14-1496-cv
Sanford v. TIAA-CREF Indiv. & Inst. Servs., LLC
 
                                 UNITED STATES COURT OF APPEALS
                                     FOR THE SECOND CIRCUIT

                                                  SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.

      At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 27th day of April, two thousand fifteen.

PRESENT: JOHN M. WALKER, JR.,
                 REENA RAGGI,
                 CHRISTOPHER F. DRONEY,
                                 Circuit Judges.
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WILLIAM F. SANFORD, individually and as Executor of
the Estate of Gerlinde U. Sanford,
                                 Plaintiff-Appellant,
                 v.                                                          No. 14-1496-cv

TIAA-CREF            INDIVIDUAL             &       INSTITUTIONAL
SERVICES, LLC, GERD SCHNEIDER, GEORGIA
SCHNEIDER,
                                 Defendants-Appellees.
----------------------------------------------------------------------
APPEARING FOR APPELLANT:                          ROBIN L. ROBERTS, Roberts & Associates,
                                                  Hattiesburg, Mississippi.

APPEARING FOR APPELLEES:                              W. BRADLEY HUNT, Mackenzie Hughes
                                                      LLP, Syracuse, New York, for TIAA-CREF
                                                      Individual & Institutional Services, LLC.

                                                      SUZANNE O. GALBATO (Kate I. Reid, on the
                                                      brief), Bond, Schoeneck & King, PLLC,

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                                          Syracuse, New York, for Gerd Schneider and
                                          Georgia Schneider.

       Appeal from a judgment of the United States District Court for the Northern District

of New York (Mae A. D’Agostino, Judge).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment entered on March 31, 2014, is AFFIRMED.

       Plaintiff William F. Sanford (“Sanford”) appeals from (1) an award of summary

judgment in favor of defendant TIAA-CREF Individual & Institutional Services, LLC

(“TIAA-CREF”) on Sanford’s ERISA claims for benefits under his deceased wife’s

(“Gerlinde Sanford”) retirement and annuity plans, see 29 U.S.C. § 1132(a)(1)(B), and (2)

the subsequent dismissal of his state-law claims against defendants Gerd and Georgia

Schneider, see 28 U.S.C. § 1367(c)(3).       Sanford contends that the district court (1)

erroneously reviewed TIAA-CREF’s denial of benefits for arbitrariness and capriciousness

rather than de novo, (2) abused its discretion by refusing to consider evidence outside the

administrative record, and (3) erroneously held that TIAA-CREF permissibly denied his

claim for benefits. Sanford further argues that if his ERISA claims are reinstated, then his

state-law claims should be reinstated as well, but he concedes that if the award of summary

judgment is affirmed then the state-law claims were properly dismissed. We assume the

parties’ familiarity with the facts and the record of prior proceedings, which we reference

only as necessary to explain our decision to affirm.

1.     Standard of Review

       A district court reviews a denial of a benefits claim de novo “unless the benefit plan

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gives the administrator or fiduciary discretionary authority to determine eligibility for

benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489

U.S. 101, 115 (1989); accord Thurber v. Aetna Life Ins. Co., 712 F.3d 654, 658 (2d Cir.

2013). To qualify, a plan’s grant of discretionary authority must be unambiguous. See

Kosakow v. New Rochelle Radiology Assocs., P.C., 274 F.3d 706, 739 (2d Cir. 2001).

       For the reasons set forth below, we conclude that summary judgment in

TIAA-CREF’s favor would be appropriate even under de novo review. We therefore

need not decide whether the district court erred by not applying de novo review in the first

instance or whether the plans at issue unambiguously grant discretionary authority to

TIAA-CREF.

2.     Refusal To Consider Evidence Outside the Administrative Record

       We review for abuse of discretion a district court’s decision to consider evidence

outside the administrative record on de novo review. See Muller v. First Unum Life Ins.

Co., 341 F.3d 119, 125 (2d Cir. 2003).

