_____________

No. 94-2266ND

_____________

Selma Fink; Craig Fink, as *

Personal Representative of the *

Estate of Stanley Fink; Young *

America, Inc., *

*

Appellants, *

*

v. *

*

Union Central Life Insurance *

Company; Jack Pankow, *

individually and as agent of *

Union Central Life Insurance *

Company, *

*

Appellees. *

_____________ Appeals from the United States

District Court for the District

No. 94-3526ND of North Dakota.

_____________

Selma Fink; Craig Fink, as *

Personal Representative of the *

Estate of Stanley Fink; Young *

America, Inc., *

*

Plaintiffs-Appellees, *

*

v. *

*

Union Central Life Insurance *

Company; *

*

Defendant-Appellant, *

*

Jack Pankow, individually and *

as agent of the Union Central *

Life Insurance Company, *

*

Defendant. *

_____________

Submitted: May 17, 1996

 Filed: August 29, 1996

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Before RICHARD S. ARNOLD, Chief Judge, and JOHN R. GIBSON and FAGG,

Circuit Judges.

_____________

FAGG, Circuit Judge.

Jack Pankow, an insurance agent, sold Young America, Inc. (Young

America) a Manhattan Life Insurance Company (Manhattan Life) group life

insurance policy that provided coverage for certain Young America officers

and employees. The group policy was an employee benefit plan governed by

the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001-1461

(1994), and Young America was the plan administrator. Young America's

Chief Executive Officer, Stanley Fink, had $300,000 of coverage under the

policy. Stanley named his wife Selma as the beneficiary. Manhattan Life

later transferred the policy to Union Central, which cancelled the

Manhattan Life policy and issued Young America a similar policy written by

Union Central. In March 1991, when Stanley was approaching the maximum age

of eligibility for the group policy, Stanley's son Craig telephoned Union

Central to discuss converting Stanley's coverage into an individual policy.

A Union Central employee informed Craig that Stanley would be covered under

the group policy until June 1, 1991. After Stanley died on May 15, 1991,

Union Central rejected Selma's claim for the $300,000 death benefit,

claiming Stanley had not been eligible to participate in the group policy

at the time of his death because he was not an active, full-time employee

of Young America. Young America, Selma, and Craig, as personal

representative of Stanley's estate (collectively the Finks), then brought

various claims against Union Central and Pankow. The district court

granted summary judgment for Union Central on the Finks' claims for

wrongful denial of ERISA benefits, equitable estoppel, and breach of

fiduciary duty. The district court also granted summary judgment for

Pankow on the Finks' claims against him for misrepresentation and

intentional and negligent infliction of
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emotional distress. The Finks appeal the grant of summary judgment on all

these claims. Also, the district court denied Union Central's application

for attorney's fees and costs under 29 U.S.C. § 1132 (g)(1), and Union

Central cross-appeals the denial of its application. We affirm. 

The Finks first contend the district court improperly granted summary

judgment on their claim for wrongful denial of pension benefits, see 29

U.S.C. § 1132(a)(1)(B), because the record shows there are material fact

disputes about whether Stanley met the policy requirement of active, fulltime employment and was eligible for coverage. We disagree. When an ERISA

plan fiduciary, like Union Central, has authority to determine eligibility

for an ERISA benefit plan or to interpret plan terms, the fiduciary's

refusal to pay benefits under the plan is reviewed for an abuse of

discretion. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115

(1989). The district court reviewed Union Central's decision under the

abuse-of-discretion standard, and the Finks do not dispute that standard

of review on appeal. Union Central did not abuse its discretion unless its

refusal to pay benefits was "`extraordinarily imprudent or extremely

unreasonable.'" Lickteig v. Business Men's Assurance Co. of Am., 61 F.3d

579, 583 (8th Cir. 1995) (quoted case omitted). Having considered the

record de novo, we agree with the district court that Union Central did not

abuse its discretion in denying benefits for Stanley. Id. (court of

appeals reviews district court's application of deferential standard de

novo).

