RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 06a0279p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT _________________

Nos. 04-1146/1942; 05-1109

RICHARD L. MOORE,

Plaintiff-Appellant,

v.

LAFAYETTE LIFE INSURANCE CO., an Indiana

Corporation; MICHIGAN TOOLING ASSOCIATION, a

Michigan Corporation; MICHIGAN TOOLING

ASSOCIATION LONG TERM DISABILITY PLAN;

MICHIGAN TOOLING ASSOCIATION SHORT TERM

DISABILITY PLAN, Jointly and Severally,

Defendants-Appellees.

No. 04-1945

RICHARD L. MOORE,

Plaintiff-Appellant/Cross-Appellee,

v.

LAFAYETTE LIFE INSURANCE CO., an Indiana

Corporation,

Defendant-Appellee/Cross-Appellant,

MICHIGAN TOOLING ASSOCIATION, a Michigan

Corporation; MICHIGAN TOOLING ASSOCIATION

LONG TERM DISABILITY PLAN; MICHIGAN TOOLING

ASSOCIATION SHORT TERM DISABILITY PLAN,

Jointly and Severally,

Defendants.

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Nos. 04-1146/1942/1945;

05-1109

Appeal from the United States District Court

for the Eastern District of Michigan at Detroit.

No. 01-73944—Robert H. Cleland, District Judge.

Argued: December 2, 2005

Decided and Filed: August 7, 2006 

1
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 2

*

The Honorable Solomon Oliver, Jr., United States District Judge for the Northern District of Ohio, sitting by

designation.

Before: CLAY and COOK, Circuit Judges; OLIVER, District Judge.*

_________________

COUNSEL

ARGUED: Mary C. O’Donnell, DURKIN, McDONNELL, CLIFTON & O’DONNELL, Detroit,

Michigan, for Appellant. D. Andrew Portinga, MILLER, JOHNSON, SNELL & CUMMISKEY,

Grand Rapids, Michigan, Elaine A. Parson, RAYMOND & PROKOP, Southfield, Michigan, for

Appellees. ON BRIEF: Mary C. O’Donnell, Gregory A. Clifton, DURKIN, McDONNELL,

CLIFTON & O’DONNELL, Detroit, Michigan, for Appellant. D. Andrew Portinga, MILLER,

JOHNSON, SNELL & CUMMISKEY, Grand Rapids, Michigan, Elaine A. Parson, Jeffrey D.

Wilson, RAYMOND & PROKOP, Southfield, Michigan, for Appellees.

CLAY, J., delivered the opinion of the court. OLIVER, D. J. (p. 26), delivered a separate

concurring opinion, in which COOK, J., joined. COOK, J. (pp. 27-29), delivered a separate opinion

concurring in part and dissenting in part.

_________________

OPINION _________________

CLAY, Circuit Judge. Plaintiff, Richard L. Moore, appeals the district court’s judgments

in favor of Defendants Lafayette Life Insurance Co. (“Lafayette”) and the Michigan Tooling

Association (“MTA”). The district court granted judgment to Defendants on Plaintiff’s claims under

the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. Plaintiff also appeals the district court’s award of partial attorneys’ fees and costs to Defendants,

along with sanctions against Plaintiff’s attorney. Defendant Lafayette cross-appeals the award of

attorneys’ fees in its favor as too low. For the reasons which follow, we AFFIRM the decision of

the district court in all respects.

I.

BACKGROUND

A. Substantive Facts

Defendant MTA is an association of approximately 700 member companies in the metalworking industry in Michigan. Plaintiff is a licensed insurance agent in the state of Michigan. 

MTA hired Plaintiff in 1971 to handle all group life, disability, and workers’ compensation

insurance for MTA and its member companies. While Plaintiff was initially hired as a salaried

employee, in 1972 MTA and Plaintiff agreed that Plaintiff’s compensation would come only from

commissions for premiums paid and signed a “Memorandum of Understanding” (“MOU”) to that

effect. Plaintiff’s responsibilities included taking “complete responsibility for all Group Life and

Disability insurance for the Detroit Tooling Association . . . . handl[ing] all questions, claim

problems and generally servic[ing] all participants in the plan . . . .” (J.A. at 1722.) The MOU also

provided that Plaintiff would pay all his own expenses. MTA filed 1099s on Plaintiff for income

tax purposes.
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 3

MTA and Plaintiff operated under the MOU until December 1998, when Plaintiff and MTA

signed a “Consulting Service Agreement” (“CSA”), whereby MTA would pay Plaintiff a fixed sum

of $75,000, in monthly installments, and Plaintiff was deemed an “independent contractor.” (J.A.

at 273.) Plaintiff was responsible for all federal and state payroll taxes, all expenses incurred in the

state of Michigan, and was free to accept outside consulting agreements. MTA continued to file

1099s on Plaintiff for income tax purposes. 

Prior to 1996, Royal Maccabees Insurance provided MTA life and disability insurance

policies. In 1996, Plaintiff recommended to MTA that MTA switch its insurance provider to

Lafayette. Lafayette became MTA’s provider of group life and disability insurance in March 1996;

Plaintiff signed the Application for Group Insurance as a licensed agent. As the signing agent,

Plaintiff attested:

I have fully explained to the Policyholder that any Employee not in Active

Employment or in a class otherwise eligible to apply for insurance coverage on the

Contract Effective Date of any Contract to be issued by the Company will not be

eligible to apply for any such insurance issued by the Company unless and until such

time such Employee becomes a member of a class eligible to apply for insurance

coverage.

(J.A. at 236.)

In March 1996, at the time Lafayette began writing insurance polices to MTA, its employees,

and MTA member companies, Plaintiff was listed as an “employee” on premium statements

submitted by MTA. From 1996 through December 1998, Plaintiff paid the premiums on his own

coverage for disability insurance directly to Lafayette.

Plaintiff and MTA operated under the CSA throughout 1999 and into 2000. During this

period, MTA deducted the costs of short-term disability (“STD”) and long-term disability (“LTD”)

premiums from Plaintiff’s monthly remunerations and remitted the premiums to the insurer,

Lafayette. MTA asserts that MTA was reliant on Plaintiff’s representations to MTA of who would

be a covered “employee” under the terms of the plan. Neither Plaintiff nor MTA informed Lafayette

of the terms of the CSA.

 In September 2000, Plaintiff filed for STD benefits, and then one month later requested LTD

benefits. MTA filed the benefit request forms on behalf of Plaintiff with Lafayette in those same

months. Lafayette proceeded to adjudicate the claims for benefits; although there are indications

in the record that Lafayette initially indicated that MTA should adjudicate the STD claim, MTA and

Lafayette ultimately agreed that Lafayette would adjudicate both claims.

Lafayette ultimately determined that Plaintiff was not a covered “employee” under the

ERISA plan. Lafayette does not dispute that “prior to January 1, 1999 [the CSA effective date]

[Plaintiff] was eligible for certain group insurance coverages issued by Lafayette . . . . However,

facts show that effective January 1, 1999, [Plaintiff’s] status with MTA changed. We were not

aware of this change in status until [Plaintiff’s] claims for benefits were submitted to us.” (J.A. at

1923.)

The STD policy states that “[a]ny employee whose employment commenced on or before

the effective date of this policy and is actively at work on full time [sic]” was eligible for coverage

upon the plan’s effective date. (J.A. at 1434.) The STD policy further provides for coverage for

employees starting after the effective date of the policy. The STD policy defines “employee” as “an

employee in the service of the employer whose terms of employment require him to work at least

20 hours per week.” (J.A. at 1435.) The policy further defines “actively at work on full time” to
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 4

mean “actually working at least six hours per working day at the employer’s place of business or

other location where his business requires the employee to be.” (J.A. at 1435.)

The LTD policy defines “employee” to mean:

A regular, full-time employee duly recorded as such on the payroll records of the

Policyholder, who is regularly working through the entire duration of the

Policyholder’s work week, and in any event not less than 30 hours per week, and is

insured under the terms of this Policy.

(J.A. at 1893.) The clause “on the payroll records” is not further defined.

B. Procedural History

Plaintiff filed the instant action in district court on October 17, 2001. Plaintiff alleged that

Defendants violated numerous responsibilities under the STD and LTD policies of MTA’s ERISA

benefit plan and prayed for relief in the form of benefits due, attorneys’ fees and costs, and statutory

penalties. Specifically, Plaintiff alleged:

Count I: that he was wrongfully denied STD and LTD benefits as an MTA-covered

“employee” under 29 U.S.C. § 1132(a)(1)(B);

Count II: that Defendants breached fiduciary duties to Plaintiff with respect to the ERISA

plan;

Count III: that if Plaintiff is not covered “employee,” Plaintiff qualifies for benefits as a

“participating employer” under the plan;

Count IV: that Defendants should pay Plaintiff’s attorneys’ fees and costs with respect to the

ERISA action;

Count V: that Defendants refused to furnish requested information as required by 29 U.S.C.

1132(c); and 

Count VI: that Defendants are estopped from asserting that Plaintiff was not covered under

the STD and LTD policies.

(J.A. at 17-28 (list formatting not in original).)

At an initial Rule 16 conference, Plaintiff objected to the application of the rules set forth

in Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609 (6th Cir. 1998), as controlling the form and

extent of discovery in the case. Accordingly, the magistrate judge ordered the parties to brief the

applicability of Wilkins. In conjunction with its brief and motion on Wilkins, Defendant Lafayette

filed a motion to dismiss with respect to Counts II, V, and VI. Likewise, Defendant MTA moved

to dismiss with respect to Counts I, II, III, and VI. The district court judge consolidated the Wilkins

motions and the motions to dismiss and issued an opinion and judgment on the motions on August

19, 2002.

The district court denied MTA’s motions on Count I, dismissed the first three (of five)

subclaims under Count II as against both Defendants, denied the motion to dismiss on Count III,

dismissed Count V as against Lafayette, and dismissed Count VI as against both defendants.

Additionally, the court concluded that Wilkins controlled discovery in the case and therefore

restricted discovery to Plaintiff’s underlying allegations of denial of due process and the withholding

of information count.
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 5

Plaintiff filed a motion to reconsider on September 6, 2002. The district court found the

motion untimely as exceeding the 10-day limit for motions to reconsider as set by Federal Rule of

Civil Procedure 6(a). The court further found the motion to be without merit, noting that Plaintiff

did not point to additional authority or facts supposedly left out of the court’s consideration of the

earlier motions.

After a period of limited discovery, the parties filed cross-motions for partial summary

judgment. The district court ruled on these motions on September 19, 2003. In its order, the district

court denied Plaintiff’s motion for summary judgment on Counts II and V, and further denied

Plaintiff’s request for expanded discovery under Count I. The court granted Lafayette’s motion for

summary judgment on Count II, and likewise granted MTA’s request for summary judgment on

Counts II, III, and V. The surviving Counts were Count I against both Defendants for denial of

benefits and Count III to designate Plaintiff a “participating employer” as against Lafayette (the

court having found that Count IV, for attorneys’ fees and costs, was more properly considered an

element of relief requested under the remaining substantive counts). The Court further noted that

while Lafayette did not file a motion for summary judgment on Count III, the court had grave doubts

as to the viability of such a claim. The court therefore ordered Plaintiff either to stipulate as to the

dismissal of Count III against Lafayette, or indicate to the court that Plaintiff intended to pursue

Count III against Lafayette, in which case the district court would afford Lafayette an opportunity

to file a second motion for summary judgment. Plaintiff voluntarily dismissed Count III against

Lafayette on September 30, 2003.

The district court took final action on the substantive counts in this case on January 6, 2004.

