Unpublished Disposition, 928 F.2d 409 (9th Cir. 1986)

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U.S. Court of Appeals for the Ninth Circuit - 928 F.2d 409 (9th Cir. 1986)

No. 89-15860.

United States Court of Appeals, Ninth Circuit.

Appeal from the United States District Court for the Northern District of California, No. CV-87-3835-SC; Samuel Conti, District Judge, Presiding.

N.D. Cal.

Before WIGGINS, and LEAVY, Circuit Judges, and STEPHENS* , District Judge.


The appellant, Claude Spivey (Spivey), brought this action for recovery of benefits under a life insurance policy pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1132(a) (West 1988).1  Spivey appeals the district court's decision made after a court trial that Judy Spivey, his deceased wife, was not a bank officer and that therefore, he was entitled to only $10,000 instead of $132,000 in life insurance. He also appeals the court's decision that no fiduciary duties were breached. We affirm.


The three insurer defendants contend they are not proper parties to this lawsuit. They also argue that the claim for a breach of fiduciary duty against them should have been dismissed because it does not seek the type of remedy authorized under ERISA. Except where the appellant alleges that there was a failure to name a fiduciary, we need not reach these contentions. On the merits, we find that Judy Spivey was not entitled to officer's life insurance benefits. We have exhaustively examined the record for evidence that she was an officer. We find none.2 

Adequacy of the Summary Plan Description

Spivey argues that the plan summary was inadequate in that it was misleading with regard to the circumstances under which benefits could be lost. He claims he may therefore recover for breaches of contract and fiduciary duty.

ERISA requires that a plan summary explain the "circumstances which may result in disqualification, ineligibility, or denial or loss of benefits," 29 U.S.C. § 1022(b), "in a manner that is calculated to be understood by the average plan participant." 29 U.S.C. § 1022(a) (1).3 

Spivey claims there is an ambiguity on page 1 of the plan summary, where the Schedule of Benefits states that "changes in amounts of benefits will be made immediately on the date a change in classification becomes effective," but then on page 4, under "Eligibility" states: "If you are not actively at work on the date the amount of your insurance would otherwise be increased, such increase is not effective until the next following day on which you are actively at work." He contends these two provisions are contradictory and violate the regulation on the general format of plan summaries that says, in pertinent part:

The description or summary of restrictive plan provisions need not be disclosed in the summary plan description in close conjunction with the description or summary of benefits, provided that adjacent to the benefit description the page on which the restrictions are described is noted.

29 C.F.R. Sec. 2520.102-3(b) (1989).

We disagree that the plan summary is ambiguous. The eligibility requirement on page 4 clearly qualifies what is meant on page 1 by an "effective" change in classification, by requiring that the employee be "actively at work" for the change to be effective. Moreover, the summary is only five pages long. The eligibility restriction on page 4 is already in close enough conjunction with the Schedule of Benefits on page 1 to not require any cross-reference to the "active day at work" requirement. This booklet is not like a longer summary where the need for cross-references is obvious. Cf. Stahl v. Tony's Bldg. Materials, Inc., 875 F.2d 1404, 1409 (9th Cir. 1989) (plan summary exceeded fifty pages). An average plan participant would understand that the requirements for eligibility logically take precedence over statements in the Schedule of Benefits page in this short, easily read document. Moreover, the plan summary warns the reader that the master policy controls:

This certificate of insurance is not an Insurance policy and does not amend, extend or alter the coverage afforded by the policy/policies listed herein. Notwithstanding any requirement, term, or condition of any contract or other document with respect to which this certificate of Insurance may be issued or may pertain, the Insurance afforded by the policy/policies described herein is subject to all the terms, exclusions and conditions of such policies.

The master policy clearly excepts from increased benefits an employee who is not actively at work on the date a classification change occurs.

Spivey also contends the plan summary is ambiguous in that it does not define what "actively at work" means. He maintains that since bank policy defines a vacation leave as being "actively at work," Judy Spivey could have taken some vacation time to which she was entitled, thereby qualifying for the increased benefits of an officer. This argument requires that very specific information be included in the plan summary.

We recently analyzed a similar argument. In Stahl v. Tony's Bldg. Materials, Inc., 875 F.2d 1404 (9th Cir. 1989), the appellant argued that the plan summary was inadequate because it did not indicate how to prevent a loss of pension benefits where a collective bargaining agreement had expired. We held that there was no violation of ERISA because all that 29 U.S.C. § 1022(b) requires is that the plan summary contain a description of the "circumstances which may result in disqualification, ineligibility, or denial or loss of benefits." We found the plan summary gave the appellant notice that he might lose pension benefits, and stated: "we cannot rule that ERISA required the summary plan description ... to contain any additional information about what circumstances could result in a loss of benefits." We stated:

To interpret Sec. 1022(b) ... to require summary plan descriptions to discuss the application of general rules to a wide range of particular situations and thereby provide specific advice to employees on how to shape their conduct to fit the rules, would undermine the statute....



