Dorothy Snow v. Boston Mutual Life Insurance Company

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 13-15067
Non-Argument Calendar
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D.C. Docket No. 3:11-cv-00813-MEF-TFM
DOROTHY SNOW,
Plaintiff - Appellant,
versus
BOSTON MUTUAL LIFE INSURANCE COMPANY,
Defendant - Appellee,
MEADOWCRAFT, INC.,
Defendant.
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Appeal from the United States District Court
for the Middle District of Alabama
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(October 16, 2014)
Before MARCUS, WILSON and ANDERSON, Circuit Judges.
PER CURIAM:
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Dorothy Snow (“Snow”), the widow and designated beneficiary under a life
insurance policy issued to James Francis Snow (“Mr. Snow”) by Boston Mutual
Life Insurance Company (“Boston Mutual”), appeals from the district court’s final
order in favor of Boston Mutual and Snow’s former employer, Meadowcraft, Inc.
(“Meadowcraft”), in Snow’s case raising claims under the Employee Retirement
Income Security Act of 1974 (“ERISA”). The amended complaint alleged that
Boston Mutual wrongfully denied payment of approximately $115,000 in life
insurance benefits to Snow, and sought equitable relief claiming that Boston
Mutual, as plan administrator and claims adjudicator, breached certain fiduciary
duties it owed to Snow. On appeal, Snow argues that: (1) the district court erred in
construing the term “Normal Retirement Date”; and (2) the district court erred in
finding that only the plan administrator owed fiduciary duties to the Snows. After
careful review, we affirm.
In an appeal following a bench trial, we review the district court’s
conclusions of law de novo and its findings of fact for clear error. A.I.G. Uruguay
Compania de Seguros, S.A. v. AAA Cooper Transp., 334 F.3d 997, 1003 (11th Cir.
2003). We review a district court’s grant of summary judgment de novo.
Levinson v. Reliance Standard Life Ins. Co., 245 F.3d 1321, 1325 (11th Cir. 2001).
All reasonable inferences are due to be drawn in the nonmoving party’s favor.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
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The relevant facts are these. Boston Mutual issued a group life insurance
policy to Meadowcraft to insure the life and death component of Meadowcraft’s
long term disability plan (the “Plan”). Meadowcraft paid 100% of the premium for
group life insurance coverage as a benefit to its employees, and the Plan included a
waiver of premium provision allowing the coverage to continue if an employee
became disabled. Mr. Snow worked at Meadowcraft from October 1993 until he
because disabled in an industrial accident in May 2002, and he died on August 27,
2009 at the age of 66 years and 9 months.
Under the Plan, when a disabled employee’s waiver of premium claim is
approved, his life insurance:
will be kept in force: (1) with no further premium cost to him or to the
Policyholder; (2) for the life amount in effect at the time; (3) for as long as
he is disabled; (4) whether or not the plan stays in force; (5) but in no event
beyond the Normal Retirement date in effect as of the date of . . . disability.
Additionally, an employee’s insurance under the Plan stops:
on the first of the following dates: (1) when the Plan stops; (2) when he is no
longer eligible for insurance under the Plan; (3) at the end of 31 days from
when the last premium was due and not paid if the employee is required to
pay part or all of the cost of his insurance; (4) when he leaves his job. But if
he leaves his job due to disability, . . . the Policyholder . . . may keep the
employee’s insurance in force until the Policyholder . . . chooses to stop it or
until the employee’s normal retirement date, whichever is earlier.
The Plan defines “Normal Retirement Date” as the “normal retirement date
provided for by the Policyholder’s published or accepted personnel practices.”
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First, we are unpersuaded by Snow’s claim that the district court erred in
construing the term “Normal Retirement Date.” For starters, because the Plan
defines “Normal Retirement Date” in reference to Meadowcraft’s “published or
accepted personnel practices,” it was necessary for the district court to examine
extrinsic evidence of Meadowcraft’s personnel practices to determine the Normal
Retirement Date. This does not mean the contract was ambiguous. Courts
routinely examine extrinsic evidence to determine the meaning of contract terms
even while holding that the contract is unambiguous. We’ve held that “[t]he parol
evidence rule excludes extrinsic evidence offered to vary or contradict, rather than
to explain and interpret, the terms of an integrated contract.” Pennzoil Co. v.
F.E.R.C., 645 F.2d 360, 388 (5th Cir. 1981). 1
As for Snow’s claim that the term “Normal Retirement date” was ambiguous
because it referred to Meadowcraft’s practices and Meadowcraft did not produce a
document labeled as “Meadowcraft Personnel Practices,” this argument is
meritless. Nothing in Plan limited what the district court could consider as
evidence of Meadowcraft’s personnel practices, and certainly nothing suggested
that the district court could not review any of the materials it did. Nor did the
district court’s review of these materials signify that the Plan had been amended.
In fact, we’ve allowed district courts to look to sources outside of an ERISA plan
1
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), we adopted as
binding precedent all Fifth Circuit decisions issued before October 1, 1981.
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to determine the meaning of a term that the plan does not define. See Tippitt v.
Reliance Std. Life Ins. Co., 457 F.3d 1227, 1234 (11th Cir. 2006) (allowing district
court to look to outside sources to determine the meaning of “regular occupation”).
