Ferrell v. Charles Machine Work ( 1998 )


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  •  IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT
    _______________
    No. 97-41302
    _______________
    BECKY FERRELL,
    Individually and as Next Friend for
    Samuel Ryann Ferrell,
    Shawna Renee Ferrell,
    and
    Steven Rae Ferrell, Jr., Minors;
    and as Representative of the Estate of
    Steven Rae Ferrell, Deceased; et al.,
    Plaintiffs,
    CLARENDON AMERICA INSURANCE COMPANY,
    Intervenor
    Plaintiff-Appellee,
    VERSUS
    THE CHARLES MACHINE WORKS INCORPORATED,
    d/b/a DITCH WITCH,
    Defendant-Appellant.
    * * * * * * * * * * * * * * * *
    _______________
    No. 97-41354
    _______________
    BECKY FERRELL,
    Individually and as Next Friend for
    Samuel Ryann Ferrell,
    Shawna Renee Ferrell,
    and
    Steven Rae Ferrell, Jr., Minors;
    and as Representative of the Estate of
    Steven Rae Ferrell, Deceased; et al.,
    Plaintiffs,
    CLARENDON AMERICA INSURANCE COMPANY,
    Intervenor
    Plaintiff-Appellant,
    VERSUS
    THE CHARLES MACHINE WORKS INCORPORATED,
    d/b/a DITCH WITCH,
    Defendant-Appellee.
    _________________________
    Appeals from the United States District Court
    for the Eastern District of Texas
    (2:96-CV-132)
    _________________________
    August 13, 1998
    Before JOLLY, SMITH, and BARKSDALE, Circuit Judges.
    JERRY E. SMITH, Circuit Judge:*
    In this consolidated appeal, we review a summary judgment in
    favor of Clarendon America Insurance Company (“Clarendon”) on its
    *
    Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion
    should not be published and is not precedent except under the limited
    circumstances set forth in 5TH CIR. R. 47.5.4.
    2
    subrogation claim and a subsequent order denying its motion for
    attorney's fees.      We affirm the summary judgment and reverse and
    remand the order denying fees.
    I.
    Steven Ferrell was killed by a defective Ditch Witch boring
    machine while installing underground cables for his employer,
    Utilities Installation of America (“UIA”), which paid his surviving
    spouse     and   children   $250,000    for   Ferrell's    accidental   death
    pursuant to the company's employee benefits package. Acceptance of
    the benefit also entailed an agreement with UIA that if the
    Ferrells collected from a third-party tortfeasor for the wrongful
    death, UIA would have a claim of subrogation against the Ferrells
    for the first $250,000 of the proceeds.
    Clarendon reimbursed UIA for the $250,000 paid to the Ferrells
    under the employee benefits package.          UIA's policy with Clarendon
    provided that in an accidental employment-related death, Clarendon
    would pay UIA up to $250,000 for any death benefits that UIA paid
    under the plan.         Clarendon was subrogated to any recovery UIA
    received as a result of the Ferrells' third-party recovery.
    II.
    After receiving the death benefits, the Ferrells sued UIA and
    Ditch Witch in state court for the wrongful death.                   Clarendon
    intervened in an attempt to recoup, from the Ferrells, the $250,000
    it   had   previously    paid   to   UIA.     UIA   then   settled   with   the
    3
    plaintiffs,     paying    them    another       $240,000.      Thereafter,       the
    plaintiffs nonsuited their state court claims against Ditch Witch
    and refiled this diversity action in federal court.
    There, the Ferrells, Ditch Witch, and Clarendon (again as
    intervenor-plaintiff)        reached      a     “Stipulation     Agreement”       in
    connection with the Ferrells' settlement of their case against
    Ditch Witch.       The Stipulation Agreement provides that (1) Ditch
    Witch    will   indemnify   and    hold       harmless   the   Ferrells   against
    Clarendon's subrogation claims on the $250,000 original payment
    from the UIA employee benefits plan; (2) Clarendon drops any claim
    against the Ferrells for subrogation from their second settlement
    with UIA (the $240,000 payment for which Clarendon also reimbursed
    UIA under its insurance policy); (3) Clarendon retains its rights
    to sue Ditch Witch (a right acquired from UIA when it tendered them
    payment    of   the   $250,000)1    to    enforce    the    Ferrells'     duty    to
    subrogate up to the amount of the original $250,000 payment from
    the UIA employee benefits plan; and (4) Clarendon allows Ditch
    Witch to assert all of its own rights and defenses as well as all
    of the Ferrells' in the instant subrogation litigation.
