Opinion ID: 4183805
Heading Depth: 3
Heading Rank: 4

Heading: Conservator Bishop’s Declaration

Text: In rebuttal, Bishop (Ann Waddell’s conservator) submitted her own declaration. According to Bishop, she found Lanier Waddell “to be well above average in his technological capabilities, competent and able-bodied up until he passed away on December 23, 2013.” Further, in the month of December 2013, Lanier Waddell performed multiple tasks: he mailed items to Bishop (including a CD that he had made), wrote checks, scanned and emailed documents, instructed Bishop on how to use Adobe Acrobat, drove over ten miles to meet Bishop, went out of town to visit his mother, and cared for Ann Waddell on a daily basis. H. District Court Grants Summary Judgment to Ann Waddell and Bishop On July 6, 2016, the district court entered an order granting summary judgment to Ann Waddell and conservator Bishop. The district court first 14 Case: 16-15321 Date Filed: 07/06/2017 Page: 15 of 20 determined that both Plans were governed by ERISA. 3 The district court next determined that, because the Plans plainly conferred discretionary authority on MetLife, it would review MetLife’s decision to deny Devin Waddell’s claim for benefits under this Circuit’s multi-step ERISA framework and not under a de novo standard of review. Under this deferential ERISA standard of review, and looking only to the facts known to MetLife at the time it made its decision, the district court found that MetLife’s decision to deny Devin Waddell benefits was “not ‘wrong’ and must be affirmed.” 4 The district court determined that the “policies clearly require that 3 As Devin Waddell points out in his brief on appeal, MetLife did state in its April 3, 2014 letter that the Term Plan was “non ERISA coverage.” However, this understanding is belied by the plain terms of the Term Plan and, moreover, it is evident from the record that MetLife exercised its discretion in interpreting the language of the Term Plan and determining that Ann Waddell was due to be paid the benefits as the first-in-line relative. In any event, even if the Term Plan is not governed by ERISA, the district court determined that it would grant summary judgment to Ann Waddell and conservator Bishop even under a non-ERISA de novo standard of review. 4 This Circuit has developed a multi-step framework to guide courts in reviewing a plan administrator’s benefits decisions under ERISA: (1) Apply the de novo standard to determine whether the claim administrator’s benefits-denial decision is “wrong” (i.e., the court disagrees with the administrator’s decision); if it is not, then end the inquiry and affirm the decision. (2) If the administrator’s decision in fact is “de novo wrong,” then determine whether he was vested with discretion in reviewing claims; if not, end judicial inquiry and reverse the decision. (3) If the administrator’s decision is “de novo wrong” and he was vested with discretion in reviewing claims, then determine whether “reasonable” grounds supported it (hence, review his decision under the more deferential arbitrary and capricious standard). 15 Case: 16-15321 Date Filed: 07/06/2017 Page: 16 of 20 Lanier Waddell [as the insured] ‘return’ or ‘file’ the Forms” and that Lanier Waddell did not do so. The district court acknowledged that, had Lanier Waddell asked someone else to send the forms for him, that might have been sufficient. However, the policies required that Lanier Waddell intend to return the forms, even if acting through a third person. There was no evidence that Lanier Waddell requested that anyone (including attorney Morris or Devin Waddell) send the forms to MetLife on his behalf and no indication in the administrative record that Lanier Waddell intended to return the forms. As the district court posited, “Lanier Waddell could have signed the Forms and then changed his mind and decided not to send them and actually effectuate the changes. There is no evidence that Lanier Waddell intended to take that last step to change the beneficiary.” Therefore, under the first prong of ERISA review, the district court concluded that “MetLife’s (4) If no reasonable grounds exist, then end the inquiry and reverse the administrator’s decision; if reasonable grounds do exist, then determine if he operated under a conflict of interest. (5) If there is no conflict, then end the inquiry and affirm the decision. (6) If there is a conflict, the conflict should merely be a factor for the court to take into account when determining whether an administrator’s decision was arbitrary and capricious. Blankenship v. Metro. Life Ins. Co., 644 F.3d 1350, 1355 (11th Cir. 2011). Additionally, “[r]eview of the plan administrator’s denial of benefits is limited to consideration of the material available to the administrator at the time it made its decision.” Id. at 1354. 