The HONORABLE ANDREW W. BOGUE, United States District Judge for 1 the District of South Dakota, sitting by designation.



## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 97-2779 No. 98-1023

___________ Gloria Molasky; * Melanjo Investments, Inc., * * Appellants, * * Appeals from the United States v. * District Court for the * Eastern District of Missouri. Principal Mutual Life Insurance * Company, * * Appellee. *

___________ Submitted: February 11, 1998 Filed: July 23, 1998

___________ Before WOLLMAN and LOKEN, Circuit Judges, and BOGUE, District Judge. 1

___________ WOLLMAN, Circuit Judge. In No. 97-2779, Gloria Molasky and Melanjo Investments, Inc . (Melanjo) appeal fr om the district court’s order dismissing their action against Principal Mutual Lif e Insurance Company (Pri ncipal). In No. 98-1023, they appeal from the order awardingAl thoughSmith was originally named as a defendant, the appellants late r 2 dismissed him from the action. -2- Principal $40,868.67 in attorney fees and costs. We affirm the order dismissing th e action. We reverse the order awarding attorney fees and costs and remand for further proceedings.

I. Melanjo is a Florida corporation, having its principal office in St. Louis, Missouri. Melanjo, wholly owned by the Molasky family, is engaged in the business of real estate and invest ments. In early 1982, Melanjo was contacted by Ben Smith, Jr., a n independent insurance broker, who supplied it with a master application and individual application forms for group life insurance coverage with Principal. 2

Inaddition to requiring that a Melanjo employee be a full-time employee to be eligible for life insurance, the group policy also included the following conditions:

The term “Person” means any individual who is a full-time employee o f [Melanjo]. The t erm “full-time employee” means an employee whose employmen t with[Melanjo] constitutes his principle occupation and who is regularl y scheduled to work at such o ccupation not less than thirty hours per week. The ter ms “active work” and “actively at work,” as used in this Polic y wit h respect to any Person, mean active full-time performance of al l customary duties of

his occupation at [Melanjo’s] business establishment or oth er location of business to which [Melanjo’s] business requires th e Person to travel.-3-

Melan jo’s bookkeeper, Rosemary Pace, filled out the individual forms for it s proposed covered employees, including Allan and Gloria Molasky and their son, Mark. At the time of the application, Mark Molask y was serving a thirty-two-year sentence in the Missouri state prison system. Allan Molasky filled out a portion of his son’ s application, listing the Molasky home as Mark’ s address rather than his prison address. Mark signed the individual application, listing his job position as “adviser.” Thi s applic ation contained a box stating “Do you work at least 30 hours per week at you r place of employment?” In response to this inquiry, the “No” box was marked. Allan Molasky also signed the master application, rep resenting that all of his employees were working at least thirty hours per week. Citing a lack of medical documentation , Principal ultimately denied the proposed coverage on November 2, 1982.

In early 1983, Melanjo reapplied for coverage and submitted a new set o f application forms. A Principal employee typed new applications for each purporte d employee, using information from the previous year’s app lications, thereafter relying on the individual who was required to sign the document to confirm that the information contained therein was correct. Melanjo and its claimed employees then completed both the master and individual applications. Once again, the master a pplication reflected that all of Me lanjo’s employees worked at least thirty hours per week. Moreover, Mark Molask y’s application again listed his position as “Adviser” and indicated “No” i n response to the question whether or not he worked at least thirty hours at his place of employment.

It was Pri ncipal’s practice to submit group life insurance applications to a dep artment

known as Group Underwriting C for review and approval. Th e docume ntation would then be forwarded to other departments within Principal , including Contracts Administration, for evaluation. Melanjo’s application was approved by Underwriting C on May 2, 1983, and then forwarded to the Contracts Administration depart ment. Later that same month, Principal sought clarification of Mark Molasky’s application, specifically citing his aforementioned “No” response. As-4-

