IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
September 29, 2008
No. 08-40332 Charles R. Fulbruge III
Summary Calendar Clerk
DIANE HOBBS, Individually and as a Representative of the Heirs and Estate
of David J. Hobbs
Plaintiff - Appellant
v.
BAKER HUGHES OILFIELD OPERATIONS, INC.
Defendant - Appellee
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 6:06-CV-97
Before JONES, Chief Judge, and STEWART and OWEN, Circuit Judges.
EDITH H. JONES, Chief Judge:*
Diane Hobbs (“Ms. Hobbs”) appeals the entry of summary judgment
against her on her claim arising under the Employee Retirement Income
Security Act of 1974, 29 U.S.C. § 1001, et seq. (“ERISA”). She also appeals the
district court’s award of costs to defendant Baker Hughes. We affirm.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
No. 08-40332
FACTS
Diane Hobbs’s husband, David J. Hobbs (“Mr. Hobbs”), was employed by
Baker Hughes from 1979 to 2003. As part of its employee benefits plan,1 Baker
Hughes provided Mr. Hobbs with two life insurance policies totaling $195,000
in coverage. Ms. Hobbs was listed as a 50% beneficiary under these policies. In
June 2003 Baker Hughes provided Mr. Hobbs a copy of its Summary Plan
Description (“SPD”), explaining that if his employment were ever terminated, his
life insurance coverage would end unless he converted it to an individual policy.
Two months later, in August 2003, Baker Hughes terminated Mr. Hobbs’s
employment for cause. On the day of his termination, Baker Hughes hand-
delivered a letter (“Termination Letter”) to Mr. Hobbs, which reiterated the
conversion policy found in the SPD: “Your company provided Life . . . coverage[]
will end on the date of your termination. You may apply to convert your
coverage to an individual policy. You must apply for the policy within 31 days
after your coverage ends. You will receive a conversion application with your
COBRA enrollment materials.” Mr. Hobbs went home that day and advised his
wife Diane that all his Baker Hughes benefits had ended. Mr. Hobbs never
discussed the benefits situation with his wife again, and he made no attempt or
inquiry with Baker Hughes to convert his life insurance policy.
Several months later, in May 2004, Mr. Hobbs suffered a fatal brain
aneurism. Ms. Hobbs asked Baker Hughes about Mr. Hobbs’s life insurance
benefits and was advised that his coverage had ended the day his employment
was terminated. Around this time, Ms. Hobbs learned that the life insurance
conversion application referenced in the Termination Letter had been mailed to
Mr. Hobbs at his office address, rather than his home.2 Ms. Hobbs filed this
1
All parties agree this plan is governed by ERISA.
2
At one time, Mr. Hobbs had asked Baker Hughes to mail his personal correspondence
to his office address. At some point prior to his termination, he requested that Baker Hughes
2
No. 08-40332
lawsuit in May 2006, seeking “reinstatement” and payment of Mr. Hobbs’s life
insurance benefits. The district court granted summary judgment to Baker
Hughes, and Ms. Hobbs appeals. Her primary argument on appeal is that Baker
Hughes’s failure to send Mr. Hobbs’s conversion application to his home address
was a breach of fiduciary duty actionable under § 502(a)(3) of ERISA, 29 U.S.C.
§ 1132(a)(3). Ms. Hobbs also challenges the district court’s award of $1,351.30
in costs to Baker Hughes.
DISCUSSION
The district court’s grant of summary judgment is reviewed de novo.
Baker v. Metropolitan Life Ins. Co., 364 F.3d 624, 627 (5th Cir. 2004). The
decision to award costs in an ERISA case is reviewed for abuse of discretion.
Wade v. Hewlett-Packard Dev. Co. LP Short Term Disab. Plan, 493 F.3d 533, 541
(5th Cir. 2007).
Section 502(a)(3) of ERISA provides, in part, that a civil action may be
brought:
by a participant, beneficiary, or fiduciary (A) to enjoin any act or
practice which violates any provision of this subchapter or the terms
of the plan, or (B) to obtain other appropriate equitable relief (i) to
redress such violations or (ii) to enforce any provisions of this
subchapter or the terms of the plan.
29 U.S.C. § 1132(a)(3). The district court granted Baker Hughes summary
judgment on this claim for two reasons. First, the court concluded that Baker
Hughes’s actions in this case — an unexplained failure to deliver a third notice
of Mr. Hobbs’s conversion rights — did not rise to the level of a breach of
fiduciary duty.3 The district court found no evidence that Baker Hughes was
change his mailing address to his residence. Baker Hughes, for unknown reasons, never
updated its records accordingly.