       A district court reviewing a denial of benefits de novo may consider evidence

outside the administrative record if it finds “good cause” to do so. Id. (internal quotation

marks omitted). Here, the district court held that Sanford had failed to establish good

cause because he “never submitted the records [at issue] to TIAA–CREF, despite having

possession of them and despite having several months to submit the information prior to

TIAA–CREF’s decision to pay the sibling beneficiaries.” Sanford v. TIAA-CREF Indiv.

& Inst. Servs., LLC, No. 12 Civ. 1254 (MAD), 2014 WL 1311827, at *9 (N.D.N.Y. Mar.


                                             3
31, 2014); see also Muller v. First Unum Life Ins. Co., 341 F.3d at 125–26 (identifying no

good cause where plaintiff had “ample time to submit additional materials” into

administrative record and failed to do so).

       Sanford argues this failure should be excused because there is no evidence that

TIAA-CREF informed his then-attorney of the need to submit documents into the

administrative record. We note that Sanford did not make this argument in his motion to

expand the record. See Pl.’s Mot. Expand R., Sanford v. TIAA-CREF Indiv. & Inst.

Servs., LLC, No. 12 Civ. 1254 (MAD) (N.D.N.Y. May 14, 2013), Doc. No. 108. Rather,

he first raised it in his cross-motion for summary judgment as part of his argument that

TIAA-CREF had acted arbitrarily and capriciously by not following proper procedures.

See Pl.’s Mem. Supp. Summ. J. at 11–14, Sanford v. TIAA-CREF Indiv. & Inst. Servs.,

LLC, No. 12 Civ. 1254 (MAD) (N.D.N.Y. Oct. 22, 2013), Doc. No. 122. In any event,

even assuming TIAA-CREF was required to inform Sanford’s attorney of the need to

submit documents, Sanford bears the burden of demonstrating good cause, see DeFelice v.

Am. Int’l Life Assur. Co. of N.Y., 112 F.3d 61, 67 (2d Cir. 1997), which burden he cannot

meet merely by pointing to a lack of evidence that TIAA-CREF satisfied that requirement.

Absent some affirmative evidence of a failure to notify—for example, an affidavit from

Sanford’s former attorney—the district court did not abuse its discretion by identifying no

good cause and refusing to consider evidence outside the administrative record.




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3.     Affirming Denial of the Claim

       Sanford argues that TIAA-CREF’s denial of his claim was erroneous for three

reasons.

       First, Sanford argues that TIAA-CREF should not have accepted the

change-of-beneficiaries form reducing his percentage of benefits because Gerlinde

Sanford lacked mental capacity at the time she signed the power-of-attorney authorizing

the change of beneficiaries. This argument lacks factual support in the administrative

record. Under New York law, which both parties agree governs the agency relationships

at issue in this case, a third party may rely on a power-of-attorney unless it has “actual

knowledge that the principal lacked capacity to execute” the power-of-attorney. N.Y.

Gen. Oblig. Law § 5-1504(3). The only evidence in the administrative record relating to

Gerlinde Sanford’s alleged incapacity was a second-hand statement by Sanford’s attorney

that, according to a nurse’s note, Gerlinde Sanford “had difficulty moving her arm” and

“had . . . been confused” before she signed the power-of-attorney. J.A. 653; see also J.A.

405.   That statement is insufficient by itself to demonstrate TIAA-CREF’s “actual

knowledge” of Gerlinde Sanford’s incapacity at the time she executed the

power-of-attorney.    Moreover, although Sanford faults TIAA-CREF’s failure to

investigate further, the record shows that TIAA-CREF waited over a month after hearing

of the nurse’s note to allow Sanford to submit documentary support and denied the claim

only after none was submitted.         See J.A. 567, 569.     Accordingly, TIAA-CREF

permissibly relied on the power-of-attorney.


                                               5
       Second, Sanford argues that the plans at issue require a participant personally to

execute any change of beneficiaries and therefore implicitly forbid use of attorneys-in-fact

or other agents. Sanford is correct that the plans state that “Participant[s]” may designate

beneficiaries and do not mention agents. J.A. 45, 101. This does not, however, support a

conclusion that agent use is proscribed. In ERISA cases involving claims under 29 U.S.C.

