Grilli v. Metropolitan Life Insurance , 78 F.3d 1533 ( 1996 )

United States Court of Appeals,
Eleventh Circuit.
Nos. 94-3328, 94-3468, 94-3469 and 94-3470.
Peter J. GRILLI, Special Master,
Julio Gonzalez-Roel, et al.; Ronald Coulter; Anissa Coulter,
Appellants,
Sherry Horton, et al., Plaintiffs-Appellees,
v.
METROPOLITAN LIFE INSURANCE COMPANY, INC.; Rick Urso,
Defendants,
W.R. Cunningham, et al., Claimants.
Peter J. GRILLI, Special Master,
Julio Gonzalez-Roel, et al., Intervenors,
Douglas Connor; Roena Connor; Ronald Coulter; Anissa Coulter;
Darrin Johns; Joann Kablach; Eric Maharg; Terrance McConnell;
Deborah Myers; Terry Palmer; Marjorie Palmer; Brian Rohm; James
Romano; Mary Romano; Albert Darren Wise; Jeanne Yokel,
Appellants,
Sherry Horton, et al., Plaintiffs-Appellees,
v.
METROPOLITAN LIFE INSURANCE COMPANY, INC.; Rick Urso,
Defendants-Appellees,
W.R. Cunningham, et al., Claimants.
Peter J. GRILLI, Special Master,
Julio Gonzalez-Roel, et al., Intervenors,
Edward Beliunas; Paulette Beliunas; John Brooks; Stephanie
Charles; Shelly A. Daughenbaugh; Jerilyn Freiwald; Nina
Heathcote; Daniel Heathcote; Robert W. Hemcher; Kenneth D.
Johnson; Michele R. Johnson; Frieda E. Kamel; Jerome J. Knorr;
Enod S. Knorr; George Liptak; Ruth Liptak; Kenneth J. Magnes;
Sandra Marie McCue; Mark A. Ondrusek; Ernestine Peterson; Rori
K. Rasel; Clarence Ridgeway; Emily N. Riehl; Joan C. Velenta;
Robert Dale Wiles; Catherine Wiles, Appellants,
Sherry Horton, et al., Plaintiffs-Appellees,
v.
METROPOLITAN LIFE INSURANCE COMPANY, INC.; Rick Urso,
Defendants-Appellees,
W.R. Cunningham, et al., Claimants.
Peter J. GRILLI, Special Master,
Julio Gonzalez-Roel, et al., Intervenors,
Ronald Coulter; Anissa Coulter, Appellants,
Sherry Horton, et al., Plaintiffs,
v.
METROPOLITAN LIFE INSURANCE COMPANY, INC., Defendant-Appellee,
Rick Urso, Defendant,
W.R. Cunningham, et al., Claimants.
April 2, 1996.
Appeals from the United States District Court for the Middle
District of Florida. (No. 93-1849-Civ-T-23A, Steven D. Merryday,
Judge.
Before TJOFLAT, Chief Judge, and RONEY and CAMPBELL*, Senior
Circuit Judges.
PER CURIAM:
Before us for review in these consolidated appeals are orders
entered by the district court in a class action suit brought on
November 1, 1993, by Sherry Horton and others ("Horton") against
Metropolitan Life Insurance Company ("MetLife"). Among other
things, these orders denied motions of two class members to
intervene in the case, to have their attorney appointed as
co-counsel for the class, and to extend the deadline for opting out
of the class. We conclude that appellants' challenges to these
*
Honorable Levin H. Campbell, Senior U.S. Circuit Judge for
the First Circuit, sitting by designation.
orders are meritless. The orders were necessary to the efficient
disposition of the case, and the district court can hardly be
faulted for entering them.
I.
Horton brought this lawsuit in the United States District
Court for the Middle District of Florida, to recover, under the
1
federal RICO statute, damages that she and the members of her
class allegedly suffered at the hands of MetLife agents who sold
them whole life insurance policies on the alleged misrepresentation
that they were retirement and/or savings plans. These sales took
place in several locations, including Pittsburgh, Pennsylvania, and
Tampa, Florida.
