Burton v. Colorado Access

• Decision Date: 13 August 2015
• Docket Number: Court of Appeals No. 14CA0728
• Citation: 456 P.3d 46
• Parties: Caroline BURTON, Plaintiff–Appellant, v. COLORADO ACCESS, a/k/a Colorado Access Long Term Disability Plan, Defendant–Appellee.
• Court: Colorado Court of Appeals

456 P.3d 46

Caroline BURTON, Plaintiff–Appellant,

v.COLORADO ACCESS, a/k/a Colorado Access Long Term Disability Plan, Defendant–Appellee.

Court of Appeals No. 14CA0728

Colorado Court of Appeals, Division II.

Announced August 13, 2015

The Murphy Law Firm, LLC, Brian A. Murphy, Wheat Ridge, Colorado, for Plaintiff–Appellant

Holland & Hart, LLP, Michael S. Beaver, Steven T. Collis, Greenwood Village, Colorado, for Defendant–Appellee

Opinion by JUDGE J. JONES

¶ 1 Plaintiff, Caroline Burton, appeals the district court's order setting aside her default judgment against defendant, Colorado Access Long Term Disability Plan (the plan), and the district court's subsequent summary judgment in the plan's favor on her ERISA benefits claim. We affirm the order and the judgment.

I. Background

¶ 2 Ms. Burton was formerly employed by a company known as Colorado Access. Colorado Access sponsored the plan, which was a long-term disability insurance policy issued and administered by Unum Life Insurance Company of America (Unum). Ms. Burton sought benefits from Unum under the insurance policy and Unum paid her benefits for about two years before terminating them.

¶ 3 On May 3, 2007, Ms. Burton filed a complaint against the plan claiming entitlement to additional benefits under section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA). See 29 U.S.C. § 1132(a)(1)(B) (2012). But she did not serve or attempt to serve the plan with the complaint. Instead, on May 11, 2007, she served the complaint on the Secretary of the United States Department of Labor under section 1132(d)(1). The Secretary did not forward the complaint to the plan. Consequently, the plan did not answer the complaint. Ms. Burton sought a default judgment against the plan, which the district court entered on May 16, 2008.¹

¶ 4 On December 11, 2012, the plan filed a motion to set aside the default judgment under C.R.C.P. 60(b)(3). It argued that Ms. Burton had never properly served it with the complaint; therefore, the district court lacked personal jurisdiction over it when the default judgment was entered, and, accordingly, the default judgment was void. The district court agreed with the plan and set aside the default judgment.

¶ 5 The plan later moved for summary judgment. It argued that because only Unum made eligibility determinations under the plan, and only Unum was obligated to pay benefits under the plan, only Unum could be subject to liability under section 1132(a)(1)(B). In support of its motion, the plan submitted an affidavit from Colorado Access's Vice President of Administrative Services and Corporate Compliance Officer, Rene Gallegos. Therein, Ms. Gallegos stated as follows:

• Colorado Access sponsored the plan, which made long-term disability insurance available to eligible Colorado Access employees.

• The plan was created by Colorado Access's purchase of an insurance policy from Unum.

• The plan's only governing document was the Unum insurance policy.

• Only Unum approved payment of benefits and only Unum paid benefits.

• The plan did not make benefits determinations or pay benefits.

• "The Plan was merely a technical legal entity that existed for the sole purpose of providing insurance under the [Unum insurance policy] to eligible Colorado Access employees. The Plan had no operations, no activities, no employees, no assets, and no means of paying any insurance benefits under the [Unum insurance policy]."

• The plan never played any role in processing Ms. Burton's claim, and did not receive the application for benefits or any correspondence concerning the claim.

¶ 6 The plan also submitted the Unum insurance policy with its motion. That policy, which included a summary plan description, included the following relevant information:

• Eligible employees were required to send all claims and information relating to claims to Unum.

• Unum would make all benefits payments.

• Colorado Access was not an agent of Unum.

• Unum determined eligibility for benefits.

• The plan administrator was Colorado Access. Unum administered benefits.

• The plan was funded as an insurance policy.

¶ 7 The district court granted the motion for summary judgment, agreeing with the plan that it cannot be sued under section 1132(a)(1)(B) because the undisputed facts show that it is not obligated to provide benefits.

¶ 8 Ms. Burton's appeal requires us to answer two questions. First, given that Colorado Access was the plan administrator, and the plan designated Colorado Access as its agent for service of process, could Ms. Burton serve process on the plan by serving the Secretary of Labor under section 1132(d)(1) ? We answer that question "no," and therefore affirm the district court's order setting aside the default judgment. Second, given that Unum is the only entity which made eligibility and payment decisions under the plan, and is the only entity that was obligated to pay benefits, can Ms. Burton nevertheless sue the plan? We answer that question "no" as well, and therefore affirm the district court's summary judgment.

