PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

HEALTHSOUTH REHABILITATION

HOSPITAL,

Plaintiff-Appellant,

v.

AMERICAN NATIONAL RED CROSS,

d/b/a American Red Cross South

Carolina Blood Services Region,

Defendant-Appellee,

No. 95-2645

and

AETNA INSURANCE COMPANY OF

AMERICA; ALBERTA SHAW; DERRICK

WAGNER, individually and as Parents

and Natural Guardians of Eric

Shaw, a Minor under the age of

Eighteen (18) Years,

Defendants.

Appeal from the United States District Court

for the District of South Carolina, at Florence.

Cameron McGowan Currie, District Judge.

(CA-94-3022-22)

Argued: September 27, 1996

Decided: December 3, 1996

Before ERVIN and HAMILTON, Circuit Judges, and SPENCER,

United States District Judge for the Eastern District of Virginia,

sitting by designation.

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Affirmed by published opinion. Judge Hamilton wrote the opinion, in

which Judge Ervin and Judge Spencer joined.

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COUNSEL

ARGUED: Annette Roney Drachman, LADDAGA, CROUT &

DRACHMAN, P.A., Charleston, South Carolina, for Appellant. Daniel J. Westbrook, NELSON, MULLINS, RILEY & SCARBOROUGH, L.L.P., Columbia, South Carolina, for Appellee. ON BRIEF:

Linda C. Garrett, LADDAGA, CROUT & DRACHMAN, P.A.,

Charleston, South Carolina, for Appellant. Alice V. Harris, NELSON,

MULLINS, RILEY & SCARBOROUGH, L.L.P., Columbia, South

Carolina, for Appellee.

_________________________________________________________________

OPINION

HAMILTON, Circuit Judge:

This is a suit for damages filed by HealthSouth Rehabilitation Hospital (HealthSouth) pursuant to the Employment Retirement Income

Security Act of 1974 (ERISA), 29 U.S.C.A. §§ 1001-1461 (West

Supp. 1995). The sole remaining defendant in this case is the American National Red Cross, South Carolina Blood Services Region (Red

Cross). HealthSouth's claims against the other defendants have either

been settled or resolved. The district court granted summary judgment

to Red Cross, and we now affirm.

I.

Red Cross maintains "For Your Benefit," a self-insured ERISA

welfare plan (Plan) for its employees. Red Cross is the plan administrator, and Aetna Life Insurance Company (Aetna) provides administrative and ministerial services to Red Cross pursuant to a contract.

According to that contract, Aetna had the authority to make determinations on behalf of Red Cross with respect to benefit payments under

the Plan and to pay out those benefits, subject to Red Cross's reserved

right to modify any such determinations. Aetna had no contractual

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authority to modify the Plan by declaring coverage for non-covered

procedures, nor to bestow beneficiary status on non-beneficiaries.

Derrick Wagner (Wagner) is a Red Cross employee and the natural

father of Eric Shaw. Red Cross provides all employees with a summary Plan description, and according to practice, one was distributed

to Wagner. That summary explains that an employee may enroll himself as a Plan participant and his spouse and dependent children as

Plan beneficiaries. In June 1989, Wagner completed a Plan enrollment form in which he elected to obtain medical coverage for himself

only. At first, Wagner checked the box "yes" to indicate coverage

election for dependent children but then marked through the "yes"

box and checked "no" and initialed the change. No premium payments for Eric Shaw's coverage under the Plan were ever made by

Wagner or received by the Red Cross. Accordingly, Eric Shaw never

satisfied the Plan definition of "beneficiary."

On January 4, 1994, Alberta Shaw, Eric Shaw's mother, took Eric

Shaw to HealthSouth, in Florence, South Carolina, for rehabilitation

therapy. Alberta Shaw represented to HealthSouth that Eric was covered by Wagner's Red Cross Plan and signed a document assigning

the right to all benefits payable from any and all insurance policies

over to HealthSouth. Alberta Shaw also presented HealthSouth with

an insurance card which advised health care providers to contact

Aetna to certify hospital admissions or verify coverage. That card also

states that it does not guarantee coverage.

Before HealthSouth admitted Eric, the hospital's Admissions Coordinator called an Aetna representative to verify coverage. That Aetna

representative erroneously informed the Admissions Coordinator that

Eric Shaw was a covered beneficiary under the Plan with no deductible and one hundred percent coverage for approved charges. A "confirmation fax" was also sent to Aetna by HealthSouth on January 4,

1994, but no response was received by HealthSouth to the confirmation fax until February 15, 1994.