    The Ferrells having dropped out of the suit, both the insurer
    and Ditch Witch moved for summary judgment.                 Ditch Witch claimed
    that Clarendon could not sue for subrogation because (1) the
    1
    Section 13 of Clarendon's policy insuring UIA provides:
    SUBROGATION
    If payment is made under this Policy, Company shall be subrogated to all
    rights of recovery therefore of the Insured and any persons entitled to
    the benefits of the Policy, against any person or organization . . . .
    4
    subrogation right really belonged to UIA, not Clarendon, and UIA
    had chosen to waive its right; (2) Clarendon and UIA violated the
    Texas Insurance Code and thus could not seek subrogation; and
    (3) the Texas Labor Code forbade Clarendon's claim for subrogation.
    The district court scheduled a hearing on the motions, but at
    the last moment Ditch Witch proffered new information, and the
    court sua sponte referred the matter to a magistrate judge for a
    report and recommendation.   The magistrate judge did not hold a
    hearing but recommended that summary judgment be denied to Ditch
    Witch and granted to Clarendon.
    The magistrate judge reasoned that, by the terms of the
    contract, the Ferrells had agreed to subrogate their third-party
    recovery to UIA; UIA had agreed to subrogate its recovery from the
    Ferrells to Clarendon; and Ditch Witch had agreed to assume all of
    the Ferrells' subrogation obligations to UIA.      Concluding that
    Clarendon and UIA did not waive any subrogation rights against the
    Ferrells, the magistrate judge found it appropriate that judgment
    should be entered against Ditch Witch for $250,000.
    Although Clarendon had also raised equitable subrogation and
    ERISA preemption as bases for its recovery, in addition to its
    claim of contractual subrogation, the magistrate judge found the
    contractual issue dispositive and therefore failed to address any
    of Clarendon's other arguments.   The magistrate judge also failed
    to address Ditch Witch's arguments that this subrogation claim was
    barred by the Texas Labor and Insurance Codes.
    Ditch Witch objected to the district court; Clarendon did not
    5
    object to the report and recommendation.                  The district court,
    conducting a de novo review, affirmed the magistrate judge's
    factual findings and conclusions of law.               Ditch Witch now appeals
    in No. 97-41302 (referred to below as “Ditch Witch's appeal”).
    Clarendon, after winning summary judgment on its subrogation
    claim, moved for attorney's fees under state law and ERISA.                     The
    district court referred the matter to the magistrate judge, who
    recommended the motion be denied.                  Clarendon objected to the
    district   court,     which    denied       the    motion.       The   appeal   in
    No. 97-41354 followed (referred to below as “Clarendon's appeal”).
    III.
    We    review    summary    judgment          de   novo.     See   Hanks     v.
    Transcontinental Gas Pipe Line Corp., 
    953 F.2d 996
    , 997 (5th Cir.
    1992).     Summary    judgment    is    appropriate        “if   the   pleadings,
    depositions, answers to interrogatories, and admissions on file,
    together with the affidavits, if any, show that there is no genuine
    issue as to any material fact and that the moving party is entitled
    to a judgment as a matter of law.”                FED. R. CIV. P. 56(c).        The
    party seeking summary judgment carries the burden of demonstrating
    that there is an absence of evidence to support the non-moving
    party’s case.       See Celotex Corp. v. Catrett, 
    477 U.S. 317
    , 325
    (1986).    After a proper motion for summary judgment is made, the
    non-movant must set forth specific facts showing that there is a
    genuine issue for trial.       See 
    Hanks, 953 F.2d at 997
    .
    We begin by consulting the applicable substantive law to
    6
    determine what facts and issues are material.             See King v. Chide,
    
    974 F.2d 653
    , 655-56 (5th Cir. 1992).         We then review the evidence
    relating to those issues, viewing the facts and inferences in the
    light most favorable to the non-movant.         See 
    id. If the
    non-movant
    sets forth specific facts in support of allegations essential to
    his   claim,   a   genuine   issue   is    presented.      See   Brothers    v.
