F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
NOV 23 1999
FOR THE TENTH CIRCUIT
PATRICK FISHER
Clerk
PATSY MILLS, surviving spouse of
Ramon H. Mills, deceased,
Plaintiff-Appellant,
Nos. 98-6440 & 99-6113
v. (D.C. No. CV-97-1948-A)
(W.D. Okla.)
UNUM LIFE INSURANCE
COMPANY OF AMERICA, a
corporation; NESTLE USA, a
corporation,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before ANDERSON , BARRETT , and BRISCOE, Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
Plaintiff Patsy Mills, the surviving spouse of Ramon H. Mills, brought this
action under the Employee Retirement Income Security Act of 1974 (ERISA),
29 U.S.C. §§ 1001 - 1461, seeking disability benefits under a long term disability
(LTD) plan based on Mr. Mills’s disability while employed with Cain’s Coffee
Company (Cain’s). Plaintiff named as defendants Nestle USA, Inc. (Nestle),
which owned Cain’s until December 4, 1992, and UNUM Life Insurance
Company of America (UNUM), the LTD insurer for Nestle and certain of its
affiliates. The district court granted defendants’ motion for summary judgment.
Subsequently, the district court granted UNUM’s motion for attorney’s fees and
costs pursuant to 28 U.S.C. § 1927. In companion appeals, plaintiff challenges
both decisions. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and affirm
the district court in both instances.
Mr. Mills started working for Cain’s in 1979. In 1986, he was diagnosed
with chronic lymphocytic leukemia. His condition worsened in the Fall of 1992
when he developed non-Hodgkin’s lymphoma and his vision deteriorated
significantly. Cain’s payroll indicates that, as of January 1, 1992, Mr. Mills was
on “Inactive Status - Medical Leave.” Appellant’s App. (Appeal No. 98-6440) at
111. The Social Security Administration deemed Mr. Mills disabled as of
October 1, 1992. On December 28, 1993, Cain’s terminated Mr. Mills based on
his absence record. Mr. Mills died on July 1, 1994.
-2-
Thereafter, plaintiff initiated this action pursuant to 29 U.S.C. § 1132(a).
That subsection permits plan participants or beneficiaries to bring a civil action to
recover, enforce, and/or clarify benefits and rights under the plan. In her
complaint, plaintiff claimed her husband was covered under Cain’s and/or
Nestle’s LTD plan when he became disabled in 1992, he was entitled to LTD
benefits, he made a demand for such benefits, and defendants refused to pay him
these benefits. Indeed, Nestle offered Cain’s employees an LTD plan in 1992 that
was fully funded by employees through insurance premium payroll deductions.
Commencing January 1, 1993, UNUM offered employees of Nestle and certain of
its affiliates a group LTD plan. In her response to defendants’ summary judgment
motion, plaintiff conceded she had no evidence to controvert UNUM’s assertions
that it did not offer an LTD policy to employees of Nestle or its affiliates in 1992
and that it did not receive, deny, or adjudicate any claim from Mr. Mills. See
Appellant’s App. (Appeal No. 98-6440) at 216. Nevertheless, plaintiff still
challenges on appeal that portion of the summary judgment decision dismissing
UNUM. See Appellant’s Br. (Appeal No. 98-6440) at 3 (“the factual record
presented to the district court was such that UNUM and Nestle were not entitled
to judgment in their favor as a matter of law”). Despite this undeveloped
challenge, the pivotal issue in this case is whether Mr. Mills was covered under
Nestle’s LTD plan in 1992 when he became disabled.
-3-
Appeal No. 98-6440 (Summary Judgment)
The parties cross moved for summary judgment and the district court
granted defendants’ motion. In Appeal No. 98-6440, plaintiff contends that the
district court erred in granting summary judgment because: (1) it failed to
consider all of the evidence submitted by her; and (2) there were genuine issues
of material fact precluding the grant of summary judgment.
We review de novo the district court’s decision granting summary judgment
and apply the same legal standards as the district court. See Bullington v. United
Air Lines, Inc. , 186 F.3d 1301, 1313 (10th Cir. 1999). Summary judgment is
appropriate on a record demonstrating that “there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a matter of
law.” Fed. R. Civ. P. 56(c). As always, “we view the factual record and
inferences therefrom in the light most favorable to the nonmoving party.”
Bullington , 186 F.3d at 1313.
The party moving for summary judgment “has the initial burden to show
‘that there is an absence of evidence to support the nonmoving party’s case.’”
Thomas v. IBM , 48 F.3d 478, 484 (10th Cir. 1995) (quoting Celotex Corp. v.
