Court Opinion

ID: 5119540
Source: CourtListenerOpinion
Date Created: 2021-10-20 00:00:36.232288+00
Date Added: 2024-06-11T08:22:12.945254
License: Public Domain

Case: 21-20069     Document: 00516061006          Page: 1    Date Filed: 10/19/2021

           United States Court of Appeals
                for the Fifth Circuit
                                                                     United States Court of Appeals
                                                                              Fifth Circuit

                                                                            FILED
                                                                     October 19, 2021
                                   No. 21-20069                        Lyle W. Cayce
                                                                            Clerk

   Erica Talasek,

                                                            Plaintiff—Appellant,

                                       versus

   National Oilwell Varco, L.P.,

                                                            Defendant—Appellee.

                  Appeal from the United States District Court
                      for the Southern District of Texas
                           USDC No. 4:18-CV-3306

   Before Owen, Chief Judge, and Clement and Duncan, Circuit Judges.
   Edith Brown Clement, Circuit Judge:
          This appeal arises from a dispute over life insurance benefits. Erica
   Talasek brought this lawsuit, stemming from a group policy sponsored by her
   late husband’s employer.      Talasek claimed benefits in the amount of
   $300,000 following her husband’s death. The insurance company and
   district court denied her relief. We agree and affirm.
                                         I.
          In 2013, Ben Talasek, Erica Talasek’s husband, attempted to enroll in
   a supplemental life insurance plan through his employer, National Oilwell
Case: 21-20069      Document: 00516061006           Page: 2     Date Filed: 10/19/2021

                                     No. 21-20069

   Varco, L.P. (“NOV”). Unum Life Insurance Company of America provided
   coverage to NOV’s employees, vis à vis NOV, through issuance of a
   “Summary of Benefits.”
          On November 17, 2013, Ben Talasek received a “Benefits
   Confirmation Statement” from Unum, reflecting his new elections, which
   were to begin in 2014. The November 2013 statement noted that “[a]ny
   coverage listed as suspended requires approval,” and it indicated that several
   of his elections were “suspended.” The statement included these notations
   because Unum required its enrollees to complete an “Evidence of
   Insurability” form before coverage could begin. Accordingly, Ben Talasek
   submitted the form on January 2, 2014.
          Later that month, Ben Talasek was diagnosed with pancreatic cancer.
   About this time, he and Unum began corresponding more frequently about
   his benefits. On January 18, 2014, Unum sent Ben Talasek a letter, informing
   him that it had identified an error in his application, specifically, with respect
   to his Evidence of Insurability form, and that more information was needed. 1
   Accordingly, he corrected the error and re-submitted his Evidence of
   Insurability form.
          On February 12, 2014, Ben Talasek contacted Unum again to discuss
   the status of his benefits and was told that the review process would take four
   to six weeks. Part of the review process required him to provide blood and
   urine samples, which he did on March 3, 2014. Because of the subsequent
   “abnormal” lab results, Unum sent Ben Talasek a letter—dated March 6,
   2014—explaining that it was “not able to approve the insurance coverage
   listed.”

          1  Before receiving the letter, Ben Talasek—and an NOV representative—
   also called Unum to follow up on the status of his coverage.

                                           2
Case: 21-20069      Document: 00516061006          Page: 3    Date Filed: 10/19/2021

                                    No. 21-20069

          Ben Talasek died on December 24, 2017. Throughout this entire
   period, however, the Talaseks received statements from the NOV Benefits
   Service Center, reflecting the same elections he made in 2013 and showing
   that NOV was deducting funds from Ben Talasek’s paycheck for the
   coverage. Absent from these statements were the “suspended” notations
   included in the November 2013 statement.
          Following Ben Talasek’s passing, Talasek submitted a claim under the
   group life insurance policy, which Unum both approved and denied. In
   denying Talasek’s claim for $300,000 of benefits, Unum indicated that it had
   rejected Ben Talasek’s application for supplemental life insurance by letter
   dated March 6, 2014. Talasek unsuccessfully appealed this decision.
          As a result, Talasek brought suit against Unum and NOV in federal
   court in September 2018, alleging estoppel, negligence, and violations of the
   Employment Retirement Income Security Act of 1974 (“ERISA”), 29
   U.S.C. § 1001 et seq. 2 Unum and NOV jointly moved to dismiss Talasek’s
   claims for ERISA breach of fiduciary duty and negligence, 3 and the
   magistrate judge recommended that the district court grant the motion,
   which it did. The parties then proceeded through discovery on Talasek’s
   estoppel and ERISA denial of benefits claims. Unum and NOV ultimately
   moved for summary judgment on both claims.

