought the underlying action against MetLife seeking damages under the theories of apparent agency and promissory estoppel, based upon an OPM employee\u2019s alleged promise to FFS regarding certain proceeds of the policy. The trial court entered summary judgment in favor of MetLife. FFS now appeals. At issue is whether FFS\u2019 state-law estoppel claim is preempted by FEGLIA.\nI. STATEMENT OF FACTS\nPlaintiff FFS is an Illinois corporation whose business includes advancing funds to funeral directors to defray funeral, burial, and other associated expenses for a deceased, and advancing immediate funds to the beneficiaries of a deceased\u2019s life insurance benefits. The beneficiaries assign their interest in the deceased\u2019s life insurance benefits to the funeral home, which then assigns the benefits to FFS. FFS then pays some or all of the funeral and other expenses.\nDefendant MetLife is a mutual life insurance company registered with the Illinois Department of Insurance and licensed to do business in Illinois. MetLife issued a federal employees\u2019 group life insurance policy, group policy No. 17000\u2014G (the FEGLI Policy), to the United States Office of Personnel Management, pursuant to the FEGLIA (5 U.S.C. \u00a7\u00a7 8701 through 8716 (1994)). The office of federal employees\u2019 group life insurance (the FEGLI Office) is the administrative unit of MetLife that is responsible for administering all- claim processing under the FEGLI Policy.\nAndrew G. Ortega (the Insured) was insured under the FEGLI Policy. Prior to his death on April 7, 1996, the Insured completed a valid designation of beneficiary form that designated three individuals to receive equal shares of the proceeds of his insurance coverage under the FEGLI Policy. Andrew R Ortega was one of the three individuals designated as beneficiary by the Insured.\nOn April 17, 1996, the FEGLI Office received an irrevocable assignment and reassignment signed by Andrew R. Ortega. This assignment/reassignment assigned Andrew R. Ortega\u2019s rights to the proceeds of Insured\u2019s policy to Palm Heights Funeral Home, which then immediately reassigned those rights to FFS. The total benefits payable under the Insured\u2019s policy amounted to $3,200. On or about July 18, 1996, the FEGLI Office paid $1,083.33 to FFS. The remaining two-thirds balance of the proceeds was paid to the two other beneficiaries in equal shares.\nOn January 12, 1998, FFS filed a complaint for promissory estoppel against MetLife in which it sought damages in the amount of $2,116.67 plus costs, interest, and attorney fees. FFS\u2019 complaint alleged that, on April 8, 1996, one of FFS\u2019 representatives spoke with Beverly Taylor, an OPM employee, to verify information about the Insured\u2019s life insurance benefits in order to determine whether FFS should advance $5,135 to Palm Heights Funeral Home. According to FFS, Ms. Taylor informed its representative that although there were not enough proceeds to cover an assignment in the amount of $5,135, there were enough proceeds to cover an assignment in the amount of $3,200 and that she would mark OPM\u2019s records and MetLife would recognize the assignment. FFS further alleged that, on April 9, 1996, Ms. Taylor contacted FFS and advised that Andrew R. Ortega was the beneficiary of the Insured\u2019s policy. FFS next alleged that, on April 10, 1996, in reliance on Ms. Taylor\u2019s statements, it authorized Palm Heights Funeral Home to write a draft on FFS\u2019 account in the amount of $3,200 less applicable fees and costs. On or around July 22, 1996, the FEGLI Office issued a check to FFS for $1,083.33. FFS alleged that it made repeated demands of MetLife to pay the remaining $2,116.67, allegedly due FSS, which MetLife refused.\nMetLife filed a motion for summary judgment, arguing that: (1) FFS\u2019s state-court promissory estoppel claim was preempted by FEG-LIA, and (2) it was prohibited by federal law from paying out any more money than allowed by FEGLIA and the FEGLI Policy.\nThe trial court granted summary judgment to MetLife. The court\u2019s order stated that it was granting summary judgment \u201cfor reasons based upon those arguments raised by MetLife in its motion and corresponding memorandum in support and reply brief.\u201d\nFFS now appeals.