a result of this inquiry, the application was amended by Principal employees to change Mark’s answer to “Yes.” The district c ourt found that Principal made this change only after confirming it with either Melanjo or its insurance agent. Mark Molasky died in prison on January 29, 1 990. Melanjo filed a claim for the $50,000 death benefit provided by the policy, listingGloria Molasky as the beneficiary. Principal denied the claim, asserting that because Mark was not a person actively a t work and not a full-time employee, he was ineligible for insurance . Gloria Molasky and Melanjo then filed suit against Principal, alleging breach of fiduciary duty, breach o f contract, and misrepresentation. (They later voluntarily dismis sed the misrepresentation claim.) By agreement, the pa rties submitted the case on the basis of written pleadings, depositions, and documentary evidence. Concluding that Principal had not acted in a fiduciary capacity, the district court dismissed the action.

II.
The appellants seek recovery from Principal on both breach of contract an d breach of fiduciary duty theories. Melanjo’s plan, which included, in part, the death benefit funded by the group life insuran ce purchased from Principal, is governed by the Employe e Retirement Income Security Act (ERISA). 29 U.S.C. §§ 1001 et seq. The appellants’ state law claim for breach of contract is preempted by ERISA. See Walker
v. National City Bank of Minneapolis , 18 F.3d 630, 634 (8th Cir. 1994) (citing Pilo t Life Ins. Co. v. Dedeaux , 481 U.S. 41 (1987)). Thus, in order to prevail, appellant s must establish that Principal acted in a fiduciary capacity and that it br eached a fiduciary duty owed to the appellants.
Under ERISA, the writ

ten plan instrument “should identify ‘one or more named fiduciaries.’” Kerns v. Benefit Trust Life Ins. Co. , 992 F.2d 214, 216 (8th Cir. 1993) (quoting 29 U.S.C. § 1102(a)(1)). Becau se Melanjo had no written plan and no named fiduciary, the appellants must demonstrate that Principal was a fiduciary under 29-5-

U.S.C. § 1002(21)(A). See Kerns , 992 F.2d at 216. Sect ion 1002(21)(A) provides that any other person
is a fiducia ry with respect to a plan to the extent (i) he exercises an y discretionary authority or

discretionary control respecting management of such plan or . . . disposition of its assets . . . or (iii) he has an y discretionary authority or discretionary r esponsibility in the administration of such plan.
29 U.S.C. § 1002(21)(A). We held in Kerns that this definition does not encompas s insuran ce companies when they are engaged in the performance of their norma l contractual claims-handling responsibilities under the terms of a group policy. See id. , 992 F.2d at 216-17. Department of Labor regulations mandate that every plan permit a claimant t o appeal a denied claim

“to an appropriate named fiduciary or to a person designated by
su chfiduciary.” 29 C.F.R. § 2560.503-1(g)(1). Often, as in this case, insurance i s purch ased to fund an employer’s ERISA plan. When an insurer retains this revie w func tion, it “shall be the ‘appropriate named fiduciary’ for purposes of this section. ” Id. at § 2560.503(g)(2); see also The Prudential Ins. Co. of America v. Doe , 140 F.3d 785, 789-90 (8th Cir. 1998); Kerns , 992 F.2d at 216. Principal supplied Melanjo with
a pamphle t entitled “Your Group Insurance Benefits” as an aid to Melanjo’ s administrationof its plan. The pamphlet includes a provision that gives claimants the right to seek Principal’s reconsideration of denied claims. Arguably, then, Principa l acted in a fiduciary capacity with respect to the claims-review function in this case.
That do es not end the matter, however, for fiduciary status is not “an all-or

nothing concept. . . . A court must ask whether a person is a fiduciary with respect to the particular activity in question.” Kerns , 992 F.2d at 217 (quoting Coleman v

