Court Opinion

ID: 1013421
Source: CourtListenerOpinion
Date Created: 2013-07-04 21:00:48.974826+00
Date Added: 2024-06-11T15:37:38.808075
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

THE ESTATE OF PERRY WEEKS,             
                Plaintiff-Appellant,
                 v.
ADVANCE STORES COMPANY,
INCORPORATED; COMPREHENSIVE                      No. 03-1926
MEDICAL EXPENSE BENEFIT PLAN, For
employees of Advance Stores;
EMPLOYEE GROUP LIFE INSURANCE &
LONG TERM DISABILITY,
              Defendants-Appellees.
                                       
           Appeal from the United States District Court
         for the Western District of Virginia, at Roanoke.
                 Samuel G. Wilson, District Judge.
                         (CA-02-724-7)

                      Argued: February 26, 2004

                        Decided: June 1, 2004

  Before LUTTIG, WILLIAMS, and GREGORY, Circuit Judges.

Affirmed by unpublished per curiam opinion.

                             COUNSEL

ARGUED: William H. Cleaveland, Roanoke, Virginia, for Appellant.
Joseph Michael Rainsbury, FLIPPIN, DENSMORE, MORSE & JES-
SEE, Roanoke, Virginia, for Appellees. ON BRIEF: Kevin P. Oddo,
2        THE ESTATE OF WEEKS v. ADVANCE STORES COMPANY
Laura Effel, FLIPPIN, DENSMORE, MORSE & JESSEE, Roanoke,
Virginia, for Appellees.

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                             OPINION

PER CURIAM:

   Plaintiff-appellant Connie Weeks ("Mrs. Weeks"), as the executrix
of the estate of her late son Perry Weeks ("Weeks"), appeals from the
judgment of the United States District Court for the Western District
of Virginia granting summary judgment for defendants-appellees
Advance Stores Co., Inc., the Corview Comprehensive Medical
Expense Benefit Plan, the Prudential Employee Group Life Insurance
Plan and Prudential Long Term Disability Plan (collectively "Defen-
dants") on her claims that Defendants breached their duties under the
Consolidated Omnibus Reconciliation Act of 1985 ("COBRA"), 29
U.S.C. § 1161 et seq., and the Employee Retirement Income Security
Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., by failing to pro-
vide Weeks with notice of his right to continue coverage under both
his health and life insurance plans and by misleading both him and
Mrs. Weeks as to the termination of benefits under each plan. The dis-
trict court granted Defendants summary judgment on the bases that
Advance Stores (1) provided Weeks with notice of his right to con-
tinue coverage under his health insurance plan as required under
ERISA and COBRA, (2) had no such duty with regard to Weeks’
ERISA life insurance plan and (3) provided Weeks sufficient infor-
mation about his right to continue coverage under both his medical
and life insurance plans that, had he and Mrs. Weeks reviewed it,
would have corrected any alleged misstatements made by Karen
Yates, a human resources manager whom it determined did not qual-
ify as an ERISA fiduciary.

  On appeal, Mrs. Weeks argues that Defendants should not have
been granted summary judgment because Advance Stores, as the plan
          THE ESTATE OF WEEKS v. ADVANCE STORES COMPANY                3
administrator, failed to provide Weeks a summary description of his
life insurance plan as required under ERISA § 1024(b)(1). Mrs.
Weeks also argues that the grant of summary judgment was improper
because, irrespective of whether COBRA requires life insurance plan
administrators to inform beneficiaries of their right to continue cover-
age under an ERISA life insurance plan, such a duty was created by
Advance Stores’ customary practice of informing employees about
this right. Lastly, Mrs. Weeks argues that the district court erred by
concluding that she and Weeks were not entitled to rely on Yates’
alleged misstatements about the termination of coverage under
Weeks’ health and life insurance plans because Yates did not qualify
as an ERISA fiduciary. For the reasons discussed below, we affirm
the district court’s grant of summary judgment.

                                   I.