Union Central thoroughly investigated Selma's claim for benefits and

discovered overwhelming evidence that Stanley was not an active, full-time

employee at the time of his death. To qualify as "active" under the

policy's terms, an employee must work at the employer's regular place of

employment or at some other place where the regular business operations of

the employer require that employee to go. Union Central learned that

Stanley spent most of the year in Arizona, not at Young America's regular

place of
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business in North Dakota, and the Finks presented no evidence that Young

America asked Stanley to go to Arizona for business reasons. Further, the

policy provides that employees must be scheduled to work at least thirty

hours a week and must be on the employer's regular payroll to be "fulltime." Stanley, however, led a semi-retired lifestyle. His primary

contacts with Young America were summer visits to the North Dakota offices

and frequent phone calls to his sons, the corporation's active managers.

Union Central also obtained tax records showing Stanley's salary dropped

sharply after 1988 and he began receiving social security payments.

Despite being given an opportunity to respond to Union Central's concerns,

the Finks did not provide Union Central with evidence showing Stanley

regularly worked thirty hours a week and was on Young America's regular

payroll for that work. Although Stanley was still considered the

corporation's Chief Executive Officer, the group policy specifically

provides that corporate officers are not eligible for coverage solely due

to their titles, but must be active, full-time employees. Considering the

information available to Union Central when it denied Selma's claim for

benefits, see Ravenscraft v. Hy-Vee Employee Benefit Plan & Trust, 85 F.3d

398, 402 (8th Cir. 1996), Union Central's denial was not an abuse of

discretion.

 

The Finks next contend that even if the denial of benefits was

consistent with the policy's terms, Union Central should be estopped from

denying benefits because Union Central misled them about Stanley's

eligibility. The Finks argue that before Union Central rewrote the policy,

it informed Young America that eligibility requirements would remain the

same as in the Manhattan Life policy, but Union Central in fact added the

requirement that corporate officers must be active, full-time employees.

The Finks also assert the Union Central employee Craig Fink spoke to on the

telephone misled Craig by telling him Stanley would be insured under the

group policy until June 1, 1996. The Finks' estoppel claims fail because

common-law estoppel principles cannot be used
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to obtain ERISA benefits that are not payable under the terms of the ERISA

plan. See Jensen v. SIPCO, Inc., 38 F.3d 945, 953 (8th Cir. 1994), cert.

denied, 115 S. Ct. 1428 (1995). Courts may apply the doctrine of estoppel

in ERISA cases only to interpret ambiguous plan terms, and the Finks do not

argue the eligibility requirements are ambiguous. Slice v. Sons of Norway,

34 F.3d 630, 634-35 (8th Cir. 1994). Unlike the Finks, we do not think the

availability of estoppel principles in ERISA cases depends on whether the

benefit plan's financial soundness would be affected by ordering the

payment of benefits. See id. at 633-34. 

We also reject the Finks' claim that Union Central breached its

fiduciary duties by failing to train Young America, the plan administrator;

by accepting premium payments on Stanley's behalf without verifying

Stanley's eligibility; and by failing to provide Craig Fink with complete

information about Stanley's status when Craig called Union Central. First,

Union Central had no duty to train or supervise Young America because Union

Central did not have the authority to select or remove the plan

administrator. Leigh v. Engle, 727 F.2d 113, 135 (7th Cir. 1984); see

American Fed'n of Unions Local 102 Health & Welfare Fund v. Equitable Life

Assurance Soc'y of the United States, 841 F.2d 658, 665 (5th Cir. 1988).

Second, the undisputed evidence shows Young America was responsible for

determining employee eligibility and updating Union Central about which

employees were covered by the group policy. See 29 U.S.C. § 1105(c)

(allowing co-fiduciaries to divide fiduciary duties and liability). Young

America represented to Union Central that Stanley was eligible, and Union

Central had no reason to think otherwise. Although Craig testified he

called Union Central because Stanley was about to turn seventy and planned

to retire, the Finks presented no evidence Craig informed Union Central

that Stanley had already moved to Arizona and scaled back his work hours.

What the Union Central employee told Craig was true and complete based on

the information available to Union Central. Cf. Eddy v. Colonial Life Ins.

Co. of Am., 919 F.2d 747, 751 & n.3
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(D.C. Cir. 1990) (insurer had duty to inform plaintiff about conversion

rights because plaintiff told insurer his coverage under group policy was

ending). In short, the Finks' assertions are insufficient to show a breach

of fiduciary duty.

We now turn to the Finks' misrepresentation and infliction of

emotional distress claims against Pankow. The district court concluded the

Finks' state common-law claims against Pankow were preempted by 29 U.S.C.

