Court Opinion

ID: 21713
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:48:25+00
Date Added: 2024-06-11T15:03:35.059203
License: Public Domain

UNITED STATES COURT OF APPEALS
                         FOR THE FIFTH CIRCUIT

                             No. 99-50821

              METROPOLITAN LIFE INSURANCE COMPANY,

                                                         Plaintiff,
                                  V.

                        LaVENA ATKINS; ET AL.,

                                                        Defendants.
           _________________________________________

        LaVENA ATKINS; CHRISTINA LaVENA ATKINS, A Minor,

                Defendants - Third Party Plaintiffs - Appellants,

                                  V.

                      UNITED STATES OF AMERICA,

                                  Third Party Defendant - Appellee.

          Appeal from the United States District Court
                for the Western District of Texas

                           August 24, 2000
Before WIENER, BENAVIDES and PARKER, Circuit Judges.
ROBERT M. PARKER:

     Third-Party Plaintiffs LaVena Atkins and Christina LaVena

Atkins appeal the dismissal of their claim for negligence filed

against Third-Party Defendant United States of America. We reverse

and remand for further proceedings.

                                  1
                     FACTS AND PROCEDURAL HISTORY

     Harold Lynn Tyler, a federal employee, died on June 14, 1997.

At the time of his death, Tyler was insured by a Federal Employees

Group Life Insurance (“FEGLI”) policy for $104,000.00.          Tyler’s

wife, Edith Tyler and his minor sister Christina LaVena Atkins made

competing   claims    for   the    proceeds.   Atkins   was   the   named

beneficiary on Tyler’s designation of beneficiary form.        However,

because the copy of the form held in Tyler’s personnel file was

unsigned, Edith Tyler claimed a superior right to the proceeds.

Metropolitan Life Insurance Company brought a declaratory judgment

suit to determine who was entitled to the proceeds and tendered the

policy into the registry of the court.         Tyler’s wife and sister

settled their dispute, and the question of the appropriateness of

the resulting distribution is not before this court on appeal.

     LaVena Atkins, mother of the deceased and next friend of the

minor claimant Christina LaVena Atkins (“Atkins”), brought a third

party negligence action against the United States under the Federal

Tort Claims Act (“FTCA”) 28 U.S.C. § 1346 (1994) and Federal

Employees Group Life Insurance Act (“FEGLIA”) 5 U.S.C. §§ 8701-8716

(1994), claiming that a federal personnel clerk breached her duty

by failing to secure and retain in her files a signed original of

Tyler’s beneficiary form.          The district dismissed the action.

Atkins appeals.

                                  DISCUSSION

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A. Negligent Misrepresentation Exception to FTCA

     The United States, as sovereign, is immune from suit except as

it consents to be sued, and the terms of its consent define the

federal courts’ jurisdiction to entertain suits against it.                  See

United States v. Nordic Village, Inc., 503 U.S. 30, 34 (1992).               The

FTCA subjects the United States to liability for personal injuries

“caused by the negligent or wrongful act or omission of any

employee of the Government.”       28 U.S.C. § 1346(b)(1994).          The FTCA

waiver of sovereign immunity, must be strictly construed.                    See

Levrie v. Dep’t of the Army, 810 F.2d 1311, 1314 (5th Cir. 1987).

     The United States filed a motion to dismiss Atkins’s claims

pursuant to FED. R. CIV. P. 12(b)(1) for lack of subject matter

jurisdiction, arguing that there has been no waiver of sovereign

immunity under the FTCA or FEGLIA. Specifically, the United States

contended that this suit falls within the exception to FTCA’s

waiver of sovereign immunity for “[a]ny claim arising out of . . .

misrepresentation . . . .”              28 U.S.C. § 2680(h)(1994).           The

district court agreed and dismissed the action.