\nII. DISCUSSION\n\u20221 Article VI of the Constitution, the supremacy clause, , provides that the laws of the United States \u201cshall be the supreme Law of the Land; *** any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.\u201d U.S. Const., art. VI, cl. 2. Since the Supreme Court\u2019s decision in M\u2019Culloch v. Maryland, 17 U.S. (4 Wheat.) 316, 427, 4 L. Ed. 579, 606-07 (1819), it has been well settled that state law that conflicts with federal law is \u201cwithout effect.\u201d Maryland v. Louisiana, 451 U.S. 726, 746, 68 L. Ed. 2d 576, 595, 101 S. Ct. 2114, 2128-29 (1981).\n\u20222 Preemption of state law occurs in three different ways. First, the federal law at issue may itself express a congressional intent to preempt state law. Congress\u2019 intent may be \u201c \u2018explicitly stated in the statute\u2019s language or implicitly contained in its structure and purpose.\u2019 \u201d Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 120 L. Ed. 2d 407, 422-23, 112 S. Ct. 2608, 2617 (1992), quoting Jones v. Rath Packing Co., 430 U.S. 519, 525, 51 L. Ed. 2d 604, 614, 97 S. Ct. 1305, 1309 (1977). Second, absent an express congressional command, preemption may be inferred if there is a direct conflict between the terms of the federal and state law. See Cipollone, 505 U.S. at 516, 120 L. Ed. 2d at 423, 112 S. Ct. at 2617. And third, we can find preemption if there exists a pervasive regulatory scheme that \u201cso thoroughly occupies a legislative field \u2018 \u201cas to make reasonable the inference that Congress left no room for the States to supplement it.\u201d \u2019 [Citations.]\u201d Cipollone, 505 U.S. at 516, 120 L. Ed. 2d at 423, 112 S. Ct. at 2617.\n\u20223 In all cases where preemption is at issue, the question of preemption turns on congressional intent. Thus, we necessarily begin our analysis with the language of the statute itself. See Metropolitan Life Insurance Co. v. Christ, 979 F.2d 575, 578 (7th Cir. 1992). In 1980, Congress amended FEGLIA for the express purpose of endowing the FEGLI Policy\u2019s provisions with preemptive effect over any inconsistent state law. This amendment, codified at 5 U.S.C. \u00a7 8709(d)(1), provides, in pertinent part, as follows:\n. \u201cThe provisions of [the FEGLI] contract *** which relate to the nature or extent of coverage or benefits (including payments with respect to benefits) shall supercede and preempt any law of any State or political subdivision thereof, or any regulation issued thereunder, which relates to group life insurance to the extent that the law or regulation is inconsistent with the [FEGLI Policy] contractual provisions.\u201d 5 U.S.C. \u00a7 8709(d)(1) (1994).\nThus, our preemption inquiry begins with consideration of whether FFS\u2019 promissory estoppel claim against MetLife: (1) is based on a state law or regulation issued thereunder; (2) relates to group life insurance; and (3) is inconsistent with the provisions of the policy of insurances issued by MetLife to OPM.\n-\u25a0 \u00ab4 First, FFS argues that it is \u201cat least doubtful\u201d whether Congress intended the preemptive provisions of section 8709(d)(1) of FEGLIA to apply to promissory estoppel claims because Congress added the language \u201cor any regulation issued thereunder\u201d to the phrase \u201cstate law.\u201d FFS asserts that this language limits the term \u201cstate law\u201d to mean only state statutory law. We reject this argument. As noted by MetLife, at least since 1938, the United States has interpreted the phrase \u201cstate law\u201d to include a state\u2019s common law, as well as its statutes and regulations. See Cipollone, 505 U.S. at 522, 120 L. Ed. 2d at 426, 112 S. Ct. at 2620 (\u201c[a]t least since Erie R. Co. v. Tompkins, 304 U.S. 64 (1938), we have recognized the phrase \u2018state law\u2019 to include common law as well as statutes and regulations\u201d).\n\u20225 Next, FFS argues that FEGLIA\u2019s preemption provision does not apply to its promissory estoppel claim because the claim does not relate to group life insurance. We disagree. The Seventh Circuit addressed the \u201crelates to\u201d language in a claim under the FEGLI policy in Metropolitan Life Insurance Co. v. Christ, 979 F.2d 575, 579 (7th Cir. 1992). In holding that the plaintiffs state-law claim for payment under the provisions of a divorce decree were preempted by FEGLIA, which required payment to other persons, the Seventh Circuit stated:\n\u201cThis clause broadly preempts any state law that is inconsistent with the FEGLIA master policy. The ordinary meaning of the term \u2018relates to\u2019 is broad: \u2018 \u201cto stand in some relation; to have bearing or concern; to pertain; refer; to bring into association with or connection with.