   Perry Weeks was a full-time employee of Advance Stores from
October 17, 1999 to March 23, 2000. He was initially hired to work
at Advance Stores’ Roanoke distribution center but was later trans-
ferred to the road crew. On his first day of employment with Advance
Stores, Karen Yates, the human resources manager at Advance
Stores’ Roanoke distribution center, provided Weeks with an
employee handbook and her business card, which contained her con-
tact information should he have any questions concerning the infor-
mation contained in the employee handbook. Upon receiving this
material, Weeks signed an acknowledgment form confirming that
Yates gave him a copy of the employee handbook. The employee
handbook provided to Weeks, in addition to summarizing the benefits
available to employees, stated in pertinent part, under the "In Gen-
eral" section, that "[c]omplete copies of all [health and life insurance]
plan document(s) are available from the Benefits Department" and
that "[e]mployees have the right to request these documents for
review at any time." J.A. 500. It also stated, under the "Life Insur-
ance" section, that "[o]ptional Life/AD&D insurance is portable,"
meaning that employees could continue this coverage upon termina-
tion of their employment with Advance Stores should they so desire.
Id. at 501. To "port" their coverage, the employee handbook
explained, employees had to "contact the insurance company directly
within 30 days of separating from employment with Advance
[Stores]." Id.
4        THE ESTATE OF WEEKS v. ADVANCE STORES COMPANY
   During his five month employment with Advance Stores, Weeks
purchased medical insurance under the Corview Point of Service
Health Plan, which was sponsored and administered by Advance
Stores. Under the terms of this plan, Weeks’ medical coverage termi-
nated the last day of the month in which he ceased being a "full-time,
active employee" of Advance Stores. In accordance with COBRA,
however, the plan allowed Perry to continue coverage—at his own
expense—after he ceased being employed with Advance Stores. To
continue coverage, Weeks had to submit an application within sixty
days of his coverage termination date or the date notice of his right
to continue coverage was sent, whichever was later.

   In addition to medical insurance, Weeks purchased life insurance
under the Prudential Term Life Coverage Plan. Under this plan, which
Advance Stores partly administered, Weeks was allowed to purchase
life insurance under Advance Stores’ basic life policy and an optional
policy that provided additional coverage. Weeks purchased coverage
under Advance Stores’ basic life policy, which provided him cover-
age for an amount equal to two times his annual earnings, and under
an optional policy, which provided him up to $100,000 in coverage.
Under the terms of these policies, if Weeks failed to apply for the
continuation of coverage, he would cease being covered the day his
employment with Advance Stores ended. To exercise his right to con-
tinue coverage under these policies, Weeks had to submit his applica-
tion within thirty-one days of his termination as an Advance Stores
employee.

   On March 23, 2000, Weeks resigned from his employment with
Advance Stores. Thus, under the terms of his medical plan, his medi-
cal coverage terminated on March 31, 2000 if he failed to continue
coverage within the applicable period. Under his life insurance plan,
he ceased being covered on the same day of his resignation, March
23rd, if he failed to continue coverage within the applicable period.

   On March 29, 2000, Weeks, who had a history of leukemia, suf-
fered a relapse. As a result, on March 30th, Mr. and Mrs. Weeks
drove Weeks from their home in Vinton, VA to St. Jude’s Children’s
Research Hospital in Memphis, Tennessee, where Weeks and his par-
ents remained until his death on June 9, 2000. Once at St. Jude’s Hos-
pital, it became apparent that Weeks would need to undergo a bone
          THE ESTATE OF WEEKS v. ADVANCE STORES COMPANY                5
marrow transplant and remain hospitalized for a significant period.
Given the expense entailed with such treatment, Weeks instructed
Mrs. Weeks to contact Advance Stores to determine whether his med-
ical or life insurance plans would cover any of the costs. Conse-
quently, in early April 2000, Mrs. Weeks contacted her niece, Jennifer
Hoback, whose husband was an employee of Advance Stores, to
determine the appropriate person to contact at Advance Stores.
Hoback told Mrs. Weeks to contact Yates, whom she believed to be
generally knowledgeable about benefits available to Advance Stores
employees.

   After speaking with Hoback, Mrs. Weeks immediately contacted
Yates, who informed her that coverage under Weeks’ medical and life
insurance plans terminated on his last day of employment. In doing
so, however, Yates failed to inform Mrs. Weeks that Weeks was still
eligible to apply for the continuation of coverage under both plans.
Based on her conversation with Yates, Mrs. Weeks assumed that none
of Weeks’ medical expenses would be covered under the plans he
purchased through his employment with Advance Stores.