. Nationwide Life Ins. Co. , 969 F.2d 54, 61 (4th Cir. 1992)). Because the appellants ’ claims relate to Principal’s alleged unilateral amendment of Mark Molasky’s-6-

applica tion, we must determine whether Principal was acting in a fiduciary capacity when it made the chan ge. Because Melanjo had no written employee benefit plan, the company by law became the plan administrator. See 29 U.S.C. § 1002(16)(A)(ii). It is well established that insurers who, like Principal in this case, are not pla n adminis trators have “no ERISA fiduciary duty to notify plan participants an d benef iciaries, unless the policy documents or the insurer’s past practices have created
an obligation to communicate directly with them.” Kerns , 992 F.2d at 217. Th e app ellants concede that Principal’s policy documents create no obligation to notif y Melanjo’s participants and beneficiaries regarding modifications to the policy. Instead, the y argue that the alleged duty arose from Principal’s sole authority to modify th e policy. In support of their contention, appellants cite language from the policy that states: “No agent or other individual except an Officer of [Principal] has authority to make or modif y this Policy . . . .” A subsequent provision of the policy, however, requires that modifications be endorsed by both Melanjo and an officer of Principal. The appellants argue that section 8 of the policy grants Principal the authority to terminate coverag e without re ason. That provision, however, grants Melanjo a grace period for payment of premiums; it says nothing about a unilateral power on Principal’s part to terminate coverage. We conclude that the foregoing policy provisions are nothing more than standard provisi ons typically found in an insurance policy, and that they, neither singly nor i n combination, transform Principal from insurer to fiduciary. Finally, t he appellants point to no evidence that Principal had a practice o f delivering notice to participants or a beneficiary other than by means of the norma l
cor respondence involved in claims handling and review. Since Principal at no tim e performed the

notification functions at issue, the obligation to perform those functions fell squarely on Melanjo, the plan administrator. See Kerns , 992 F.2d at 217.-7-

Ev en if it were held that Principal was acting in a fiduciary capacity when i t amended Mark Molas ky’s application, the appellants could not prevail, for the district court f ound that Principal’s employees consulted with Melanjo before making th e ch ange. Although Principal’s employees had difficulty recollecting thei r communications with Melanjo employees, the district court found that it was Principal’s customary practice to consult with either the policy holder or its agent before amending an application. Thus, the change was made not as a result of a breach of fiduciary duty, but as the consequence of consultation with the policy holder.
“A district court’s choi ce between two permissible views of evidence cannot be clearly erroneous.” Estate of Davis by Ostenfeld v. Delo , 115 F.3d 1388, 1393 (8th Cir. 1997). We conclude that the foregoing findings are not clearly erroneous. Similarly, we find no error in the other factual findings contested by the appellants.

The appellants contend that the district court erroneously admitted numerou s exhibits into evidence ov er their objections. We review the court’s evidentiary rulings for a “clear and prejudic ial abuse of discretion.” Pittman v. Frazer , 129 F.3d 983, 989 (8th Cir. 1997). The appellants have failed to cite anylegal authority in support of their argume nt, however, and “it is not this court’s job to research the law to support a n appellant’s argument.” Lusby v. Union Pacific R.R. Co. , 4 F.3d 639, 642 (8th Cir

. 1993); see Fed. R. App. P. 28(a)(6). In any event, we find no abuse of discretion in the district court’s admissibility rulings. Finally, the appellants argue that the district court abused its discretion i n awa rding Principal its attorney fees and costs under 29 U.S.C. 1132(g) by failing t o make the findings require d by our holding in Lutheran Med. Ctr., of Omaha, Nebraska v. Contractors, Laborers, Teamsters and Engineers Health & Welfare Plan , 25 F.3d 616, 623 ( 8th Cir. 1994). Reaffirming our earlier decisions on this issue, we held that a district court must consider the following factors before awarding attorney fees i n ERISA litigation: “[T]he degr ee of culpability or bad faith; the ability to pay an award-8-

foratto rney fees; the deterrent effect an award would have on others; whether th e attor ney fees are requested to benefit the other plan participants or to resolve lega l issues; and the relative merits of the parties’ positions.” 25 F.3d at 623. The district court’s order awarding fees and costs reflects no consideration of these factors. Accord ingly, we reverse the fee order and remand the case to the district court fo r further proceedings on the matter of fees and costs.

The orde r dismissing the action is affirmed. The order awarding attorney fee s and cost s is reversed, and the case is remanded to the district court for furthe r proceedings. A true copy.

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