     The   exception   applies     to    both     negligent   and   intentional

misrepresentations,    as   well    as      to   both   affirmative   acts   and

omissions of material fact.        See, e.g., McNeily v. United States,

6 F.3d 343, 347 (5th Cir. 1993).                 “Moreover, causes of action

distinct from those excepted under § 2680(h) are nevertheless

barred when the underlying governmental conduct ‘essential’ to the

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plaintiff’s claim can be fairly read to ‘arise out of’ conduct that

would establish an excepted cause of action.”                          Id.    Thus, the

manner in which a plaintiff chooses to plead her claim is not

controlling; rather, a court must “look to the essential act that

spawned the damages” to determine whether the misrepresentation

exception bars the claim.            See Saraw Partnership v. United States,

67 F.3d 567, 570 (5th Cir. 1995).               To determine whether the instant

negligence claim arises out of misrepresentation, we consider

whether    the    focal     point    of    the       claim    is    negligence   in    the

communication         of   (or   failure    to       communicate)      information      or

negligence       in   the   performance         of    an     operational     task,    with

misrepresentation being merely collateral to such performance. See

id. at 570-71.        The key question is “whether the chain of causation

from the alleged negligence to the alleged injury depends upon the

transmission of misinformation by a government agent.”                       Commercial

Union Ins. Co. v. United States, 928 F.2d 176, 179 (5th Cir. 1991).

     The     district        court     found         that     the     transmission      of

misinformation was a necessary link in the chain of causation

between the alleged negligent conduct and the injury.                        The crux of

Atkins’s third-party claim was that the United States, through its

employees, negligently failed to discover that Tyler had not signed

his name in the designated block on the copy of the beneficiary

form in Tyler’s personnel file and negligently filed the unsigned

form rather than a properly signed copy, with the result that

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Tyler’s intended designation of Christina LaVena Atkins as his life

insurance beneficiary was ineffective.    In the district court’s

view, non-communication was an integral component of the claim.

The district court reasoned that even if the federal employee had

determined that Tyler had not signed the form, it would have been

necessary to take the additional step of communicating the problem

to Tyler so that he could supply his signature.    The evidence in

the record, taken in the light most favorable to the Atkins, does

not support this view of the case.       While no direct evidence

establishes why an unsigned copy was retained in Tyler’s personnel

file, the parties’ stipulated facts would support a conclusion by

the fact finder that Tyler signed one or more copies of the

beneficiary form and turned it over to the United States.1       We

     1
      The parties stipulated, inter alia, that:

     M. There are affidavits from the two witnesses Robert
     Baker and Robert Haislet that more than one original form
     existed. One or both of them advised Mr. Tyler that his
     signature did not appear on his copy.          Mr. Tyler
     responded he was aware the copy lacked his signature, but
     believed he had signed the original, which was on file
     with the USA.      Mr. Tyler apparently believed his
     designation of beneficiary form was valid because neither
     Ms. Montgomery nor any other USA employee advised him of
     any problems with his form.

     N. Mr. Tyler gave a copy of the designation form to his
     mother for safekeeping.    His mother, LaVena Atkins,
     stated that the copy did not bear his signature.
     According to his mother, Mr. Tyler replied: “I know,
     mother, but I signed the one they have at the office.
     This is just a copy for you to keep.

Joint Stipulated Facts and Issues.

                                 5
understand Atkins’s claims as alleging that the United States

employee failed to preserve and properly file the correct copy –-

that is, the signed copy -- of Tyler’s form.      We conclude that

because the negligent performance of an operational task allegedly

caused the harm, the negligent misrepresentation exception to

FTCA’s waiver of sovereign immunity does not apply.   See Saraw, 67
F.3d at 571.     We therefore reverse the dismissal for lack of

subject matter jurisdiction.

B. Waiver of Sovereign Immunity under FEGLIA

     The district court, having concluded that there was no waiver

of immunity under the FTCA, went on to consider whether there was

some other possible basis of jurisdiction over Atkins’s claims. In

her pleadings, Atkins had invoked Federal Employees Group Life

Insurance Act, 5 U.S.C. § 8715 (1994)(“FEGLIA”), which waives

sovereign immunity independently of the FTCA when a plaintiff

claims that the United States breached duties imposed by FEGLIA.

See Barnes v. United States, 307 F.2d 655, 657 (D.C. Cir. 1962).

The district court, citing 5 U.S.C. § 9705(a) and 5 C.F.R. §

870.802, found that the burden of properly executing and filing the

designation of beneficiary form rests with the insured, while the

employing office of the United States has no duty beyond receiving

the forms.   The district court therefore held that FEGLIA does not

provide the necessary waiver of sovereign immunity.   This holding

has given rise to two opposing arguments on appeal.   Atkins argues

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that the district court erred in that the United States does have

a duty to Tyler under FEGLIA.              Contrariwise, the United States

urges us to affirm the holding that FEGLIA imposed no duty, and

goes on to argue that       FEGLIA preempts any possible cause of action

Atkins may have under the FTCA.