    Klevenhagen, 
    28 F.3d 452
    , 455 (5th Cir. 1994).
    IV.
    Ditch Witch argues that Clarendon has waived its right to
    argue equitable subrogation and ERISA preemption, contending that
    although the insurer argued these points to the magistrate judge,
    it failed to object to the district court when the magistrate judge
    failed to address these arguments in his report and recommendation.
    “[A] party's failure to file written objections to the proposed
    findings, conclusions, and recommendation in a magistrate judge's
    report and recommendation within 10 days after being served with a
    copy shall bar that party, except upon grounds of plain error, from
    attacking on appeal the unobjected-to proposed factual findings and
    legal conclusions accepted by the district court . . . .”            Douglass
    v. United Servs. Auto. Ass'n, 
    79 F.3d 1415
    , 1428-29 (5th Cir. 1996)
    (en banc).
    Ditch    Witch's   argument    rests    on   the    premise   that    the
    magistrate judge's failure to address these points constituted an
    adverse ruling to Clarendon on these issues.             Logically, however,
    that assumption is problematic.       More likely, the magistrate judge
    7
    found the contractual subrogation issue dispositive and had no need
    to address alternate theories of recovery. Thus, assuming arguendo
    that a prevailing party fits into the Douglass rule, we do not find
    the magistrate judge's failure to address something constitutes an
    adverse “conclusion of law” where, as here, resolution of that
    issue   was   not   necessary   to       the   reasoning   supporting   the
    recommendation and report.      A contrary holding would risk, as
    Clarendon puts it, mandating “any prevailing party . . . to appeal
    omitted references of their arguments that were raised but not
    expressly written in a magistrate's report.”
    V.
    The crux of Ditch Witch's appeal is its contention that
    Clarendon, through UIA, does not have a contractual right of
    subrogation against the Ferrells because UIA failed to demand in
    writing the Ferrells' agreement to subrogate; it argues that
    UIASSand thereby Clarendon standing in UIA's shoesSScannot now
    assert subrogation rights against Ditch Witch, which is standing in
    the Ferrells' shoes.   Ditch Witch's argument turns on the terms of
    the employee benefits plan agreement between UIA and the Ferrells,
    and on United States Fidelity & Guar. Co. v. Valdez, 
    390 S.W.2d 485
    (Tex. Civ. App.SSHouston [1st Dist.] 1965, writ ref'd n.r.e.)
    (hereinafter “USF&G”).
    The employee benefits plan that UIA offered its employees
    provided, in relevant part:
    (a) To receive any Plan benefits . . . the Participant or
    the Participant's legal representative (or in the case of
    8
    the Participant's death, the Participant's estate) must
    agree in writing:
    (i) that the Participant's Employer (as the
    sole source for payment of benefits under the
    Plan) will be subrogated to any recovery
    (irrespective of whether there is any recovery
    from the third party of the full amount of all
    claims against the third party) or right of
    recovery against that third party . . . .
    (b) The Participant's Employer will be subrogated to the
    extent of Plan benefits paid because of the Injury,
    Occupational Disease, or Cumulative Trauma.
    (c) Subrogation rights of the Participant's Employer
    under this Section 5.4 will not be jeopardized merely
    because the Participant's Employer fails to recognize or
    claim its right of subrogation until after paying Plan
    benefits, or if the Participant's Employer recognizes or
    claims its right of subrogation, but fails to obtain the
    written agreement provided at 5.4(a) above, before paying
    Plan benefits.      Any Plan benefits paid to the
    Participant, his legal representative, or his estate must
    be returned to the Employer immediately if the Employer
    requests the recipient execute, deliver, and fully comply
    with the written agreement provided at 5.4(a) above, and
    the recipient of such Plan benefits fails or refuses to
    execute, deliver, or comply fully with such agreement.
    (d) The Participant, by participation in this Plan,
    agrees that his or her estate, and the legal
    representative of such estate, shall be obligated to
    agree that the Participant's Employer will be subrogated
    to any recovery or right of recovery the estate has
    against any third party with respect to the Injury,
    Occupational Disease or Cumulative Trauma or with respect
    to any wrongful death claim or action.