The court dismissed the remaining Count I against MTA, reasoning that because Lafayette, and not

MTA, was responsible for claims administration under the plan, MTA was not a proper defendant

in a claim for benefits. Finally, the court concluded that Plaintiff was not a covered employee for

purposes of the STD and LTD policies and granted judgment for Defendant Lafayette on Plaintiff’s

sole remaining claim for benefits in the suit. Plaintiff timely appealed all orders in the case on

January 26, 2004.

Defendant MTA thereafter filed motions for attorneys’ fees and costs and Rule 11 sanctions

against Plaintiff’s counsel. Defendant Lafayette filed a motion for attorneys’ fees and costs.

Plaintiff cross-filed for review of the clerk’s taxed bill of costs as submitted by Defendants. On June

21, 2004, the court denied Plaintiff’s motion and granted MTA’s and Lafayette’s motions for

attorneys’ fees and costs, ordering Plaintiff to pay 50 percent of Defendants’ attorneys’ fees in

addition to Defendants’ taxed bill of costs (J.A. at 2552). In addition, the court found, under both

Rule 11 and its authority under 28 U.S.C. § 1927, that Plaintiff’s counsel should be jointly and

severally liable with Plaintiff for the 50 percent assessment.

Plaintiff and Plaintiff’s counsel timely appealed the award of attorneys’ fees and the

imposition of sanctions on July 20, 2004. Defendant Lafayette timely cross-appealed its award of

attorneys’ fees as too low on July 29, 2004.

II.

ANALYSIS

A. The District Court’s Initial Determinations Under ERISA

In arguments to this Court, Plaintiff avers that in its August 19, 2002 order the district court

improperly dismissed subclaims (a), (b), and (c) of Plaintiff’s Count II (breach of fiduciary duty) and

improperly dismissed Count VI in its entirety (promissory estoppel). 
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 6

1. Standard of Review

This Court reviews a district court’s judgment in an ERISA case de novo, applying the same

standard of review to the administrator’s action as required by the district court. See Wilkins, 150

F.3d at 615-16. Claims for breaches of fiduciary duty and promissory estoppel are not claims for

denial of benefits and are therefore addressed in the first instance in the district court, requiring no

deference to any administrator’s action or decision.

2. The District Court Correctly Dismissed Subclaims (a), (b), and (c) of Count II

Plaintiff’s Count II alleged that Defendants breached their fiduciary duties and obligations

as follows:

(a) Defendants failed to make and authorize short term disability and long term

disability benefit payments to plaintiff at a time when Lafayette and/or MTA

knew or should have known that he was entitled to such benefits;

(b) Defendants unreasonably and/or arbitrarily withheld payments in bad faith

knowing the plaintiff’s claims to be valid;

(c) Defendants unreasonably, arbitrarily and in bad faith failed to pay plaintiff’s

benefits at a time when defendant[s] had insufficient information to justify

such actions;

(d) Defendant MTA failed to provide a written plan document and a claims

procedure for the STD and LTD policies as required by ERISA §§ 402 and

503 respectively;

(e) Other breaches of fiduciary duties yet unknown, but which will become

known to plaintiff through discovery.

(J.A. at 22.) Plaintiff’s claims under Count II were brought under 29 U.S.C. § 1132(a)(3), ERISA’s

“catch all” remedial section.

The district court reasoned that subclaims (a) through (c) were merely restatements of

Plaintiff’s claim for benefits. The district court reasoned that Plaintiff’s ability to bring suit for

payment of benefits under 29 U.S.C. § 1132(a)(1) precluded Plaintiff’s suit under the “catch-all”

remedial section for those subclaims sounding as failure to pay due benefits. See Varity Corp. v.

Howe, 516 U.S. 489, 512 (1996); see also Wilkins, 150 F.3d at 615-16 (“Because § 1132(a)(1)(B)

provides a remedy for [the plaintiff’s] alleged injury . . . he does not have a right to a cause of action

for breach of fiduciary duty pursuant to § 1132(a)(3) . . . . To rule in [the plaintiff’s] favor would

allow him and other ERISA claimants to simply characterize a denial of benefits as a breach of

fiduciary duty, a result which the Supreme Court expressly rejected.”) (citing Varity Corp., 516 U.S.

at 512 (1996)). 

The district court was correct. The allegedly wrongful actions referred to in subclaims

(a) through (c) all relate to Plaintiff’s denial of benefits and point to the same remedy as Plaintiff’s

claim under Count I. As such, Plaintiff is precluded from using § 1132(a)(3) for allegedly wrongful

actions addressable under § 1132(a)(1).

3. The District Court Correctly Dismissed Count VI in its Entirety

Under Count VI, Plaintiff claims that MTA and Lafayette are estopped from asserting that

Plaintiff is not a covered employee under the STD and LTD policies. Plaintiff claims that Plaintiff
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 7

1

Judge Cook’s partial dissent insists that this Court’s determination that Plaintiff is not, in fact, an “employee”

under ERISA, see infra, deprives this Court of jurisdiction over this case. We therefore fail to see how Judge Cook could

join Judge Oliver’s conclusion on the merits of Plaintiff’s promissory estoppel claim, inasmuch as promissory estoppel

is merely an alternative theory of recovery under Plaintiff’s ERISA benefits claim.

relied on representations by MTA and Lafayette that his disability coverage would continue under

the CSA, and in particular that MTA’s remittance of premium payments to Lafayette on Plaintiff’s

behalf is conduct inconsistent with any subsequent position that Plaintiff is not eligible for benefits.

This Court has recognized that promissory estoppel is a viable theory in ERISA welfare

benefit actions. See Sprague v. Gen. Motors, Inc., 133 F.3d 388, 403 (6th Cir. 1998). The elements

of an estoppel claim are as follows:

(1) there must be conduct or language amounting to a representation of material

fact; 

(2) the party to be estopped must be aware of the true facts;

(3) the party to be estopped must intend that the representation be acted on, or

the party asserting the estoppel must reasonably believe that the party to be

estopped so intends; 

(4) the party asserting the estoppel must be unaware of the true facts; and 

(5) the party asserting the estoppel must reasonably or justifiably rely on the

representation to his detriment.

Sprague, 133 F.3d at 403 (list formatting not in original).

Typically, estoppel actions occur when a plan fiduciary misrepresents the actual meaning

of plan terms in a situation where the plan itself is ambiguous. See id. at 404. Plaintiffs cannot

recover under an estoppel theory for misrepresentations which contradict unambiguous, written plan

terms because their reliance on the subsequent representation would be unreasonable. See id. The

district court found that Plaintiff had failed to base his promissory estoppel claim on a premise that

the plan terms were ambiguous. Because, in the district court’s determination, Plaintiff did not

allege that the plan documents were ambiguous, the district court granted judgment for Defendants

on Plaintiff’s promissory estoppel theory.1

This Court can affirm a district court on any basis supported by the record. See City Mgt.

Corp. v. U.S. Chem. Corp., 43 F.3d 244, 251 (6th Cir. 1994). Plaintiff did properly allege that the

plan documents were ambiguous, insofar as Plaintiff was arguing over the meaning of “employee”

under the plan. Nonetheless, Plaintiff cannot prove at least one element of promissory estoppel with

respect to each Defendant and therefore cannot prevail.

Plaintiff cannot show that his reliance on any alleged misrepresentations by MTA

management was reasonable, as required by the Supreme Court and this Circuit. See Sprague, 133

F.3d at 403; Gregg v . Transp. Workers of Am. Int’l, 343 F.3d 833, 841 (6th Cir. 2003). Plaintiff

admits to being more knowledgeable about insurance coverage issues than anyone in management

at MTA. Plaintiff was the self-acknowledged expert in welfare benefits coverage for MTA.

Plaintiff admitted that he sold the policy at issue to MTA and likewise explained the policy terms

to MTA officers, including the term on covered employees. Plaintiff admitted that he was the “go

to” guy for insurance questions held by MTA and its member companies. (J.A. at 1031-32.)

Plaintiff had worked in insurance for over 30 years. Under the1972 MOU between Plaintiff and
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 8

MTA, Plaintiff handled all questions and claim problems for MTA’s group life and disability

insurance plans. Any reliance by Plaintiff on representations by MTA management going to

insurance coverage, therefore, would have been unreasonable under the circumstances of this case

and in light of Plaintiff’s acknowledged superior expertise on the specific insurance policies at issue.

This is not to say that an insurance “expert” can never prevail in an ERISA action under a

promissory estoppel theory, only that reasonable reliance by Plaintiff would require a representation

from someone with better or more specific knowledge than Plaintiff, or at least from someone who

Plaintiff reasonably believed to have better or more specific knowledge. Under the circumstances

of this case, for example, had Lafayette known the terms of Plaintiff’s relationship with MTA under

the CSA and then represented to Plaintiff that Plaintiff was covered under the plan, Plaintiff’s

promissory estoppel theory might be viable. Under the facts of this case, however, Lafayette did not

know the terms of the CSA and therefore did not know whether Plaintiff was an “employee” under

the plan. See infra, Part II.C. Consequently, any alleged representations by Lafayette were not

made while Lafayette was “aware of the true facts” (criteria two for a promissory estoppel claim),

and Plaintiff therefore cannot assert promissory estoppel against Lafayette.

B. The District Court Properly Limited the Scope of Discovery for the Remaining Claims

Under Wilkins

Plaintiff argues that the district court improperly limited the scope of discovery for his

remaining benefits and breach of fiduciary duty claims. We disagree.

1. Standard of Review

This Court reviews the district court’s conclusions as to the applicability of Wilkins de novo.

Cf. Putney v. Medical Mut., 111 Fed. App’x 803, 806 (6th Cir. 2004) (unpublished opinion).

2. Wilkins Applies to All ERISA Benefit Cases

In Wilkins, this Court clarified the permissible scope of discovery in an ERISA action in

federal district court. 150 F.3d at 618-19. This Court instructed district courts to follow a two-step

process in adjudicating an ERISA benefit action:

1. As to the merits of the action, the district court should conduct a de novo

review based solely upon the administrative record, and render findings of

fact and conclusions of law accordingly. The district court may consider the

parties’ arguments concerning the proper analysis of the evidentiary

materials contained in the administrative record, but may not admit or

consider any evidence not presented to the administrator.

2. The district court may consider evidence outside of the administrative record

only if that evidence is offered in support of a procedural challenge to the

administrator’s decision, such as an alleged lack of due process afforded by

the administrator or alleged bias on its part. This also means that any

prehearing discovery at the district court level should be limited to such

procedural challenges.

Id. 

Plaintiff argues that because he alleged that Defendants denied him due process in

adjudicating his claim for benefits, Plaintiff was entitled to discovery into his denial of benefits

claim. Plaintiff argues that his case is distinct from the action in Wilkins because, among other

things: 1) the claimant in that case did not allege violations of due process, 2) there was no
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 9

2

That the district court was permitting discovery into due process issues with respect to Defendants’ denial of

benefits is even clearer when the Court considers the lower court’s opinion on Plaintiff’s motion for reconsideration:

“[U]ntil Plaintiff has proven the denial of due process, the court will not expand the review on the denial of benefits

claim.” (J.A. at 60.)

confusion in the Wilkins case about which documents actually constituted the applicable ERISA

plan, and 3) there was no confusion in Wilkins about who was the plan administrator. 

While Plaintiff is correct about the factual dissimilarities between Wilkins and his case, these

dissimilarities do not make the Court’s instructions in Wilkins any less applicable to the case at bar.