   At or about the same time that Mrs. Weeks spoke to Yates,
Advance Stores mailed a letter to Mrs. Weeks’ Vinton, VA address,
which Weeks listed as his place of residence, informing Weeks, as
required by ERISA, of his right to continue coverage under his medi-
cal plan. However, because Mrs. Weeks remained by Weeks’ bedside
until his death and because she only instructed her daughter to open
and pay her monthly bills, Mrs. Weeks did not become aware of this
letter and its content until after Weeks’ death. Advance Stores also
alleges that a similar letter, in accordance with its customary practice,
was mailed to Mrs. Weeks’ home address informing Weeks of his
right to continue coverage under his life insurance plan. Mrs. Weeks,
however, contends that she never received such a letter.

   In September 2000, Mrs. Weeks received a package from Advance
Stores containing information about Weeks’ life insurance plan. After
reviewing its content, Mrs. Weeks realized that Weeks could have
continued his coverage under this plan when she spoke to Yates, who
told her that all coverage had been terminated. Believing that she and
Weeks had been misled by Yates, Mrs. Weeks contacted Richard
Robbins, whose telephone number was listed in the package material,
6        THE ESTATE OF WEEKS v. ADVANCE STORES COMPANY
and informed him of her concerns. After speaking with Robbins, Mrs.
Weeks looked through Weeks’ personal belongings and determined
that Weeks had indeed been given an employee handbook, employee
benefit summary and a summary description of his medical plan. She
was, however, unable to locate a summary description of Weeks’ life
insurance plan.

   After her initial conversation with Robbins, Mrs. Weeks contacted
him several times to ascertain whether any of Weeks’ medical
expenses would be covered under his medical or life insurance plans.
After repeatedly telling Mrs. Weeks that he needed to further investi-
gate the matter, Robbins instructed Mrs. Weeks to put her concerns
in a letter. Accordingly, on November 27, 2000, Mrs. Weeks wrote
a letter to Advance Stores detailing her concerns and subsequently
spoke with Debra Caldwell, one of Advance Stores’ vice presidents.
After speaking with Caldwell, Mrs. Weeks was informed that Weeks’
medical expenses would not be covered under his medical or life
insurance plans because he failed to continue coverage within the
applicable periods.1

   On June 10, 2002, Mrs. Weeks commenced the present action
against Defendants in the United States District Court for the Western
District of Virginia. In her complaint, Mrs. Weeks alleged that Defen-
dants breached their fiduciary duties under ERISA by failing to "dis-
close information related to the notification of continuation of
available health and life insurance benefits" and by misinforming her
that Weeks "was not entitled to any continuation of benefits beyond
the 31st of March 2000, [statements which] . . . [she] and [Weeks
relied upon] to their detriment." Id. at 10. After both parties filed
cross-motions for summary judgment, the district court granted
Defendants summary judgment. This appeal followed.

    1
   To assist Mr. and Mrs. Weeks in paying Weeks’ medical expenses,
St. Jude’s Hospital provided them with charitable services. In addition,
a portion of Weeks’ medical expenses were covered under Mr. Weeks’
personal insurance plan.
         THE ESTATE OF WEEKS v. ADVANCE STORES COMPANY                7
                                  II.

                                  A.

   "We review a district court’s grant of summary judgment de novo."
Young v. Prince George’s County, 355 F.3d 751, 754 (4th Cir.
2004)(quoting Continental Airlines, Inc. v. United Airlines, Inc., 277
F.3d 499, 508 (4th Cir. 2002)). Summary judgment is appropriate
only where "there is no genuine issue as to any material fact and . . .
the moving party is entitled to a judgment as a matter of law." Fed.
R. Civ. P. 56(c).

                                  B.

   Mrs. Weeks first argues that Defendants should not have been
granted summary judgment because they failed to provide Weeks
with a summary description of his life insurance plan within ninety
days of his becoming a plan participant as required under ERISA
§ 1024(b)(1). Defendants argue, and we agree, that this issue should
not be reached on appeal because Mrs. Weeks failed to raise it before
the district court.

   This Court does not consider issues raised for the first time on
appeal absent exceptional circumstances of plain error or a fundamen-
tal miscarriage of justice. Washington Metro. Area Transit Auth. v.
Precision Small Engines, 227 F.3d 224, 227-28 (4th Cir. 2000); Gre-
nier v. Cynamid Plastics, Inc., 70 F.3d 667, 678 (4th Cir. 1995). Thus,
a party’s failure to raise an issue in a complaint or opposition to sum-
mary judgment constitutes a waiver of that issue. Indeed, "[e]ven an
issue raised in the complaint but ignored at summary judgment may
be deemed waived." Grenier, 70 F.3d at 678. "This is because ‘an
appellate court, in reviewing a summary judgment order, can only
consider those matters presented to the district court.’" Id. (quoting
Frank C. Bailey Enters., Inc. v. Cargill, Inc., 582 F.2d 333, 334 (5th
Cir. 1978)). Here, we find that Mrs. Weeks failed to raise her ERISA
§ 1024(b)(1) argument in both her complaint and opposition to sum-
mary judgment.