3
The district court assumed for the sake of argument, as do we, that Baker Hughes was
acting as a fiduciary at all relevant times.
3
No. 08-40332
responsible for more than a clerical oversight in this matter. See Bodine v.
Employers Casualty Co., 352 F.3d 245, 251 (5th Cir. 2003) (noting that plaintiffs
had made no allegations of “deceptive practices, misrepresentations, or other
behavior typically associated with fiduciary breaches by employers under
ERISA”); see also Vallone v. CNA Fin. Corp., 375 F.3d 623, 642 (7th Cir. 2004)
(“[W]hile there is a duty to provide accurate information under ERISA,
negligence in fulfilling that duty is not actionable.”) The district court also held
that Ms. Hobbs had failed to demonstrate a fact issue on the question of
causation; i.e., the court found no evidence indicating that Mr. Hobbs would have
acted differently had he been advised yet again of his conversion rights. See
Ferrer v. Chevron Corporation, 484 F.3d 776, 782 (5th Cir. 2007) (affirming Rule
12(b)(6) dismissal of an ERISA claim for lack of a causal relationship between
the alleged breach of fiduciary duty and damages).
The district court further noted that there was some dispute whether the
reinstatement Ms. Hobbs seeks is “appropriate equitable relief” available under
§ 502(a)(3). The district court found it unnecessary to reach this question, but
for our purposes the issue is sufficient to resolve the case at hand. See FDIC v.
Laguarta, 939 F.2d 1231, 1240 (5th Cir. 1991) (noting that summary judgment
may be affirmed on any grounds adequately developed below). Our caselaw
makes it clear that the “reinstatement” of benefits Ms. Hobbs seeks does not
qualify as equitable relief under § 502(a)(3). Amschwand v. Spherion Corp.,
505 F.3d 342, 348 (5th Cir. 2007), cert. denied 128 S. Ct. 2995 (2008). Though
Ms. Hobbs has attempted to cast her prayer for relief as equitable,4 in substance
4
Ms. Hobbs explained in her response to Baker Hughes’s Motion for Summary
Judgment that the “proper equitable relief” would allow her to convert Mr. Hobbs’s benefits
retroactively, pay any necessary premiums, and collect the balance due on the policies. This
is, in substance, a request for damages. See Amschwand, 505 F.3d at 348 n.7 (“Such attempts
to recharacterize a desired § 502(a)(3) remedy as a purely equitable form of relief, like an
injunction, have been consistently rejected.”).
4
No. 08-40332
she is seeking damages in the form of life insurance proceeds. “Obtaining the
lost policy proceeds . . . is simply a form of make-whole damages. This demand
is not equitable in derivation, but is akin to the legal remedies of
extracontractual or compensatory damages.” Id. (citations omitted). These legal
remedies are not available under § 502(a)(3). Thus, even assuming Baker
Hughes did breach its fiduciary duty in failing to update its records and mail Mr.
Hobbs a third notice of his conversion rights, and assuming Ms. Hobbs could
show a causal link between this breach and Mr. Hobbs’s decision not to convert
his benefits, the relief she seeks is not available under § 502(a)(3).
Ms. Hobbs also challenges the district court’s order affirming the award
of costs to Baker Hughes. She complains that Baker Hughes should have filed
a motion for costs, rather than submitting a bill of costs to the court clerk.
ERISA authorizes a court to award costs “in its discretion.” 29 U.S.C. § 1132(g).
Costs in an ERISA suit may be awarded on a simple “prevailing party” basis.
Wade, 493 F.3d at 542-43. Here, Baker Hughes was the prevailing party, and
it submitted its bill of costs to the court clerk in accordance with Local Rule
54.2.5 Ms. Hobbs filed an objection, which the district court examined and
overruled. Ms Hobbs has not shown this process to be inadequate or an abuse
of discretion.
The judgment of the district court is affirmed. Ms. Hobbs’s request for
permission to submit supplemental briefing on Amschwand v. Spherion Corp.
is denied as untimely.
AFFIRMED.
5
Southern District of Texas Local Rule 54.2, “Bill of Costs,” provides in relevant part,
“An application for costs shall be made by filing a bill of costs within 14 days of the entry of a
final judgment. . . . Objections to allowance of the bill, the attorney’s fees, or both must be filed
within five days of the bill’s filing.”
5