* * *

A plan summary description ... cannot violate ERISA merely because it could have included language more specifically discussing the precise situation of a particular beneficiary. The description, instead, should provide information about the general circumstances in which benefits could be lost. The plan's rules should be explained to permit the ordinary employee to recognize that certain events or actions could trigger a loss of benefits. It need not discuss every imaginable situation in which such events or actions might occur, but it must be specific enough to enable the ordinary employee to sense when there is a danger that benefits could be lost or diminished.

Id. at 1408. Finally, we noted that plan summaries must "remain concise so that employees will read them." Id. at 1409.4 

The facts in this case do not require a different result from that in Stahl. No one can claim that the plan summary did not describe eligibility in such a way that an ordinary employee in Judy Spivey's situation would not sense that "danger lurked" in the plan summary's statement that "If you are not actively at work on the date the amount of your insurance would otherwise be increased, such increase is not effective until the next following day on which you are actively at work." See id. at 1408-09.

Moreover, Exchange Bank, the employer, was under no obligation to provide individualized advice to the Spiveys. See id. at 1409-10. As a result, there is no breach of a fiduciary duty.

Spivey also argues that a fiduciary duty was breached because Judy Spivey retroactively could have received officer's benefits by taking either vacation or sick time during her leave of absence to be classified "actively at work." However, under Stahl, there is no duty to present these alternatives to the Spiveys, either in the plan summary or as individualized advice from the employer. Thus there is no breach.

The Failure To Name A Fiduciary

The plan at issue fails to name a fiduciary. 29 U.S.C. § 1102(a) (1) requires that

[e]very employee benefit plan shall be established and maintained pursuant to a written instrument. Such instrument shall provide for one or more named fiduciaries who jointly or severally shall have authority to control and manage the operation and administration of the plan.

(Emphasis added.) We agree that the plan is deficient in this respect. We point out that if no fiduciary is specified in the plan, a fiduciary is to be identified by the employer. 29 U.S.C. § 1102(a) (2); 4 S.M. Young, Pension and Profit-Sharing Plans Sec. 17.03 (1990).

However, the Supreme Court has held that a recovery for breach of fiduciary duty under 29 U.S.C. § 1109(a)5  must inure to the benefit of the plan as a whole. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 140 (1985) (finding that section 1109 does not authorize a fiduciary to be personally liable for extracontractual compensatory or punitive damages caused by improper or untimely processing of benefit claims). The Court observed: " [a] fair contextual reading of the statute makes it abundantly clear that its draftsmen were primarily concerned with the possible misuse of plan assets, and with remedies that would protect the entire plan, rather than with the rights of an individual beneficiary." Id. at 142 (footnote omitted).

We have followed Russell to strictly limit remedies available under ERISA. See Sokol v. Bernstein, 803 F.2d 532, 536, 538 (9th Cir. 1986). We held: "ERISA grants no private right of action by a beneficiary qua beneficiary; rather, it accords beneficiaries the right to sue on behalf of the entire plan if a fiduciary breaches the plan's terms." Id. at 536.

Spivey does not seek to recover for the plan as a whole. Instead, he requests money damages for himself as the beneficiary. Consequently, he is precluded from bringing the claim that the defendants breached a fiduciary duty by failing to name a fiduciary.


Spivey contends the district court erred by not determining whether estoppel applied on the failure to disclose and the misinformation given to the Spiveys. Spivey also contests the district court's failure to apply estoppel on the ground that Judy Spivey was a de facto officer.

Aside from the fact that there were no duties owed to the Spiveys of the kind alleged, we will not apply estoppel to a claim governed by ERISA, following the Supreme Court's refusal to expand ERISA remedies in Massachusetts Mutual Life Ins. Co. v. Russell. See, e.g., Moran v. Aetna Life Ins. Co., 872 F.2d 296, 300 (9th Cir. 1989); Davidian v. Southern Cal. Meat Cutters Union and Food Employees Benefit Fund, 859 F.2d 134, 136-37 (9th Cir. 1988).

Whether Purported Conversations Between Judy Spivey and Agents of Exchange Bank Should Be Excluded As Hearsay

Spivey contends the district court erred in excluding as hearsay statements Judy Spivey allegedly made to him about statements Exchange Bank representatives allegedly made to her, to the effect that she was an officer before April 22, 1986. There are two hearsay statements here: (1) the statements made to Judy Spivey by Exchange Bank; and (2) statements made to Claude Spivey by Judy Spivey.