  In her complaint, Mrs. Weeks only argued that Defendants
breached their duties under ERISA "by failing to notify [Weeks] of
8         THE ESTATE OF WEEKS v. ADVANCE STORES COMPANY
his right to continuation of health and life insurance benefits, and by
misrepresenting that [Weeks] was not entitled to any . . . benefits"
after March 31, 2000. J.A. 11. In her opposition to summary judg-
ment, although stating in passing that Weeks never received a sum-
mary description of his life insurance plan, Mrs. Weeks never asserted
that Defendants violated ERISA § 1024(b)(1). Indeed, Mrs. Weeks
never expressly cited or mentioned this subsection of ERISA. Instead,
Mrs. Weeks, after stating that Weeks never received a summary
description of his life insurance plan, immediately returned to her
claim that Weeks was never notified of his right to continue coverage
under his health and life insurance plans. We find it odd that Mrs.
Weeks would not cite or mention a subsection of ERISA that she now
expressly relies upon if her intent was to raise this argument below.

   Accordingly, because there are no exceptional circumstances of
plain error or a fundamental miscarriage of justice, we deem Mrs.
Weeks’ argument waived and thus decline to consider it.

                                   C.

   Mrs. Weeks next argues that Advance Stores’ customary practice
of notifying terminated employees of their right to continue their life
insurance coverage created an affirmative duty to provide Weeks with
such notice. As with Mrs. Weeks’ first argument, Defendants argue
that Mrs. Weeks waived this argument by failing to raise it before the
district court. We agree.

   In arguing that Advance Stores had a duty to notify Weeks of his
right to continue his life insurance coverage, Mrs. Weeks never
asserted, directly or indirectly, that such a duty was based on Advance
Stores’ customary practice of providing terminated employees with
such notice. Indeed, Mrs. Weeks never made mention of Advance
Stores’ practice. In her complaint, Mrs. Weeks solely stated that her
action was being brought pursuant to ERISA. In her opposition to
summary judgment, Mrs. Weeks only cited COBRA as the basis for
her argument that Advance Stores had a duty to inform Weeks of his
right to continue coverage under both his health and life insurance
plans. Id. at 52 ("There is a factual dispute over whether proper notice
was sent pursuant to . . . [COBRA]"); id. at 71 ("There exist genuine
issues of material fact that are in dispute, including . . . the question
          THE ESTATE OF WEEKS v. ADVANCE STORES COMPANY               9
of whether the defendants breached a duty to notify the plaintiff of his
right to continuation of benefits under ‘COBRA’ . . . ."). Given that
Mrs. Weeks failed to raise this argument in either her complaint or
opposition to summary judgment, we find that she waived it and
therefore decline to consider it.

                                  III.

   Having concluded that Mrs. Weeks’ first two arguments have been
waived, we now turn to the one argument that she properly preserved
for appeal. Mrs. Weeks argues that the district court erred by conclud-
ing that she and Weeks were not entitled to rely on Yates’ statements
as to the termination of Weeks’ medical and life insurance coverage
because Yates did not qualify as an ERISA fiduciary. We disagree.

   Section 1002(21)(A) of ERISA provides that "a person is a fidu-
ciary with respect to a plan," and therefore subject to ERISA fiduciary
duties, "to the extent" that he or she:

    i)    exercises any discretionary authority or discretionary
          control respecting management of such plan or exer-
          cises any authority or control respecting management
          or disposition of its assets,

    ii)   renders investment advice for a fee or other compensa-
          tion, direct or indirect, with respect to any moneys or
          other property of such plan, or

    iii) has any discretionary authority or discretionary respon-
         sibility in the administration of such plan.

