Counts v. American General Life & Accident Insurance , 111 F.3d 105 ( 1997 )

United States Court of Appeals, Eleventh Circuit.
No. 96-8795.
J.W. COUNTS, Plaintiff-Counter-Defendant, Appellant,
v.
AMERICAN GENERAL LIFE AND ACCIDENT INSURANCE COMPANY; American
General Corporation Plan Administrator, Defendants-Counter-
Claimants-Appellees,
Gulf Life Insurance Company, et al., Defendants.
April 29, 1997.
Appeal from the United States District Court for the Southern
District of Georgia. (No. CV694-055), Anthony A. Alaimo, Judge.
Before DUBINA and BLACK, Circuit Judges, and COHILL*, Senior
District Judge.
DUBINA, Circuit Judge:
Appellant J.W. Counts ("Counts") appeals the district court's
1
grant of summary judgment in this ERISA action in favor of
Appellees American General Life and Accident Insurance Company and
American General Corporation Plan Administrator (collectively,
"AGLA"). The district court ruled that Counts failed to exhaust
his administrative remedies. For the reasons that follow, we
affirm.
I. BACKGROUND
Counts worked as an insurance agent and sales manager for AGLA
and its predecessors from 1965 to 1990. Counts was a participant
in the Gulf Life Field Representative's Long-Term Disability Plan
*
Honorable Maurice B. Cohill, Jr., Senior U.S. District
Judge for the Western District of Pennsylvania, sitting by
designation.
1
Employee Retirement Income Security Act of 1974, 29 U.S.C.
§ 1001 et seq.
2
("the Plan"), an employee benefit plan governed by ERISA and
administered by AGLA. A participant must be totally disabled to
receive long term disability ("LTD") benefits under the Plan. The
Plan defines total disability as a sickness or injury which
prevents a participant from performing the main duties of his or
her regular occupation. After 12 months, however, the definition
changes: the participant must be unable to perform "each and every
of the main duties of any occupation. Any occupation is one that
the Participant's training, education, or experience will
reasonably allow." R3-61, District Court Order at 3 (emphasis
added).
Counts injured his back in 1986. Four years later, he became
totally disabled and stopped working. In November 1990, AGLA began
paying Counts LTD benefits under the Plan. Counts received LTD
benefits for 12 months. AGLA then suspended his benefits pending
receipt of an opinion from his physician, Dr. Cannon, as to whether
Counts was totally disabled under the "any occupation" definition.
In March 1992, Dr. Cannon sent AGLA a letter stating that he felt
Counts was capable of light clerical work and was not totally
disabled. Two other doctors who evaluated Counts reached similar
conclusions.
By letter dated April 30, 1992, AGLA's Disability Committee
terminated both Counts' LTD benefits and his employment with AGLA.
The termination letter stated that the committee had determined
that Counts no longer met the requirements for total disability
under the Plan. The letter also provided as follows:
2
AGLA assumed control of all Gulf Life operations in 1990.
The Disability Committee decision is final unless overturned
by an appeal; therefore, your employment and benefit status
will remain terminated during the appeal process.
If you disagree with this determination, you may appeal the
decision by sending your written request within 60 days
following your receipt of this notice stating the reason for
your appeal along with any additional information for review
to [address omitted].
If you wish to examine any pertinent documents, we will need
a written authorization from your physician before medical
information can be released to you.
District Court Order at 4-5.
Counts did not appeal the decision. Four months after the 60-
day appeals period expired, Counts' attorney wrote AGLA a letter
discussing Counts' medical situation and stating, "We would
appreciate hearing from you regarding this matter at your earliest
convenience." Id. at 5. Counts' attorney did not request any
specific information from AGLA. AGLA wrote back reiterating its
basis for discontinuing Counts' benefits and offering further
assistance upon request. Ten months later, Counts' attorney wrote
AGLA a second letter stating that AGLA's letter terminating Counts'
LTD benefits failed to comply with the notice requirements set
forth in 29 U.S.C. § 1133 and 29 C.F.R. § 2560.503-1(f). AGLA
responded that it felt its denial letter was in substantial
compliance with the regulatory requirements, but that it welcomed
further inquiries. Counts made none. Five months later, Counts
filed this action.
