Kimberly Hendrix v. Wal-Mart Stores, Incorporated, et al

Filing

UNPUBLISHED OPINION FILED. [16-20750 Affirmed] Judge: TMR, Judge: CH, Judge: GJC. Mandate pull date is 07/12/2017 [16-20750]

Case: 16-20750

Document: 00514043044

Page: 1

Date Filed: 06/21/2017

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 16-20750

United States Court of Appeals
Fifth Circuit

FILED
June 21, 2017

KIMBERLY D. HENDRIX,

Lyle W. Cayce
Clerk

Plaintiff - Appellant
v.
PRUDENTIAL INSURANCE COMPANY OF AMERICA; WAL-MART
STORES, INCORPORATED; ASSOCIATES' HEALTH AND WELFARE
PLAN,
Defendants - Appellees

Appeals from the United States District Court
for the Southern District of Texas
USDC No. 4:15-CV-1920
Before REAVLEY, HAYNES, and COSTA, Circuit Judges.
PER CURIAM:*
Kimberly D. Hendrix (“Mrs. Hendrix”) appeals the motion to dismiss and
summary judgment granted against her on her ERISA claims arising out of a
life insurance policy originally issued to her husband, Randy Hendrix (“Mr.
Hendrix”), by Defendant Prudential Insurance Company of America
(“Prudential”) and the dismissal of her claims against his former employer,
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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
*

Case: 16-20750

Document: 00514043044

Page: 2

Date Filed: 06/21/2017

No. 16-20750
Wal-Mart Stores, Inc. (“Wal-Mart”) and the Associates’ Health and Welfare
Plan (the “Wal-Mart Plan”). We AFFIRM.
Mr. Hendrix was employed with Wal-Mart until July 11, 2012.
Prudential presented evidence that it sent a letter on July 23, 2012, notifying
Mr. Hendrix of his right to convert his Wal-Mart associate term life insurance
policy to an individual life insurance policy. Under the terms of the policy, Mr.
Hendrix had until August 11, 2012, thirty-one days after he “ceased to be
insured for the Associate Term Life Insurance,” to indicate whether he would
convert his associate term life insurance to individual life insurance.

On

August 27, 2012, Mr. Hendrix passed away. Because Prudential received no
response to its notice of conversion and because Mr. Hendrix passed away
outside of a thirty-one-day conversion period, Prudential concluded that Mr.
Hendrix both was not covered under the associate term life insurance and had
failed to convert his insurance to individual coverage. As such, Prudential
denied Mrs. Hendrix’s claims for benefits. On September 4, 2012, Prudential
sent a letter to Mrs. Hendrix notifying her that “[s]ince Randy Hendrix was
not actively employed by Wal-Mart, you are not eligible to claim Life
Coverage.”
On December 2, 2013, Mrs. Hendrix sent a letter to Prudential
requesting “copies of any and all information pertaining to [Mr. Hendrix’s]
policies.”

Prudential subsequently sent a letter to Mrs. Hendrix on December

17, 2013, stating that Prudential had “completed [its] evaluation of [Mrs.
Hendrix’s] claim for [associate] term life insurance” and was “unable to
approve this claim.”

Mrs. Hendrix twice requested reconsideration of

Prudential’s denial of benefits, but Prudential upheld its decision on both

2

Case: 16-20750

Document: 00514043044

Page: 3

Date Filed: 06/21/2017

No. 16-20750
occasions. Mrs. Hendrix eventually filed suit, raising several claims, but she
did not prevail. We address those claims raised on appeal. 1
Failure to Provide Documents. Under 29 U.S.C. § 1132(c)(1), qualifying
individuals may collect penalties if “[a]ny administrator . . . fails or refuses to
comply with a request for any information which such administrator is
required by this subchapter to furnish.” (emphasis added). Mrs. Hendrix
contends that Defendants failed to furnish the requisite documents despite her
request. However, under the Wal-Mart Plan, the “Administrative Committee”
is the administrator. None of the defendants in this suit is the administrator,
and Mrs. Hendrix does not argue that she made a request for documents from
the Administrative Committee.

Accordingly, the district court correctly

determined that Mrs. Hendrix failed to state a claim for penalties.

See

Bannistor v. Ullman, 287 F.3d 394, 407 (5th Cir. 2002).
With respect to Prudential, to the extent Mrs. Hendrix attempts to state
a claim that Prudential violated 29 C.F.R. § 2560.503-1(h)(2)(iii), she does not
plead that Prudential failed to provide her copies of the administrative record
from which Prudential based its decision to deny benefits. Prudential is not
under a duty to provide the records of employment she seeks. Mrs. Hendrix’s
conclusory alter-ego argument also fails.
Finally, Mrs. Hendrix’s claim that she is entitled to equitable relief
under 29 U.S.C. § 1132(a)(3) for the failure to produce documents also fails.

