Court Opinion

ID: 59650
Source: CourtListenerOpinion
Date Created: 2010-04-26 03:23:46+00
Date Added: 2024-06-11T17:19:50.182142
License: Public Domain

[DO NOT PUBLISH]

          IN THE UNITED STATES COURT OF APPEALS

                 FOR THE ELEVENTH CIRCUIT
                                                            FILED
                   _______________________         U.S. COURT OF APPEALS
                                                     ELEVENTH CIRCUIT
                                                        MARCH 28, 2008
                         No. 07-13076
                                                      THOMAS K. KAHN
                   _______________________
                                                           CLERK

            D. C. Docket No. 05-01572-CV-ORL-22JGG

CHERYL ALDERMAN,
CINDY HOUCK,

                                               Plaintiffs-Appellants,

                              versus

STANDARD INSURANCE COMPANY,
PRUDENTIAL INSURANCE COMPANY OF AMERICA,

                                              Defendants-Appellees.

                    ______________________

            Appeal from the United States District Court
                for the Middle District of Florida
                    ______________________

                         (March 28, 2008)
Before BIRCH and FAY, Circuit Judges, and HINKLE,* District Judge.

PER CURIAM:

             Appellees provided life insurance coverage under an employee benefit

plan. Appellants were beneficiaries of coverage on the life of an employee who

applied for increased coverage, did not obtain the requested increase, and later

died. Appellants assert the insurers violated their fiduciary duties under the

Employee Retirement Income Security Act by failing properly to process the

application for increased coverage.

             The district court granted summary judgment for the insurers on the

ground that ERISA does not authorize relief of the kind at issue—essentially an

award of damages for the amount of coverage that was sought but not provided.

We affirm but on a different ground. The record establishes, without dispute, that

even had the application been properly processed, the increased coverage would

not have been provided, because the employee’s medical condition did not meet

the applicable underwriting guidelines.

                                                I

             David Wayne Alderman was an employee of Republic Services, Inc.

       *
         Honorable Robert L. Hinkle, United States District Chief Judge for the Northern District
of Florida, sitting by designation.

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Republic provided an employee benefit plan that included term life insurance.

Until December 31, 2004, the insurer was appellee The Prudential Insurance

Company of America. Effective as of January 1, 2005, Republic replaced

Prudential with appellee Standard Insurance Company. Republic was its own plan

administrator and thus was responsible for receiving applications from employees

and forwarding them to the appropriate insurer.

           Republic provided employees an “open season” in November 2004

during which employees could make changes to their coverages that would take

effect as of January 1, 2005. Mr. Alderman applied to increase his life coverage

from $125,000 to $400,000. Under the terms of the plan, the proposed increase

was subject to medical underwriting and would take effect only if approved by the

affected insurer. Because the increase would not go into effect until January 1,

2005, the affected insurer was Standard.

           Through no fault of Mr. Alderman, his application went instead to

Prudential. Prudential reviewed the application and determined—based on the

medical answers—that further medical information was needed. Prudential sent

Mr. Alderman a “long form” on which he was to submit additional information.

Prudential says that it never received the long form back from Mr. Alderman and

that it advised him by letter dated January 2, 2005, that it was therefore closing its

                                           3
file on the application for increased coverage. Whether the long form was in fact

sent to Prudential is disputed. It is undisputed, however, that neither Prudential

nor Standard approved the application. The increase never took effect, and Mr.

Alderman was never charged an increased premium.

           Mr. Alderman died in a car crash on January 27, 2005. The

beneficiaries of his life insurance—appellants Cheryl Alderman and Cindy

Houck—assert claims in this action against Prudential and Standard for breach of

fiduciary duties in connection with the processing of the application for increased

coverage. Appellants seek to recover the difference between the amount that was

paid under the coverage that was actually in effect and the amount that would have

been paid had Mr. Alderman’s application for an increase been granted.

                                         II

           Prudential and Standard filed separate motions for summary judgment

on multiple grounds. Appellants responded on the merits without seeking a

continuance under Federal Rule of Civil Procedure 56(f) or otherwise asserting the

matter was not ripe for a decision. The district court granted the motion on the

ground that the ERISA provision invoked by appellants—29 U.S.C.

§1132(a)(3)—authorizes only “equitable relief” and thus does not allow recovery

of the damages sought by appellants. Based on this ruling, the district court did

                                          4
not need to address—and did not address—the other grounds asserted in the

motions for summary judgment.

                                         III

           An appellate court of course may affirm a judgment on any ground

supporting the result. See, e.g., Turlington v. Atlanta Gas Light Co., 135 F.3d
1428, 1433 n.9 (11th Cir. 1998). The record establishes without dispute that had

Mr. Alderman’s application for increased coverage been submitted to

Standard—as it should have been—Standard would have denied the application

based on its established underwriting guidelines as then in effect. In support of its

motion for summary judgment, Standard submitted an uncontradicted declaration

of its supervising underwriter making this clear.

           Appellants assert that the law forbids a post-mortem analysis of

whether Mr. Alderman’s application would have been approved. But that makes

no sense. If, as appellants assert, Mr. Alderman’s application was mishandled,

then his beneficiaries are entitled, at most, to have the error corrected and any

resulting harm undone. Here there was no harm. Put differently, the beneficiaries

may or may not be entitled to what they would have received had the application

been handled properly—but they most assuredly are not entitled to proceeds that

they never would have received under any circumstances.

                                          5
                           IV

For these reasons, the judgment in appellees’ favor is AFFIRMED.

                            6