    Ditch Witch's argument against contractual enforcement of the
    subrogation right against the Ferrells concentrates on the fact
    that UIA never requested or required the Ferrells to execute a
    written assignment agreement to subrogate under § 5.4(a) of the
    employee benefits plan.   Ditch Witch maintains that UIA's failure
    to obtain a written subrogation agreement either before payment, or
    9
    after, constitutes a waiver of its rights to subrogation under the
    terms of the plan.
    To buttress its point, Ditch Witch points to USF&G, in which
    the court found waiver of a plan beneficiary's obligation to repay
    the employer for amounts recovered from a third party for the
    deceased's wrongful death.   In USF&G, the court was faced with a
    similar, unexecuted written release provision in the employee
    benefits plan.   The court noted:
    [There] is a special provision for subrogation.        It
    contemplates that the beneficiary shall execute an
    assignment. It is true that the provision says one of
    the conditions precedent to payment shall be the
    execution of an assignment but this contemplates
    affirmative action by the beneficiary and not automatic
    transfer by reason of payment.     There is a very good
    reason for such a provision contemplating the execution
    of an assignment instead of automatic subrogation. The
    beneficiary of a deceased employee who was not covered by
    the compensation law has a cause of action against an
    employer for negligence or he may receive voluntary
    compensation payments. He might hesitate to accept the
    compensation payments in lieu of a possible damage claim
    against his employer for negligence if he was thereby
    giving up his full rights against a third party. The
    provision, therefore, contemplates that the insurer may
    not want to insist on the assignment.
    
    USF&G, 390 S.W.2d at 492
    .    From these observations, Ditch Witch
    urges us to conclude that unless the beneficiary executes a written
    assignment agreement, we must find that the payor waives its
    subrogation rights.
    This conclusion, however, did not necessarily follow for the
    policy at issue in USF&G, nor does it for this case.     As in the
    instant employee benefits plan, the policy in USF&G provided that
    acceptance of the payor's subrogation rights would be a condition
    10
    precedent to payment to the insured.       Here, the employee benefits
    plan provides in § 5.4(d) that “by participation in this Plan, [the
    Participant]   agrees   that   his   or   her   estate,   and   the   legal
    representative of such estate, shall be obligated to agree that the
    Participant's Employer will be subrogated to any recovery or right
    of recovery the estate has against any third party with respect to
    the Injury . . . .”
    Given such a clause, the USF&G court found:
    Appellant [USF&G] here insists that appellees [the
    beneficiaries] having accepted the benefits of the
    contract must take the contract as they find it and this
    includes the conditions under which they were entitled to
    payment. This correctly states the general rule of law.
    Were the facts in this case merely that payment was made
    we would have to presume appellees accepted it under the
    conditions provided and appellant could require the
    execution of an assignment.
    
    USF&G, 390 S.W.2d at 492
    (emphasis added).          The court, however,
    found that USF&G had done more than just fail to obtain a written
    assignment; it had also voluntarily waived that right in a judicial
    proceeding.
    In USF&G, the beneficiaries did not claim the payment outright
    from the employer.    Instead, they filed a “friendly suit” in state
    court in which the employer agreed to pay the death benefit.            The
    judgment also provided, however, that nothing contained therein
    would “release or prejudice any right [that the beneficiaries]
    might have against any third party responsible for the death of
    [the deceased].”     
    Id. (quoting the
    judicial settlement).
    The USF&G court read this as a release of the employer's
    rights under the employee benefits plan to obtain an assignment:
    11
    “We feel it may be inferred from the facts in the record that by
    not taking the assignment when the other condition precedent was
    carefully stated in the judgment and the release that appellant did
    not intend to rely on this condition precedent. . . . [T]his was an
    express reservation by appellees of all of their rights against the
    third party which includes the full amount of damages recoverable.”
    
    Id. Although UIA
       did   not    enforce   the   written    request      as   a
    condition precedent to payment, its waiver of its assignment rights
    cannot be assumed.       First, UIA has the right, under the employee
    benefits plan, to insist on assignment either before or after
    payment;   the    employee's         participation    in   the   plan    is     his
    contractual acceptance of the employer's assignment rights.
    Second,    there   is    no    comparable   express   waiver      of    UIA's
    subrogation rights in a settlement document, judicial or otherwise.