Plaintiff’s arguments about the inapplicability of Wilkins all come back to whether Plaintiff had

sufficient opportunity to present evidence and arguments to Defendants and to respond to

Defendants contentions – in essence, all due process issues. The Wilkins panel foresaw occasions

in which the procedural process of gathering all pertinent information may have broken down at the

administrative level and directed the courts to permit discovery in those cases. Wilkens, 150 F.3d

at 619. (“The district court may consider evidence outside of the administrative record only if that

evidence is offered in support of a procedural challenge to the administrator’s decision.”) If

discovery into the alleged procedural defects supports a plaintiff’s allegations of due process denial,

then a district court is obligated to permit discovery into more substantive areas of a plaintiff’s

claim. See id. If a court finds that due process was not denied, however, then it is appropriate for

the district court to deny further discovery into substantive areas, or else a plaintiff could circumvent

the directive of Wilkins merely by pleading a due process problem. Cf. id.

3. The District Court Properly Applied Wilkins

The district court permitted discovery into whether Plaintiff was actually denied due process.

The district court noted that “the court will not expand discovery until it is proven that such a denial

of due process occurred.” (J.A. at 44.) This order was entirely consistent with the intent and letter

of Wilkins.

2

 Plaintiff argues that the district court’s ruling on Wilkins somehow held Plaintiff to a

higher standard than this Court requires under Wilkins. (See Pl. Br. 23-24 (“In neither Vanderlock

nor Wilkins did this Court require that plaintiff prove the alleged denial of due process before it

permitted both expanded discovery and consideration of additional evidence outside of the

administrative record.”).) We find Plaintiff’s argument without merit. The Vanderlock panel found,

as a matter of law, that the evidence before the court established that the plaintiff in that action had

been substantially denied the procedural protections afforded by ERISA. Vanderklok v. Provident

Life & Accident Ins. Co., 956 F.2d 610, 617 (6th Cir. 1992). After reaching such a conclusion, this

Court remanded to the district court for discovery. Id. In the instant action, the district court

deferred discovery into Plaintiff’s substantive claims until it had enough evidence to determine

whether Plaintiff had been substantially denied ERISA’s procedural protections. There is no

inconsistency between the district court’s actions and this Court’s holding in Vanderlock. Moreover,

the only logical reading of this Court’s instructions in Wilkins is that until a due process violation

is at least colorably established, additional discovery beyond the administrative record into a

plaintiff’s denial of benefits claim is impermissible. Wilkins was properly followed.

C. The District Court Properly Granted Summary Judgment for Defendants on Plaintiff’s

Claims for Breach of Fiduciary Duty and § 1132(c) Monetary Penalties

Plaintiff argues that the district court improperly granted Defendants summary judgment on

his breach of fiduciary duty and § 1132(c) claims. We conclude that the district court properly

found that Plaintiff had failed to present evidence of either a due process violation or a breach of

fiduciary duties. In addition, the district court did not abuse its discretion in refusing to grant

penalties under 29 U.S.C. § 1132(c). 
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 10

1. Standard of Review

This Court reviews summary judgment de novo. Eastman Kodak Co. v. Image Technical

Servs., Inc., 504 U.S. 451, 466 n.10 (1992). Summary judgment is appropriate when there is no

genuine issue of material fact, thereby entitling the movant to a judgment as a matter of law. Kocsis

v. Multi-Care Mgt., Inc., 97 F.3d 876, 882 (6th Cir. 1996). This Court’s “inquiry, therefore,

unavoidably asks whether reasonable [fact-finders] could find by a preponderance of evidence that

the plaintiff is entitled to a [judgment].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 322 (1986).

“This Court reviews de novo ‘the question of whether the procedure employed by the

fiduciary in denying the claim meets the requirements of Section [503].’” Marks v. Newcourt Credit

Group, Inc., 342 F.3d 444, 459 (6th Cir. 2003) (quoting Kent v. United of Omaha Life Ins. Co., 96 F.3d 803, 806 (6th Cir. 1996)).

Because a district court has discretion in the award of monetary penalties under 29 U.S.C.

§ 1132(c), this Court reviews a district court’s decision under that section for an abuse of discretion.

Bartling v. Fruehauf Corp., 29 F.3d 1062, 1068 (6th Cir. 1994). An abuse of discretion exists when

the reviewing court is firmly convinced that a mistake has been made. In re Bendectin Litig., 857

F.2d 290, 307 (6th Cir. 1988).

2. The District Court Properly Dismissed Plaintiff’s Breach of Fiduciary Duties Claim

The district court allowed Plaintiff’s breach of fiduciary duties claim to proceed, with

discovery, to the extent that the claim alleged 1) that Defendants had made material

misrepresentations to Plaintiff about Plaintiff’s eligibility for benefits, and 2) that Defendants had

failed to provide Plaintiff with requested plan documentation. (J.A. at 40-45.) Inherent in these

allegations was Plaintiff’s assertion that Defendants had denied Plaintiff due process in the

adjudication of his denial of benefits claim, and the district court reached Plaintiff’s due process

allegations in ruling on Plaintiff’s claim for breach of fiduciary duty. 

a. Breach of fiduciary duty claims under ERISA

This Court has recognized an equitable claim by a participant against an ERISA plan

fiduciary arising out of 29 U.S.C. § 1132(a)(3) when a fiduciary misleads a participant or

beneficiary. See Krohn v. Huron Mem. Hosp’l, 173 F.3d 542, 546 (6th Cir. 1999).

Pursuant to § 1002(21)(A) of ERISA:

[A] person is a fiduciary with respect to a plan to the extent (i) he exercises any

discretionary authority or discretionary control respecting management of such plan

or exercises any authority or control respecting management or disposition of its

assets . . . or (iii) he has any discretionary authority or discretionary responsibility

in the administration of such plan.

29 U.S.C. § 1002(21)(A). ERISA also provides that “a fiduciary shall discharge his duties with

respect to a plan solely in the interest of the participants and beneficiaries.” 29 U.S.C. § 1104(a)(1).

A fiduciary breaches his duty by providing plan participants with materially misleading

information, “regardless of whether the fiduciary’s statements or omissions were made negligently

or intentionally.” Krohn, 173 F.3d at 547 (internal quotation and citation omitted). “Misleading

communications to plan participants regarding plan administration (for example, eligibility under

a plan, the extent of benefits under a plan) will support a claim for a breach of fiduciary duty.”

Drennan v. Gen. Motors Corp., 977 F.2d 246, 251 (6th Cir. 1992) (internal quotation and citation

omitted). A lower court in this Circuit has applied the fiduciary duty/misrepresentation case law of
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 11

this Court to a plaintiff’s claim that a misrepresentation precluded her from seeking alternative

sources of disability coverage. See Parks v. Fin. F.S.B., 345 F. Supp. 2d 889, 897 (W.D. Tenn.

2004).

To establish a claim for breach of fiduciary duty based on alleged misrepresentations

concerning coverage under an employee benefit plan, a plaintiff must show: 

(1) that the defendant was acting in a fiduciary capacity when it made the

challenged representations;

(2) that these [representations] constituted material misrepresentations; and 

(3) that the plaintiff relied on those misrepresentations to [his] detriment. 

James v. Pirelli Armstrong Tire Corp., 305 F.3d 439, 449 (6th Cir. 2002). “Whether an affirmative

misrepresentation was ‘material’ is a mixed question of law and fact. [] [A] misrepresentation is

material if there is a substantial likelihood that it would mislead a reasonable employee in making

an adequately informed decision about if and when to retire.” Id. (internal quotations and citations

omitted). Finally, a plaintiff’s reliance on the misrepresentation must be “reasonable.” Parks, 345

F. Supp. 2d at 897; cf. Gregg, 343 F.3d at 843 (requiring defendant plan administrator show that its

reliance on financial experts was reasonable).

b. The district court correctly concluded that no genuine issues of material fact

existed as to Defendants’ liability for alleged misrepresentations

i. No misrepresentations were made by either Defendant prior to

Plaintiff’s signing of the CSA

The district court found that Plaintiff had failed to put forth any evidence that MTA or

Lafayette made misrepresentations to Plaintiff about the effect of the CSA on his status as a covered

“employee” prior to Plaintiff’s signing of the CSA. The district court referred to Plaintiff’s

deposition testimony, in which Plaintiff’s testimony as to statements by Defendants contain no exact

time reference. Plaintiff’s only time reference cites statements made at a “December 1998” meeting.

(See J.A. at 273, 1060.) Defendant MTA’s witness testified in a later deposition that this meeting

took place on December 3, 1998, one day after Plaintiff signed the CSA. In addition, elsewhere in

his deposition testimony, Plaintiff asserts that he signed the CSA within moments of its presentation

to him, without discussing its terms or its effect on Plaintiff’s disability coverage with Defendants.

The district court refused to consider a subsequent affidavit submitted by Plaintiff in support of his

motion for summary judgment as an unreliable affidavit pursuant to Penny v. United Parcel Serv., 128 F.3d 408, 417 (6th Cir. 1997) (noting that a “party cannot create a genuine issue of material fact

by filing an affidavit, after a motion for summary judgment has been made, that essentially

contradicts his earlier deposition testimony”). Plaintiff’s late-filed affidavit states that Plaintiff

sought and received assurance from Defendants, prior to signing the CSA, that the CSA would not

affect Plaintiff’s disability coverage.

Plaintiff alleges that the district court’s reference to Plaintiff’s deposition testimony was

somehow incomplete and unjustified, and asserts that counsel for Defendants, taking the deposition,

somehow had the obligation to establish when the alleged misrepresentations were made. (See Pl.

Br. 40.) Plaintiff further argues that the district court improperly discounted Plaintiff’s affidavit.

Plaintiff’s assertions that somehow Defendants’ counsel had the burden of pulling out of

Plaintiff when the alleged misrepresentations were made are without merit. At the summary

judgment stage, Defendants had the burden of putting evidence or argument before the district court

which showed that Plaintiff had failed to establish a genuine issue of material fact. See Fed. R. Civ.
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 12

3

Plaintiff additionally argues that general assertions by MTA management in the year leading up to the CSA,

that upon Plaintiff’s retirement or change in status, his coverage under the benefit plan would remain the same, materially

misrepresented Plaintiff’s disability benefits to Plaintiff. This argument fails due to the very generality of the statements

upon which Plaintiff purportedly relied. These statements do nothing more than speak to management’s desire at the

time the statement were made to maintain Plaintiff’s coverage. The statements do not represent that the CSA, which

Plaintiff subsequently signed, actually maintained Plaintiff’s eligibility for benefits. In fact, the general assurances do

not refer to any specific agreement or arrangement. 

Proc. 56. Defendants did this, with respect to any misrepresentations allegedly made before Plaintiff

signed the CSA, by pointing to Plaintiff’s deposition testimony and the lack of dates therein. (See

J.A. at 470-71.) The burden then shifted to Plaintiff to show evidence in the record from which a

reasonable trier of fact could find that Defendants did make misrepresentations prior to Plaintiff’s

signing of the CSA. Plaintiff does not do this.

Instead, Plaintiff points to his late filed affidavit and defense counsel’s “failure” to establish

the dates of the alleged statements. We find that the district court correctly excluded the affidavit

from consideration because it cannot be reconciled with Plaintiff’s deposition testimony that

Plaintiff signed the CSA within moments of receiving it and without asking any questions beyond

“who . . . wants this?” (J.A. at 1059.) Further, the district court correctly found that Plaintiff had

failed to put forth sufficient evidence to survive summary judgment. Plaintiff cannot establish a date

for the alleged misrepresentations, and Defendants’ evidence indicates that any discussions as to

Plaintiff’s continued disability coverage, if such discussions did occur, took place after Plaintiff

signed the CSA.3 Plaintiff therefore could not have relied on these alleged misrepresentations in

signing the CSA.

ii. Plaintiff cannot show reasonable reliance on any alleged

misrepresentations by MTA after Plaintiff signed the CSA

Plaintiff alleges that MTA misrepresented Plaintiff’s eligibility for disability benefits after

Plaintiff signed the CSA by deducting premium payments from Plaintiff’s monthly remunerations

and remitting these premiums to Lafayette.