On March 25, 1994, approximately four months after Horton
brought her suit, Ronald and Anissa Coulter ("the Coulters"),
represented by attorney Kenneth W. Behrend of Pittsburgh, sued
MetLife in state court in Pittsburgh. They sought recovery for
themselves and the members of the Horton class who were residents
of Pennsylvania.2 A class has not been certified in that case, 3
accordingly, at the present time, the Coulters are proceeding in
1
Racketeer Influenced and Corrupt Organizations Act, 18
U.S.C. § 1964 (1994) (as added by the Organized Crime Control Act
of 1970, Pub.L. No. 91-452, § 901(a), 84 Stat. 922, 941-47).
Horton also sought recovery under several other theories of
liability, including common law fraud.
2
They also sought recovery for themselves and others who had
purchased MetLife products not formally approved by the
Pennsylvania insurance commissioner. The Coulters alleged that,
in selling the products described in their complaint, MetLife
violated several federal and state laws.
3
That is, as of the date of the oral argument of these
appeals, December 5, 1995, a class had not been certified in the
Pennsylvania case.
that case alone.
On April 7, 1994, Horton and MetLife reached a settlement
agreement. On April 22, the district court certified a settlement
class, appointed class counsel, preliminarily approved the proposed
settlement and the class notice, and scheduled a fairness hearing
for July 18, 1994. In accordance with the settlement agreement,
the court ordered that any who wished to be excluded from the class
opt out by June 13. The court set the same deadline for the filing
of claim forms, which accompanied the class notice.
On May 30, 1994, the Coulters, through Behrend, moved the
district court for leave to intervene as plaintiffs in Horton.
They represented that their claims were "atypical of those in the
Horton class." The Coulters' motion requested that the court sever
all Pennsylvania residents from the settlement class so that the
Coulters could seek to represent them in the suit they had brought
in Pittsburgh. Alternatively, the Coulters asked the court to
allow their attorney, Behrend, to represent the members of the
Horton class from Pennsylvania. In moving the court to intervene,
the Coulters did not present the court with a proposed complaint
for filing in the case. In fact, at no time have they sought to
litigate a claim independently and apart from the Horton class in
that case.
The fairness hearing was held as scheduled on July 18, 1994.
The district court heard the objections of the Coulters and others
to the proposed settlement and to the adequacy of the notice that
had been sent to the class. The court also heard argument on the
Coulters' motion to intervene. The court denied their motion in an
oral ruling from the bench. The court reduced its ruling to a
written order on October 25, 1994.4
In that order, the court stated that even though the Coulters,
as class members, had a legally protectable interest in the action,
they were not entitled to intervene as of right under Rule 24. See
Fed.R.Civ.P. 24(a). They could protect their interest either by
opting out of the class and litigating separately, or by remaining
in the case (where, in the court's view, they were being adequately
represented by the plaintiffs' attorneys) and, if they thought the
proposed settlement was unfair, by objecting to it. Turning to the
Coulters' alternative request that they be granted permissive
intervention under Rule 24(b), the court observed that the
procedures for objecting to the settlement or opting out of the
class already offered the Coulters all the relief they were seeking
for themselves and the Pennsylvania members of the settlement
class.5 The Coulters appealed the court's rulings in appeal No.
94-3328. The court approved the proposed settlement on the same
day it issued a written order denying the Coulters intervention.6
After the district court announced from the bench at the July
18 hearing that it was denying the Coulters' motion for leave to
intervene, Behrend asked the court to exclude the Coulters from the
4
Comprehensive findings of fact and conclusions of law
accompanied the order.
5
At the same time, the court stated that the Coulters
appeared to lack standing to represent the Pennsylvania members
of the Horton class on any issue. The Pittsburgh court had not
certified a class, had not declared them class members, and had
not approved their attorney's representation of any class.