    The key fact that the USF&G court appeared to rely on was the
    employer's decision to enter into a settlement agreement with the
    aforementioned waiver language.               Although the USF&G court was
    sympathetic to the beneficiaries, the court had to acknowledge that
    the “general rule” is that the beneficiary “took the contract as he
    finds it” and that by accepting the money, they would otherwise
    have opened themselves up for a claim of subrogation.                    See 
    id. Without the
    express waiver by UIA, under USF&G, Texas law holds the
    Ferrells to the employee benefits plan contract.             See 
    id. That is,
    when they agreed to take the $250,000, they also agreed, under
    § 5.4 of the plan, to assign any claims up to that amount to UIA.
    12
    Thus, under the convoluted assignments and reassignments of rights
    and duties, Ditch Witch is contractually liable to Clarendon for
    the Ferrells' receipt of the $250,000 from UIA.2
    VI.
    Ditch    Witch    argues    that        even    if    the    Ferrells    were
    contractually bound to assign their third-party recovery to UIA,
    the   assignment    was   prohibited      by    the    Texas      Insurance   Code.
    Specifically, Ditch Witch contends that because this insurance
    coverage is triggered by the participant's death, it is life
    insurance.        See TEX. INS. CODE ANN. art. 3.01 § 1.               Therefore,
    according to Ditch Witch, all of the state regulatory hurdles for
    selling    life    insurance     must    be     met    by   the     “seller”SSUIA.
    Otherwise, Ditch Witch argues, the life insurance seller is, or
    should be, estopped from asserting any of its rights under the
    illegal life insurance contract against the insured/beneficiary.
    See TEX. INS. CODE ANN. art. 3.42(a); Mutual Life Ins. Co. v. Daddy$
    Money, Inc., 
    646 S.W.2d 255
    , 257 (Tex. App.SSDallas 1982, writ
    ref'd n.r.e.).
    Ditch Witch's argument relies on an incorrect premise:                   Even
    2
    Ditch Witch also argues that, to the extent the Ferrells did
    contractually assign their wrongful death claim, they were precluded from doing
    so under Texas law absent a statutory grant of authority to do so. See, e.g.,
    Carter v. Van Meter, 
    495 S.W.2d 583
    (Tex. Civ. App.SSDallas 1973, writ
    dismissed). Ditch Witch raised this argument before the magistrate judge, who,
    although failing to address it, ruled against Ditch Witch. The magistrate judge
    therefore necessarily rejected it, and Ditch Witch was obliged to raise this
    objection to the district court under Douglass. Its failure to do so means that
    only plain error review applies. See 
    Douglass, 79 F.3d at 1428-29
    . Under this
    standard of review, Ditch Witch has demonstrated no “manifest injustice” or
    threat to the “integrity of the judicial process” necessary to justify reversal,
    even if, arguendo, the district court erred on this point of Texas law.
    13
    though this insurance benefit is triggered by the participant's
    death, and thus at first glance falls within the Insurance Code's
    definition of “life insurance,” Texas courts have found that death
    benefits awarded as part of an occupational injury plan are not
    “life insurance” under art. 3.01 § 1.            See, e.g., Ayre v. Brown &
    Root, Inc., 
    678 S.W.2d 564
    , 565 (Tex. App.SSHouston [14th Dist.]
    1984, writ ref'd n.r.e.).3 Instead, they are more properly thought
    of as “accident insurance” under TEX. INS. CODE ANN. art. 3.01 § 2.
    See 
    id. If this
    benefit is not “life insurance,” art. 3.42 and its
    regulatory hurdles do not apply.            Because the state has not, and,
    in our view, would not invoke its art. 3.42 regulatory, police
    powers over this “life insurance” contract in the first instance,
    any argument that we should “supplement” those powers, by finding
    this contract a nullity, is without force.
    VII.
    Ditch Witch avers that the state workers' compensation laws
    prevent Clarendon's recovery.         Specifically,
    (a) A contract entered into to indemnify an employer from
    3
    The court added:
    Although Appellant is correct in stating that the definition of a
    life insurance company, found in art. 3.01 § 1, could reasonably
    include payments for cessation of life by accidental death, TEX. INS.
    CODE ANN. art. 3.01 § 2 (Vernon 1981), precludes us from so holding.