The district court found that any reliance by Plaintiff on statements made by MTA personnel

would be unreasonable, when Plaintiff was the self-acknowledged expert in welfare benefits

coverage for MTA. Plaintiff admitted that he sold the policy at issue to MTA and likewise

explained the policy terms to MTA officers, including the term on covered employees. Plaintiff

admitted that he was the “go to” guy for insurance questions held by MTA and its member

companies. Plaintiff had worked in insurance for over 30 years. Plaintiff began his insurance

career as an underwriter for AETNA Casualty. Plaintiff was originally hired by MTA in 1971 to

manage MTA’s insurance programs. When Plaintiff and MTA signed an MOU in 1972, Plaintiff

continued to handle all questions and claim problems for MTA’s group life and disability insurance.

We find that the district court correctly concluded that any reliance by Plaintiff on

representations by MTA management personnel as to the CSA’s effect on Plaintiff’s disability

coverage would be unreasonable in light of Plaintiff’s undisputed position vis-a-vis MTA

management on insurance issues. Plaintiff argues that he was not an undisputed expert on ERISA.

Plaintiff need not be an undisputed expert on ERISA, however, to be the undisputed most

knowledgeable person operating in or with MTA on welfare benefit issues. Plaintiff admits in his

brief to this Court that when Plaintiff was unable to answer an MTA employee or member’s question

on welfare benefits, Plaintiff would refer such questions to Lafayette. Plaintiff does not assert that

Plaintiff would refer such unanswerable questions to a member of MTA management. Were

Lafayette, not MTA, to have represented to Plaintiff that Plaintiff was a covered “employee” under

the terms of the CSA, Plaintiff’s reliance might be reasonable. In light of Plaintiff’s superior
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 13

insurance knowledge, however, Plaintiff’s reliance on any representations by MTA management

would be unreasonable.

iii. Plaintiff has failed to show that Lafayette made misrepresentations to

Plaintiff after Plaintiff signed the CSA

Plaintiff does not put forth any evidence that Lafayette knew the terms of the CSA prior to

Plaintiff’s application for disability benefits. Plaintiff argues that Lafayette knew that Plaintiff was

going to operate under a consulting arrangement with MTA beginning in 1999, but knowing that

Plaintiff’s relationship with MTA was going to change is not the same as knowing the terms of that

new relationship. Plaintiff testified that he could not recall providing Lafayette with a copy of the

CSA. (J.A. at 1068.) Without any evidence that Lafayette knew the terms of Plaintiff’s status under

the CSA, any alleged misrepresentations by Lafayette could not even have been negligently made.

The district court therefore correctly granted summary judgment for Lafayette on Plaintiff’s breach

of fiduciary duty/misrepresentation claim.

3. The District Court Correctly Concluded That Plaintiff Had Failed to Create a

Genuine Issue of Material Fact as to Whether Plaintiff Was Denied Due Process in

the Adjudication of His Claim

The district court found that despite some initial confusion as to the proper ERISA

documentation, the lack of a summary plan description, and some initial disagreement between

MTA and Lafayette as to who was responsible for adjudicating Plaintiff’s STD claim, the claim was

ultimately adjudicated without any substantive impairment to Plaintiff’s procedural rights. The

district court concluded that Plaintiff had been afforded a full opportunity to present any and all

evidence to Lafayette in support of Plaintiff’s claims for disability and that Plaintiff could have taken

advantage of an appeals process should Plaintiff have chosen to do so.

Plaintiff argues that numerous procedural defects “deprived [Plaintiff] of any assurance that

the process would be something other than arbitrary.” (Pl. Br. 47.) Plaintiff fails, however, to show

how these procedural defects prejudiced Plaintiff’s ability to put desired evidence in front of the

claims adjudicator, Lafayette. Generally, the courts have recognized in ERISA cases that procedural

violations entail substantive remedies only when some useful purpose would be served. Kent, 96

F.3d at 807. Neither does Plaintiff point to any evidence in briefs to this Court or to the district court

which Plaintiff argues he would have placed before Lafayette had Plaintiff been given an

opportunity.

Plaintiff argues that he was prejudiced by Lafayette’s adjudication of Plaintiff’s STD claim.

Under a 1999 Agreement between Lafayette and MTA, MTA agreed to administer claims for STD

benefits. MTA, however, asked Lafayette to administer Plaintiff’s claim for STD benefits because

of a feared conflict of interest due to Plaintiff’s close association with MTA. Lafayette ultimately

agreed to do so. Plaintiff alleges that were MTA, instead of Lafayette, to have adjudicated his STD

claim, Plaintiff would have prevailed in his pursuit of benefits because MTA “admitted” that

Plaintiff was a covered “employee” under the ERISA plan in its Answer to Plaintiff’s Complaint.

(Pl. Br. 46.) Plaintiff’s argument, however, misconstrues Defendants’ obligations to Plaintiff.

Lafayette was ultimately responsible under the terms of the STD policy itself for the adjudication

of STD claims. The subsequent contract between Lafayette and MTA did not confer legal

entitlements on Plaintiff. Plaintiff was entitled to substantial compliance by Defendants with

ERISA’s procedural requirements in claims administration. Contractual arrangements as to who was

to engage in this process do not affect whether Plaintiff actually enjoyed these procedural

protections. 

ERISA requires claim administrators to put a claimant on notice of the reasons for its denial

and to afford claimants an opportunity to appeal an adjudicator’s initial decision. Pursuant to § 503,
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 14

Every employee benefit plan shall – 

(1) provide adequate notice in writing to any participant or beneficiary whose

claim for benefits under the plan has been denied, setting forth the specific

reasons for such denial, written in a manner calculated to be understood by

the participant, and

(2) afford a reasonable opportunity to any participant whose claim for benefits

has been denied for a full and fair review by the appropriate named fiduciary

of the decision for denying the claim. 

29 U.S.C. § 1133.

 Generally, an administrator’s failure to comply with ERISA procedural requirements can

result in a remand by the reviewing court to the administrator. See VanderKlok, 956 F.2d at 619.

This Court, however, has adopted the rule that administrators need only substantially comply with

these ERISA notice requirements in order to avoid remand. Kent, 96 F.3d at 807. To decide

whether there is substantial compliance, this Court considers all communications between an

administrator and plan participant to determine whether the information provided was sufficient

under the circumstances. See Marks, 342 F.3d at 461; see also White v. Aetna Life Ins. Co., 210 F.3d

412, 414 (D.C. Cir. 2000); Brehmer v. Inland Steel Indus. Pension Plan, 114 F.3d 656, 662 (7th Cir.

1997) (“The question is whether [plaintiff] was supplied with a statement of reasons that under the

circumstances of the case permitted a sufficiently clear understanding of the administrator’s decision

to permit effective review.”). “When claim communications as a whole are sufficient to fulfill the

purposes of Section 1133 the claim decision will be upheld even if a particular communication does

not meet those requirements.” Kent, 96 F.3d at 807. In this analysis, this Court asks whether the

plan administrators fulfilled the essential purpose of § 503 – notifying Plaintiff of their reasons for

denying his claims and affording him a fair opportunity for review. Id.

Plaintiff argues that Lafayette’s denial letter was inadequate and that Plaintiff was denied

an appeals process. Plaintiff’s arguments, however, are unsupported by the record. Lafayette’s

denial letter explained its reason for denying Plaintiff’s claim in depth – Lafayette’s determination

that Plaintiff was not an “employee” under the terms of the plan. (J.A. at 1655.) The denial letter

was more than four pages in length and further explained the factual basis for Lafayette’s

determination that Plaintiff was not an “employee.” We find that the letter very clearly placed

Plaintiff on notice as to why Lafayette was denying benefits.

Similarly, Plaintiff was very clearly afforded an appeals procedure. Before any decision on

Plaintiff’s claim had been reached, the adjudicator forwarded to Plaintiff’s counsel a copy of

Lafayette’s “Grievance Procedure” used in connection with Lafayette’s LTD policy. The Grievance

Procedure established a contact person and procedure for any claimant wishing to contest a coverage

determination. Moreover, Lafayette’s letter of July 20, 2000, denying benefits, concluded by

stating:

Should you and your client disagree with our conclusions that neither long-term

disability nor short-term disability benefits can be paid, you may certainly, prior to

the institution of any formal grievance with us, provide us with the written basis for

your opinion and any information supporting your belief to us in writing and we will

consider it.

(J.A. at 1658.) Plaintiff does not contend that he attempted to submit any additional evidence to

Lafayette or that he attempted to institute formal grievance procedures as outlined in Lafayette’s

policy documents held by Plaintiff’s counsel.
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 15

We find that Plaintiff was afforded a full and fair opportunity to present his claims for

benefits to Lafayette. Without any evidence that Plaintiff was precluded from submitting such

evidence, or that Plaintiff was prevented from undertaking an administrative appeal, Plaintiff’s

claims for due process violations must fail.

4. The District Court Did Not Abuse its Discretion in Refusing to Grant Monetary

Penalties Under 29 U.S.C. § 1132(c)

Under Count V, Plaintiff asserted a claim under 29 U.S.C. § 1132(c) against MTA for failure

to furnish requested information. MTA does not dispute that it did not produce a summary plan

description as required by ERISA. The district court, however, exercised its discretion in refusing

to assess monetary penalties as authorized under 29 U.S.C. § 1132(c). In reaching its decision, the

district court noted that Plaintiff had received a copy of the relevant policies, if not the summary

plan descriptions, that Plaintiff’s expertise in the benefit field counseled against any finding of

prejudice as a result of a lack of summary plan descriptions, and that Plaintiff had not, in fact,

demonstrated any prejudice from lacking the summary plan descriptions. 

This Court has said that courts may consider any prejudice or lack thereof in deciding

whether § 1132(c) penalties are warranted. See Bartling, 29 F.3d at 1068. We find that the evidence

does not firmly establish that a “mistake has been made.” Id. We therefore affirm the district

court’s refusal to grant monetary penalties under § 1132(c).

D. THE DISTRICT COURT CORRECTLY GRANTED JUDGMENT IN FAVOR OF

DEFENDANTS ON PLAINTIFF’S CLAIM FOR BENEFITS

Plaintiff argues that the district court improperly concluded that Plaintiff was not a covered

“employee” under ERISA and therefore was not entitled to benefits under the applicable ERISA

plan.

1. Standard of Review

Courts review a denial of benefits challenged under 29 U.S.C. § 1132(a)(1)(B) de novo, unless the plan gives the plan administrator or fiduciary discretionary authority to determine benefit

eligibility or construe the terms of the plan. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,

115 (1989). The parties do not appeal the lower court’s determination that the plan administrator

here does not have discretionary benefit eligibility authority. This Court reviews the district court’s

decisions on matters of law in an ERISA benefits action de novo and its factual findings for clear

error. See Stoll v. W. & S. Life Ins Co., No. 01-3401, 64 Fed. App’x 986, 990 (6th Cir. May 22,

2003) (unpublished opinion).

2. The District Court Properly Dismissed MTA as a Defendant

The district court concluded that MTA was not a proper defendant for a claim for benefits

because MTA did not participate in the decision to deny Plaintiff benefits under either the STD or

the LTD policies. Rather, Lafayette, as the claims administrator, was the proper party defendant for

Plaintiff’s denial of benefit claim.