The district court dismissed all claims against Wal-Mart and the Wal-Mart Plan for
failure to state a claim. We review a district court’s dismissal for failure to state a claim de
novo, accepting all well-pleaded facts as true and viewing those facts in the light most
favorable to the plaintiff. Shakeri v. ADT Sec. Servs., Inc., 816 F.3d 283, 290 (5th Cir. 2016)
(quoting Hines v. Alldredge, 783 F.3d 197, 200–01 (5th Cir. 2015)). Dismissal is appropriate
when a plaintiff fails to allege enough facts to state a claim that is plausible on its face. Id.
A summary judgment is also reviewed de novo. Guilbeau v. Hess Corp., 854 F.3d 310, 311
(5th Cir. 2017).
1

3

Case: 16-20750

Document: 00514043044

Page: 4

Date Filed: 06/21/2017

No. 16-20750
Equitable relief is normally unavailable under ERISA “where Congress
elsewhere provided adequate relief for a beneficiary’s injury.” Vanity Corp. v.
Howe, 516 U.S. 489, 515 (1996).

Here, Congress provided a statutory

framework for the production of documents that includes a provision for
penalties if the administrator fails to comply. 29 U.S.C. § 1132(c)(1); see also
Tolson v. Avondale Indus., Inc., 141 F.3d 604, 610 (5th Cir. 1998) (“Because
Tolson has adequate relief available for [a different subsection of 29 U.S.C. §
1132], relief through the application of section 1132(a)(3) would be
inappropriate.”). Mrs. Hendrix is thus not entitled to equitable relief on her
failure to produce documents claim.
Denial of Benefits. Mrs. Hendrix also contends that Prudential abused
its discretion in denying Mrs. Hendrix’s claim to life insurance benefits. If an
ERISA plan grants discretionary authority to determine benefits payouts, the
denial of benefits is reviewed for an abuse of discretion. Holland v. Int’l Paper
Co. Ret. Plan, 576 F.3d 240, 246 (5th Cir. 2009). “A decision is arbitrary if it is
‘made without a rational connection between the known facts and the
decision.’” Anderson v. Cytec Indus., Inc., 619 F.3d 505, 512 (5th Cir. 2009)
(quoting Meditrust Fin. Servs. Corp. v. Sterling Chems., Inc., 168 F.3d 211, 215
(5th Cir. 1999)). Here, the Wal-Mart Plan granted Prudential total authority
to determine the payout of life insurance benefits. Mr. Hendrix passed away
outside of the thirty-one days after his last day of work, and he did not convert
his associate term life insurance policy into an individual life insurance policy
in the time allowed under the Wal-Mart Plan.

Therefore, Prudential’s

determination that Mrs. Hendrix was not entitled to Mr. Hendrix’s life
insurance benefits was neither arbitrary nor capricious.
Mrs. Hendrix nonetheless argues that Mr. Hendrix was still within a
conversion period when he died. Under the Wal-Mart Plan, both basic and
optional associate term life coverage ends when an employee no longer works
4

Case: 16-20750

Document: 00514043044

Page: 5

Date Filed: 06/21/2017

No. 16-20750
at Wal-Mart. At that point in time, the Wal-Mart Plan allows an employee to
convert their associate term life insurance benefits into an individual life
insurance contract. In order to enact the conversion, a former employee:
must apply for the individual contract and pay the first
premium by the later of:
(1) the thirty-first day after you cease to be insured for
the Associate Term Life Insurance; and
(2) the fifteenth day after you have been given written
notice of the conversion privilege. But, in no event
may you convert the insurance to an individual
contract if you do not apply for the contract and pay
the first premium prior to the ninety-second day after
you cease to be insured for the Associate Term Life
Insurance.
Aside from this conversion privilege, the Wal-Mart Plan allows a death
benefit to be paid if a covered person dies both “(1) within 31 days after you
cease to be a Covered Person; and (2) while entitled under [the section quoted
above] to convert your Associate Term Life Insurance under this Coverage to
an individual contract.” The language in the policy that states that a death
benefit “is payable even if you did not apply for conversion” applies to the
section defining whether an individual can received a death benefit during the
conversion period.

Mr. Hendrix did not qualify for this benefit because he

passed away later than thirty-one days after he ceased to be a “Covered
Person.”
Similarly, the policy language providing a repose period of ninety-two
days to convert an associate term life insurance policy did not apply to Mr.
Hendrix. That language applies only in the event that Prudential did not send
written notice of Mr. Hendrix’s conversion privilege.

Here, Prudential

presented evidence that it provided written notice of Mr. Hendrix’s right to
convert on July 23, 2012, twelve days after he ceased to be insured for the
5

Case: 16-20750

Document: 00514043044

Page: 6

Date Filed: 06/21/2017

No. 16-20750
associate term life insurance. 2 This evidence supports Prudential’s findings
of fact both that it gave notice of conversion and that Mr. Hendrix failed to
respond within the requisite time period. Thus, the ninety-two-day repose
period of the policy never came into play.

Mrs. Hendrix’s other arguments

regarding the denial of benefits are without merit.
AFFIRMED.

Mrs. Hendrix cites no authority for the proposition that a notice of conversion
(required only by the policy and not by ERISA) had to be sent by a means other than regular
mail. Nor is the fact that Mr. Hendrix died at a location other than the place where the notice
was sent conclusive evidence that the notice address was not his actual address.
2

6