    Section 2 defines an “accident insurance company” as a corporation
    which pays money in the event of death resulting from traveling or
    general accidents.    A maxim of statutory construction is that a
    specific provision governs a general provision.
    
    Id. 14 loss
    or damage resulting from an injury sustained by an
    employee that is compensable under this subtitle is void
    unless the contract also covers liability for payment of
    compensation under this subtitle.
    (b) This section does not prohibit an employer who is not
    required to have workers' compensation insurance coverage
    and who has elected not to obtain workers' compensation
    insurance coverage from obtaining insurance coverage on
    the employer's employees if the insurance is not
    represented to any person as providing workers'
    compensation insurance coverage authorized under this
    subtitle.
    TEX. LABOR CODE ANN. § 406.052.          Ditch Witch's argument is bipartite.
    First,    it    asserts     that    Clarendon's         policy    “is    void”     under
    subsection (a) because it does not provide for compensation to
    UIA's employees under the workers' compensation laws.                           Second,
    Ditch Witch maintains that subsection (b) precludes Clarendon and
    UIA from enforcing their rights because the insurance policy
    provided by Clarendon insures UIA, not UIA's employees directly.
    Subsection (a) is not applicable, as no one contends that UIA
    must provide workers' compensation insurance.                       By its terms,
    subsection      (a)   applies       only     to    those     injuries       that    are
    “compensable under this subtitle” of the Texas Labor Code.                           As
    Ditch Witch acknowledges, UIA has the option, under Texas labor
    law, to forego the workers' compensation scheme entirely and
    subject    itself     to     the     full       extent     of     the    common     law
    liabilitySSabsent any common law defenses.                 See TEX. LABOR CODE ANN.
    §§   406.002,     406.033.         UIA    chose    to    exercise       this    option.
    Accordingly, injuries occurring in the scope of its employees'
    employment      are   not    “compensable         under”    the     state      workers'
    compensation laws.
    15
    The relevant issue thus becomes whether UIA comported with the
    requirements of subsection (b).            Ditch Witch argues that because
    Clarendon's    policy     covered   only    UIA   and    not   UIA's   employees
    directly, subsection (b) bars Clarendon's insurance coverage of
    UIA.    Subsection (b), however, cannot be read for all that Ditch
    Witch suggests.
    The statute “does not prohibit” non-workers' compensation
    subscribing employers from obtaining “insurance on the employer's
    employees”     if   the    employer    provides         adequate   notice   and
    representations to the employee that this insurance is not workers'
    compensation. The crux of Ditch Witch's argument is its reading of
    subsection (b) as an exclusive exception to subsection (a).                 That
    reading is incorrect.
    The structure of the law is more properly understood thus:
    Subsection (a) provides that if an employer obtains workers'
    compensation    insurance     (and    thereby     receives      the    statutory
    protection from employee suit), it must cover all that the workers'
    compensation laws say it must cover.          Lurking in the background of
    subsection (a) is the fact that Texas does not require employers to
    have workers' compensation insurance.              See TEX. LABOR CODE ANN.
    § 406.002.
    Subsection (b) prevents employers from getting the benefits of
    the workers' compensation laws without paying their full price.
    For instance, in the absence of subsection (b), an employer might
    opt out of the workers' compensation scheme but still offer its
    employees some type of private insurance coverage for on-the-job
    16
    accidents.
    Let us assume that this insurance does not cover the statutory
    requirements of workers' compensation. Let us also assume that the
    employer tells its employees that it is offering private “workers'
    compensation.”       An unknowing, injured employee might take the
    private insurance benefit and think that he is thereby precluded
    from also bringing suit against the employer by the workers'
    compensation laws.        The employer has no incentive to dispel the
    employee's misperception and may even wish to foster it through
    affirmative misrepresentations.
    Subsection (b) is a statutory protection of these workers. It
    allows employers the right to provide their own insurance, if it
    is not represented as workers' compensation insurance.               As a
    result, there is less likelihood that an injured employee will
    wrongly conclude that acceptance of the benefit also precludes his
    own independent tort action against the employer.              That said,
    subsection (b) says nothing about an employer's decision to offer
    its     own    benefits   to   employeesSSbenefits   not   represented   to
    employees as workers' compensation insuranceSSand then to have
    itself insured on having to pay those benefits, as is the case
    here.         In such a circumstance, there is no need to protect
    unknowing employees, and thus subsection (b) does not apply.