16 Case: 16-15321 Date Filed: 07/06/2017 Page: 17 of 20 decision to deny benefits to Devin Waddell was supported by substantial evidence in the record and was not ‘wrong.’” The district court then went one step further and determined that, even under a de novo standard of review and taking into account evidence outside the administrative record, the record did not “establish that Lanier Waddell returned or even intended to return the Forms to MetLife.” The district court pointed out that no one—not Devin Waddell, Tharpe, or Davis—actually witnessed Lanier Waddell attempting to send the forms. As the district court put it: “The fact that Davis ‘got the impression he had faxed them’ is a far cry from Davis’ witnessing Lanier Waddell’s faxing the Forms.” Further, there was no evidence in the record that Lanier Waddell was ill, incapacitated, or otherwise incapable of sending the forms to MetLife. On the contrary, according to Bishop, Waddell was capable and ablebodied up until the time of his sudden death. Thus, the district court determined that “Lanier Waddell did not send the Forms to MetLife even though he had the opportunity and capability of doing so. Lanier Waddell did not ask anyone else to send the Forms before he died.” The district court next addressed Devin Waddell’s argument of “substantial compliance”—that “MetLife has no right to demand strict compliance with the policies’ requirements for changing beneficiaries since an interpleader is an equitable remedy.” While correctly noting that this Circuit has not adopted the 17 Case: 16-15321 Date Filed: 07/06/2017 Page: 18 of 20 substantial compliance doctrine in the context of ERISA, 5 the district court found that, if it did apply, “Lanier Waddell did not substantially comply with the change of beneficiary provisions” for two reasons. 6 First, the record did not necessarily indicate that Lanier Waddell intended to make Devin Waddell his sole beneficiary, as his Will and the RLT meant to pass all property to Devin Waddell and Leisa Hardage. Second, even if Lanier Waddell obtained the beneficiary forms and signed them on December 12, 2013, “there is no evidence of Lanier Waddell’s having undertaken the required ‘positive action’ of returning the Forms.” On this 5 Neither the district court nor the parties raised the issue of whether the substantial compliance doctrine is still viable after the Supreme Court’s decision in Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, 555 U.S. 285, 129 S. Ct. 865 (2009). Kennedy involved a conflict between a form designating the decedent’s then-wife as the beneficiary of his company-sponsored savings and investment plan (the “SIP”) and a later divorce decree that divested her of any claim or right to the SIP benefits. 555 U.S. at 289-90, 129 S. Ct. at 868-69. The Supreme Court held that the plan administrator properly disregarded the waiver in the divorce decree “owing to its conflict with the designation made by the former husband in accordance with the plan documents.” Id. at 288, 129 S. Ct. at 868. The Kennedy Court explained that “by giving a plan participant a clear set of instructions for making his own instructions clear, ERISA forecloses any justification for enquiries into nice expressions of intent” because allowing any less-certain rules would force plan administrators to “examine a multitude of external documents that might purport to affect the dispensation of benefits, and be drawn into litigation like this over the meaning and enforceability of purported waivers.” Id. at 301, S. Ct. at 875-76 (citation omitted) (internal quotation marks omitted). This Court has not addressed whether, post-Kennedy, a court may apply the federal common law substantial compliance doctrine in ERISA beneficiary designation cases. We need not decide that issue today, however, because even assuming arguendo that we may apply the doctrine here, we agree with the district court that Lanier Waddell did not substantially comply with the Plans’ change-of-beneficiary requirements. 6 The district court, for the purposes of its order, adopted the Fourth Circuit’s formulation of the federal common law substantial compliance doctrine, which requires that the insured (1) evidence his intent to make the change and (2) attempt to effectuate the change “by undertaking positive action which is for all practical purposes similar to the action required by the change of beneficiary provisions in the policy.” See Phoenix Mut. Life Ins. Co. v. Adams, 30 F.3d 554, 564 (4th Cir. 1994). 18 Case: 16-15321 Date Filed: 07/06/2017 Page: 19 of 20 point, and relying on a Sixth Circuit decision, the district court determined that, although Lanier Waddell may have taken steps toward changing the beneficiary, he did not do “all that he reasonably could have done” to successfully send them to MetLife. Finally, the district court rejected Devin Waddell’s argument that the change-of-beneficiary provisions were ambiguous, ought to be construed against MetLife, and granted MetLife an impermissible level of discretion. Accordingly, the district court granted the motions for summary judgment filed by Ann Waddell and conservator Bishop and denied Devin Waddell’s motion for summary judgment. Devin Waddell timely appealed.