           Case: 12-11537   Date Filed: 11/06/2012   Page: 1 of 15

                                                          [DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                      ________________________

                             No. 12-11537
                         Non-Argument Calendar
                       ________________________

                D.C. Docket No. 8:10-cv-02436-SDM-MAP

FLORIDA HEALTH SCIENCES CENTER, INC., etc.,

                                                      Plaintiff,

KRISTY SCHWADE,

                                                      Plaintiff-Appellant,

                                  versus

TOTAL PLASTICS, INC.,

                                                      Defendant-Appellee.

                       ________________________

                Appeal from the United States District Court
                    for the Middle District of Florida
                      ________________________

                            (November 6, 2012)

Before HULL, MARTIN and COX, Circuit Judges.

PER CURIAM:
              Case: 12-11537     Date Filed: 11/06/2012   Page: 2 of 15

      Kristy Schwade sued Total Plastics, Inc., the Plan Administrator of a self-

funded Employee Retirement Income Security Act healthcare plan, seeking benefits

under the Plan. The Plan Administrator had withheld payments to Schwade because

she failed to execute a subrogation agreement and provide additional information

despite the Plan’s requirement that she do so. The district court granted summary

judgment to Total Plastics because the court found that the Plan Administrator had

correctly denied Schwade benefits and that Schwade had failed to exhaust her

administrative remedies. Schwade now appeals. Because we conclude that Schwade

did not exhaust her administrative remedies, we affirm.

                                          I.

      Kristy Schwade’s son, K.S., began exhibiting symptoms of a condition known

as “shaken baby syndrome” in May of 2007, when he was five months old. An

investigation traced his condition to the actions of a daycare provider, who later pled

guilty to aggravated child abuse. In the hands of the daycare provider, K.S. had

incurred catastrophic and permanent brain damage. He spent two months in Tampa

General Hospital and thereafter required continuous medical treatment. K.S. died in

January of 2011 at the age of four.

      When K.S. was injured, Schwade was a participant in an Employee Retirement

Insurance Security Act (ERISA) medical-benefits plan made available and funded by

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her then-employer, Total Plastics, Inc. K.S. was a beneficiary of the Plan. This

litigation arose out of the denial of medical benefits to which Schwade claims herself

entitled under the terms of the Plan.

      This appeal concerns two provisions of the Plan, as provided in the Plan

Summary: the subrogation right and the administrative appeal procedure.

      First, the Summary establishes a subrogation right: the Plan’s right to recover

from a participant who received benefits “[a]ny amount” that the participant “is

entitled to receive” from other sources due to an injury or other medical condition.

(R. 1-20, Ex. 5 at 60.) The Summary also stipulates that, “if requested,” a participant

must “execute documents . . . and deliver instruments and papers and do whatever

else is necessary to protect the Plan’s rights.” (Id.) The Summary makes clear that

the Plan Administrator “has no obligation” to pay medical benefits if the participant

“does not sign or refuses to sign” these documents. (Id.)

      Second, the Summary establishes an administrative appeal procedure that a

participant must follow before he or she may take outside legal action against the

Plan. The Summary first states that the Plan Administrator will notify a claimant of

any “adverse benefit determination”—which the Summary defines as any “denial,

reduction or termination of a benefit, or a failure to provide or make payment, in

whole or in part, for a benefit”—by a “claim denial notice, usually referred to as an

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Explanation of Benefits (EOB) form.” (Id. at 70.) This Explanation of Benefits form

will include specific reasons for the denial and cite the corresponding plan provisions,

tell the claimant how to correct the error (by, for example, providing more

information), and tell the claimant how to challenge the determination. (Id.) The

Summary then outlines a mandatory appeal procedure for an adverse benefit

determination.1 In pertinent part, this procedure requires the claimant to file an

appeal within 180 days of the date he or she receives an Explanation of Benefits form.

(Id.)