Based on Aetna's oral assurances, Eric Shaw was admitted at

HealthSouth and underwent treatment for several weeks. Throughout

Eric's stay at the hospital, Aetna was called on a weekly basis to

obtain pre-certification for additional days of treatment. That pre-

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certification was always orally given. However, on February 15,

1994, an Aetna employee contacted HealthSouth and stated that the

earlier oral confirmation of beneficiary status was in error. Aetna also

informed HealthSouth for the first time that Eric Shaw was not a beneficiary under the Plan. HealthSouth discharged Eric Shaw on February 17, 1994, after he had incurred $82,967 in expenses. The hospital

submitted that bill to Aetna, but Red Cross declined to pay because

Wagner had never elected to secure coverage for Eric.

HealthSouth brought an action against Red Cross, Aetna, Derrick

Wagner, and Alberta Shaw, seeking to recoup Eric Shaw's hospital

bills. The hospital alleged two claims against Red Cross in its

amended complaint. First, the hospital alleged that Aetna acted as Red

Cross's designated agent when Aetna orally confirmed Eric Shaw's

coverage under Wagner's health insurance plan with Red Cross.

Accordingly, HealthSouth asserted that Aetna's "interpretation" modified the Plan and Red Cross was bound by that modification. HealthSouth further maintained that because of the modification, Eric Shaw

became a beneficiary and Red Cross was liable for Eric Shaw's hospital costs of $82,967. Second, HealthSouth alleged that it had become

a valid assignee of any rights Eric Shaw had under the Plan and

because Red Cross refused to pay the benefits allegedly owed to Eric

as a now "confirmed" beneficiary of the Plan, Red Cross had

breached the fiduciary duties it owed to HealthSouth as assignee. 29

U.S.C.A. § 1104(a)(1).

Red Cross filed a motion for summary judgment, claiming that

HealthSouth did not have standing to bring the suit because Eric

Shaw was not a beneficiary or an employee of a qualifying ERISA

plan. 29 U.S.C.A. § 1132(a). HealthSouth opposed summary judgment and in its memorandum in opposition, indicated that if the district court was inclined to grant summary judgment to Red Cross,

HealthSouth requested leave to amend its complaint to add an estoppel claim. HealthSouth also objected to the discovery restrictions

imposed on it by the district court.

The district court granted summary judgment to Red Cross and in

so doing rejected all of HealthSouth's claims, including the attempt

to amend its complaint. HealthSouth timely brought this appeal questioning the district court's grant of summary judgment on its modifi-

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cation claims, the district court's discovery ruling, and the district

court's refusal to entertain its proposed amendment to the complaint

to add a promissory estoppel theory of recovery.

II.

Whether Red Cross was entitled to summary judgment is a matter

of law which we review de novo. Higgins v. E.I. DuPont de Nemours

& Co., 863 F.2d 1162, 1167 (4th Cir. 1988). Granting summary judgment as a matter of law is appropriate when the pleadings, depositions, affidavits, and other documents in the record leave no issue of

any material fact which needs to be passed on by a jury. Fed. R. Civ.

P. 56(c). Accordingly, the moving party must negate any material

issue of fact and prove its entitlement to judgment on the relevant

legal principles. See Celotex Corp. v. Catrett , 477 U.S. 317, 323

(1986). In determining whether a genuine issue has been raised, the

court must construe all inferences and ambiguities in favor of the nonmoving party. United States v. Diebold, 369 U.S. 654, 655 (1962).

III.

HealthSouth contends that the district court erred when it concluded that HealthSouth had no standing to bring its ERISA claims.

We disagree.

In order to establish its right to derivative standing because of

Alberta Shaw and Eric Shaw's assignment of rights, HealthSouth

would have to show that Eric Shaw was somehow "made" a beneficiary by Aetna's oral assurances that Eric Shaw's hospital expenses

would be covered. Other than the Secretary or a fiduciary, an ERISA

action may be brought only by a "participant" or a beneficiary to an

ERISA plan. 29 U.S.C.A. § 1132(a) (West 1994). ERISA defines

"participant" as "any employee or former employee of an employer

. . . who is or may become eligible to receive a benefit of any type

from an employee benefit plan . . . or whose beneficiaries may be eligible to receive any such benefit." 29 U.S.C.A.§ 1002(7). Therefore,

a person who is neither a participant nor a beneficiary lacks standing

to bring an ERISA action against a fiduciary or plan administrator.

See Stanton v. Gulf Oil Corp., 792 F.2d 432, 434-35 (4th Cir. 1986);

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see also Cromwell v. Equicor-Equitable HCA Corp., 944 F.2d 1272,

1277-78 (6th Cir. 1991), cert. denied, 505 U.S. 1233 (1992).