          2  Talasek’s original complaint alleged only claims for ERISA denial of
   benefits and estoppel. She subsequently twice amended her complaint to include
   claims for ERISA breach of fiduciary duty and negligence and to name NOV as a
   defendant. Talasek named both NOV and Unum as defendants in her claims for
   estoppel and negligence. She named Unum as the sole defendant in her ERISA
   denial of benefits claim and NOV as the sole defendant in her negligence claim.
          3
          At this point, the district court referred the matter to Magistrate Judge
   Nancy K. Johnson. It was later referred to Magistrate Judge Christina A. Bryan.

                                          3
Case: 21-20069       Document: 00516061006             Page: 4      Date Filed: 10/19/2021

                                        No. 21-20069

          The magistrate judge issued a report and recommendation,
   recommending that the district court grant the motions for summary
   judgment. The district court adopted the recommendation of the magistrate
   judge. 4 Talasek timely appealed.
                                             II.
          “Standard summary judgment rules control in ERISA cases.”
   Ramirez v. United of Omaha Life Ins. Co., 872 F.3d 721, 725 (5th Cir. 2017)
   (quoting Cooper v. Hewlett-Packard Co., 592 F.3d 645, 651 (5th Cir. 2009)).
   Thus, “[w]e review the grant of summary judgment de novo, applying the
   same standard as the district court,” and take all inferences in the light most
   favorable to Talasek. Bryan v. McKinsey & Co., Inc., 375 F.3d 358, 360 (5th
   Cir. 2004) (citation omitted). 5
          Summary judgment is appropriate “if the pleadings, depositions,
   answers to interrogatories, and admissions on file, together with the
   affidavits, if any, show that there is no genuine issue as to any material fact
   and that the moving party is entitled to judgment as a matter of law.” Celotex

          4  In doing so, the district court ordered Talasek to file a motion for
   judgment. Talasek’s summary judgment briefing included a request, in the
   alternative, for the return of the premiums she had paid, in the event the court
   denied her claims. Thus, in order to fully resolve the claims at bar, the district court
   ordered this issue be considered. The magistrate judge issued a second report and
   recommendation, recommending that the district court grant Talasek’s motion for
   judgment. The district court adopted the recommendation and then entered
   judgment.
          5 The parties have not contended—below or on appeal—that an abuse of
   discretion standard applies to Talasek’s estoppel claim. “Because [Talasek’s]
   estoppel claim is not a review of a decision of the [Unum claims administrator],”
   we review the decision of the district court de novo. Mello v. Sara Lee Corp., 431 F.3d
   440, 444 (5th Cir. 2005).

                                              4
Case: 21-20069      Document: 00516061006           Page: 5    Date Filed: 10/19/2021

                                     No. 21-20069

   Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citation omitted); see Fed. R.
   Civ. P. 56.
                                         III.
          On appeal, Talasek challenges only the district court’s grant of
   summary judgment in favor of NOV on her estoppel claim. Therefore, our
   review of the decision below is so confined. We conclude that she cannot
   meet the second element of her claim and hold that her claim must fail as a
   matter of law.
          To survive summary judgment on her estoppel claim, Talasek needed
   to create a genuine dispute of material fact as to whether NOV made a
   material misrepresentation, on which she reasonably and detrimentally
   relied, under extraordinary circumstances. Mello v. Sara Lee Corp., 431 F.3d
   440, 444–45 (5th Cir. 2005) (Clement, J.). Caselaw regarding ERISA
   estoppel claims is sparse in the Fifth Circuit. Accordingly, we have often
   looked to our sister circuits for help in resolving these claims. See, e.g., High
   v. E-Systems Inc., 459 F.3d 573, 579–81 (5th Cir. 2006); Mello, 431 F.3d 444–
   48.
          Talasek contends that NOV misrepresented the status of her
   husband’s life insurance coverage by continuing to deduct premiums from
   Ben Talasek’s paycheck and by confirming these deductions in the annual
   benefits statements. Material misrepresentations need not stem directly
   from the insurance plan itself but rather “can be made in informal
   documents,” such as NOV’s Benefit Confirmation Statements. Mello, 431
   F.3d at 445.     And, where “there is a substantial likelihood that [a
   misrepresentation] would mislead a reasonable employee in making an
   adequately informed decision,” a misrepresentation is material. Curcio v.
   John Hancock Mut. Life Ins. Co., 33 F.3d 226, 237 (3d Cir. 1994) (quoting
   Fischer v. Philadelphia Elec. Co., 994 F.2d 130, 135 (3d Cir. 1993)).