§ 1144(a) because the claims related to the group insurance plan. See

Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 138-39 (1990). The Finks

argue their state law claims affect the insurance plan in too tenuous,

remote, or peripheral a manner to be preempted, because the claims are

based on misrepresentations Pankow made during the sale of the Manhattan

Life policy to Young America, before Young America began administering the

policy for its employees. See Consolidated Beef Indus., Inc. v. New York

Life Ins. Co., 949 F.2d 960, 963 (8th Cir. 1991), cert. denied, 503 U.S.

985 (1992). We think the claims are probably preempted, see id. at 964,

but summary judgment would be proper anyway because there is no evidence

Pankow acted wrongfully during the sale of the Manhattan Life policy. It

is the Finks' position that Stanley was covered under the Manhattan Life

policy, and Union Central added the active, full-time employment

requirement for officers. Pankow presented undisputed evidence that he did

not even know the group policy was transferred to Union Central until about

two years after the transfer. We conclude the Finks have not presented

evidence to show Pankow made misrepresentations about the policy or caused

the Finks emotional distress.

The district court also treated the Finks' misrepresentation and

infliction of emotional distress claims against Pankow as ERISA claims for

breach of fiduciary duty. See Slice v. Sons of Norway, 978 F.2d 1045, 1046

(8th Cir. 1992) (per curiam) (when ERISA preempts state law claims, court

should consider whether claims
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state cause of action under ERISA or federal common law). As the district

court correctly concluded, Pankow did not act in a fiduciary capacity

toward the Finks. Individuals "who provide professional services to plan

administrators `are not ERISA fiduciaries unless they "transcend the normal

role" and exercise discretionary authority.'" Kerns v. Benefit Trust Life

Ins. Co., 992 F.2d 214, 217-18 (8th Cir. 1993) (quoting Martin v. Feilen,

965 F.2d 660, 669 (8th Cir. 1992), cert. denied, 506 U.S. 1054 (1993)).

Insurance agents can become fiduciaries by participating in the

administration of a benefit plan, managing the plan's assets, or providing

investment advice for compensation about the plan's money or property. See

29 U.S.C. § 1002(21)(A) (defining fiduciary); Olson v. E.F. Hutton & Co.,

957 F.2d 622, 626 (8th Cir. 1992). According to the Finks, Pankow

understood their insurance needs and recommended the Manhattan Life policy

as the one Young America should purchase, and Pankow helped Selma apply for

Stanley's death benefit. These assertions are not enough to show Pankow

crossed the line between insurance broker and fiduciary. Like the

insurance agent in Consolidated Beef Industries, Pankow was not involved

in plan administration or investments, but "was merely a salesperson

earning commissions and not a fiduciary under ERISA." 949 F.2d at 965.

As a nonfiduciary, Pankow is not liable for damages under ERISA, and the

Finks' complaint requests only a damages award. Firstier Bank v. Zeller,

16 F.3d 907, 914 (8th Cir.), cert. denied, 115 S. Ct. 194 (1994).

Although the Finks make a passing reference to federal common law in

their appellate brief, they do not develop an argument that federal common

law provides them a cause of action against Pankow. At any rate, we would

not use federal common law to allow a damages claim against a nonfiduciary

because ERISA's carefully drafted enforcement provisions "provide strong

evidence that Congress did not intend to authorize other remedies that it

simply forgot to incorporate expressly." Massachusetts Mut. Life Ins. Co.

v. Russell, 473 U.S. 134, 146 (1985). Federal common law may be used
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to fill gaps in ERISA, Anderson v. John Morrell & Co., 830 F.2d 872, 877

(8th Cir. 1987), but not to upset Congress's policy choices.

Turning to Union Central's cross-appeal, we conclude the district

court did not abuse its discretion in denying Union Central's application

under 29 U.S.C. § 1132(g)(1) for attorney's fees and costs. See

Consolidated Beef Indus., 949 F.2d at 966. Contrary to Union Central's

contention, the district court adequately considered the factors set out

in Lawrence v. Westerhaus, 749 F.2d 494, 495-96 (8th Cir. 1984) (per

curiam).

 

Because the Finks' ERISA and state common-law claims fail as a matter

of law, summary judgment was proper, and the district court did not abuse

its discretion in denying Union Central's 29 U.S.C. § 1132 (g)(1)

application for fees and costs. We affirm.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.