6
The court's approval of the settlement is not an issue in
these appeals.
settlement class even though the June 13 deadline for opting out
had passed. 7 Other parties who let the deadline pass sought the
same relief. The district court denied these requests because (1)
none of the movants had established excusable neglect under Federal
Rule of Civil Procedure 6(b)(2) for failing to move for an
extension of the deadline prior to the deadline date, (2) allowing
the requested opt-outs would severely prejudice MetLife's rights
under the settlement agreement, and (3) the movants would suffer
little, if any, prejudice by remaining in the class, since MetLife
would permit them to file late proofs of claim and to participate
in the settlement and obtain full restitution. The Coulters and
the other late movants appeal this ruling in appeal No. 94-3468.
On October 4, 1994, the Coulters, again through Behrend, filed
a "Petition for Injunctive Relief Pursuant to F.R.C.P. 23(d) for
Restraint of Improper Contacts in Violation of Local Rule 4.04, and
for Sanctions." The petition alleged that two MetLife sales
representatives had engaged in improper communications with certain
potential class members and that MetLife and/or its counsel were
permitting the company to sabotage the class notice. The Coulters
asked the court for permission to conduct discovery, to require the
issuance of a new class notice, to appoint their attorney, Behrend,
as co-counsel for the class, and to award attorney's fees.
Both MetLife and the Horton plaintiffs opposed the motion.
Noting the absence of any evidentiary support for the Coulters'
petition, the district court concluded that the petition "appears
7
The Coulters repeated this request in a written application
filed on September 21, 1994.
to have been filed for the sole purpose of causing delay, derailing
the proposed class action settlement, and generating legal fees for
the Coulters' attorney." The court found the petition "unworthy of
additional consideration, and because the Coulters and their
attorney have consumed already an enormous amount of the parties'
and the Court's resources," their request for relief was denied. 8
The Coulters appeal this ruling in No. 94-3470.
Meanwhile, on September 21, 1994, Edward Beliunas and others
("Beliunas"), who were also represented by Behrend, moved the court
to declare that they were not members of the settlement class. The
motion was based essentially on counsel's assertion that Beliunas
had not received notice of the lawsuit. At the same time, however,
the motion seemed to question whether Beliunas had purchased the
sort of MetLife product that was involved in Horton and thus
whether Beliunas should have been notified at all.
Because the question of whether a policy holder is a class
member is a fact-specific inquiry determined on a case-by-case
basis, the district court denied Beliunas' motion without prejudice
and appointed a special master. The court directed that any of the
Beliunas movants who wished to obtain a determination as to whether
8
In rejecting the Coulters' petition, the court, sua sponte,
admonish[ed] the Coulters and their attorney ... [to]
remain mindful of the provisions of [Federal Rule of
Civil Procedure] 11. Rule 11 precludes the filing of
superfluous motions for the purposes of wasting
valuable resources, perpetuating undue delay, and
serving illegitimate self-interests. If applied to the
papers filed by the Coulters and their attorney, Rule
11 might well trigger relief markedly different in both
effect and object from that which they proposed or
contemplated.
he or she was a member of the settlement class should petition the
special master for such determination. The court set November 22,
1994 as the deadline for filing such petitions. In appointing a
special master for this purpose, the court noted that the
settlement agreement contemplated the use of a special master to
resolve the disputed claims of individual class members. None of
the Beliunas movants accepted the court's invitation to petition
the special master, however. Instead, all appealed, in appeal No.
94-3469.
II.
These appeals raise several issues. We address only four of
them, because they are dispositive. These issues, and our
resolution thereof, are as follows.
(1) Whether, in No. 94-3328, the district court (a) erred in
denying the Coulters' motion for leave to intervene in the action
as a matter of right for the purpose of representing their
interests and those of the Pennsylvania members of the settlement
class, or (b) abused its discretion in denying the Coulters
permissive intervention.