    VIII.
    Ditch Witch maintains that the magistrate judge erred in
    ruling on the motions for summary judgment without a hearing and
    17
    with no notice that a hearing would not be held after the district
    court referred the matter to the magistrate judge.
    Rule 56(c) merely requires the court to give the non-
    movant an adequate opportunity to respond prior to a
    ruling. . . .     Rule 56(c) requires neither an oral
    hearing nor advance notice of a 'date certain' on which
    a motion for summary judgment is to be decided; instead
    'if there is not a hearing, the adverse party must have
    at least ten days to respond to the motion for summary
    judgment.' Daniels v. Morris, 
    746 F.2d 271
    , 274-75 (5th
    Cir. 1984).
    Jackson v. Widnall, 
    99 F.3d 710
    , 713 (5th Cir. 1996).4
    Ditch Witch makes no claim that it was prejudiced by a lack of
    notice; it merely asserts that there was lack of notice.                    Its
    arguments are unavailing.
    First, an oral hearing is not required.              See 
    id. Second, Ditch
    Witch had more than ten days to offer a rebuttal to the
    motion for summary judgment before the magistrate judge ruled on
    the motion.    Indeed, in considering the cross-motions for summary
    judgment, the district court granted an additional ten days at the
    originally scheduled hearing of July 7, 1997, for Clarendon to
    respond to a last-minute filing submitted by Ditch Witch.                Ditch
    Witch could easily have used that time to respond to Clarendon
    4
    Jackson and Daniels, moreover, do not conflict with Capital Films Corp.
    v. Charles Fries Prods., Inc., 
    628 F.2d 387
    , 392 (5th Cir. 1980), cited by Ditch
    Witch. Capital Films, too, is concerned with giving the non-movant adequate
    notice by making sure it has at least ten days to respond to the motion for
    summary judgment. The later cases offer a more articulate standard of the one
    introduced in Capital Films.
    Also, the facts of Capital Films were egregious. The defendant filed a
    motion for summary judgment. The court acted as if it were proceeding to trial.
    The day before voir dire (a year after the motion was filed), it entered summary
    judgment, apparently not giving the plaintiff a chance to offer additional
    material in support of its contention, developed during the interim year, that
    a genuine issue of material fact existed. Ditch Witch offers no similar showing
    of reliance on the alleged lack of notice.
    18
    before     the   magistrate    judge   issued      his    recommendation.    We
    therefore uphold the summary judgment in Ditch Witch's appeal.
    IX.
    Clarendon cross-appeals, claiming attorney's fees under both
    Texas state law and ERISA.         We address the latter issue first.
    A.
    Clarendon's claim for attorney's fees under ERISA is easily
    dismissed.       An award of attorney's fees for cases “brought under”
    ERISA     is   within   the   discretion     of   the    district   court.   See
    29 U.S.C. § 1132(g)(1).5
    As far as we can tell from the briefs and the arguments, this
    case has little to no nexus with ERISA; the “brought under”
    requirement of § 1132(g)(1) is not met.                 The crux of the dispute
    between Clarendon and Ditch Witch concerns state contract and
    insurance subrogation law.          ERISA supposedly arises only as an
    affirmative defense, and it really does not even appear in that
    regard.
    The insurer's reliance on ERISA is ironic because, aside from
    arguing that it did not waive the issue in the district court, the
    issue appears nowhere in its brief in the related appeal on the
    5
    Clarendon points to a multi-factored test that the district court should,
    or must, consider in determining whether to award attorney's fees under ERISA.
    It claims that it was error for the district court not to discuss these
    considerations in this case. We disagree. Clarendon cannot pass the threshold
    showing that this is an ERISA case. Therefore, any further inquiry into what
    ERISA requires the district court to consider in its award of attorney's fees is
    necessarily unjustified.
    19
    merits.      Accordingly, the district court was well within its
    discretion in denying an award of attorney's fees under ERISA.
    B.
    The   more   difficult    issue    is   whether   the   court   erred   in
    concluding that Clarendon could not recover attorney's fees under
    state law.    We conclude that it did so err.
