Fisher v. Metropolitan Life Ins. Co.

• Decision Date: 09 March 1990
• Docket Number: No. 89-4365,89-4365
• Citation: 895 F.2d 1073
• Parties: , 12 Employee Benefits Ca 1044 Bertice D. FISHER, Plaintiff-Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, A Corporation, and Ingalls Shipbuilding Division, Litton Systems, Inc. and Litton Industries, Inc., Defendants-Appellees. Summary Calendar.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1073

895 F.2d 1073

15 Fed.R.Serv.3d 1484, 12 Employee Benefits Ca 1044

Bertice D. FISHER, Plaintiff-Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, A Corporation, and Ingalls Shipbuilding Division, Litton Systems Inc. and Litton Industries, Inc. Defendants-Appellees.

No. 89-4365

Summary Calendar.

United States Court of Appeals, Fifth Circuit.

March 9, 1990.

C.R. McRae, Margaret P. Ellis, Pascagoula, Miss., Lawrence E. Abernathy, III, Laurel, Miss., for plaintiff-appellant.

Frederick B. Feeney, II, Richard P. Salloum, Gulfport, Miss., James M. Lenaghan, William J. Toppeta, New York City, for Metropolitan Life.

Karl Wisenburg, William F. Jordan, Pascagoula, Miss., for Ingalls and Litton.

Appeal from the United States District Court for the Southern District of Mississippi.

Before POLITZ, GARWOOD, and JOLLY, Circuit Judges.

POLITZ, Circuit Judge:

Following dismissal of his amended complaint on grounds of ERISA preemption the district court granted Bertice Fisher leave to file a second amended complaint stating claims arising under ERISA. The court then dismissed Fisher's second amended complaint in part for failure to name the Plan administrator as an indispensable party and in part on summary judgment. Finding no error warranting reversal, we affirm.

Background

On January 1, 1978, Litton Industries, Inc. established its Employees' Long Term Disability Plan (the Plan) to provide monthly disability benefits to its employees and those of its participating divisions and subsidiaries. Litton and the Chase Manhattan Bank entered into an Agreement and Declaration of Trust under which Chase Manhattan serves as trustee of the Litton Industries, Inc. Employees Long Term Disability Trust which funds Plan benefits. The Plan administrator and the finance manager are named fiduciaries of the Plan. The Plan subsequently entered into an agreement with the Metropolitan Life Insurance Company under which the Plan administrator delegated to Metropolitan the responsibility for plan administration and actuarial calculations, and the evaluation, approval, calculation, and payment of employee claims.

The Plan description provides that an employee's monthly benefit is reduced by designated forms of "other income," including any disability benefits paid to the employee and his dependents by the Social Security Administration. This offset is limited to assure employees a minimum monthly benefit of $25. The Plan also authorizes the Plan administrator to correct any errors made in benefit payouts in "whatever manner he determines is consistent with his responsibilities in administering the Plan."

Bertice Fisher was an employee of Ingalls Shipbuilding, a Litton division that participates in the Plan. Following surgery to remove one eye that left him legally blind Fisher filed a claim for disability benefits which Metropolitan approved on April 13, 1978. Metropolitan informed Fisher that his $921 monthly benefit would be reduced by the Social Security awards paid to him and his dependents. Fisher submitted his and his spouse's award certificates showing that they received $722.30 monthly from Social Security. Metropolitan began to pay Fisher $198.70 in monthly benefits. Subsequently determining that Fisher's two children were also receiving Social Security disability benefits, Metropolitan requested their certificates which showed payments to each of $144.40 monthly. When he sent in his children's award certificates Fisher appended a handwritten note asking Metropolitan to provide him with the "policies covering my contract for salary continuation."

Upon receipt of the children's certificates Metropolitan reduced Fisher's monthly payment to the guaranteed $25 minimum. Computing that it had overpaid Fisher $1,339.60 Metropolitan requested reimbursement. Not receiving a timely reply, Metropolitan notified Fisher that it would credit the $25 monthly payment until the overpayment was recovered. Metropolitan responded to Fisher's request for "policies" by referring him to his former employer. The overpayment was recouped by June 1984 at which time Metropolitan resumed the $25 per month payments.