\u201d \u2019 [Citation.] Moreover, a state law need not specifically address the subject of the federal law to relate to that subject:\n\u2018 \u201c[A] state law may \u2018relate to\u2019 a benefit plan, and thereby be preempted, even if the law is not specifically designed to affect such plans, or the effect is only indirect.\u201d \u2019 [Citation.]\u201d Christ, 979 F.2d at 579.\nHere, FFS\u2019 promissory estoppel claim seeks the payment of insurance proceeds under the FEGLI Policy that were previously paid to other beneficiaries pursuant to the terms of the policy and FEGLIA. As such, it undoubtedly concerns the FEGLI Policy.\n\u20226 Finally, FFS asserts that its claim is not within the preemptive grasp of section 8709(d)(1) of FEGLIA because it is not \u201cinconsistent with\u201d the FEGLI Policy. FFS argues that its claim is not a claim for proceeds under the FEGLI Policy and does not depend on the FEGLI Policy for payment. We disagree. FFS\u2019 only entitlement to proceeds arises from the FEGLI Policy and the assignment to FFS by one of the three beneficiaries. Under the FEGLI Policy and FEGLIA, FFS is not entitled to the unassigned two-thirds of the proceeds. Thus, FFS\u2019 claim conflicts with the FEGLI Policy.\n\u20227 Accordingly, we find that FFS\u2019 claim for promissory estoppel is preempted pursuant to section 8709(d)(1) of FEGLIA.\nPreemption aside, there is a second basis upon which to find that FFS\u2019 claim must fail. As noted by MetLife, the entire amount of proceeds payable under the Insured\u2019s FEGLI Policy has already been paid (collectively to FFS and the other two beneficiaries); thus, any additional payment to FFS would be in excess of the contractually and statutorily authorized benefit amount. Such a payment is prohibited by FEGLIA and, in addition, would constitute an unauthorized withdrawal from the United States Treasury.\nTo demonstrate that any additional sums paid to FFS would come from the United States Treasury, MetLife submitted the affidavit of Ellen Tunstall, the United States government employee responsible for the administration of the FEGLI program. She stated:\n\u201cPursuant to OPM\u2019s interpretation of FEGLIA, any payment by MetLife, OFEGLI, or OPM, above and beyond the amount of the insured\u2019s coverage under the FEGLI Policy would represent an unauthorized withdrawal from the United States Treasury and the Fund. Any payment by Met-Life, OFEGLI, or OPM to Andrew R. Ortega, or his assigns \\i.e., the plaintiff] of benefits beyond the benefits designated by the Insured (in this case one-third of the life insurance proceeds) would represent an unauthorized withdrawal from the United States Treasury and the Fund.\u201d\nMoreover, section 25 of the FEGLI Policy expressly limits the relief available in any action at law or in equity by a beneficiary or claimant to the amount of insurance in force plus any applicable interest or attorney fees. This defeats FFS\u2019 argument that it is entitled to damages measured by the amount expended by it in reliance on the promise or representations of MetLife as \u201can additional and separate obligation on MetLife.\u201d\nIn further support of its argument that FFS cannot maintain a promissory estoppel claim, MetLife directs us to Office of Personnel Management v. Richmond, 496 U.S. 414, 110 L. Ed. 2d 387, 110 S. Ct. 2465 (1990), and Chanda v. United States Office of Personnel Management, 841 F. Supp. 432 (D.D.C. 1993), aff'd, No. 93\u20145249 (D.C.C. 1993), aff'd, No. 93\u20145249 (D.C.C. 1994).