Hall v. Lhaco, Inc.

• Citation: 140 F.3d 1190
• Decision Date: 14 April 1998
• Docket Number: No. 97-3679.,97-3679.
• Parties: James HALL, Plaintiff-Appellant, v. LHACO, INC., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

140 F.3d 1190

James HALL, Plaintiff-Appellant, v. LHACO, INC., Defendant-Appellee.

No. 97-3679.

United States Court of Appeals, Eighth Circuit.

Submitted March 9, 1998.

Decided April 14, 1998.

Jordan M. Lewis, Minneapolis, MN, argued (Shane C. Perry and John J. Carey, on the brief), for Plaintiff-Appellant.

Dennis D. Palmer, Kansas City, MO, argued (William E. Quirk, Michael J. Elston, on the brief), for Defendant-Appellee.

Before MCMILLIAN and FAGG, Circuit Judges, and BENNETT,^* District Judge.

BENNETT, District Judge.

Can a participant in a health benefit plan covered by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq., maintain an action for benefits and other equitable relief against a purported plan administrator who no longer has any connection with his ERISA plan? The appellant, a participant in an ERISA plan, asserts that the district court¹ improperly granted summary judgment to a purported plan administrator on the participant's action for benefits pursuant to § 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B), because the court incorrectly held that such a claim could only be brought against the ERISA plan itself. The purported plan administrator, however, contends that the appellant simply sued the wrong party, because he did not sue the ERISA plan itself. The appellant also asserts that he could bring his claim for injunctive and other equitable relief pursuant to § 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3), against the purported plan administrator, despite the district court's conclusion that he had no standing to pursue such a claim where the purported plan administrator no longer had any connection with the plan.

In addition to, or in conjunction with, these questions about whether the appellant can maintain the present lawsuit against the present defendant, the appellant contends that the district court erred in not ruling on his motion for class certification before it ruled on the appellee's motion for summary judgment. This error, the appellant asserts, was outcome determinative on the summary judgment motion, because many members of the class he seeks to represent would have been able to pursue the claims asserted.

We affirm.

I. BACKGROUND

Plaintiff-appellant James Hall filed this lawsuit as a class action on October 29, 1996, against defendant-appellee LHACO, Inc. Hall brought this lawsuit on behalf of all individuals who are covered under contracts and plans subject to ERISA to which LHACO provided administrative services to challenge LHACO's alleged practice of asserting subrogation liens against covered individuals far in excess of what their plans permit. Count I of the complaint sought enforcement of the plan terms and payment of plan benefits pursuant to §§ 502(a)(1)(B) and (a)(3) of ERISA, 29 U.S.C. §§ 1132(a)(1)(B) and (a)(3). Count II asserted breach of fiduciary duty pursuant to § 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3), and sought equitable relief, including injunctive relief and an accounting. LHACO was the only defendant named in the action.

Although the nub of Hall's lawsuit is his contention that LHACO, the purported plan administrator of his ERISA benefit plan, improperly attempted to expand the ERISA plan's rights to subrogation beyond what was conferred by the terms of the plan by conditioning payment of benefits on a participant's signing of a form acknowledging subrogation rights in excess of those provided by the plan, the merits of that issue are not currently before us. Rather, we will address Hall's argument that the district court erred in granting summary judgment in favor of LHACO on essentially the ground that Hall had sued the wrong party and, if required, Hall's further argument that the district court erred by considering LHACO's motion for summary judgment before ruling on his own motion for class certification. Therefore, the universe of pertinent facts for this appeal is relatively small.

Hall participates in an ERISA-covered, self-funded health care plan called SSM Health Care System Flex Care Program ("the Plan"), which he alleges was administered by LHACO. LHACO protests on appeal that it was not the Plan administrator, which LHACO asserts instead was SSM, according to Plan documents. However, LHACO acknowledges that it or one of its successors provided "administrative services," specifically "claims administration," to the Plan until December 20, 1996. Among other things, LHACO regularly reviewed claims against the Plan for evidence that a claim might be covered by other insurance or might be the result of an accident for which a third party could be liable. When LHACO identified such a claim, it sent the participant a subrogation questionnaire and requested a signed "Certification Agreement" from the participant before the claim was processed. Hall contends that this Certification Agreement improperly expanded the Plan's or LHACO's subrogation rights beyond the terms of the Plan. In any event, in June of 1995, Hall's son suffered an accident and Hall submitted a claim. Hall refused, however, to sign the Certification Agreement on advice of counsel. LHACO therefore never paid Hall's claim.