HealthSouth maintains that because of Aetna's agreement with Red

Cross, Aetna possessed either actual or apparent authority to confer

beneficiary status on Eric Shaw. The district court correctly concluded, however, that any discretionary authority over administration

of the Plan rested solely with Red Cross. See 29 C.F.R. § 2509.75-8

(1994); see also Haidle v. Chippenham Hosp., Inc., 855 F. Supp. 127,

131-32 (E.D. Va. 1994); Baker Hosp. v. Aetna Life Ins. & Casualty

Co., No. 91-2004, 1991 WL 179113 (unpublished) (4th Cir. October

25, 1991).1 In order to have the authority to amend or alter an ERISA

plan, Aetna would have to be a fiduciary and thus, be cloaked with

discretionary control respecting management of the Plan, including

the authority to dispose of Plan assets. 29 U.S.C.§ 1002(21)(A).

Given Aetna's limited role in processing claims under the Plan and

reading a computer screen to determine who is and who is not covered, it is clear that Aetna is not a fiduciary under the Plan. See Baxter

v. C.A. Muer Corp., 941 F.2d 451 (6th Cir. 1991) (a claims processor

that only had the power to pay out benefits according to the terms of

the established plan was not an ERISA fiduciary); Baker v. Big Star

Div. of the Grand Union Co., 893 F.2d 288, 290 (11th Cir. 1989)

("An insurance company does not become an ERISA`fiduciary' simply by performing administrative functions and claims processing

within a framework of rules established by an employer."); Haidle,

_________________________________________________________________

1 Although the opinion in Baker Hospital is unpublished and does not

constitute precedential authority pursuant to Local Rule 36(c), we find its

reasoning persuasive. In Baker Hospital, a hospital called Global Associates, Inc. (Global), the plaintiff's employer, to verify coverage for Sally

Reese Warren, as directed on the Aetna insurance benefit card. Thus,

Global was performing the same sort of administrative duties for the

Aetna insured policy in that case, as Aetna performs for the Plan at issue

before us. Id. at *1-*2. In addition, just like the Aetna/Red Cross card at

issue here, the Global/Aetna card stated that it did not guarantee coverage. Id. at *2. Even though a Global employee assured the hospital that

Sally Reese Warren was covered, we held that Global was not a fiduciary

and as a non-fiduciary, its administrative processing decisions could not

bind Aetna. Id. at *2. The panel also held that Aetna did not breach its

fiduciary duties by delegating non-fiduciary authority to Global. Id. at

*2-*3.

 6
855 F. Supp. at 131-32 (Processing and paying claims are administrative, not discretionary functions, and an entity seized of the obligation

to simply make determinations about who and what is covered by

looking at the Plan's clearly established language is not an ERISA

fiduciary.).

However, even if Aetna were a fiduciary, the oral statements made

by it would be insufficient to modify the terms of an established

ERISA plan. In Biggers v. Wittek Indus., Inc. , 4 F.3d 291 (4th Cir.

1993), we held that oral and informal amendments to established

ERISA plans are completely incapable of altering the specified terms

of the plan's written coverage. Id. at 295; see also Coleman v. Nationwide Life Ins. Co., 969 F.2d 54, 58-59 (4th Cir. 1992), cert. denied,

506 U.S. 1081 (1993). ERISA requires that a plan be"established

and maintained pursuant to a written instrument," 29 U.S.C.A.

§ 1102(a)(1), and that said written instrument must describe the formal procedures pursuant to which the plan can be amended, 29

U.S.C.A. § 1102(b)(3). Based on that clear statutory directive we

have concluded that in order to be effective, "any modification to a

plan must be implemented in conformity with the formal amendment

procedures and must be in writing." Id. at 58.

Appendix I to the Red Cross Plan states that Red Cross's Board of

Governors is the entity with the power to approve or reject amendments to the Plan after recommendation by the Board of Trustees.

Aetna, therefore, does not have the authority to effect unilateral modifications to the Plan by giving erroneous information to potential benefit claimants like HealthSouth. Thus, nothing in the Plan, the Red

Cross/Aetna contract, or any other written document before this court

indicates that Aetna may unilaterally alter the plan by bestowing beneficiary status upon a previously non-covered individual. In short, if

we adopted HealthSouth's position, the Plan at issue would be modified such that someone not entitled to benefits would be found entitled to benefits. That result flies in the face of ERISA's clear statutory

language. See Coleman, 969 F.2d at 59. Accordingly, the district

court correctly granted summary judgment to Red Cross on HealthSouth's modification claims.

IV.

