A group of salaried General Motors retirees sued MetLife today in Wayne County Circuit Court after their life insurance coverage was cut to 10,000, despite assurances that their higher guaranteed amounts would remain in effect for the rest of their lives.
The 45 former employees of GM and its affiliates — who are seeking class action status — want the full value of their policies reinstated, plus additional damages. They accuse the insurance giant of breach of contract, fraud, unfair trade practices and unjust enrichment, according to court documents.
Their attorney, Andrew Rogers, said these people made estate and retirement planning decisions based on the information MetLife had given them. The plaintiffs have letters sent to them on the day they retired, stating how much their coverage would be after at least a decade of paying premiums.
“MetLife sits to have a huge windfall here,” he explained. “When these reductions come 20 years later, when people are in their later years of life, they’re no longer insurable.”
The insurance company said in a statement, “We have not seen the lawsuit so we are not in a position to comment on it. MetLife continues to provide valuable life insurance coverage to GM’s active employees and retirees.”
The lawsuit states that the “reduction of these benefits to a mere 10,000, an amount likely insufficient to even cover funeral and burial expenses, was extreme and outrageous under the circumstances.”
Rogers didn’t know how that amount was selected. The plaintiffs want the full value of their policies reinstated, which in the most dramatic instance was 125,000.
“The bankruptcy court reduced GM’s responsibility to pay into their policies. It didn’t excuse policies already paid in part or in full,” Rogers said. “The bankruptcy court never said, ‘We’ll wipe these policies out that have been paid in 20 years.’ MetLife wasn’t a party. It didn’t go into bankruptcy. … They’re not excused from its debts and obligations.”
Rogers explained that his clients aren’t suing GM, because they don’t have “smoking gun letters” from the car company.
GM declined to comment, because it hadn’t yet seen the suit, according to spokesman James Cain.
In 1998, a federal appeals court in Cincinnati ruled against GM retirees who’d sued the automaker for making changes to their healthcare benefits. The U.S. Supreme Court refused to hear their appeal.
Contact Zlati Meyer: 313-223-4439 or zmeyer@freepress.com
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