      1. Duty

      “The district courts of the United States have original

jurisdiction . . . of a civil action or claim against the United

States founded on [FEGLIA].”       5 U.S.C. § 8715 (1994).     It is clear,

based on § 8715, that the United States has consented to be sued

for any breach of legal duty owed by it under FEGLIA.           See Barnes,
307 F.2d at 657.        We must then define the nature of the legal duty

owed by a United States employee under the circumstances of this

case.    The district court was unable to discern any legal duty on

the part of the United States under FEGLIA to make certain that its

employees sign their designation of beneficiary forms. Noting that

the     statute   and    regulations   addressing     the   designation   of

beneficiaries speaks in terms of a United States employing office

“receiving” the designation, the district court held that the law

imposes no duty on the United States.              However, one plausible

version of the facts emerging from the pleadings and evidence is

that Tyler fulfilled his duty to turn over a properly filled out

and signed designation of beneficiary form and a United States

employee lost or misfiled it.          While we agree with the district

                                       7
court that the personnel clerk had no duty to ensure that the forms

were properly completed, we conclude that the United States,

through the personnel clerk, has a duty to maintain the designation

of beneficiary forms turned over to its care as a part of its

responsibilities under FEGLIA.

     On appeal, the United States urges this court to affirm the

district   court’s   holding   concerning    duty   by   adopting   the

alternative analysis developed in Robinson v. United States, 8 Cl.

Ct. 343 (1985), aff’d, 806 F.2d 249 (Fed. Cir. 1986).         Robinson

assumed without deciding that the United States had a duty to the

plaintiff under FEGLIA, but that plaintiff could not recover money

damages from the United States.       The Robinson plaintiff alleged

that the United States breached a duty to timely provide her mother

with forms which would have allowed the mother to convert her

FEGLIA policy to an individual policy.      During the United States’s

delay in providing forms, the plaintiff’s mother died and her

FEGLIA policy lapsed.     The United States moved to dismiss the

lawsuit on the grounds that FEGLIA does not “provide for the

recovery of money damages against the United States.”      Id. at 343.

The plaintiff argued that FEGLIA created a duty upon the United

States to timely provide the requisite conversion forms. The court

disagreed, stating that even if the statute created a duty, in the

absence of a “much clearer legislative statement,” the court would

not recognize a money remedy against the United States for the

                                  8
breach of any such duty. Id. at 345.           The court reasoned that

without specific Congressional intent, it would be unwise to

“expose the Government to potential monetary liability for every

administrative lapse which might occur in the course of operating

a program as large as FEGLI[A].”       Id.   The United States urges us

to bypass the issue of duty and hold, as the Robinson court did,

that Congress’s directive concerning liability under FEGLIA is not

explicit enough to allow recovery of money damages against the

United States.   We disagree.     The “civil action or claim against

the United States founded on [FEGLIA]” contemplated by § 8715 is

sufficient to establish Congress’s intent to allow suits such as

the present one to proceed in district court.

     3. Preemption

     Under the FTCA, the United States waived sovereign immunity

for torts committed by government employees under circumstances

where the United States, if a private person, would be liable under

the law of the place where the act or omission occurred.      28 U.S.C.

§§ 1346(b) and 2674 (1994).     FEGLIA, however includes a preemption

provision, which provides:

     The provisions of any contract under this chapter which
     relate to the nature or extent of coverage or benefits
     (including payments with respect to benefits) shall
     supersede and preempt any law of any State or political
     subdivision thereof, or any regulation issued thereunder,
     which relates to group life insurance to the extent that
     the law or regulation is inconsistent with the
     contractual provisions.

5 U.S.C. § 8709(d)(1)(1994).        Since the 1980 addition of the

                                   9
preemption language to FEGLIA, no published case has expressly

decided whether FEGLIA preempts a state law negligence claim such

as Atkins’s case.   The issue was not raised or decided in the

district court, but was raised for the first time in the United

States’s appellee brief in this court.     Because the issue is not

dispositive of this appeal, we decline to address it in the first

instance without further development.

                              CONCLUSION

     For the foregoing reasons, we reverse the district court’s

dismissal of Atkins’s third-party claims and remand for further

proceedings consistent with this opinion.

     REVERSED and REMANDED.

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