HealthSouth also contends that it was not given an adequate opportunity to complete discovery. This argument is without merit.

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A district court should refuse to grant summary judgment when an

opposing party needs additional time to complete discovery and properly respond to the motion. See Anderson v. Liberty Lobby, 477 U.S.

242, 251 n.5 (1986). In the instant matter, however, HealthSouth was

provided with a copy of the Aetna/Red Cross contract as well as all

other documents relevant to its standing to sue Red Cross. Unfortunately for HealthSouth, it simply has no derivative standing to bring

an ERISA claim based on any actions taken by Aetna. No amount of

discovery could have unearthed information which would contravene

the clear language of the Plan and disturb the fact that Eric Shaw

never was a Plan beneficiary.

V.

Apparently realizing the minimal chance of success on its modification claims, HealthSouth further maintains that the district court

erred when it refused to allow it to amend its complaint to add an

estoppel cause of action against Red Cross. We disagree.

The decision to grant a party leave to amend its pleadings rests

within the sound discretion of the district court. See Sandcrest Outpatient Serv. v. Cumberland County Hosp. Sys., 853 F.2d 1139, 1148

(4th Cir. 1988). Nevertheless, it is well settled that, "in the absence

of any apparent or declared reason--such as undue delay, bad faith,

or dilatory motive on the part of the movant, . . . undue prejudice to

the opposing party by virtue of allowance of the amendment, futility

of amendment, etc.--the leave sought should, as the rules require, be

freely given." Foman v. Davis, 371 U.S. 178, 182 (1962). Moreover,

delay in requesting the amendment is generally not a sufficient reason, by itself, to deny the requested motion. See Davis v. Piper Aircraft Corp., 615 F.2d 606, 613 (4th Cir.), cert. dismissed, 448 U.S.

911 (1980). Delay, however, can be a sufficient reason for denial of

leave when accompanied by futility or prejudice to the non-movant.

See Deasy v. Hill, 833 F.2d 38, 40 (4th Cir. 1987), cert. denied, 485

U.S. 977 (1988). Lastly, as long as its reasons are apparent, a district

court's failure to articulate grounds for denying a plaintiff's leave to

amend does not amount to an abuse of discretion. See Island Creek

Coal Co. v. Lake Shore, Inc., 832 F.2d 274, 279 (4th Cir. 1987).

According to HealthSouth, because Aetna is Red Cross's agent for

the purpose of health benefit determinations, Aetna's declaration of

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coverage for Eric Shaw is binding on Red Cross. This is a claim that

"sounds" in both state and federal promissory estoppel. HealthSouth

concedes that it does not have any state law promissory estoppel

claim because any such state claim falls within ERISA's broad preemption provision. See 29 U.S.C.A. § 1144; see also Shaw v. Delta

Air Lines, Inc., 463 U.S. 85, 96-97 (1983) (ERISA preemption is construed broadly and displaces any state law which relates to an ERISA

plan or "if it has a connection with or reference to such a plan.").

Nor can HealthSouth proceed with a federal common law estoppel

claim, for we have already squarely rejected such a contention. See

Singer v. Black & Decker Corp., 964 F.2d 1449, 1452 (4th Cir. 1992)

("[R]esort to federal common law generally is inappropriate when its

application would conflict with the statutory provisions of ERISA, . . .

or threaten to override the explicit terms of an established ERISA

plan."); see also Degan v. Ford Motor Co., 869 F.2d 889, 895 (5th

Cir. 1989) (Use of estoppel principles to bring about an oral modification of a written ERISA plan would conflict with ERISA's preference

for written agreements.). We have never recognized estoppel arguments which would serve to vary the terms of a written plan, see

Coleman, 969 F.3d at 54,2 a fact which HealthSouth cannot avoid. We

are aware that leaving HealthSouth to bear the cost of Eric Shaw's

hospital stay is an unsatisfying conclusion. However, ERISA simply

does not recognize the validity of oral or non-conforming written

modifications to ERISA plans. See 29 U.S.C.§§ 1102(a)(1), and

1102(b)(3).

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2 HealthSouth seeks to avoid our rulings which have disallowed oral

modifications by claiming that no modification of the Plan at issue is

necessary. According to HealthSouth, Eric Shaw could be a beneficiary

under the Plan so there is no need to change the Plan's terms in order to

afford it the relief it seeks. Essentially, HealthSouth maintains that all

Aetna did was "interpret" the Plan's terms and designate Eric Shaw a

beneficiary -- all without modifying the Plan at all. Unfortunately for

HealthSouth, we have already addressed this very sort of "interpretation"

argument and rejected it in Coleman, 969 F.2d at 59 (Estopping a Plan

Administrator from denying benefits to an individual who was not a participant, nor a beneficiary, would have the unmitigated effect of modifying the Plan's written terms--a result that is in clear conflict with the

statute's requirements.).

