Strube v. American Equity Investment Life Insurance

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
FILED
No. 05-11461 U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
Non-Argument Calendar November 29, 2005
________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 01-01236-CV-ORL-19-DAB
CHARLES W. STRUBE, individually, and as Trustee
of the Charles W. Strube Revocable Trust, on
behalf of himself and all others similarly situated,
WILBERT NORRIS, individually and on behalf of
himself and all others similarly situated, et al.,
Plaintiffs-Appellees,
BEVERLY MALONE,
Plaintiff-Appellant,
versus
AMERICAN EQUITY INVESTMENT LIFE
INSURANCE COMPANY, an Iowa corporation,
Defendant-Appellee.
________________________
No. 05-13014
Non-Argument Calendar
________________________
D. C. Docket No. 01-01236-CV-ORL-19-DAB
CHARLES W. STRUBE, individually, and as Trustee
of the Charles W. Strube Revocable Trust, on
behalf of himself and all others similarly situated,
BEVERLY MALONE,
WILBERT NORRIS, individually, and on behalf of
himself and all others similarly situated,
Plaintiffs-Appellees,
versus
AMERICAN EQUITY INVESTMENT LIFE INSURANCE
COMPANY, an Iowa corporation,
Defendant-Appellant.
________________________
Appeals from the United States District Court for the
Middle District of Florida
_________________________
(November 29, 2005)
Before ANDERSON, BLACK and PRYOR, Circuit Judges.
PER CURIAM:
This consolidated case concerns two appeals pertaining to the settlement of
a class action. Charles Strube, on his own behalf and on behalf of a nationwide
class of 23,000 individuals, sued American Equity Investment Life Insurance
Company (“American Equity”), alleging that American Equity committed a variety
of misrepresentations and omissions in connection with its sale to class members
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of equity-indexed annuities for estate planning purposes. Beverly S. Malone, a
member of the class, challenges the settlement to the extent that it would force her
to abandon her personal claims against American Equity in a Kentucky state court
alleging that American Equity committed various misrepresentations and
omissions in connection with their establishment of Malone’s living trust.
American Equity appeals the denial of an injunction it sought preventing Malone
from continuing with her personal action. Strube reminds this Court that the ages
of the class members make time of the essence in the disposition of this case.
On September 28, 2001, Charles Strube filed a class action in Florida state
court which was later removed to the United States District Court for the Middle
District of Florida on October 22, 2001. On February 8, 2005, the district court
entered an order granting final approval of the class settlement agreement. The
settlement provided for various forms of non-economic and economic relief and
required class members to waive their rights to maintain claims against American
Equity “on the basis of, connected with, arising out of , or related to, in whole or
in part” “the marketing, solicitation, application, underwriting, acceptance, sale,
purchase, operation , performance, retention, administration and/or replacement”
of covered equity indexed annuities. The district court interpreted the release not
to apply claims similarly situated to the marketing, preparation, or sale of living
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trusts. On May 19, 2005, American Equity sought an order from the district court
enjoining Malone from continuing with her action against American Equity in
Kentucky. The district court declined to do so because it believed an evidentiary
hearing would be needed to determine whether Malone’s living trust claims were
in fact claims about equity indexed annuities. On May 25, 2005, American Equity
appealed the denial.
I. Jurisdiction of American Equity’s Appeal.
On June 9, 2005, this Court certified the following jurisdictional question
for the litigants: “Whether the district court’s May 19, 2005 order denying
[defendant’s] motion for . . . an injunction is immediately appealable?” We
conclude that this Court has jurisdiction.
II. Does the Settlement Agreement Quash Malone’s Kentucky Suit?
This Court reviews the interpretation of a class action settlement agreement
de novo. See, e.g., Waters v. Int’l Precious Metals Corp., 237 F.3d 1273, 1277
(11th Cir. 2001) (“We review the district court’s construction of the [settlement]
[a]greement de novo.”). Under Rule 23(e) of the Federal Rules of Civil
Procedure, court approval is required for the settlement of the claims of a certified
class. Courts do not have the power to modify the terms of the settlement that has
already received the agreement of the parties. Evans v. Jeff D., 475 U.S. 717, 726,
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106 S.Ct. 1531, 1537 (1986) (“the power to approve or reject a settlement
negotiated by the parties before trial does not authorize the court to require the
parties to accept a settlement to which they have not agreed.”)
Both Malone and American Equity recognize that the plain language of the
settlement forbids Malone from maintaining her action against American Equity in
Kentucky for claims arising out of their creation of a living trust for her. Malone’s
trust was funded by her purchase of an equity-indexed annuity from American
Equity. In her pleadings and statements before the district court, Malone described
the living trust as a “Trojan horse” for the sale of equity-indexed annuities.
Because the living trust is, “in whole or in part,” “connected with” and “related to”
the sale of equity-indexed annuities, the terms of the settlement agreement release
American Equity from any potential liability concerning Malone’s living trust.
Nonetheless, Malone contends that the Kentucky suit remains viable. She
claims that the plain language reading of the settlement is trumped by the district
court’s interpretation of the settlement as not releasing claims connected to living
trusts. However, our interpretation of the settlement is determined by its plain
language, and not by any interpretive glosses provided by the district court. See
Waters v. Int’l Precious Metals Corp., 237 F.2d 1273, 1276-77 (11th Cir. 2001).
Alternatively, she then asks this Court to find that the district court wrongly
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approved the settlement agreement. In deciding whether to approve a settlement
agreement, a district court must determine whether the agreement is “fair,
reasonable, and adequate.” Piambino v. Bailey, 757 F.2d 1112 (11th Cir. 1985)
(“. . . the district court has a heavy duty to ensure that any settlement is ‘fair,
reasonable, and adequate.’”) (internal citations omitted). This Court examines a
district court’s approval of a class action settlement agreement under the “abuse of
discretion” standard. Bennett v. Behring, 737 F.2d 982, 986 (11th Cir. 1984).
This inquiry evaluates the fitness of the settlement in its entirety. Cotton v.
Hinton, 559 F.2d 1326, 1332 (5th Cir. 1977) (“The settlement must stand or fall as
a whole.”)
We leave untouched the district court’s approval of the settlement
agreement. As Malone concedes, her objections to the settlement are not shared
by any other of her fellow class members. Her criticisms of the agreement are
peripheral to the chief bargains struck between the plaintiff class and American
Equity. She asserts that the settlement is impermissibly broad because it would
quash her Kentucky litigation which, she argues, involve claims that are based on
an entirely different factual predicate. We do not find that to be the case. Both the
Kentucky litigation and the Strube action concern American Equity’s marketing
and sale of equity-indexed annuities. In addition, Malone’s arguments challenging
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the adequacy of Strube to serve as lead representative and the typicality of his
claims are waived because they were not raised before the district court. See, e.g.,
Access Now, Inc. v. Southwest Airlines Co., 385 F.3d 1324, 1331 (11th Cir. 2004)
(“This Court has repeatedly held that ‘an issue not raised in the district court and
raised for the first time in an appeal will not be considered by this court.’”)
(citations omitted).
Thus, we hold that the terms of the settlement agreement prevent Malone
from continuing with her living trust suit against American Equity in Kentucky.
Consequently, we grant American Equity a permanent injunction against Malone
preventing her from maintaining her suit against American Equity in Kentucky. 1
REVERSED.
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Parties’ requests for oral argument are denied.
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