On April 5, 1984, Fisher filed suit in Mississippi state court against Metropolitan, Ingalls, and Litton, alleging breach of his "insurance" contract and seeking a declaration of his rights under the "group insurance policy," and compensatory and punitive damages. Litton and Ingalls moved to dismiss Fisher's claim on the grounds that his causes of action were preempted by section 502 of ERISA and that Thomas Holgate, the Plan administrator, was an indispensable party. Metropolitan sought dismissal on those grounds, adding that Fisher had failed to exhaust his remedies under the Plan. When Fisher failed to respond to these motions the state trial court dismissed his case for failure to prosecute.

On Fisher's motion the state court reinstated his suit but placed it on the inactive docket pending the Supreme Court's decision in Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987). Following the Court's decisions in Pilot Life and Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987), Litton, Ingalls, and Metropolitan moved to dismiss Fisher's case as stating claims preempted by ERISA. The state court dismissed Fisher's suit and gave him 30 days in which to amend his complaint. Fisher's amended complaint alleged causes of action relating to "fraudulent" reduction of his "group insurance" benefits by the amount of Social Security he received and wrongful recovery of Metropolitan's overpayment in violation of Mississippi and/or California law. He sought $1.2 million in compensatory and $10 million in punitive damages. The defendants removed to federal court on the grounds that Fisher's amended complaint again asserted causes of action governed by ERISA.

Metropolitan moved for summary judgment on the grounds that ERISA preempted Fisher's causes of action, did not permit extracontractual or punitive damages, and did not entitle Fisher to a jury trial. Fisher contested the applicability of ERISA and moved to remand his case to state court. The district court denied Fisher's motion to remand and granted Metropolitan's motion for summary judgment on preemption grounds, but allowed Fisher to amend his amended complaint to state any claims arising under ERISA.

Fisher filed his second amended complaint, incorporating his two prior complaints. He also alleged that the defendants had committed fraud by modifying a prior existing plan, that Metropolitan had failed to provide him with a copy of the Plan in violation of 29 U.S.C. Sec. 1024(b)(4), and that he was entitled to attorneys' fees and such other equitable relief as the court saw fit arising out of defendants' infliction of emotional distress. After answering the complaint Litton and Ingalls moved to dismiss or, in the alternative, for summary judgment. Fisher moved to stay their motion under Fed.R.Civ.P. 56(f) to enable him to discover whether Holgate, as Plan administrator, was an indispensable party. Finding Holgate to be an indispensable party and that Fisher had submitted no evidence to support the allegations in his complaint, the district court denied his motion for further discovery and granted Litton's and Ingall's alternative motions to dismiss and for summary judgment. The court granted Metropolitan similar relief. Fisher timely appealed.

Analysis

1. Litton, Ingalls, and Metropolitan as Fiduciaries

Fisher first contends that the district court's determination that Litton, Ingalls, and Metropolitan were not fiduciaries of the Plan and that Fisher's causes of action could not, therefore, be asserted against them was in error. Emphasizing ERISA's functional approach to imposing fiduciary obligations, Fisher argues that all appellees are Plan fiduciaries. Assuming, arguendo, that this assertion is correct, such does not present reversible error.

ERISA's definition of "fiduciary" is functional in nature, imposing the duties that accompany that status upon any person who "exercises any discretionary authority or discretionary control respecting management of [a] plan or exercises any authority or control respecting management or disposition of its assets ... [or] has any discretionary authority or discretionary responsibility in the administration of such [a] plan." 29 U.S.C. Secs. 1002(21)(A)(i), 1002(21)(A)(iii). See Firestone Tire & Rubber Co. v. Bruch, --- U.S. ----, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). Fiduciary duties extend to any person to whom a named fiduciary delegates fiduciary responsibilities pursuant to 29 U.S.C. Sec. 1105(c)(1)(B). 29 U.S.C. Sec. 1002(21)(A). Fisher contends that Litton's reserved right under the Plan to alter its terms and to terminate it, and Metropolitan's delegated discretion to determine who will receive benefits and in what amount, make both entities fiduciaries under ERISA.

Whether Metropolitan, Litton, and Ingalls may be regarded as ERISA fiduciaries, however, need not be resolved because of the district court's alternative finding that summary judgment was appropriate on the merits of Fisher's charges that the Litton Plan had fraudulently modified a prior existing plan and that the Litton Plan's integration provision was illegal. ¹ Fisher does not contest this portion of the court's order. This alternative finding that there was no genuine issue of material fact as to whether a breach of fiduciary duty had occurred and that the appellees were entitled to judgment as a matter of law, makes it unnecessary for us to reach the issue of appellees' fiduciary...