Hall then filed the present lawsuit and, on February 10, 1997, moved for certification of the suit as a class action. Shortly before Hall filed his motion for class certification, on February 4, 1997, LHACO moved to dismiss, or in the alternative, for summary judgment, asserting primarily that Hall had sued the wrong party, because he had not sued the Plan and LHACO was no longer associated with the Plan.

On September 10, 1997, the district court ruled on LHACO's motion, Hall's motion for class certification, and other pending motions. Because the court considered information contained in affidavits presented in support of LHACO's motion, it treated that motion as one for summary judgment. The district court first characterized Hall's claim in Count I as a claim properly brought solely pursuant to § 502(a)(1)(B). The district court noted that neither the Supreme Court nor the Eighth Circuit Court Appeals had specifically addressed the question of whether a plaintiff can bring a § 502(a)(1)(B) action against a plan administrator for equitable relief, but that courts to consider the question had held that the only proper party defendant on such a claim was the ERISA plan itself. Because the district court characterized LHACO as the "plan administrator," the court found LHACO was not the proper party defendant on Hall's § 502(a)(1)(B) claim. Therefore, the district court granted LHACO's motion for summary judgment as to Count I.

As to Count II, which the district court characterized as a claim for breach of fiduciary duty seeking injunctive and "other appropriate equitable relief," the court first concluded, on the authority of Varity Corp. v. Howe, 516 U.S. 489, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996), and this court's decision in Wald v. Southwestern Bell Corp. Customcare Medical Plan, 83 F.3d 1002 (8th Cir. 1996), that Hall's claim pursuant to § 502(a)(3) was barred, except for the prayer for injunctive relief, because Hall was provided adequate relief through his right to sue SSM under § 502(a)(1)(B). The district court found no reason this relief could not be sought against the Plan — such as termination of the Plan — and hence no reason a claim for this relief should be allowed against LHACO. As to injunctive relief, the district court found that the uncontroverted evidence in the record was that LHACO had not provided any administrative services to the Plan since December 20, 1996. Consequently, the district court concluded that Hall did not have standing to pursue a claim for injunctive relief against LHACO, because the claim was not likely to be redressed if the requested relief was granted. Specifically, the district court found that enjoining LHACO "will have absolutely no effect on Plaintiff, who has had his SSM benefits administered by another company since December 20, 1996." Order of September 10, 1997, p. 8.

Having concluded that Hall had sued the wrong party, or did not have standing to sue the party he had named, the court granted LHACO's motion for summary judgment and denied as "moot" Hall's motion for class certification. This appeal followed.

II. ANALYSIS

Although Hall contends first that the district court erred in ruling on LHACO's motion for summary judgment before ruling on his motion for class certification, and that this error was outcome determinative, we will consider first whether the district court's grant of summary judgment was tenable on the grounds the court stated. This court reviews de novo a decision to grant summary judgment. Christopher v. Adam's Mark Hotels, 137 F.3d 1069, 1070-71 (8th Cir.1998); Lane v. Amoco Corp., 133 F.3d 676, 677 (8th Cir.1998). We view the record "`in the light most favorable to the non-moving party.'" Layes v. Mead Corp., 132 F.3d 1246, 1249 (8th Cir.1998) (quoting Wald v. Southwestern Bell Corp. Customcare Medical Plan, 83 F.3d 1002, 1006 (8th Cir. 1996)). Summary judgment is appropriate when the movant establishes "that there are no material facts in [genuine] dispute and that, as a matter of law, the movant is entitled to judgment." Christopher, 137 F.3d at 1069, 1071 (quoting Oldham v. West, 47 F.3d 985, 988 (8th Cir.1995)). Furthermore, "`we may affirm the district court's grant of summary judgment on any ground supported by the record.'" Tyus v. Schoemehl, 93 F.3d 449, 453 n. 6 (8th Cir.1996) (quoting White v. Moulder, 30 F.3d 80, 82 (8th Cir.1994), cert. denied, 513 U.S. 1084, 115 S.Ct. 738, 130 L.Ed.2d 641 (1995)), cert. denied, ___ U.S. ___, 117 S.Ct. 1427, 137 L.Ed.2d 536 (1997). Thus, we may affirm even if our reasoning is different from the district court's. Duffy v. Wolle, 123 F.3d 1026, 1035 n. 6 (8th Cir.1997), petition for cert. filed, (Jan. 27, 1998) (No. 97-1371); Yowell v. Combs, 89 F.3d 542, 544 n. 4 (8th Cir.1996).

A. The § 502(...