        For around two months following K.S.’s injury, the Plan paid his medical

expenses. On June 28, 2007, however, the Plan Administrator sent Schwade a letter

telling her that it could not process her claim for benefits unless she filled out and

signed a questionnaire about K.S.’s injury and signed a subrogation agreement. (R.

1-20, Ex. 6.) The questionnaire directed her to “return it immediately.” (Id.) The

subrogation agreement warned her, in all capital letters, that her “failure or refusal”

to execute the agreement would “relieve[] the plan of any and all . . . obligation” to

pay her benefits. (Id.) Schwade did not respond to this letter.


        1
          The appeal procedure has two levels, the first mandatory and the second voluntary. (R. 1-
20, Ex. 5, at 70–71.) The Covered Person “must exhaust” the mandatory first level “before any
outside action is taken.” (Id. at 70.) The summary stipulates, however, that the plan will “not assert
a failure to exhaust administrative remedies if a Covered Person elects to pursue a claim in court
before following this voluntary appeal process.” (Id. at 72.)


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       Between August 7 and November 30, 2007, the Plan Administrator sent

Schwade fifty-four Explanation of Benefits forms, according to the summary

judgment record.2 Each form listed an “Amount Billed,” an “Amount Not Payable,”

a reason for the nonpayment, and an amount “Provider May Bill You.” (See, e.g., R.

1-20, Ex. 9.) Every form also came attached to a form letter providing a phone

number and a website for questions about the Explanation of Benefits form and

explaining how to file an appeal of the claim decision referenced in the form. (See,

e.g., id.) In five of these forms, the listed amounts were not payable because

“[c]harges incurred after the date coverage ends are not covered.” (R. 1-20, Exs. 7,

12.) In one form, no amounts were payable due to a “[p]rovider negotiated reduction”

and because charges were “applied toward the hospital deductible/copayment.” (R.

1-20, Ex. 11.) In the other forty-eight forms, the listed amounts at issue in this appeal

were not payable for the following reason: “We need updated accident information

to process your claim.” (R. 1-20, Exs. 9, 12.) The forms then provided a phone




       2
          The Plan Administrator had previously sent Explanation of Benefits forms to Schwade on
June 19 and June 26, 2007. The June 19 form told Schwade that the Plan had paid ninety percent
of K.S.’s medical expenses. (R. 1-20, Ex. 11.) The June 26 form told her that the accrued expenses
during that period had either been reduced as a “[p]rovider negotiated reduction” or were copayments
that Schwade had made. (Id.)


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number and website Schwade could use to contact the Plan Administrator.3 Schwade

did not respond to any of these letters or forms.

       On June 5, 2008, Schwade’s attorney sent the Plan Administrator a letter

seeking information about Schwade’s benefits claim.                   (R. 1-3, Ex. 3.)        The

Administrator responded on June 18 that Schwade needed to sign the subrogation

agreement before a determination could issue and again warned that Schwade’s

failure to sign the agreement voided any obligations the Plan may have had. (Id. Ex.

4.) On July 1, 2008, the Administrator sent another letter to Schwade’s attorney

stating that, “[a]t this time[,] no additional charges will be considered until the

Subrogation Agreement is received.” (Id. Ex. 5.) Schwade’s attorney protested this

statement in a July 28 letter, complaining that the Administrator ignored Schwade’s

claim for the “sole reason” that she did not “sign[] a boiler plate subrogation

agreement,” the language of which was “totally unacceptable.” (Id. Ex. 6.) He

refused, on Schwade’s behalf, to sign the agreement.

       Schwade’s attorney then tried to cut a deal with the Plan Administrator. In a

November 4, 2008 letter, he wrote that the subrogation right “prohibit[ed] any civil

action on [K.S.’s] behalf” by requiring the plan’s reimbursement for recovery from


       3
         Many of the forms denying benefits due to the need for “updated accident information” also
denied certain other amounts as “[p]rovider negotiated reduction[s].”