Catrett , 477 U.S. 317, 325 (1986)). Thereafter, it is the nonmoving party’s
burden to “identify specific facts that show the existence of a genuine issue of
material fact.” Id. “‘The party opposing the motion must present sufficient
-4-
evidence in specific, factual form for a jury to return a verdict in that party’s
favor.’” Id. (quoting Bacchus Indus., Inc. v. Arvin Indus., Inc. , 939 F.2d 887,
891 (10th Cir. 1991)). “It is well settled in this circuit that we can consider only
admissible evidence in reviewing an order granting summary judgment.” Gross v.
Burggraf Constr. Co. , 53 F.3d 1531, 1541 (10th Cir. 1995). However, the form
of the evidence is not dispositive, rather “the content or substance of the evidence
must be admissible.” Thomas , 48 F.3d at 485.
In their motion for summary judgment, defendants argued that Mr. Mills
was not covered under either Nestle’s LTD plan in 1992 or the LTD Plan offered
by Nestle through UNUM as of January 1, 1993. In support of the motion,
defendants offered affidavit testimony from both Nestle and UNUM employees.
According to these affidavits, Mr. Mills did not pay LTD insurance premiums in
1992, as reflected in the payroll records attached to the affidavit of Nestle’s
payroll clerk. Nor did UNUM offer employees of Cain’s any LTD benefits in
1992. In response, plaintiff’s submissions included her affidavit, correspondence
between plaintiff and Nestle concerning Mr. Mills’s benefits, and Mr. Mills’s
“1991 Benefits Deductions” form.
Plaintiff’s main contention on appeal is that the district court failed to
evaluate her evidence which she claims creates questions of fact material to Mr.
-5-
Mills’s coverage under the LTD plan. 1
Specifically, plaintiff argues that the
“1991 Benefits Deductions” form shows that Mr. Mills contributed toward LTD
benefits in 1991 and there is no indication that he stopped making these
contributions in 1992. In addition, plaintiff contends that the correspondence
concerning benefits creates a factual issue because it shows that Nestle never
disavowed Mr. Mills’s coverage under its LTD plan.
While the district court deemed much of plaintiff’s evidence inadmissible,
it considered the evidence nevertheless and concluded that plaintiff failed to meet
her burden on summary judgment. Despite its finding that the “1991 Benefits
Deductions” form was not admissible pursuant to its local rule, W.D. Okla.
LCvR7.1(h), 2
because the only explanation of that document was contained in
plaintiff’s brief, the district court discussed it at length. Noting that plaintiff
failed to explain its significance, the district court found that “[o]n the record
presented, it appears to be simply a worksheet done by or for Mr. Mills to
1
Although plaintiff’s complaint references only LTD benefits, her summary
judgment briefs and briefs on appeal also refer generally to benefits under a
retirement plan. Plaintiff argues that the district court erred by limiting her claim
to the LTD plan instead of considering whether she was due benefits under any
plan. Plaintiff did not amend her complaint to include a claim for retirement
benefits. Nor was a claim for retirement benefits tried by “express or implied
consent of the parties.” Fed. R. Civ. P. 15(b). Hence, plaintiff is limited to her
LTD benefits claim.
2
Local Rule 7.1(h) states that “[f]actual statements or documents appearing
only in briefs shall not be deemed to be a part of the record in the case, unless
specifically permitted by the Court.”
-6-
ascertain what his contribution would be for certain benefit plans if he chose to
participate in them during 1991.” Appellant’s App. (Appeal No. 98-6440) at 344.
The district court concluded that nothing in that document indicated whether
Mr. Mills ultimately elected to participate in the LTD plan during 1991.
Next, the district court considered the correspondence between the Mills
and Nestle concerning Mr. Mills’s benefits. The district court noted that only one
piece of correspondence was part of the record, i.e., the letter dated May 26, 1993
to Mr. Mills from Karen Corvino, Nestle’s Benefits Manager. The district court
found that the letter was not related to Mr. Mills’s claim for LTD benefits as, by
its terms, it pertains to Nestle’s “Retirement Plan.” In addition, while not part of
the record for the same reason attributed to the “1991 Benefits Deductions” form,
the district court stated that the other correspondence plaintiff submitted was
similarly flawed.
Hence, the district court, contrary to plaintiff’s assertion, did consider the
inadmissible evidence and concluded that all of the evidence she submitted failed
to evince a trial-worthy, factual dispute. Nor, based on our independent review of
the record, do we find otherwise; the evidence submitted by plaintiff--whether
admissible or not--is not probative. We have nothing to add to the district court’s
decision which is thorough and well reasoned. Accordingly, we affirm the district
-7-
court’s grant of summary judgment for substantially the reasons stated in its order
dated October 5, 1998.