Hearsay "is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted." Fed.R.Evid. 801(c). Hearsay is inadmissible in a court of law unless it comes under one of the exceptions set forth in Federal Rule of Evidence 803. Henien v. Saudi Arabian Parsons Ltd., 818 F.2d 1508, 1512 (9th Cir. 1987), cert. denied, 484 U.S. 1009 (1988). This court reviews the evidentiary determinations of a trial court, including hearsay determinations, for an abuse of discretion. M.A.P. Oil Co., Inc. v. Texaco, Inc., 691 F.2d 1303, 1310 (9th Cir. 1982); Keogh v. C.I.R., 713 F.2d 496, 499 (9th Cir. 1983).

Hearsay included within hearsay, or "multiple hearsay," such as the proferred testimony here, is not excluded under the hearsay rule if each part of the combined statements conforms with an exception to the hearsay rules. Fed.R.Evid. 805.

Spivey does not elucidate how each statement by itself conforms with an exception to the hearsay rules. He discusses only the statements made by the bank to Judy Spivey. He argues that the bank's purported statements to Judy Spivey are admissions of a party opponent under Rule 801(d) (2) (C) and (D) and are admissible because they are not hearsay. Rule 801(d) (2) (C) and (D) state:

A statement is not hearsay if--



* * *

The statement is offered against a party and is ... a statement by a person authorized by the party to make a statement concerning the subject, or ... a statement by the party's agent or servant concerning a matter within the scope of the agency or employment, made during the existence of the relationship....

This argument cannot apply to the insurer defendants because there is no evidence they authorized the bank to make statements concerning Judy Spivey's status as an officer, and the bank is not the insurer defendants' agent. These statements might, however, be admissible against Exchange Bank. Such admissions generally enjoy broader admissibility because there need be no guarantee of trustworthiness. Fed.Rule of Evid. advisory committee's note, at 263. However, the problem still remains for the appellant to show how Judy Spivey's statement to him concerning the bank's statements are an exception to the hearsay rule.

Spivey asserts that the "statements" are admissible under the residual hearsay rule, Federal Rule of Evidence 804(b) (5), which states in relevant part:

A statement not specifically covered by any of the foregoing exceptions but having equivalent circumstantial guarantees of trustworthiness [is not excluded by the hearsay rule], if the court determines that (A) the statement is offered as evidence of a material fact; (B) the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts; and (C) the general purposes of these rules and the interests of justice will best be served by admission of the statement into evidence.

Judy Spivey's purported statements to her husband regarding her position as an officer have no circumstantial guarantees of trustworthiness. The alleged statements come from unidentified bank representatives and are unverifiable. Such alleged statements are not more probative than the other evidence Spivey presented to show that Judy Spivey was an officer, such as her pay. These statements are offered for the classic purpose of "proving the truth of the matter asserted;" that is, that Judy Spivey was an officer. As such, they are hearsay and are properly excluded.

Because of our disposition of this case, we decline to award attorneys' fees to Spivey. See Sokol, 803 F.2d at 538.



The Honorable Albert Lee Stephens, Jr., Senior United States District Judge for the Central District of California, sitting by designation


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3


29 U.S.C. § 1132(a) provides in pertinent part:

A civil action may be brought--

(1) by a participant or beneficiary ...

(B) to recover benefits due him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.


Judy Spivey became ill and took a leave of absence from the bank on April 21, 1986. The following day, the Board of Directors appointed her to the position of officer at Exchange Bank. Judy Spivey never returned to work at the bank. She died on November 19, 1986. Because she never spent an active day at work as an officer at Exchange Bank as required by the life insurance plan, she was denied the life insurance benefits of an officer


29 U.S.C. § 1022 states in relevant part:

(a) (1) A summary plan description ... shall be written in a manner calculated to be understood by the average plan participant, and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan....

* * *

(b) The plan description and summary plan description shall contain the following information: ... circumstances which may result in disqualification, ineligibility, or denial or loss of benefits....

* * *


In Stahl, we distinguished two cases Spivey relies on, Genter v. Acme Scale & Supply Co., 776 F.2d 1180 (3d Cir. 1985) and Chambless v. Masters, Mates & Pilots Pension Plan, 772 F.2d 1032 (2d Cir. 1985), cert. denied, 475 U.S. 1012 (1986). We observed that Genter was inapposite because the plan summary failed to provide any information about the specific rule sought to be avoided, see 776 F.2d at 1185-86, and so was Chambless because the inadequate notice "not only failed to meet ERISA requirements, but also involved a plan amendment held to be arbitrary and capricious. See 772 F.2d at 1040." Stahl, 875 F.2d at 1409

For the same reasons, we find those cases inapposite here.


29 U.S.C. § 1109(a) states:

Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary.

(Emphasis added.)