Counts' complaint alleged (1) that AGLA wrongfully
discontinued his LTD benefits under the Plan and (2) that AGLA
terminated his employment for the purpose of interfering with his
rights under other AGLA employee benefit plans in which Counts was
a participant. Counts sought an order reinstating his LTD benefits
and requiring AGLA to continue contributing to his other employee
benefit plans. Counts also sought attorney's fees and an award of
civil penalties for AGLA's alleged failure to supply him with
requested information. AGLA counterclaimed for overpayment of LTD
benefits. The district court granted AGLA's motion for summary
judgment on the ground that Counts failed to exhaust his
administrative remedies. Counts appealed.3
II. DISCUSSION
We review the district court's grant of summary judgment de
novo, applying the same standards as the district court. Harris v.
Board of Educ. of the City of Atlanta, 105 F.3d 591, 595 (11th
Cir.1997). "Summary judgment is appropriate if the pleadings,
depositions, and affidavits show that there is no genuine issue of
material fact and that the movant is entitled to judgment as a
matter of law." Harris v. H & W Contracting Co., 102 F.3d 516, 518
(11th Cir.1996). In reviewing a grant of summary judgment, we view
the evidence in the light most favorable to the party opposing the
motion. Id. at 519.
It is undisputed that Counts failed to exhaust his
administrative remedies. The Plan required Counts to appeal the
denial of his LTD benefits within 60 days of receiving his
termination letter. Counts never appealed. The law is clear in
this circuit that plaintiffs in ERISA actions must exhaust
3
Counts' first appeal was dismissed for lack of
jurisdiction. The district court then certified that its summary
judgment order was final, and Counts renewed his appeal. AGLA's
counterclaim is still pending in the district court.
available administrative remedies before suing in federal court.
Springer v. Wal-Mart Associates' Group Health Plan, 908 F.2d 897,
899 (11th Cir.1990); Mason v. Continental Group, Inc., 763 F.2d
1219, 1225-27 (11th Cir.1985). However, district courts have
discretion to excuse the exhaustion requirement when resort to
administrative remedies would be futile or the remedy inadequate.
Curry v. Contract Fabricators, Inc. Profit Sharing Plan, 891 F.2d
842, 846 (11th Cir.1990). The district court found neither
circumstance present here. Accordingly, the district court
declined to excuse the exhaustion requirement in this case. Counts
argues that the district court erred for several reasons.
First, Counts argues that the district court should have
excused his failure to exhaust administrative remedies because
AGLA's termination letter failed to comply with ERISA's notice
requirements. See 29 U.S.C. § 1133; 29 C.F.R. § 2560.503-1(f).
The district court agreed that AGLA's letter was technically
deficient. Nevertheless, the district court concluded that the
letter substantially complied with the notice requirements because,
taken as a whole, it supplied Counts "with a statement of reasons
that, under the circumstances of the case, permitted a sufficiently
clear understanding of the administrator's position to permit
effective review." District Court Order at 12, quoting Donato v.
Metropolitan Life Ins. Co., 19 F.3d 375, 382 (7th Cir.1994).