Appeal No. 99-6113 (Attorney’s Fees)
In this companion appeal, plaintiff and plaintiff’s counsel contend that the
district court abused its discretion by imposing part of UNUM’s attorney’s fees
and costs against plaintiff’s counsel.
After their motion for summary judgment was granted, defendants sought
attorney’s fees and costs under a number of different fee-shifting authorities. The
district court awarded UNUM its attorney’s fees and costs -- expended after
March 3, 1998 -- against plaintiff’s attorney pursuant to 28 U.S.C. § 1927. That
section provides as follows:
Any attorney or other person admitted to conduct cases in any court
of the United States or any Territory thereof who so multiplies the
proceedings in any case unreasonably and vexatiously may be
required by the court to satisfy personally the excess costs, expenses,
and attorneys’ fees reasonably incurred because of such conduct.
The district court acknowledged that “plaintiff’s counsel was operating
under a misconception of the plans and benefits described by Nestle and Cain’s in
correspondence between the decedent and his employer’s representatives as well
as correspondence between the decedent’s former counsel and these
representatives.” Appellant’s App. (Appeal No. 99-6113), Vol. II at 615. The
district court reasoned that plaintiff’s attorney was alerted by March 3, 1998, after
-8-
taking plaintiff’s deposition, that she and her husband “were not aware of their
ability to obtain coverage under UNUM and did not file a claim under UNUM.”
Id. Hence, the district court concluded that “[b]y March 3, 1998, counsel for
plaintiff should have been aware that UNUM was not a proper party in this action,
particularly as plaintiff had not alleged a claim for breach of fiduciary duty.” Id.
In addition, the district court noted that “[c]ounsel for defendants continuously
advised plaintiff’s counsel that there was no evidence the decedent was covered
by or submitted a claim for UNUM coverage.” Id. at 613. The district court
adjudged this behavior vexatious multiplication of the action and ordered
plaintiff’s counsel to pay to UNUM $ 15,919 in attorney’s fees and $ 1,351.26 in
expenses.
In general, “[w]e review a district court’s decision to deny attorneys’ fees
under 28 U.S.C. § 1927 for abuse of discretion.” AeroTech, Inc. v. Estes ,
110 F.3d 1523, 1528 (10th Cir. 1997). “However, ‘any statutory interpretation or
other legal analysis which provides the basis for the award is reviewable de
novo.’” Corneveaux v. CUNA Mut. Ins. Group , 76 F.3d 1498, 1508 (10th Cir.
1996) (quoting Supre v. Ricketts , 792 F.2d 958, 961 (10th Cir. 1986)). This court
has explained that “the proper standard under . . . § 1927 is that excess costs,
expenses, or attorney’s fees are imposable against an attorney personally for
conduct that, viewed objectively, manifests either intentional or reckless disregard
-9-
of the attorney’s duties to the court.” Braley v. Campbell , 832 F.2d 1504, 1512
(10th Cir. 1987) (en banc). When imposing an award, the district court’s order
“must sufficiently express the basis for the sanctions imposed to identify the
excess costs reasonably incurred by the party to whom they will be due.” Id. at
1513.
Here, counsel’s failure to dismiss UNUM as a defendant after March 3,
1998, was objectively unreasonable conduct which justified the district court’s
imposition of attorney’s fees and costs incurred by UNUM after that date pursuant
to 28 U.S.C. § 1927. Hence, we find no abuse of discretion.
Attorney’s Fees and Costs on Appeal
Defendants seek attorneys fees and costs pursuant to Fed. R. App. P. 38 and
28 U.S.C. § 1927 for both appeals. Rule 38 empowers us to impose “just
damages . . . and costs” on either the litigants or their attorneys for frivolous
appeals. “An appeal is frivolous when the result is obvious, or the appellant’s
arguments are wholly without merit.” Braley , 832 F.2d at 1510 (quotation
omitted). In addition, as discussed above, § 1927 allows us to sanction attorneys
“for conduct that, viewed objectively, manifests either intentional or reckless
disregard of the attorney’s duties to the court.” Id. at 1512. We conclude that
attorney’s fees and costs are not justified under either standard.
-10-
The judgments of the United States District Court for the Western District
of Oklahoma in Appeal Nos. 99-6113 and 98-6440 are AFFIRMED. We deny
defendants’ request for attorney’s fees and costs in both appeals.
Entered for the Court
Stephen H. Anderson
Circuit Judge
-11-