According to ERISA, a plan “fiduciary” is one who “exercises any discretionary authority

or discretionary control respecting the management of [an ERISA] plan or exercises any authority

or control respecting the management or disposition of its assets” or who “has any discretionary

authority or discretionary responsibility in the administration of such plan.” 29 U.S.C.

§ 1002(21)(A). This Court has found that “the definition of a fiduciary under ERISA is a functional

one, [and] is intended to be broader than the common-law definition” such that the issue of whether

one is considered a fiduciary does not turn upon formal designations. Smith v. Provident Bank, 170
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 16

F.3d 609, 613 (6th Cir. 1999). Therefore, for purposes of ERISA, a “fiduciary” not only includes

persons specifically named as fiduciaries by the benefit plan, but also anyone else who exercises

discretionary control or authority over a plan’s management, administration, or assets. See Mich.

Affiliated Healthcare Sys., Inc. v. CC Sys. Corp. of Mich., 139 F.3d 546, 549 (6th Cir. 1998). 

Under ERISA a person is a fiduciary only with respect to those aspects of the plan over

which he or she exercises authority or control. See Grindstaff v. Green, 133 F.3d 416, 426 (6th Cir.

1998). When an insurance company administers claims for employee welfare benefit plans and has

authority to grant or deny claims, the insurance company is a “fiduciary” for ERISA purposes. See

Libbey-Owens-Ford Co. v. Blue Cross & Blue Shield Mut. of Ohio, 982 F.2d 1031, 1035 (6th Cir.

1993). An employer who does not control or influence the decision to deny benefits is not the

fiduciary with respect to denial of benefit claims. Chiera v. John Hancock Mut. Life Ins. Co., 3 Fed.

App’x 384, 389 (6th Cir. 2001) (unpublished decision) (“Defendant [insurance company] is a

fiduciary for purposes of ERISA inasmuch as it had a role in administering the plan because it had

authority to accept or reject claims for losses under the group insurance policy as evidenced by the

rejection letter that it sent to Plaintiff in response to her attorney’s letter.”)

Here, despite some initial confusion over proper ERISA titles, Lafayette and MTA agreed

early on in the litigation that while MTA is the plan administrator, Lafayette is the claims

administrator and exercised full authority in adjudicating Plaintiff’s claim for benefits. It was

Lafayette who made a decision with respect to Plaintiff’s benefits, not MTA. Lafayette, and not

MTA, is therefore the proper party defendant for a denial of benefits claim by Plaintiff. See

Kennard v. Unum Life Ins. Co., No. 01-217-B-K, 2002 U.S. Dist. LEXIS 4467, at *4-6 (D. Me. Mar.

14, 2002) (unpublished opinion) (dismissing employer from benefits suit when insurance company,

and not employer, made benefit decisions). The district court did not err in dismissing MTA from

Plaintiff’s suit for benefits.

3. The District Court Properly Found That Plaintiff Was Not a Covered Employee

a. As a threshold matter, Plaintiff must meet the definition of “employee” under

ERISA

Plaintiff’s action for benefits arises under 29 U.S.C. § 1132(a), which enables a benefit plan

“participant” to enforce the substantive provisions of ERISA. The Act elsewhere 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 . . . .” § 1002(7). 

Plaintiff does not allege that he has vested welfare benefits due to his status as a “former

employee” of MTA in reference to his work with MTA prior to 1999. Instead, Plaintiff alleges that

he is a “participant” because he was an “employee” of MTA while under the CSA. Thus, Plaintiff’s

claim for benefits under ERISA “can succeed only if he was [MTA’s] ‘employee,”’ while under the

CSA. The Supreme Court has held that to qualify as an “employee” for ERISA purposes, a plaintiff

must meet the common law test for employee. Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318,

320-321 (1992). Only once Plaintiff has demonstrated that he meets the common law meaning of

“employee” should this Court turn to whether Plaintiff was an “employee” as defined in the STD

and LTD policies, as distinct from an “employee” under ERISA.

b. Plaintiff is not a common law employee

The Supreme Court has adopted a common law definition of employee under ERISA: 

In determining whether a hired party is an employee under the

general common law of agency, we consider the hiring party’s right

to control the manner and means by which the product is
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 17

accomplished. Among the other factors relevant to this inquiry are

the skill required; the source of the instrumentalities and tools; the

location of the work; the duration of the relationship between the

parties; whether the hiring party has the right to assign additional

projects to the hired party; the extent of the hired party’s discretion

over when and how long to work; the method of payment; the hired

party’s role in hiring and paying assistants; whether the work is part

of the regular business of the hiring party; whether the hiring party is

in business; the provision of employee benefits; and the tax treatment

of the hired party. 

490 U.S. at 751-752 (footnotes omitted).

Cf. Restatement (Second) of Agency § 220(2) (1958) (listing nonexhaustive criteria

for identifying master-servant relationship); Rev. Rul. 87-41, 1987-1 Cum. Bull. 296,

298-299 (setting forth 20 factors as guides in determining whether an individual

qualifies as a common-law “employee” in various tax law contexts). Since the

common-law test contains no shorthand formula or magic phrase that can be applied

to find the answer, . . . all of the incidents of the relationship must be assessed and

weighed with no one factor being decisive.

Nationwide, 503 U.S. at 324 (internal quotations and citations omitted).

The district court considered all the factors outlined in Nationwide. The district court

concluded that:

a. MTA exercised no significant control over how Plaintiff performed his duties, and the CSA

described Plaintiff as an “independent contractor;”

b. Plaintiff required significant skill to perform his duties, counseling against finding Plaintiff

an employee;

c. While Plaintiff had an office at MTA, he covered much of his own expenses;

d. MTA did not appear to require Plaintiff to work on site at MTA;

e. While MTA and Plaintiff worked together for many years, they did so under a contractual

relationship, which changed in December 1998 when the CSA was signed;

f. Under the terms of the CSA, MTA did not have the right to assign additional duties to

Plaintiff;

g. Plaintiff had significant discretion over when and how long to work;

h. Plaintiff was paid pursuant to the CSA as an independent contractor and had to remit his own

taxes and social security payments;

i. Plaintiff appeared free to hire assistants if he so chose;

j. Plaintiff’s services were essential to the regular business of MTA;

k. Plaintiff was not eligible for “employee benefits” in the normal course of MTA business and

pursuant to the language of the CSA, which provided for remittance of the balance due under

the CSA in the event of Plaintiff’s extended illness or medical incapacity; and
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 18

4

“Any attorney or other person admitted to conduct cases in any court of the United States or any Territory

thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to

satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.” 28

U.S.C. § 1927.

l. Plaintiff’s tax treatment indicated Plaintiff was not an employee, because MTA reported

Plaintiff’s remuneration on 1099s and not W-2s.

(J.A. at 103-10.) In addition to the Nationwide factors, the district court also considered Plaintiff’s

representation of his employment status on a social security disability benefit application. In those

forms, Plaintiff asserted that he was “self-employed” and “president of [a] one man company.” (J.A.

at 110.) Plaintiff further represented that he had “incorporated himself” and that he was receiving

payment “until the end of contracts that expire 12-31-00.” (J.A. at 110.)

We find that the district court’s factual findings are not clearly erroneous. We further agree

with the district court that the balance of the evidence supports the conclusion that Plaintiff does not

meet the definition of an “employee” under the common law. Plaintiff’s self-representation to the

Social Security Administration is compelling. When viewed in conjunction with the issuance of

1099s, Plaintiff’s responsibility for his own payroll taxes, and reference to Plaintiff as an

“independent contrator” by the CSA itself, Plaintiff is not a common law employee and therefore

ineligible under an ERISA benefit plan.

E. The District Court Did Not Abuse its Discretion in Awarding Partial Attorneys’ Fees

Under 29 U.S.C. § 1132(g)(1) Against Plaintiff and in Sanctioning Plaintiff’s Counsel

Plaintiff argues that the Court’s conclusion that Plaintiff is not a common law employee, and

therefore not a “participant” under ERISA, results in a determination that Plaintiff lacks statutory

standing and that this Court therefore lacks jurisdiction under 29 U.S.C. § 1132(g)(1) to award fees

against Plaintiff. In the alternative, Plaintiff argues that the district court abused its discretion in

awarding attorneys fees against Plaintiff pursuant to 29 U.S.C. § 1132(g)(1). In addition, Plaintiff’s

attorney argues that the district court abused its discretion in sanctioning Plaintiff’s attorney by

holding the attorney jointly and severally liable with Plaintiff for the award of fees. Plaintiff,

Plaintiff’s attorney, and Lafayette also take issue with the district court’s calculation of awarded

fees. We reject these arguments in turn.

1. Standard of Review

This Court construes the terms of the ERISA statute de novo. Jordan v. Mich. Conf. of 

Teamsters Welfare Fund, 207 F.3d 854, 858 (6th Cir. 2000).

This Court reviews a district court’s award of attorneys’ fees and costs under 29 U.S.C.

§ 1132(g)(1) for an abuse of discretion. See 29 U.S.C. § 1132(g)(1) (“[T]he court in its discretion

may allow a reasonable attorney’s fees and costs . . . .”). Similarly, this Court reviews a district

court’s decision to impose sanctions against an attorney for abuse of discretion. See 28 U.S.C.

§ 1927.4

 “[A]n abuse of discretion exists only when the court has the definite and firm conviction

that the district court made a clear error of judgment in its conclusion upon weighing relevant

factors.” Sec’y of Dep’t of Labor v. King, 775 F.2d 666, 669 (6th Cir. 1985).

2. The District Court Had Authority to Impose Attorneys’ Fees Against Plaintiff

Plaintiff first argues that the district court lacked authority to impose attorneys’ fees against

Plaintiff because the court had found that Plaintiff was not an “employee” under ERISA and was

therefore ineligible to recover benefits under an ERISA cause of action. Plaintiff argues that the
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 19

5

The United States Court of Appeals for the Ninth Circuit has explicitly rejected such a self-serving argument

as Plaintiff presents here. See Credit Mgrs. Assoc. of So. Calif. v. Kennesaw Life & Accident Ins. Co., 25 F.3d 743 (9th

Cir. 1994) (“[I]t would be unjust to permit [plaintiff] to insulate itself from liability for attorney’s fees simply because

[he] failed to produce sufficient evidence to prevail on [his] claims.”).

district court’s factual conclusion as to Plaintiff’s status as an “employee” means that Plaintiff can

not be a “participant” under § 1132(g)(1), which authorizes the award of attorneys’ fees against a

participant, beneficiary, or fiduciary of an ERISA plan involved in a suit under the statute. See 29

U.S.C. § 1132(g)(1). 

We find Plaintiff’s argument both self-serving and incorrect.5

 Were the Court’s factual

determination on the merits as to Plaintiff’s status as an “employee” determinative of whether

Plaintiff was a “participant” under the ERISA statute, our merits determination would render

Plaintiff without statutory standing and this Court without jurisdiction to hear the case at all, a result

inapposite to Supreme Court precedent, despite Judge Cook’s conclusion to the contrary in her

partial dissent in this case.

a. ERISA “participants” and Firestone

Plaintiff’s action for benefits arises under 29 U.S.C. § 1132(a), which enables a benefit plan

“participant” to enforce the substantive provisions of ERISA. The Act elsewhere 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 which covers employees of

such employer . . . .” 29 U.S.C. § 1002(7). Plaintiff alleges that he was an employee of MTA when

his disability began, making him an “employee . . . who is eligible to receive a benefit . . . .” and

therefore a “participant” under ERISA with standing to sue. MTA argues that Plaintiff was an

“independent contractor” and not an “employee.”

Judge Cook cites to Ward v. Alternative Health Delivery Systems, 261 F.3d 624 (6th Cir.