Moreover, not only was the term not ambiguous, but the district court did
not clearly err in construing the Normal Retirement Date to be 65 year old. This
age was found in a summary of Meadowcraft’s 401(k) plan, which provided that
“your normal retirement age is the date you reach age sixty-five,” and in testimony
from Meadowcraft human resources employees Larry York and Mary Beth
Wilbanks. Although Mr. Snow was not a 401(k) participant, the record shows that
the summary was made available to all salaried employees, and that Mr. Snow
attended open-enrollment meetings where attendees received the 401(k) summary
stating. But even if he hadn’t received the summary, “ERISA does not require”
that a participant “have any knowledge of a written plan’s terms.” Moorman v.
UnumProvident Corp., 464 F.3d 1260, 1271 (11th Cir. 2006) (quotation marks and
citation omitted). 2
As for whether the district court’s interpretation failed to give meaning to all
provisions of the Plan, we disagree. Under the District Court’s interpretation of the
Plan, an employee who becomes disabled prior to age 65 could continue to receive
2
As for Snow’s argument that a copy of the 401(k) plan summary was not placed in the
administrative claim record, Snow did not raise this argument below. See Knights Armament Co.
v. Optical Sys. Tech., Inc., 654 F.3d 1179, 1186 n.13 (11th Cir. 2011). In any event, Snow has
failed to show any prejudice from any violation of 29 U.S.C. § 1133(2), and has failed to
establish that the statute and accompanying regulations even apply to the 401(k) summary.
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the waiver of premium benefit until age 65; an employee who becomes disabled
after age 65 would be deemed retired and not receive the waiver of premium
benefit; and a non-disabled employee could continue to receive the benefit until his
actual retirement, although the benefits would be reduced after age 70. No
language of the Plan is rendered surplusage under the district court’s interpretation.
Nor, moreover, do we find any support for Snow’s claim that ERISA precludes a
Normal Retirement Date of age 65, or that there is any difference between “normal
retirement date” and “normal retirement age.”
In short, because the district court did not clearly err in finding that the Plan
term “Normal Retirement Date” means an employee’s sixty-fifth birthday, the
district court did not err in concluding that Mr. Snow’s life insurance coverage
lapsed prior to his death at age 67, and that Snow was not entitled to any benefits
under the Plan.
We are also unpersuaded by Snow’s claim that the district court erred in
concluding that only the plan administrator owed fiduciary duties to the Snows.
Snow’s ERISA § 502(a)(3) claim for fiduciary breach arises of out the
“Defendants’” supposed failure to provide her decedent with (1) a Summary Plan
Description, (2) complete and accurate information regarding the Plan, and (3) all
material information related to benefits and coverage. Because these disclosure
obligations are statutorily vested with Plan Administrators, the district court looked
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to the Plan documents and the ERISA statute to determine which entity -- Boston
Mutual or Meadowcraft -- was the administrator for Meadowcraft’s Plan. After
conducting a thorough analysis, the district court concluded “there is no basis for
finding Boston Mutual to be the Plan Administrator under ERISA.” The district
court explained:
[T]he undisputed evidence establishes that Meadowcraft, rather than Boston
Mutual, is the Plan Administrator in this instance. There is no dispute that
Mr. Snow’s employer was Meadowcraft. There is also no dispute that the
Plan was “established or maintained by a single employer” -- Meadowcraft.
Thus, while Meadowcraft may not have been expressly designated as the
administrator in the Plan, it qualifies as such by virtue of being a “plan
sponsor.” Therefore, Meadowcraft, not Boston Mutual, would be the proper
defendant in an action for breaches of Plan Administrator duties under
ERISA. See 29 U.S.C. § 3(16)(A)(ii), (B)(i).
While noting that Snow may not have a viable remedy (assuming she could
establish a breach) because Meadowcraft is no longer in business, the District
Court explained that this “reality … does not alleviate Plaintiff of her burden to
establish the essential elements of her claim…” The District Court’s decision is not
only supported by the ERISA statute and the Plan documents, but also by
Meadowcraft’s former human resources personnel who unequivocally testified that
Meadowcraft was the Plan Administrator for all of the Company’s Plans.
Further, Snow’s claim that Boston Mutual qualifies as a “Plan
Administrator” because it “drafted all plan documents” and had to “consent” to any
amendments is equally unavailing. First of all, Boston Mutual did not unilaterally
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design the Plan. Meadowcraft, as the Plan Sponsor, negotiated the terms of the
coverage and crafted the design of the Plan as reflected in the application. Second,
the design and adoption of an ERISA Plan is a settlor function, not a fiduciary act.
Lockheed Corp. v. Spink, 517 U.S. 882, 890 (1996) (explaining that when plan
sponsors adopt, modify or terminate ERISA plans, “they do not act as fiduciaries
but are analogous to settlors of a trust.”) (citations omitted). Third, the design of
the Plan has nothing to do with Snow’s claim for equitable relief; rather, her
grievance lies with the Meadowcraft’s alleged failure to provide her late husband
with a plan description or other meaningful disclosures regarding the Plan. Again,
Boston Mutual, the Plan insurer, was not responsible for making those disclosures.
AFFIRMED.
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