\nIn Richmond, the respondent had received incorrect advice from his employing agency regarding the amount of disability annuity payment that was due him under the provisions of 5 U.S.C. \u00a7 8337(a). The federal circuit court of appeals held that the erroneous advice constituted \u201caffirmative misconduct\u201d that estopped the government from reducing the respondent\u2019s annuity to the \u201ccorrect\u201d amount. Reversing the federal circuit\u2019s decision, the United States Supreme Court concluded that no judicial remedy was legally available because estoppel could never be asserted against the government to require payment of Treasury funds contrary to statute. See Richmond, 496 U.S. at 434, 110 L. Ed. 2d at 405, 110 S. Ct. at 2476. Relying on the appropriations clause, the Court stated:\n\u201cRespondent points to no authority in precedent or history for the type of claim he advances today. Whether there are any extreme circumstances that might support estoppel in a case not involving payment from the Treasury is a matter we need not address. As for monetary claims, it is enough to say that this Court has never upheld an assertion of estoppel against the Government by a claimant seeking public funds. In this context there can be no estoppel, for courts cannot estop the Constitution. The judgment of the Court of Appeals is reversed.\u201d Richmond, 496 U.S. at 434, 110 L. Ed. 2d at 405, 110 S. Ct. at 2476.\nIndeed, this case is similar to Richmond because FFS is asserting that a government employee (i.e., Beverly Taylor of OPM) erroneously told FFS that enough funds existed to cover a $3,200 assignment. FFS\u2019 claim must fail because \u201cthere can be no estoppel, for the courts cannot estop the Constitution.\u201d Richmond, 496 U.S. at 434, 110 L. Ed. 2d at 405, 110 S. Ct. at 2476.\nFurther, in Chanda, the insured had attempted to elect FEGLIA option B coverage under circumstances in which FEGLIA and OPM\u2019s regulations required that the insured provide satisfactory medical proof of insurability. See Chanda, 841 F. Supp. at 437-38. The government employee who reviewed the insured\u2019s election form assumed incorrectly that such proof was not necessary and mistakenly certified that the insured was eligible for option B coverage. See Chanda, 841 F. Supp. at 437-38. Subsequently, deductions were taken from the insured\u2019s salary to pay for option B coverage. See Chanda, 841 F. Supp. at 437-38. Nevertheless, OPM subsequently denied the insured\u2019s option B coverage. See Chanda, 841 E Supp. at 437-38. The insured argued that the defendants, OPM and Met-Life, were estopped from denying option B benefits because of the government\u2019s affirmative misconduct, relying on the fact that the insured had received a certificate of insurance and that deductions for the option B coverage had been taken from her salary. See Chanda, 841 F. Supp. at 437-38. Nevertheless, the district court, following Richmond, held that the insured could not assert estoppel to compel either OPM, the insured\u2019s employer, or MetLife to pay option B benefits from the United States Treasury in violation of FEGLIA. See Chanda, 841 F. Supp. at 437-38.\nThus, based on the above, we agree that FFS cannot maintain its estoppel claim. In addition, we also agree that in a FEGLI case, it is irrelevant whether the party sought to be estopped is a governmental entity, because the courts do not have the authority to estop a constitutional requirement that no government funds may be expended without congressional appropriation.\nIII. CONCLUSION\nAccordingly, we hold that FFS\u2019 promissory estoppel claim is preempted by federal law and hereby affirm the trial court\u2019s order which granted summary judgment to MetLife.\nAffirmed.\nO\u2019BRIEN and GALLAGHER, JJ., concur.\nCongress enacted FEGLIA in 1954 \u201cto provide low-cost group life insurance to Federal employees.\u201d H.R Rep. No. 2579 at 1 (1954), reprinted in 1954 U.S.C.C.A.N. 3052. Under FEGLIA, insurance benefits are provided under master policy issued by Metlife to OPM. See 5 U.S.C. \u00a7 8709 (1994) (authorizing OPM to purchase group policy from private life insurance companies). OPM administers FEGLIA and has the authority to \u201cprescribe regulations necessary to carry out FEGLIA\u2019s purposes.\u201d 5 U.S.C. \u00a7 8716 (1994).", "type": "majority", "author": "JUSTICE BUCKLEY" } ], "attorneys": [ "Harry C. Lee, of Law Office of Harry C. Lee, of Chicago, for appellant.", "Catherine A. Van Horn, of Davidson Mandell & Menkes, of Chicago, for appellee." ], "corrections": "", "head_matter": "FUNERAL FINANCIAL SYSTEMS, LTD., Plaintiff-Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant-Appellee.\nFirst District (6th Division)\nNo. 1\u201499\u20141984\nOpinion filed June 29, 2001.\nHarry C. Lee, of Law Office of Harry C. Lee, of Chicago, for appellant.\nCatherine A. Van Horn, of Davidson Mandell & Menkes, of Chicago, for appellee." }, "file_name": "1133-01", "first_page_order": 1151, "last_page_order": 1158 }