2001), for the proposition that this Court lacks subject matter jurisdiction over an ERISA suit

brought by a plaintiff who lacks statutory standing. While we agree that lack of standing is

determinative of the jurisdiction of this Court in an ERISA action, we do not agree that Plaintiff

lacks standing in the case at bar or that this case is analogous to that cited in Ward. The Ward

plaintiff argued for an extension of existing law under the corollary “beneficiary” standing prong

of ERISA. Id. at 627. This Court refused to extend the definition of “beneficiary” to include health

care providers. Id. This was a ruling of law, not a factual determination that the Ward plaintiff did

not qualify as a beneficiary under traditional definitions. 

 Plaintiff in the case at bar is not arguing for an extension of existing ERISA standing law.

Rather, Plaintiff argues that, as a matter of fact, Plaintiff was an “employee” when his disability

began. This goes to the merits. Questions of statutory standing and cause of action often merge.

This is the circumstance of the case at bar. Plaintiff alleges that he was an employee of the

Defendant MTA when he became disabled. In fact, whether or not Plaintiff was an employee is

determinative in the suit. It is circular to argue that because the Court has determined that Plaintiff

was not an employee, Plaintiff lacked standing to sue and that this Court therefore lacks jurisdiction.

Rather, Plaintiff had a colorable claim that he was an employee and that he was therefore covered

by the statute. Logic dictates that the federal courts be able to reach this question. 

The Supreme Court addressed this issue in Firestone Tire and Rubber Co. v. Bruch, 489

U.S. at 101. The Firestone Court addressed the question of statutory standing under the term

“participant.” Id. at 115-18. The plaintiffs in Firestone were former employees of the tire

manufacturer who claimed that they were entitled to benefits under a termination pay plan that

Firestone had in place at the time Firestone sold the business in which plaintiffs worked. The
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 20

plaintiffs argued, in part, that they were entitled to receive plan information from Firestone after

Firestone sold the business unit in which the plaintiffs worked. The district court agreed with

Firestone, however, that at the time plaintiffs requested the information (after the sale of the business

unit in which they worked), plaintiffs were no longer participants of Firestone’s ERISA plans,

obviating Firestone’s obligations to provide information. Id. at 107. The Third Circuit reversed the

district court, reasoning that the right to request and receive information about an employee benefit

plan “most sensibly extend[s] both to people who are in fact entitled to a benefit under the plan and

those who claim to be but in fact are not.” Id. at 108 (quoting from the Third Circuit opinion). 

On appeal, the Supreme Court rejected the Third Circuit’s contention that a litigant’s bald

assertion of participant status ended the inquiry. Id. at 117. The Supreme Court noted that

“Congress did not say that all ‘claimants’ could receive information about benefit plans. To say that

a ‘participant’ is any person who claims to be one begs the question of who is a ‘participant’ and

renders the definition set forth in § 1002(7) superfluous.” Id.; see also 29 U.S.C. § 1002(7)

(defining 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 . . . .”). The Supreme

Court was therefore requiring the court of appeals to address the more particularized definition of

participant available in the statute.

In remanding the case, the Supreme Court further noted that “[i]n our view, the term

‘participant’ is naturally read to mean either employees in, or reasonably expected to be in, currently

covered employment . . . or former employees who have . . . a reasonable expectation of returning

to covered employment or who have a colorable claim to vested benefits.” Firestone Tire & Rubber, 489 U.S. at 117 (internal quotations and citations omitted). The Supreme Court expanded on its

definition even further by noting that:

“[i]n order to establish that he or she ‘may become eligible’ for benefits, a claimant

must have a colorable claim that (1) he or she will prevail in a suit for benefits, or

that (2) eligibility requirements will be fulfilled in the future. This view attributes

conventional meanings to the statutory language since all employees in covered

employment and former employees with a colorable claim to vested benefits ‘may

become eligible.’ A former employee who has neither a reasonable expectation of

returning to covered employment nor a colorable claim to vested benefits, however,

simply does not fit within the phrase ‘may become eligible.’” 

Id. at 118-19 (internal quotations and citations omitted). The Supreme Court did not reach the

question of whether the claimants qualified as participants in Firestone, preferring to leave that

determination to the court of appeals upon remand. Id. at 118.

The logical reading of the Supreme Court’s opinion in Firestone is that by failing to look to

the statutory definition of participant, the court of appeals abrogated the statutory restriction on who

was entitled to plan information. At minimum, the Supreme Court seemed to be saying that a

litigant must claim to be an “employee or former employee” as a participant is defined in the ERISA

statute, and in determining “participant” status a court must do more than take the claimant’s bald

assertion. It does not follow, however, that a claim for benefits which revolves around the question

of whether a litigant is or was an “employee” under ERISA devolves into a standing issue alone.

Since Firestone, the Supreme Court has ruled on a case revolving around the claimant’s

status as an employee. See Nationwide, 503 U.S. at 318. The posture of the parties in Nationwide

was very similar to the posture in the case at bar. The plaintiff was a former insurance agent for

defendant Nationwide. After Nationwide terminated the plaintiff’s agency, the plaintiff brought suit

under ERISA to enforce the terms of a retirement plan under which the plaintiff claimed eligibility.

Id. at 320. The proceedings in the lower court turned on whether the plaintiff qualified as an
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 21

“employee or former employee” of Nationwide and thereby a “participant” eligible to claim benefits

under ERISA. Id. at 321-22. The Supreme Court held that common law agency principles applied

to determine whether the plaintiff was an “employee” under ERISA. The Supreme Court remanded

the case for the application of the correct legal standard. Id. at 328. The Court did not imply, in any

way, that a finding that the plaintiff was not an employee would function to strip the federal courts

of their authority over the case.

b. When the merits and jurisdictional issues merge

While Firestone is directly on point and favors standing, we have also been instructed by the

Supreme Court more generally to assume jurisdiction when statutory standing and merits questions

converge. See Bell v. Hood, 327 U.S. 678, 681-82 (1945). The Fifth Circuit has summarized the

meaning of that case very well as it relates to cases such as the one at bar:

When the basis of federal jurisdiction is intertwined with the plaintiff’s federal cause

of action, the court should assume jurisdiction over the case and decide the case on

the merits. Bell v. Hood, 327 U.S. 678, 681-82 . . . . (1945) . . . . “The question of

subject matter jurisdiction and the merits will normally be considered intertwined

where the [same] statute provides both the basis of federal court subject matter

jurisdiction and the cause of action.” Clark v. Tarrant County, Texas, 798 F.2d 736,

742 (5th Cir. 1986) (citation omitted). In Williamson [v. Tucker], we explained that

no purpose is served by indirectly arguing the merits in the context

of federal jurisdiction. Judicial economy is best promoted when the

existence of a federal right is directly reached and, where no claim is

found to exist, the case is dismissed on the merits. . . . Therefore as

a general rule a claim cannot be dismissed for lack of subject matter

jurisdiction because of the absence of a federal cause of action.

645 F.2d [404,] 415-16 [5th Cir. 1981]. The basic reason for this rule is obvious. If

federal jurisdiction turned on the success of a plaintiff’s federal cause of action, no

such case could ever be dismissed on the merits.

The exceptions to the rule of Bell v. Hood are that jurisdictional dismissal is proper

if the federal claim “clearly appears to be immaterial and made solely for the purpose

of obtaining jurisdiction or where such a claim is wholly insubstantial and frivolous.”

Bell v. Hood, 327 U.S. at 682-83 . . . . This “standard is met only where the plaintiff's

claim ‘has no plausible foundation’ or ‘is clearly foreclosed by a prior Supreme

Court decision.’” Williamson, 645 F.2d at 416 (quoting Bell v. Health-Mor, Inc., 549

F.2d 342, 344 (5th Cir. 1977)). 

Eubanks v. McCotter, 802 F.2d 790, 793 (5th Cir. 1986).

The Supreme Court has recently expanded on the premise of Bell v. Hood and emphasized

that the courts must not extend the concept of subject matter jurisdiction, which deals with the

“classes of cases . . . falling within a court’s adjudicatory authority,” to capture other instances in

which a court should dismiss or refuse to take a case. See Kontrick v. Ryan, 540 U.S. 443, 455-56

(2004) (distinguishing between issues of subject matter jurisdiction and claims processing rules).

This Court recently reflected the Kontrick distinction in Primax Recoveries, Inc. v. Gunter, in which

a panel held that a plaintiff’s claim under ERISA § 1132(a)(3) was properly dismissed for failure

to state a claim, and not for lack of subject matter jurisdiction, when the plaintiff sought legal relief

and the statute authorized only equitable actions. 433 F.3d 515, 519-20 (6th Cir. 2006). The Primax

Recoveries panel further held that because the district court possessed subject matter jurisdiction

over the case, even though the plaintiff failed to state a claim, the court possessed full authority to
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 22

award attorneys’ fees to the prevailing party under the ERISA statute. Id. at 520. The Primax panel

cited to Steel Co. v. Citizens for a Better Env’t, 533 U.S. 83, 89 (1998), noting that dismissal for lack

of subject matter jurisdiction because of the inadequacy of a federal claim is proper only when a

claim is “so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise

completely devoid of merit so as not to involve a federal controversy.” Primax Recoveries, 433 F.3d

at 519 (citing Steel Co., 533 U.S. at 89).

In the instant case, Plaintiff makes at least a colorable claim that he was an “employee,” and

therefore an ERISA “participant,” at the time of his disability. His claim is not so insubstantial that

it fails to present a federal controversy. Steel Co., 533 U.S. at 89. Moreover, a factual determination

on the merits that Plaintiff’s status was not actually that of an employee does not strip the federal

courts of jurisdiction over the case. Rather, under the rules of Bell v. Hood and Steel Co., we may

properly reach the merits of Plaintiff’s case and retain jurisdiction to make an appropriate award of

attorneys fees’ as envisioned by Congress when crafting the ERISA scheme.

3. The District Court Did Not Abuse its Discretion in Awarding Attorneys’ Fees and

Costs

Plaintiff argues that the district court abused its discretion in awarding Defendants a portion

of their attorneys’ fees and costs. 

Courts in this Circuit consider five factors in deciding ERISA attorneys’ fees questions:

(1) the degree of the opposing party’s culpability or bad faith; 

(2) the opposing party’s ability to satisfy an award of attorneys’ fees; 

(3) the deterrent effect of an award on other persons under similar circumstances; 

(4) whether the party requesting fees sought to confer a common benefit on all

participants and beneficiaries of an ERISA plan or resolve significant legal questions

regarding ERISA; and 

(5) the relative merits of the parties’ positions.

King, 775 F.2d at 669. The district court addressed each of these factors in turn. The district court

found, first and foremost, that Plaintiff did not litigate in good faith. While Plaintiff presented a

colorable claim for benefits, Plaintiff asserted a number of “near frivolous” claims against both

Defendants, Plaintiff refused to dismiss claims against one Defendant or another once it became

clear which was the proper Defendant for that claim, and Plaintiff unnecessarily prolonged litigation

by filing unreliable briefs and pursuing arguments even after their rejection by the court. In

addition, the district court found that Plaintiff “improperly took quotations out of context and made

strained arguments based upon such misinterpreted citations.” (J.A. at 2548.)

We find that the district court’s conclusions are supported by the record. For example, after

the parties agreed that MTA was the plan administrator while Lafayette was the claims

administrator, Plaintiff refused to dismiss his claim for benefits against MTA and refused to dismiss

his claim for failure to turn over plan documents against Lafayette. The case law is very clear about

who is a proper party defendant for each of these claims. The district court need not determine that

the entire matter was pursued in bad faith to find some level of culpability on the part of Plaintiff

for the unnecessary scope of litigation.