    Under TEX. CIVIL PRAC. & REM. CODE ANN. § 38.001(8), “[a] person
    may recover reasonable attorney's fees from an individual or
    corporation, in addition to the amount of a valid claim and costs,
    if the claim is for: . . . (8) an oral or written contract.”               “The
    award of reasonable attorney's fees to a plaintiff recovering on a
    valid claim founded on a written or oral contract preceded by
    proper presentment of the claim is mandatory” under § 38.001(8).
    In re Smith, 
    966 F.2d 973
    , 978 (5th Cir. 1992).6
    “The requisites to recover for attorney's fees under
    [§ 38.001(8)] . . . are: 1) recovery of a valid claim in
    a suit on an oral or written contract; 2) representation
    by an attorney; 3) presentment of the claim to the
    opposing party or a representative of the opposing party;
    and 4) failure of the opposing party to tender payment of
    the just amount owed before the expiration of thirty days
    of presentment.” Sikes v. Zuloaga, 
    830 S.W.2d 752
    , 753
    & n.1 (Tex. App.SSAustin 1992, no writ).       The party
    seeking attorney's fees must both “plead and prove that
    presentment of a contract claim was made to the opposing
    party and that the party failed to tender performance.”
    Ellis v. Waldrop, 
    656 S.W.2d 902
    , 905 (Tex. 1983).
    Triad Elec. & Controls, Inc. v. Power Sys. Eng'g, Inc., 
    117 F.3d 6
             “[R]ecovery on a valid claim founded on a written or oral contract”
    includes maintaining the award on appeal. See Humble Nat'l Bank v. DCV, Inc.,
    
    933 S.W.2d 224
    , 236 (Tex. App.SSHouston [14th Dist.] 1996, writ denied). Our
    affirmance in the consolidated appeal in No. 97-41302 satisfies this requirement.
    20
    180, 196 (5th Cir. 1997).
    In its briefs, Ditch Witch does not contend that Clarendon has
    failed to meet any of these requirements.7          Rather, it argues that
    there is no contractual right or duty between Ditch Witch and
    Clarendon. Essentially, it contends that this case really concerns
    Clarendon's “tort” claim against Ditch Witch, not a “contract”
    claim.
    We disagree.      At bottom, this suitSSas Ditch Witch freely
    acknowledges in the related appeal on the meritsSSis a claim by UIA
    against the Ferrells for reimbursement given their recovery from
    Ditch Witch.     There certainly is a contract between UIA and the
    Ferrells in this regardSS§ 5.4 of the employee benefits plan.
    The idea that Clarendon is suing Ditch Witch for its tort also
    conflicts with the record:        Clarendon's complaint in intervention
    sues “all the plaintiffs” for subrogation on their recovery.
    Therefore, UIA, via Clarendon, is suing the Ferrells, via Ditch
    Witch, on the Ferrells' broken contractual promise under the UIA
    employee benefits package made in consideration for their receipt
    of the $250,000 payment.
    Accordingly, under Texas law, Clarendon has recovered on a
    “claim [that] is for . . . an oral or written contract.”             TEX. CIV.
    7
    Ditch Witch does not argue that any of these requirements is unmet, and
    our review of the record additionally satisfies us that all were. Although our
    review of the record convinces us that Clarendon made a sufficient presentment
    of its contract claim to the Ferrells and to Ditch Witch, Clarendon failed to
    “plead” presentment in its motion for attorney's fees. Under Texas law, Ditch
    Witch has waived any rights it may have in that regard, however, by failing to
    object to the district court, or to raise it on appeal. See, e.g., Mendleski v.
    Silvertooth, 
    798 S.W.2d 30
    , 32 (Tex. App.SSCorpus Christi 1990, no writ)
    (“[F]ailure to properly plead presentment would be waived absent a special
    exception . . . .”).
    21
    PRAC. & REM. CODE ANN.       §    38.001(8).      Once     the   aforementioned
    requirements   are    met,   the    award   of    attorney's       fees   becomes
    “mandatory.”   See 
    Smith, 966 F.2d at 978
    .               Without a choice, we
    therefore   reverse,    in       Clarendon's     appeal,     and    remand   for
    determination of     “reasonable” attorney's fees.          See TEX. CIV. PRAC.
    & REM. CODE ANN. § 38.003.
    The judgment in No. 97-41302 is AFFIRMED; the judgment in
    No. 97-41352 is REVERSED and REMANDED.
    22