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The decisions of Elmore v. Cone Mills Corp., 23 F.3d 855 (4th Cir.

1994), and Hall v. Cropmate, 887 F. Supp. 1193 (S.D. Ind. 1995), do

not require a different result. HealthSouth cites Elmore for the proposition that a fiduciary in an ERISA action can now be estopped from

denying plan coverage based on oral assertions made to a claimed

beneficiary. That reliance is misplaced.

In Elmore, this court, sitting en banc , addressed the question of

whether estoppel principles could be used to bind a plan fiduciary to

oral modifications made before terms of the plan were written down

and became binding. 23 F.3d at 863. The plan at issue in Elmore was

adopted subsequent to the contract that formed the basis for the plaintiff's estoppel claim. Id. at 868. Thus, the alleged beneficiaries in

Elmore did not seek to alter a pre-existing ERISA plan, they merely

asked that a contract entered into prior to the ERISA plan's adoption

be given binding effect. Id. The district court held that an estoppel

claim could go forward on those facts. An equally divided en banc

court affirmed that decision.

Thus, Elmore carries no precedential weight, see Arkansas Writers'

Project v. Ragland, 481 U.S. 221, 234 n.7 (1987), and HealthSouth's

reliance on Elmore fails on that basis alone. In any event, a careful

reading of the different opinions in Elmore shows that four of the

judges who would have allowed an estoppel claim on the facts presented in Elmore would also reject HealthSouth's argument here.

Judge Murnaghan took great pains in his concurring opinion, in which

three other judges joined, to distinguish Elmore on its facts from

Coleman and Singer. See Elmore 23 F.3d at 868-69 (Murnaghan, J.,

concurring). In determining that the district court was correct when

it allowed the estoppel argument to proceed, Judge Murnaghan clearly

did not take issue with either Singer or Coleman. Id. at 869. Specifically, Judge Murnaghan stated:

Prior existence of the Plan when the contract was formed

might have caused problems to arise. In Coleman v. Nationwide Life Ins. Co., we held that estoppel principles cannot

be used to effect a modification of an existing ERISA benefit plan. In such a case, adoption of an estoppel theory

"would require this court to rewrite the contract of insurance

. . . ." Id. at 56 . . . . I have no quarrel with any of these prior

 10
decisions in their proper context. However, here the Plan

was created subsequent to the contract, so no such Plan

existed when the contract came into existence.

Id. Consequently, even under Judge Murnaghan's approach in

Elmore, Coleman and Singer mandate the failure of HealthSouth's

estoppel claim here.

Similarly, Hall v. Cropmate is of no help to HealthSouth. In Hall,

the district court for the Southern District of Indiana concluded that

an estoppel claim could proceed on facts quite similar to the case

before us. 887 F. Supp. 1193. The Indiana district court held that

when an individual's claim concerns whether coverage is afforded by

the plan, no modification need be undertaken, and an estoppel claim

is cognizable in that instance. Id. at 1197. Although the district court's

reasoning in Hall supports HealthSouth's argument, we will not, and

cannot overturn our clear precedent in order to follow the Southern

District of Indiana.3 Again, Coleman made it clear that when a nonbeneficiary seeks to obtain benefits pursuant to an ERISA plan, any

change to that plan, or interpretation of that plan, is a modification

which is prohibited by ERISA's plain language. Coleman, 969 F.2d

at 59.

In summary, we affirm the district court's refusal to allow HealthSouth to amend its complaint because allowing the amendment would

have been futile and would have, at most, delayed the inevitable dismissal of all of HealthSouth's claims against Red Cross. See Deasy,

833 F.2d at 40.

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3 The decision by the Indiana district court may not be completely without support in the context of Seventh Circuit jurisprudence. Hall principally relied on Miller v. Taylor Insulation Co. , 39 F.3d 755 (7th Cir.

1994), a case which apparently recognized the possibility of a promissory estoppel claim in the ERISA context. ". . . Taylor may be estopped

to deny that Miller is a participant." Id. at 758. However, based on the

authority of Coleman, which is the controlling authority in this Circuit,

and the reasons set forth herein, HealthSouth cannot establish a promissory estoppel claim. HealthSouth proposes an oral modification to the

Plan and Coleman rejects a claim of that nature. But see id., at 759.

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VI.

For the reasons stated herein, the judgment of the district court is

affirmed.

AFFIRMED

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