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a third party “first and in full, regardless of the costs and attorney fees expended to

make such a recovery possible.” (Id. Ex. 7 at 1.) On that reasoning, he proposed that

K.S. and the Plan instead split any recovery from a civil action equally “after payment

of the costs and attorney fees.” (Id.) The Plan Administrator apparently ignored this

letter, because Schwade’s attorney again proposed the deal on March 12, 2009. (Id.

Ex. 8.) The second proposal seems to have also been ignored. On December 14,

2009, Schwade’s attorney wrote that he “f[ou]nd it hard to believe” the subrogation

agreement’s language was “valid under ERISA” or that the Administrator could

require Schwade’s signature before the plan would issue benefits. (Id. Ex. 9.) The

Plan Administrator issued no response.

       Tampa General Hospital sued Schwade in March of 2010 for more than

$600,000 in medical expenses. Schwade removed the case and filed a third-party

complaint against Total Plastics,4 challenging the plan’s denial of benefits under 29

U.S.C. § 1132(a)(1)(B)5 and claiming nearly $1.5 million.

       Total Plastics moved for summary judgment, arguing that Schwade’s failure

to provide the requested information entitled the plan to deny her benefits and that,

at any rate, Schwade failed to exhaust administrative remedies the Plan required. The
       4
           The district court remanded Tampa General’s action but retained the third-party action.
       5
          Section 1132(a)(1)(B) allows an ERISA plan participant to bring a civil action “to recover
benefits due to 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.”

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district court agreed with Total Plastics on both grounds and granted summary

judgment. Schwade moved the court to reconsider under Fed. R. Civ. P. 59(e). The

court denied her motion. Schwade then timely appealed the district court’s grant of

summary judgment.

                                              II.

       First, Schwade challenges the district court’s determination that the Plan

Administrator’s denials of benefits were correct.6 Second, she challenges the district

court’s findings that she failed to exhaust her administrative remedies and that the

exhaustion requirement was not excused.

       As we explain below, we conclude that Schwade failed to exhaust her

administrative remedies and that the district court did not err in refusing to excuse her

failure to exhaust. Accordingly, we do not address Schwade’s other arguments.

                                              III.

       We have long maintained that participants in an ERISA plan to whom benefits

have been denied must exhaust their administrative remedies before challenging the

denial in court. See Variety Children’s Hosp., Inc. v. Century Med. Health Plan, Inc.,

57 F.3d 1040, 1042 (11th Cir. 1995). If a plan participant fails to exhaust these


6
  Schwade also argues that the district court erred by refusing to apply equitable principles to
prospectively limit the Plan’s anticipated reimbursement for any recovery Schwade might obtain
from third parties.

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administrative remedies, the district court may grant summary judgment in favor of

the Plan. See, e.g., Merritt v. Confederation Life Ins. Co., 881 F.2d 1034, 1035 (11th

Cir. 1989). The district court may, however, exercise its discretion not to require

exhaustion when “resort to administrative remedies would be futile or the remedy

inadequate,” Perrino v. S. Bell Tel. & Tel. Co., 209 F.3d 1309, 1315 (11th Cir. 2000)

(quoting Counts v. Am. Gen. Life & Accident Ins. Co., 111 F.3d 105, 108 (11th Cir.

1997)) (internal quotation mark omitted), or “where a claimant is denied ‘meaningful

access’ to the administrative scheme in place,” id. (quoting Curry v. Contract

Fabricators, Inc. Profit Sharing Plan, 891 F.2d 842, 846–47 (11th Cir. 1990)).

      Here, the district court determined that Schwade failed to exhaust her

administrative remedies. It found that Schwade never appealed because the letters

from Schwade’s attorney did not constitute appeals and that Schwade did not appeal

any Explanation of Benefits form within 180 days from its receipt, the window

allowed for appeals of determinations. The court further determined that an appeal

was not excused due to either the futility of appealing or the Plan’s “technical

defects” in noticing Schwade of the denial of benefits. (R. 2-31 at 21–22.)