Plaintiff further argues that the district court had insufficient basis to reach a conclusion that

Plaintiff could afford to pay the imposed attorneys’ fees. The district court based its conclusion on
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 23

the fact that Plaintiff had reported approximately half a million dollars in income in 1998 and 1999.

Plaintiff presented no evidence to the district court, and indeed presents no evidence to this Court,

in support of his contention that he cannot pay the fees.

Plaintiff next argues that the district court is improperly deterring colorable claims for

benefits by awarding partial attorneys’ fees against Plaintiff. Plaintiff’s argument is without merit.

While there is no presumption of award of attorneys’ fees to the prevailing party in an ERISA

action, see Schwartz v. Gregori, 160 F.3d 1116, 1119-20 (6th Cir. 1998), the district court’s

objective was not to deter plaintiffs from bringing colorable claims for benefits, but from

unnecessarily expanding the scope and complexity of litigation. Finally, the district court

considered that the fourth King factor was inapplicable, and that the fifth factor favored Defendants

because many of Plaintiff’s subclaims were either duplicative or lacked merit.

This Court is not left with a “definite and firm conviction that the district court made a clear

error of judgment.” We have reviewed Plaintiff’s briefs to the district court and agree with the

district court that the briefs were relatively unreliable, an unreliability that continued in Plaintiff’s

briefs to this Court. In addition, Plaintiff continued to pursue claims against both Lafayette and

MTA when the record had become clear that one or the other was not a proper defendant for some

of Plaintiff’s subclaims, despite the communication of relevant and clear legal authority for the

dismissal of one defendant or the other to Plaintiff’s counsel. The district court did not abuse its

discretion in awarding attorney fees’ against Plaintiff.

4. The District Court Did Not Abuse its Discretion in Sanctioning Plaintiff’s Attorney

Plaintiff argues that the district court abused its discretion in holding Plaintiff’s attorney

jointly and severally liable with Plaintiff to pay 50 percent of Defendant’s attorneys’ fees. The

district court rendered its decision for MTA’s fees under both Rule 11 and 28 U.S.C. § 1927

authority. The district court rendered its decision for Lafayette’s fees under its 28 U.S.C.§ 1927

authority. While Rule 11 and § 1927 are alternative sanctioning schemes, each possesses its own

requirements. See Chambers v. NASCO, Inc., 501 U.S. 32, 43-44 (1991) (finding that § 1927, Rule

11, and a court’s inherent power to impose sanctions exist in concert). This Court may affirm the

district court’s imposition of sanctions, however, if we find counsel’s conduct sanctionable under

either Rule 11 or § 1927, because we may affirm the district court on any grounds supported by the

record. City Mgmt. Corp., 43 F.3d at 251; see also Ridder v. City of Springfield, 109 F.3d 288, 299

(6th Cir. 1997) (affirming award of attorneys’ fees pursuant to § 1927 when award under Rule 11

was improper).

a. Sanctions were untimely under Rule 11

Under the revised Rule 11, sanctions under Rule 11 are only appropriate when a party is

made aware of the offending document as filed with the court and has an opportunity to withdraw

the filing. Fed. R. Civ. Proc. 11 advisory comm. notes (1993 amendments) (“[A] party cannot delay

serving its Rule 11 motion until conclusion of the case . . . .”) This Court held as much in Ridder, 109 F.3d at 295 (“A party must now serve a Rule 11 motion on the allegedly offending party at least

twenty-one days prior to the conclusion of the case or judicial rejection of the offending

contention.”). The parties do not dispute that the Rule 11 motions were made after the disposition

of the case on summary judgment. Therefore any sanction under Rule 11 constitutes an abuse of

discretion. We find, however, that the district court’s sanctions were proper under its alternative

§ 1927 holding. See infra.
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 24

b. The district court did not abuse its discretion in imposing sanctions under

§ 1927

Section 1927 provides:

Any attorney or other person admitted to conduct cases in any court of the United

States or any Territory thereof who so multiplies the proceedings in any case

unreasonably and vexatiously may be required by the court to satisfy personally the

excess costs, expenses, and attorneys’ fees reasonably incurred because of such

conduct.

28 U.S.C. § 1927. This Court has held that:

the question under 28 U.S.C. § 1927 is whether Plaintiff’s attorney “multiplie[d] the

proceedings . . . unreasonably and vexatiously.” An affirmative answer to that

question does not require a finding of recklessness, subjective bad faith, or conscious

impropriety; an attorney does not have carte blanche to burden the federal courts by

pursuing claims that he should know are frivolous (see Jones v. Continental Corp., 789 F.2d 1225 (6th Cir. 1986)) . . . .

Haynie v. Ross Gear Div. of TRW, 799 F.2d 237, 243 (6th Cir. 1986).

Our inquiry, therefore, is whether there is support in the record that Plaintiff’s attorney

“multiplie[d] the proceedings . . . unreasonably and vexatiously.” The district court’s sanction

against Plaintiff’s counsel is supported by the court’s finding of bad faith supporting the award of

attorneys’ fees against Plaintiff. See supra. The district court specifically found that “Plaintiff’s

counsel’s litigation tactics, mischaracterizations, and relentless pursuit of untenable claims and

positions satisfies § 1927.” (J.A. at 2557.) A court may hold a party’s attorney jointly and severally

liable for the opposition’s attorneys’ fees as a 28 U.S.C. § 1927 sanction. See N. Trust Co. v. Muller,

616 F. Supp. 788, 789 (N.D. Ill. 1985). This Court is not left with a “definite and firm conviction

that the district court made a clear error of judgment.”

5. The Size of the Attorneys’ Fee Award Was Reasonable

Plaintiff argues in the alternative that the size of the district court’s award of fees was

unreasonable. MTA submitted monthly invoices with hourly accountings accompanied by attorney

hourly rate charges. MTA’s total amount requested was approximately $166,000. The district court

found these charges reasonable. Lafayette, however, submitted only a total amount and an

accompanying affidavit attesting to the amount’s reasonableness. Lafayette requested a total amount

of about $75,000. The district court likewise found this amount reasonable. Concluding that

Plaintiff and Plaintiff’s counsel unnecessarily expanded the scope and complexity of the ERISA

action by approximately 50 percent, the district court ordered Plaintiff and Plaintiff’s counsel held

jointly and severally liable for 50 percent of both MTA’s and Lafayette’s submitted fees.

Plaintiff points to no portion of the bill submitted by MTA which Plaintiff avers represents

an unreasonable charge. Rather, Plaintiff argues only that the district court failed to give the matter

“careful analysis” and make “discrete findings” as required for a § 1927 sanction. We disagree. The

district court held counsel jointly responsible for the same conduct which underpinned the court’s

award of attorneys’ fees against Plaintiff, conduct which the district court referenced in the
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 25

6

The district court found, first and foremost, that Plaintiff did not litigate in good faith. While Plaintiff

presented a colorable claim for benefits, Plaintiff asserted a number of “near frivolous” claims against both Defendants,

Plaintiff refused to dismiss claims against one Defendant or another once it became clear which was the proper

Defendant for that claim (e.g., the claim for failure to provide plan documentation upon request), and Plaintiff

unnecessarily prolonged litigation by filing unreliable briefs and pursuing arguments even after their rejection by the

court. In addition, the district court found that Plaintiff “improperly took quotations out of context and made strained

arguments based upon such misinterpreted citations.” (J.A. at 2548.)

7

While normally a party seeking attorneys’ fees under ERISA should submit detailed hourly billing statements,

see Adcock-Ladd v. Sec’y of Treasury, 227 F.3d 343, 349 (6th Cir. 2000), Plaintiff’s failure to present proper argument

to this Court makes it unnecessary for us to reach this issue here.

memorandum of opinion accompanying the order awarding fees.6 We therefore find the district

court’s award of 50 percent of Lafayette and MTA’s attorneys’ fees a reasonable award, pursuant

to the district court’s factual findings that Plaintiff and Plaintiff’s counsel unreasonably multiplied

the litigation by the same amount. We believe the district court’s findings satisfied this Court’s

instructions that trial courts provide “clear and concise explanation[s] of [their] reasons” for

awarding attorneys’ fees. Gettings v. Bldg. Laborers Local 310, 349 F.3d 300, 310 (6th Cir. 2003).

Plaintiff further argues, in a perfunctory way, that the district court erred in awarding fees

to Lafayette when Lafayette had yet to submit detailed hourly charges constituting a breakdown of

its fees.7

 Plaintiff argues only that such documentation would be a “logical prerequisite to

establishing ‘reasonableness’” under § 1927. (Pl. Br. 67.) Plaintiff fails to support this statement

with any case law, and further fails to cite to any relevant legal authority which requires this Court

to overturn a district court’s award of attorneys’ fees in the absence of an hourly bill. Plaintiff’s one

sentence argument to this effect is therefore insufficient to preserve this argument on appeal. “[The

courts of appeals] are not self-directed boards of legal inquiry and research, but essentially arbiters

of legal questions presented and argued by the parties.” See Cruz v. Am. Airlines, Inc., 356 F.3d

320, 333-34 (D.C. Cir. 2004); Indeck Energy Servs., Inc. v. Consumers Energy Co., 250 F.3d 972,

979 (6th Cir. 2000) (“[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort

at developed argumentation, are deemed waived.” (internal quotation and citation omitted)); see also

Re/Max North Central, Inc. v. Cook, 64 Fed. App’x 562, 565 (7th Cir. 2003) (finding party’s

arguments as to attorneys’ fees waived for lack of development on appeal); cf. Taubenfeld v. Aon

Corp., 415 F.3d 597, 600 (7th Cir. 2005) (applying waiver analysis to party’s allegations of lower

court error in the award of attorneys’ fees); Griggs v. E. I. DuPont de Nemours & Co., 385 F.3d 440,

454 (4th Cir. 2004) (same). Plaintiff’s perfunctory argument and failure to elucidate relevant case

law therefore amounts to a waiver of this argument on appeal.

6. The District Court Did Not Abuse its Discretion in the Amount of Fees Awarded to

Lafayette

Lafayette cross-appeals the district court’s award of its attorneys’ fees as too low. Inasmuch

as the amount awarded by the district court was premised on the amount submitted by Lafayette, and

the fact the Plaintiff’s claim for benefits was at least colorable as against Lafayette, we find that this

cross-appeal is without merit.

III.

CONCLUSION

For the foregoing reasons, we AFFIRM the decision of the district court in all respects.
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 26

______________________

CONCURRENCE ______________________

OLIVER, District Judge, concurring. I join Judge Clay’s opinion affirming the decision of

the district court, except in regard to Section II.A.3, which discusses Plaintiff’s promissory estoppel

claim. I write separately because, unlike Judge Clay, I would affirm the trial court’s dismissal of

the promissory estoppel claim on the same ground the trial court relied upon: failure to state a claim

upon which relief could be granted. Before the trial court, Plaintiff based his promissory estoppel

claim on his reliance upon Defendants’ representations and on the fact that the insurance policies

in issue were not plan documents. Even though Plaintiff had copies of, and was intimately familiar

with, the insurance policies, he did not argue, as he argues before this court, that the term

“employee” as used in the plans, was ambiguous. The trial court found that the LTD and STD

policies were plan documents. See Musto v. Am. Gen. Corp., 861 F.2d 897, 901 (6th Cir. 1988). The

trial court further found that under Sprague v. Gen. Motors Corp., 133 F.3d 388, 404 (6th Cir. 1998)

(en banc), where written plan documents exist, a promissory estoppel claim cannot succeed unless

the plan documents are ambiguous. Id. Because Plaintiff did not argue there was ambiguity in the

plan documents, the court dismissed his estoppel claim. 