Even if the district court erred in finding substantial
compliance, Counts would not be excused from the exhaustion
requirement. The consequence of an inadequate benefits termination
letter is that the normal time limits for administrative appeal may
not be enforced against the claimant. Epright v. Environmental
Resources Management, Inc. Health & Welfare Plan, 81 F.3d 335, 342
(3rd Cir.1996); White v. Jacobs Eng'g Group, 896 F.2d 344, 350
(9th Cir.1989). Thus, the usual remedy is not excusal from the
exhaustion requirement, but remand to the plan administrator for an
out-of-time administrative appeal. Weaver v. Phoenix Home Life
Mut. Ins. Co., 990 F.2d 154, 159 (4th Cir.1993); Brown v. Babcock
& Wilcox Co., 589 F. Supp. 64, 71-72 (S.D.Ga.1984). Counts
consistently took the position in the district court that remand
was unwarranted and the only suitable course of action was excusal
of the exhaustion requirement. Counts now argues that remand may
be appropriate. However, "[a]n appellate court generally will not
consider an issue raised for the first time on appeal ... [,
especially] where the appellant pursued a contrary position before
the district court." United States v. One Learjet Aircraft, 808
F.2d 765, 773-74 (11th Cir.), vacated on other grounds, 831 F.2d
221 (11th Cir.1987). We hold that Counts waived any entitlement he
may have had to the remedy for deficient notice. Accordingly, we
need not address whether AGLA's termination letter substantially
complied with regulatory notice requirements.
Counts also argues that the district court should have
excused the exhaustion requirement because AGLA blocked his efforts
to exhaust by failing to answer his requests for information about
its benefits decision. In Curry v. Contract Fabricators Inc.
Profit Sharing Plan, 891 F.2d 842, 846-47 (11th Cir.1990), we held
that "[w]hen a plan administrator in control of the available
review procedures denies a claimant meaningful access to those
procedures, the district court has discretion not to require
exhaustion." In Curry, the plan administrator failed to send Curry
a written denial of his benefits claim. When Curry requested
copies of plan documents to pursue his claim administratively, the
administrator failed to provide them. The situation in this case
was quite different. AGLA sent Counts a written termination letter
which informed him of its decision and of his right to appeal
within 60 days. Counts took no action during the 60 days. Months
later, Counts' attorney sent AGLA two letters, neither of which
requested Plan documents or other specific information from AGLA.
AGLA responded to both letters and offered to supply additional
information upon request. AGLA did not deny Counts meaningful
access to the administrative review process. Curry simply does not
apply here.
Finally, Counts argues that the exhaustion requirement should
not apply to his claims alleging that AGLA violated ERISA by firing
him to avoid contributing to his other employee benefit plans and
by withholding information about its decision. We have
consistently stated that the exhaustion requirement applies both to
actions to enforce a statutory right under ERISA and to actions
brought to recover benefits under a plan. Springer v. Wal-Mart
Associates' Group Health Plan, 908 F.2d 897, 899 (11th Cir.1990);
Mason v. Continental Group, Inc., 763 F.2d 1219, 1225-27 (11th
Cir.1985). Counts asks us to depart from this precedent and hold,
along with several of our sister circuits, that exhaustion is not
required for claims of statutory violation. See Held v.
Manufacturers Hanover Leasing Corp., 912 F.2d 1197, 1205 (10th
Cir.1990); Zipf v. American Tel. & Tel. Co., 799 F.2d 889, 891-94
(3rd Cir.1986); Amaro v. Continental Can Co., 724 F.2d 747, 750-53
(9th Cir.1984); but see Lindemann v. Mobil Oil Corp., 79 F.3d 647,
650 (7th Cir.1996) (rationale for exhaustion applies equally to
claims for benefits and claims based upon ERISA itself). However,
even if we agreed with Counts' position, this panel lacks the
authority to overrule prior panel decisions of this court. Bonner
v. City of Pritchard, 661 F.2d 1206, 1209 (11th Cir.1981) (en
banc). Under controlling precedent, Counts was required to exhaust
administrative remedies for all of his ERISA claims.
III. CONCLUSION
Counts failed to exhaust his administrative remedies before
filing this ERISA action. The district court did not abuse its
discretion in refusing to excuse that failure. Accordingly, we
affirm the district court's grant of summary judgment in favor of
AGLA.
AFFIRMED.