      There are thus two standards of review at play in this appeal. On one hand, we

review de novo a district court’s grant of summary judgment based on a determination

that a plan participant failed to exhaust administrative remedies. Counts, 111 F.3d

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at 108. Summary judgment is appropriate when “there is no genuine issue as to any

material fact” and “the moving party is entitled to a judgment as a matter of law.”

Fed. R. Civ. P. 56(c); accord HCA Health Servs. of Ga., Inc. v. Emp’rs Health Ins.

Co., 240 F.3d 982, 991 (11th Cir. 2001). On the other hand, we review the district

court’s decision to excuse or not to excuse the exhaustion requirement for a clear

abuse of discretion. Perrino, 209 F.3d at 1315; Springer v. Wal-Mart Assocs.’ Grp.

Health Plan, 908 F.2d 897, 899 (11th Cir. 1990).

                                         A.

      Schwade contends that the district court erred in finding that she never

appealed. She claims that she in fact appealed through “her counsel’s written

expressions of disagreement with the denial of benefits,” which “amounted to . . .

administrative appeal[s] sufficient to satisfy the exhaustion requirement.” (Appellant

Br. at 23.) At the very least, she submits, whether these letters amounted to appeals

of an adverse benefits determination presents a material dispute of fact that should

preclude summary judgment. (Id.)

      These arguments miss the point. The Plan Administrator sent Schwade a letter

on June 28, 2007, warning her that she needed to provide more information. It then

sent Schwade fifty-four Explanation of Benefits forms and form letters between

August and November of 2007 refusing benefits payments and explaining the appeals

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process. The Plan Administrator heard nothing from Schwade until her attorney sent

the plan a letter on June 5, 2008, after the windows to appeal these letters closed.7

Even if this letter could be construed as an appeal, Schwade’s attorney submitted it

too late.

       Schwade, seemingly anticipating this response, argues that the 180-day window

had not closed when her attorney submitted the June 5 letter or, at least, that a

genuine issue of material fact exists regarding when the time to appeal began to run.

She bases this assertion on her suggestion that “[t]he trier-of-fact could find that

ambiguities in correspondence from the Plan—which seemed to hold out the

possibility of payment of Mrs. Schwade’s claim after providing additional ‘accident

information’—create a fact question as to when the 180 day period started to run.”

(Id. at 25.)

       She fails, however, to indicate exactly what these ambiguities were. We agree

with the district court’s determination that the Plan Administrator provided her

unambiguous notice, under the Plan’s language, that it denied her claims:

       [E]ach explanation of benefits states “YOUR IMMEDIATE RESPONSE
       IS REQUIRED” (caps in original) and provides in several places

       7
           We assume that the June 5, 2008 letter was sent more than 180 days after Schwade’s
receipt of the last of the Explanation of Benefits forms, which is dated November 30, 2007. Neither
party states differently, and both appear to assume that, if the Explanation of Benefits forms and
attached letters do start the 180-day window for appeals, Schwade’s attorney did not send the letter
on time.

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      information on contacting the Plan administrator. Each explanation of
      benefits advises how to appeal a claim denial and warns that an appeal
      must occur within one hundred eighty days. In sum, the explanations of
      benefits were ample notification that the Plan had denied claims and that
      an appeal was due within a stated time.

(R. 2-31 at 21.) The plan summary provides that a claimant to whom the plan

administrator denies benefits—in whole or in part—will receive a “claim denial

notice, usually referred to as an Explanation of Benefits (EOB) form,” and the form

will include reasons for the denial, explain how the claimant can correct the error, and

describe the appeal process. (R. 1-20, Ex. 5 at 70.) Schwade received forty-eight

Explanation of Benefits forms pertinent to this case. The forms provided reasons for

the denial (the need for further information), explained how Schwade could correct

the error (by providing that information), and described to her the process for

appealing the denial. We find no ambiguity in the forms Schwade received. Thus,

we reject Schwade’s argument that her attorney’s letter on June 5, 2008 was timely.