At the trial court, Plaintiff wholly failed to raise any alternative argument that the plan

documents were ambiguous, even in the face of briefing on Sprague by Defendants and strong

suggestions from the court at the oral hearing on the motion that the insurance policies were plan

documents. Plaintiff even filed a supplemental brief after oral argument, and before the court issued

its order addressing whether legally sufficient plan documents existed, but that brief also failed to

raise an alternative argument on ambiguity. Moreover, after the court ruled that the insurance

policies constituted plan documents and dismissed the promissory estoppel claim, Plaintiff filed a

motion for reconsideration regarding other issues which were addressed in the court’s order, but did

not challenge the court’s finding that the policies were plan documents or raise an alternative

argument on ambiguity. Thus, Plaintiff had ample reason and opportunity to raise this argument

throughout the district court proceedings, but did not. Since Moore never raised an argument about

ambiguity below, he may not do so now. See United States v. Ninety-Three Firearms, 330 F.3d 414,

424 (6th Cir. 2003) (holding that “[t]his court has repeatedly held that it will not consider arguments

raised for the first time on appeal unless our failure to consider the issue will result in a plain

miscarriage of justice.”).

I would not reach the merits of the claim, as Judge Clay does in his opinion. The issues he

addresses were not squarely before the district court, and thus, there was no incentive for the lawyers

to focus their arguments on the evidence or law bearing on those issues. 
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 27

____________________________________________________

CONCURRING IN PART, DISSENTING IN PART ____________________________________________________

COOK, Circuit Judge, concurring in part and dissenting in part. Though I agree with much

of the lead opinion, I respectfully differ on two points. First, I join Judge Oliver’s concurrence

dismissing Moore’s promissory estoppel claim on the grounds employed by the district court.

Second, the determination that Moore is not a common-law employee (and thus not a “participant”)

leads me to conclude that Moore lacked statutory standing, and accordingly that the district court

lacked jurisdiction over the merits of certain of his ERISA claims, including fees and costs. 

I. Effect of Concluding that Moore Was not a Common-Law Employee

I agree with the majority’s application of the multi-factor test of employment in Nationwide

Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992), to conclude that Moore was not a common-law

employee. But given this conclusion, I cannot agree that the district court retained jurisdiction over

Moore’s ERISA claims.

ERISA empowers a “participant or beneficiary” to bring a civil action “to recover benefits

due to him” or “for relief [from an administrator’s refusal to supply requested information],” 29

U.S.C. § 1132(a)(1)(B), and empowers a “participant, beneficiary or fiduciary” to bring a civil action

“to obtain other appropriate equitable relief.” 29 U.S.C. § 1132(a)(3). ERISA also provides that

“[i]n any action . . . by a participant, beneficiary or fiduciary, the court in its discretion may allow

a reasonable attorney’s fees and costs of action to either party.” 29 U.S.C. § 1132(g)(1). No party

argues that Moore is a “beneficiary” or “fiduciary” so we examine “participant” status. 

ERISA defines “participant” to include “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,”

29 U.S.C. § 1002(7), and defines “employee” as “any individual employed by an employer.” 29

U.S.C. § 1002(6). To help clarify these definitions, the Supreme Court, in Nationwide, 503 U.S. at

323-24, adopted the common-law test of employment for determining who qualifies as an

“employee” under ERISA. Because Moore is not a common-law employee, he also is not an

“employee” for purposes of ERISA and, by definition, not a “participant.”

Statutory standing—the issue of whether a statute “authorizes [a] plaintiff to sue”—is a

jurisdictional matter deserving of threshold judicial inquiry. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 92 (1998). This court confirmed in Ward v. Alternative Health Delivery Sys., Inc., 261

F.3d 624 (6th Cir. 2001), that whether a person is a “participant” or “beneficiary” under ERISA is

a matter of statutory standing. The plaintiff in Ward was a member of a network of health care

providers who, on the basis of her clients’ participation in an employee plan, brought ERISA claims

against the network’s corresponding HMO and specialty care management company. This court

agreed with the district court that “[the] plaintiff was not an ERISA plan participant or beneficiary

and, therefore, that she did not have standing to bring her ERISA claims.” Id. at 627. In the context

of Ward’s pendent state law claims, the court left no doubt as to the consequence of that

determination: “[P]lantiff’s ERISA standing is a jurisdictional matter. Once the district court

dismissed the only claims within its original jurisdiction for lack of subject matter jurisdiction, it did

not have jurisdiction to retain plaintiff’s state law claims.” Id. And likewise, upon this court’s

finding that Moore is not a “participant,” this court should hold that the district court lacked

jurisdiction to adjudicate his substantive claims.

The majority distinguishes Ward on the ground that the plaintiff there “argued for an

extension of existing law,” rather than appealing to “traditional definitions”—a distinction with
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 28

which I am respectfully unfamiliar—and that therefore the court’s holding constituted “a ruling of

law,” rather than a “factual determination.” (Maj. Op. at 19.) Ward’s argument may have been

weaker than Moore’s, but the cases differ (if at all) by degree, not by kind, and I cannot see how the

statutory language—particularly when combined with the twelve-factor common law test of

employment—could resolve a legal question in one context and a “factual” question in a closer case.

Both cases required the court to apply parallel statutory language to undisputed facts; and in each

case those facts have been found to fall outside of the statutory concept. The consequences of the

inquiries should not differ.

The majority worries that holding that the district court lacked jurisdiction because Moore

is not a “participant” will produce a “circular” result—presumably because it believes that such a

conclusion forecloses jurisdiction over the question whether Moore was a “participant” in the first

place. (Maj. Op. at 20.) But this conflates jurisdiction over the merits with “jurisdiction” over

questions of jurisdiction. Courts are always free (and in fact are required) to determine their own

jurisdiction. And that determination has res judicata effect. See Ins. Corp. of Ir. v. Compagnie Des

Bauxites De Guinee, 456 U.S. 694, 702 n.9 (1982) (“A party that has had an opportunity to litigate

the question of subject-matter jurisdiction may not, however, reopen that question in a collateral

attack upon an adverse judgment. It has long been the rule that principles of res judicata apply to

jurisdictional determinations -- both subject matter and personal.”) (citing Chicot County Drainage

Dist. v. Baxter State Bank, 308 U.S. 371 (1940); Stoll v. Gottlieb, 305 U.S. 165 (1938)). No

circularity results because the determination that a court lacks jurisdiction over the merits of a claim

does not undermine its authority to make that determination.

I am puzzled by the majority’s later discussion of Firestone Tire & Rubber Co. v. Bruch, 489

U.S. 101 (1989). In the cited section of that case, the Court rejected a gloss that the Third Circuit

applied to the term “participant.” The Supreme Court held that “participant[s]” consisted only of

actual “employee[s] or former employee[s] . . . who [are] or may become eligible [for benefits],”

29 U.S.C. § 1002(7), and that a plaintiff who merely claims to be a “participant” does not fall within

the statute. Id. at 115-18. The Court did suggest that the phrase “may become eligible” extends the

term “participant” to employees or former employees who have a “colorable claim” to benefits. But

it did not extend the statutory definition of “participant” to persons who have only a colorable claim

to being “employees or former employees.”

The discussion is puzzling because Firestone’s parsing of the term “participant” adds nothing

to the majority’s analysis, given its previous holding (with which I fully concur) that Moore was

not a “participant.” Whether a plaintiff is a “participant” differs from what consequences flow from

the determination that he or she is not, and Firestone only implicates the first question. We are still

left to determine whether “participant” status implicates statutory standing.

Nationwide, in which “[t]he Supreme Court held that common law agency principles applied

to determine whether the plaintiff was an ‘employee’” (Maj. Op. at 21), does not suggest otherwise.

The majority observes that “[t]he Court did not imply” that whether a plaintiff was a “participant”

was a question of statutory standing. Id. But nor did it “imply” the contrary. And the fact that

Nationwide was published several years before Ward suggests that Nationwide poses no barrier to

the conclusion that being a “participant” implicates statutory standing.

That leaves only Bell v. Hood, 327 U.S. 678 (1946), which the majority reads as instructing

federal courts “to assume jurisdiction when statutory standing and merits questions converge.”

(Maj. Op. at 21.) But Bell stands for the narrower proposition that “the failure to state a proper

cause of action calls for a judgment on the merits and not for a dismissal for want of jurisdiction.”

327 U.S. at 682; see Steel Co., 523 U.S. at 89-90 (“[T]he absence of a valid (as opposed to arguable)

cause of action does not implicate subject-matter jurisdiction, i.e., the courts’ statutory or

constitutional power to adjudicate the case.” (emphasis in original)). This is significant because the
Nos. 04-1146/1942/1945; 05-1109 Moore v. Lafayette Life Ins. Co., et al. Page 29

question implicated by whether Moore is a “participant” is not whether Moore has stated a proper

cause of action, but whether he is a proper plaintiff for those claims. Cf. Steel Co., 523 U.S. at 92

(distinguishing questions of who may seek relief under a statute from questions regarding the scope

of a statutory cause of action); Primax Recoveries, Inc. v. Gunter, 433 F.3d 515 (6th Cir. 2006)

(characterizing the dismissal of a claim under 29 U.S.C. § 1132(a)(3) that improperly sought legal

relief, rather than equitable relief, as failing to state a claim, rather than failing to support the court’s

jurisdiction—and where there was no dispute over whether the plaintiff was a “participant”). To see

that this is so, consider that the district court dismissed Moore’s fiduciary duty claim (Count II) and

failure to furnish information claim (Count V) on the merits without relying on its later conclusion

that he was not a “participant.” Even under the majority’s reading of Bell, the question of whether

Moore was a “participant” could still be jurisdictional because the merits of such claims did not

converge with statutory standing.

The same is true of Moore’s claim for benefits, which the district court did resolve on the

basis that Moore was not a “participant.” For if the district court had found that Moore was a

“participant,” that would not have ended the court’s inquiry. It still would have had to assess

whether Moore was an employee and eligible for relief under the plan’s definitions, and while that

may have been straightforward in this case, it is not always so. Eligibility for relief is a distinct

concept from whether a plaintiff is a “participant,” thus the merits of Moore’s claim for benefits do

not converge with the issue of statutory standing. Bell does not require us to view whether Moore

was a “participant” as a question on the merits. 

Finally, viewing whether Moore was a “participant” as a question of statutory standing

promotes the goal of judicial economy. The district court should have addressed the issue first and,

upon determining that Moore was not a “participant,” dismissed all of Moore’s ERISA claims—for

benefits, breach of fiduciary duty, attorneys’ fees, and failure to supply information—that stemmed

from conduct occurring after he signed the CSA.

II. Fees

Just as the district court lacked jurisdiction to consider the merits of Moore’s ERISA claims,

so too it lacked jurisdiction to award attorneys’ fees under ERISA. Section 1132(g)(1) only allows

a court to award fees and costs in actions “by a participant, beneficiary, or fiduciary.” Because

Moore was none of the above, the district court did not have jurisdiction over Moore’s Count IV

(seeking such fees), or over the defendants’ motion for fees under ERISA. I would thus vacate the

district court’s award of fees against Moore.

Because the district court held Moore’s counsel jointly and severally liable with Moore for

the § 1132(g) penalty, a holding that the court was without jurisdiction to award fees under ERISA

would seem to remove the only basis for that sanction. However, because the district court

suggested an independent basis for Moore’s counsel’s liability, I would remand the question of

whether sanctions were appropriate under 28 U.S.C. § 1927 (given the majority’s conclusion that

defendants’ Rule 11 motion was untimely). I would also remand the question of whether Moore

himself was similarly liable on a non-ERISA basis.