Metropolitan Life Insurance v. Atkins , 225 F.3d 510 ( 2000 )

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.
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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
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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.
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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
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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
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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
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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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