                                          B.

      Next, Schwade contends that the district court erred in determining that she did

not have an excuse allowing her to bring legal action without exhausting her

administrative remedies. She does so on two bases: first, that the Plan Administrator

failed to follow the Plan’s own claims procedures, and second, that an appeal would




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have been futile. As stated above, we review the district court’s refusal to excuse the

exhaustion requirement for an abuse of discretion.

       Schwade’s first basis for excuse is misdirected.8 A Plan Administrator’s failure

to follow designated procedures in providing a claimant notice of a benefits denial

does not excuse exhaustion of administrative remedies but rather requires the district

court to remand to the plan administrator “for an out-of-time administrative appeal.”

Counts, 111 F.3d at 108.            Accordingly, Schwade cannot argue excusal from

exhausting administrative remedies on the basis that the Plan Administrator failed to

fulfill the terms of the plan summary. She has never sought a remand to the Plan

Administrator for an appeal. We therefore consider this argument waived. See id.

(considering a similar argument waived when the appellant never argued for a remand

to the plan administrator but instead consistently argued that an administrative appeal

was excused due to the plan’s alleged deficient notices of a benefits denial).


       8
         Specifically, she alleges that the Plan Administrator did not provide a “specific reason” for
denying her claim, as required in the Plan Summary. (Appellant Br. at 26.) She notes that while the
Explanation of Benefits forms told her the Plan Administrator needed “updated accident
information,” the Administrator actually denied her claim because she did not submit a subrogation
agreement. (Id. at 27.) In any case, she argues that she did not know why the claim was denied and
believes that her confusion “was a result of the violation of the Plan’s substantive requirement to
specify the reason for the denial.” (Id. at 28.) Schwade fails, however, to either support her
accusation that the reason given by the Plan Administrator (the need for more information) was
pretextual or explain why giving a pretextual reason violates the language of the Plan Summary in
a way that would excuse her from submitting an appeal within the required window. Regardless,
she does not seek the remedy this argument would allow her, requiring us to consider her argument
waived.

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          As her second ground for excusal, Schwade argues that the district court erred

by finding that she could not claim that an administrative appeal would have been

futile.

          As a general rule, a district court can, in its discretion, enforce the exhaustion

requirement despite a claimant’s futility argument if the claimant was “not denied

access to an administrative scheme from which [she] could have received an adequate

legal remedy for [her] ERISA claims.” Perrino, 209 F.3d at 1319. Accordingly, we

have found that, if nothing indicates that a plan administrator would have afforded

a claimant less than an adequate legal remedy, a claimant who does not first attempt

to use administrative remedies waives the futility argument. Bickley v. Caremark RX,

Inc., 461 F.3d 1325, 1330 (11th Cir. 2006); see also Lanfear v. Home Depot, Inc., 536

F.3d 1217, 1225 (11th Cir. 2008) (“In Bickley, we rejected an argument of futility as

speculative because the participant had not attempted to pursue administrative

remedies.”).

          Here, the district court determined that “a futility argument is closed to

Schwade because Schwade needed to at least attempt to pursue an administrative

remedy” (R. 2-31 at 21 (citing Lanfear, 536 F.3d at 1225)), and that Schwade

foreclosed the argument anyway by pleading only “bare allegations of futility” rather

than the “‘clear and positive’ showing of futility” our cases have required, (id. at

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21–22 (quoting Bickley, 461 F.3d at 1330)). Thus, the district court exercised its

discretion not to excuse the exhaustion requirement.

                                        IV.

      We conclude that the district court properly found that Schwade failed to

exhaust her administrative remedies and that the district court did not abuse its

discretion in deciding not to excuse her failure to exhaust. We therefore affirm.

      AFFIRMED.




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