Though a denial of a motion to intervene is generally not
considered an appealable final order, we have provisional
jurisdiction to review such an order under the Eleventh Circuit's
"anomalous rule." EEOC v. Eastern Airlines, Inc., 736 F.2d 635,
637 (11th Cir.1984). If we conclude the district court's order was
properly granted, our jurisdiction evaporates because the ruling is
not a final order. If we find the district court erred, however,
we retain jurisdiction and reverse the ruling. Id.
We find no error or abuse of discretion in the ruling. At
the time the district court ruled, neither the Pittsburgh court
presiding over the Coulters' suit against MetLife, or any other
court, had appointed the Coulters as the representatives of any
class of purchasers of MetLife products. Moreover, no court had
appointed Behrend to represent anyone with a claim against MetLife.
We therefore cannot conclude that the district court's denial of
intervention was erroneous.
(2) Whether, in No. 94-3468, the district court abused its
discretion in denying the requests of the Coulters and others to
opt out of the settlement class after the June 13, 1994, deadline
had expired.
Because the Coulters made a tactical decision not to opt out
in time, and the other movants failed to meet the "excusable
neglect" standard of Rule 6(b)(2), we see no reason for permitting
an opt-out after the expiration of the deadline. Accordingly, we
find no abuse of discretion by the district court.
(3) Whether, in No. 94-3469, the district court's order (a)
denying without prejudice Beliunas' motion that the court declare
that Beliunas was not a member of the settlement class and (b)
referring that class-status issue to a special master, is an
appealable order and, if so, whether the court's action constituted
an abuse of discretion.
An order referring a matter to a special master is not a
final order appealable under 28 U.S.C. § 1291 because it does not
terminate the appellant's claim. See Deckert v. Independence
Shares Corp., 311 U.S. 282, 290-91 & n. 4, 61 S. Ct. 229, 234 & n.
4, 85 L. Ed. 189 (1940) (order referring issue to master is
interlocutory and not appealable); Turner v. Secretary of Air
Force, 944 F.2d 804, 806 n. 1 (11th Cir.1991) (noting that court
had found order of reference to special master non-final). We
hold, therefore, that the portion of the challenged order providing
for the resolution of class-status issues to a special master is
not appealable; we therefore do not review it.
A dismissal without prejudice may be treated as an appealable
final order. See Davis Forestry Corp. v. Smith, 707 F.2d 1325,
1326-27 n. 1 (11th Cir.1983). We do not believe, however, that we
have a final order before us. The district court denied a motion
without prejudice; it did not dismiss a complaint. In short, it
was an interlocutory order. Moreover, the court anticipated
further proceedings with respect to the issues raised, and provided
a means for Belunias and others to have their class status
reviewed.
Assuming for the sake of argument that the disposition is
appealable, we conclude that the court's action was entirely
reasonable, especially when coupled with the reference to the
special master. The court simply drew on its inherent power to
fashion an efficient and economic solution to the problem the
movants presented. Clearly, there was no abuse of discretion.9
(4) Whether, in No. 94-3470, the district court abused its
discretion in denying the Coulters' motion for injunctive relief,
remedial measures, and sanctions based on MetLife's allegedly
9
We note in passing that none of the movants objected to the
reference to the special master or requested the court to fashion
an alternative method for addressing their concerns.
improper communications with potential class members.
We affirm the district court on this issue because the
Coulters lacked standing to seek the requested relief. They
themselves were not affected by the alleged misconduct, and they
could not speak for anyone else. Even if we were to assume that
they had standing, the district court did not abuse its discretion
in denying the requested relief because the Coulters failed to
demonstrate that the alleged misconduct occurred.
III.
These appeals not only lack merit, they are frivolous. We
therefore exercise our discretion to award the appellees double
costs and reasonable attorney's fees. Those fees shall be
determined with respect to each appellant and appellee by the
district court following the receipt of our mandate. See
Fed.R.App.P. 38; Pelletier v. Zweifel, 921 F.2d 1465, 1523 (11th
Cir.), cert. denied, 502 U.S. 855, 112 S. Ct. 167, 116 L. Ed. 2d 131
(1991).
SO ORDERED.