                                          5
Case: 21-20069     Document: 00516061006           Page: 6    Date Filed: 10/19/2021

                                    No. 21-20069

          It is difficult to imagine a misrepresentation more likely to mislead a
   recipient. Every year for four years, Talasek and her husband received
   statements from NOV, purporting to identify the benefits elected and
   indicating the amount of the deduction for each element of coverage. Cf. id.
   (“Here[, the decedent’s employer] was actually representing that the plan
   was offering a new benefit; thus, we find that the representations [the
   employer] made were ‘material misrepresentations.’”). The district court
   acknowledged NOV’s erroneous actions but failed to find that Talasek
   satisfied the first element of her claim. That omission was error. However,
   the error was harmless, as Talasek cannot create a genuine dispute of material
   fact with respect to the remaining elements of estoppel.
          Talasek must also have relied—(1) reasonably and (2) to her
   detriment—on NOV’s material misrepresentation. Mello, 431 F.3d at 444–
   45. The district court found that Talasek “presented a genuine issue of
   material fact regarding detrimental reliance[.]” We agree. Thus, the crux of
   the second element is whether that reliance was reasonable.
          Our precedent clearly indicates that an employee cannot reasonably
   rely on informal documents in the face of unambiguous terms in insurance
   plans. See Nichols v. Alcatel USA, Inc., 532 F.3d 364, 375 (5th Cir. 2008);
   High, 459 F.3d at 580 (“[A] ‘party’s reliance can seldom, if ever, be
   reasonable or justifiable if it is inconsistent with the clear and unambiguous
   terms of plan documents available to or furnished to the party.’” (quoting
   Sprague v. Gen. Motors Corp., 133 F.3d 388, 404 (6th Cir. 1998) (en banc)));
   Mello, 431 F.3d at 447; see also Marks v. Newcourt Credit Grp., Inc., 342 F.3d
   444, 456 (6th Cir. 2003) (“A party cannot seek to estop the application of an
   unambiguous written provision in an ERISA plan . . . . When a party seeks to
   estop the application of an unambiguous plan provision, he by necessity
   argues that he reasonably and justifiably relied on a representation that was
   inconsistent with the clear terms of the plan.” (internal citations omitted)),

                                         6
Case: 21-20069       Document: 00516061006            Page: 7     Date Filed: 10/19/2021

                                       No. 21-20069

   superseded on other grounds by regulation, 29 C.F.R. § 2560.503-1(l) (2003), as
   recognized in Wallace v. Oakwood Healthcare, Inc., 954 F.3d 879, 889 (6th Cir.
   2020).
            The provision of the group life insurance policy that required Ben
   Talasek to complete an Evidence of Insurability form before coverage could
   begin was unambiguous. The Summary of Benefits, provided by Unum, is
   the governing document. It states, in no uncertain terms, that “[e]vidence
   of insurability is required for any amount of life insurance.” Ben Talasek was
   on notice that “[c]overage applied for during an annual enrollment period”
   began at midnight following the later of two conditions: (1) the first day of the
   next plan year; and (2) “the date Unum approve[d his] evidence of
   insurability form for life insurance.” The Summary of Benefits made clear
   that this was also the case for changes in coverage.
            Furthermore, the Summary of Benefits also made clear that NOV’s
   representations were not Unum’s.              And, perhaps most significant, it
   delineated when and by whom changes could be made to the terms—
   restricting those instances to narrow circumstances. Talasek does not argue
   that she and her husband relied on NOV’s “representations to help [them]
   interpret an ambiguous or unclear term in the [Summary of Benefits].
   Rather, [she] contends that [it] was reasonable to rely on [NOV’s
   representations] rather than the unambiguous” group policy language. Mello,
   431 F.3d at 445–46; see id. at 447 (analyzing and citing favorably In re Unisys
   Corp. Retiree Med. Benefit “ERISA” Litigs., 58 F.3d 896, 907–08 (3d Cir.
   1995)). 6 Against this backdrop, we cannot say that Talasek’s reliance on

            6In Unisys Corp., a “company engaged in a ‘systematic campaign of
   confusion[,]’ which led employees to believe that their [retirement medical]
   benefits were to continue for life.” 58 F.3d at 907 n.20. Nevertheless, the Third
   Circuit affirmed the district court’s finding that the retirees’ estoppel claim failed

                                             7
Case: 21-20069     Document: 00516061006          Page: 8   Date Filed: 10/19/2021

                                   No. 21-20069

   NOV’s statements and deductions was reasonable—no matter how
   frustrating those misrepresentations were in reality. Thus, Talasek cannot
   establish the second element of her claim.
         Because Talasek cannot create a genuine dispute of material fact over
   the reasonable reliance aspect of the second element, we need not consider
   whether extraordinary circumstances existed. See Mello, 431 F.3d at 448.
   The district court did not err in granting summary judgment to NOV on
   Talasek’s estoppel claim.
         AFFIRMED.

   as a matter of law because the “finding that the [terms of the plan were]
   unambiguous undercut[] the reasonableness of any detrimental reliance by the
   retirees.” Id. at 908.

                                        8