II. Default Judgment—Service on the Secretary of Labor

A. Applicable Law and Standard of Review

¶ 9 C.R.C.P. 60(b)(3) provides that a court may set aside a judgment that is "void." Indeed, if a judgment is void, the court must set it aside. First Nat'l Bank of Telluride v. Fleisher, 2 P.3d 706, 714 (Colo.2000) ; In re Petition of C.L.S., 252 P.3d 556, 561 (Colo.App.2011). And this is so regardless of when the party seeking to set aside the judgment moves to set it aside: no time limit applies to a motion under C.R.C.P. 60(b)(3). Davidson Chevrolet, Inc. v. City & Cnty. of Denver, 138 Colo. 171, 175, 330 P.2d 1116, 1118–19 (1958) ; In re Petition of C.L.S., 252 P.3d at 560 ; Don J. Best Trust v. Cherry Creek Nat'l Bank, 792 P.2d 302, 304 (Colo.App.1990).

¶ 10 A judgment is void if the court that entered it lacked subject matter jurisdiction or personal jurisdiction over the defendant. See Davidson Chevrolet, 138 Colo. at 175, 330 P.2d at 118. If a plaintiff fails to properly serve the defendant with a complaint, there is no personal jurisdiction over the defendant. See Weaver Constr. Co. v. Dist. Court, 190 Colo. 227, 232, 545 P.2d 1042, 1045 (1976) ; Carlson v. Dist. Court, 116 Colo. 330, 341–42, 180 P.2d 525, 531 (1947) ; Rea v. Corr. Corp. of Am., 2012 COA 11, ¶ 12, 272 P.3d 1143 (citing Cambridge Holdings Grp., Inc. v. Fed. Ins. Co., 489 F.3d 1356, 1361 (D.C.Cir.2007) ); United Bank of Boulder, N.A. v. Buchanan, 836 P.2d 473, 476–77 (Colo.App.1992) ; see also Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987).

¶ 11 Likewise, a default judgment entered against a defendant without proper notice may violate a defendant's due process rights and be void for that reason as well. See First Nat'l Bank, 2 P.3d at 714 ; In re Petition of C.L.S., 252 P.3d at 561 ; Don J. Best Trust, 792 P.2d at 305.

¶ 12 We review de novo a district court's decision on a motion to set aside a default judgment under C.R.C.P. 60(b)(3). First Nat'l Bank, 2 P.3d at 714 ; In re Petition of C.L.S., 252 P.3d at 561.

B. Analysis

¶ 13 Determining whether Ms. Burton properly served process on the plan requires us to construe various provisions of ERISA. In so doing, we apply federal rules of statutory interpretation. Copeland v. MBNA Am. Bank, N.A., 907 P.2d 87, 90 (Colo.1995) ; People in Interest of A.R., 2012 COA 195M, ¶ 17, 310 P.3d 1007. We must consider " ‘whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case.’ " Roberts v. Sea–Land Servs., Inc., 566 U.S. 93, 100, 132 S.Ct. 1350, 1356, 182 L.Ed.2d 341 (2012) (quoting Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997) ). This requires us to "look first to [the statute's] language, giving the words used their ordinary meaning." Id. (internal quotation marks omitted). Further, we must not construe the statute "in a vacuum. It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme." Davis v. Mich. Dep't of Treasury, 489 U.S. 803, 809, 109 S.Ct. 1500, 103 L.Ed.2d 891 (1989). It is also a fundamental canon of statutory construction that "a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant." TRW Inc. v. Andrews, 534 U.S. 19, 31, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001) (internal quotation marks omitted). Along the same lines, we must avoid "interpretations of a statute which would produce absurd results ... if alternative interpretations consistent with the legislative purpose are available." Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 575, 102 S.Ct. 3245, 73 L.Ed.2d 973 (1982).

¶ 14 Section 1132(d)(1) of ERISA provides that "[s]ervice of summons, subp[o]ena, or other legal process of a court upon ... an administrator of an employee benefit plan in his capacity as such shall constitute service upon the employee benefit plan." "The term ‘administrator’ means the person specifically so designated by the terms of the instrument under which the plan is operated...." 29 U.S.C. § 1002(16)(A)(i) (2012). A corporation is a "person" for purposes of ERISA. § 1002(9). So, ERISA is clear that service of process on a plan administrator is service on the plan, and that the administrator may be a corporation.

¶ 15 But ERISA also allows a plan to designate a person other than the plan administrator as its agent for service of process. 29 U.S.C. § 1022(b) (2012) (the summary plan description must contain "the name and address of the person designated as agent for the service of process, if such person is not the administrator"). And "[i]n a case where a plan has not designated in the summary plan description of the plan an individual as agent for the service of legal process, service upon the...