29 U.S.C. § 1002(21)(A). Thus, "[u]nlike the common law definition
under which fiduciary status is determined by virtue of the position
a person holds, ERISA’s definition is functional." LoPresti v. Terwil-
liger, 126 F.3d 34, 40 (2d Cir. 1997)(quoting Mason Tenders Dist.
Council Pension Fund v. Messera, 958 F.Supp. 869, 881 (S.D.N.Y.
1997)). Accordingly, our determination of whether a person qualifies
as an ERISA fiduciary is based on a person’s job activities rather than
job title. Moreover, once we determine that a person qualifies as an
10       THE ESTATE OF WEEKS v. ADVANCE STORES COMPANY
ERISA fiduciary, we only consider the job activities that bring them
within ERISA’s definition of fiduciary when assessing whether they
satisfied their ERISA duties because a person is an ERISA fiduciary
"only as to the activities which bring [him or her] within the defini-
tion." Coleman v. Nationwide Life Ins. Co., 969 F.2d 54, 61 (4th Cir.
1992). Therefore, in adjudicating Mrs. Weeks’ claim, we must deter-
mine whether any of Yates’ job activities brought her within ERISA’s
definition of fiduciary and, if so, whether Yates performed these
activities in a manner that satisfied her duties as an ERISA fiduciary.
We find that Yates’ job activities did not make her an ERISA fidu-
ciary.

   As a human resources manager for Advance Stores, Yates was pri-
marily responsible for recruiting new employees, informing them of
company policies and their benefits, maintaining personnel files and
answering employee questions or directing such questions to the
proper person. In answering employee questions, however, Yates sim-
ply repeated information that was given to her by upper-management
or that had already been inputted into the company’s computer data-
base. Thus, although Yates may have exercised some discretion in the
overall performance of her job duties, Yates did not have any discre-
tionary authority or control over the manner in which employee plans
were managed and administered. Nonetheless, Mrs. Weeks argues
that Yates became an ERISA fiduciary by answering her questions
about Weeks’ benefits rather than transferring her call to the benefits
department. We have held, however, that "reading a computer screen
to determine who is and who is not covered" does not make someone
an ERISA fiduciary because such a function is administrative rather
than discretionary. HealthSouth Rehab. Hosp. v. Am. Nat’l Red Cross,
101 F.3d 1005, 1009 (4th Cir. 1996). Such an act is merely adminis-
trative because in performing it an employee does not exercise any
discretionary authority over the manner in which the ERISA plan is
managed or administered.

   Mrs. Weeks’ argument that Yates qualifies as an ERISA fiduciary
appears to rest on the things that she believes Yates should have done
when confronted with her questions regarding Weeks’ benefits. Mrs.
Weeks argues that Yates "could have explained that [she] should be
looking in the mail for the notification of rights under COBRA . . .
[or] . . . told [her] that the company would be sending a letter with
          THE ESTATE OF WEEKS v. ADVANCE STORES COMPANY                11
instructions about how to convert life insurance benefits . . . [or] . . .
directed her to another benefits department for information relating to
a specific address or telephone number of Prudential in order to con-
vert the life insurance." Brief for Appellant at 20-21. The fact that
Yates could have, and probably should have, done some of these
things does not, however, make her an ERISA fiduciary. In determin-
ing whether a person qualifies as an ERISA fiduciary, we do not look
at what that person should have done. Rather, our inquiry solely
focuses on whether that person actually exercised any discretionary
authority over the management and administration of the plan in ques-
tion. Only after determining that a person qualifies as an ERISA fidu-
ciary, do we consider what that person should and should not have
done. Here, Yates, as illustrated by her job duties listed above, simply
did not exercise the requisite discretionary control over Weeks’ medi-
cal and life insurance plans. Moreover, we note that Mrs. Weeks and
Weeks could have corrected any misstatements made by Yates, an
administrative employee, by going through the documentation, such
as the employee handbook, that was provided to Weeks.

   Accordingly, we find that the district court did not err by conclud-
ing that Mrs. Weeks and Weeks were not entitled to rely on Yates’
statements as to the termination of Weeks’ medical and life insurance
coverage because Yates did not qualify as an ERISA fiduciary.

                                   IV.

   We hold that the district court properly granted Defendants sum-
mary judgment on Mrs. Weeks’ claim that she and Weeks were enti-
tled to rely on Yates’ statements regarding coverage under Weeks’
medical and life insurance plans because Yates qualifies as an ERISA
fiduciary. Because Mrs. Weeks failed to raise her ERISA
§ 1024(b)(1) argument below, we decline to reach this issue. Like-
wise, we decline to reach her argument that Advance Stores’ custom-
ary practice of notifying terminated employees of their right to
continue their life insurance coverage created an affirmative duty to
provide Weeks with such notice.

                                                             AFFIRMED