§ 1132(a)(1)(b), we interpret plans according to “federal common law,” which “is largely

informed by state law principles . . . [and] familiar rules of contract interpretation.”

Lifson v. INA Life Ins. Co. of N.Y., 333 F.3d 349, 352–53 (2d Cir. 2003). Under those

principles, a properly authorized agent may act on a principal’s behalf to change

beneficiaries absent some explicit limitation in the plan. See Restatement (Third) of

Agency § 6.01 cmt. b (2006) (“An agent has power to make contracts on behalf of the

agent’s principal when the agent acts with actual or apparent authority.”); see also N.Y.

Gen. Oblig. Law § 5-1502L(2) (stating that attorney-in-fact may “change the designation

of beneficiaries in effect for any . . . retirement benefit or plan” if so authorized by a

“statutory gifts rider”); N.Y. Gen. Oblig. Law § 5-1514(3)(c)(7) (stating that principal may

authorize agent to change “beneficiary or beneficiaries of any type of retirement benefit or

plan”); J.A. 435 (statutory gifts rider signed by Gerlinde Sanford specifically authorizing

agents to change beneficiaries for TIAA-CREF account).

       Metropolitan Life Insurance Co. v. Sullivan, 96 F.3d 18 (2d Cir. 1996), is not to the

contrary. That case held that a statutory requirement, contained in a statute not applicable

here, that beneficiaries be “designated by the employee in a signed and witnessed writing”


                                             6
forbade the use of agents to change beneficiaries and preempted state contract law allowing

the use of agents. Id. at 19–20. Here, however, there is no similar restriction on how

participants may designate beneficiaries. While in Metropolitan Life Insurance Co.,

employees had to make their designations by means of “a signed and witnessed writing,”

the plans in this case are agnostic as to the method of designation used and, therefore,

cannot be read implicitly to forbid common (and, in New York, statutorily authorized)

means such as designation through an agent. Accordingly, TIAA-CREF permissibly

allowed the change in beneficiaries by means of a power-of-attorney.1

       Third, Sanford argues that the change of beneficiaries was invalid because, although

the power-of-attorney required the two attorneys-in-fact to act jointly, only one attorney

initialed a modification to the percentage of benefits for the new beneficiaries on the

change-of-beneficiaries form. We need not address how this joint-action requirement

applied to every document modification. The alleged omission here pertains only to the

relative percentages of benefits given to the new beneficiaries, whereas the only change

that affects Sanford—the reduction of his percentage of benefits from 100% to 50%—was

signed by both attorneys-in-fact and was unaffected by the modification. See J.A. 361–

363. Accordingly, the modification initialed by only one attorney-in-fact offers Sanford

no support.



1
  In light of our conclusion that the change of beneficiaries complied with the terms of the
plans, we need not address whether “substantial compliance” would have been sufficient.
See Metropolitan Life Ins. Co. v. Johnson, 297 F.3d 558, 567 (7th Cir. 2002); Phoenix
Mut. Life Ins. Co. v. Adams, 30 F.3d 554, 564–65 (4th Cir. 1994).

                                             7
      Sanford also argues that TIAA-CREF committed a number of procedural errors that

deprived him of the opportunity to submit additional evidence to TIAA and to challenge

the change of beneficiary. See Appellant’s Br. 29–35. Sanford was aware of the change

in beneficiary since at least June 2010, however, and he and his attorney were in

discussions with TIAA-CREF about the designation since at least August 2010.

TIAA-CREF gave Sanford over a month to challenge the designation and to submit

documentary support, which he did not do. Sanford’s claim that he was deprived of the

opportunity to challenge TIAA-CREF’s decisions is therefore meritless.        Because

TIAA-CREF’s alleged procedural deficiencies were at worst harmless error, we need not

address the merits of Sanford’s procedural arguments.

      We have considered plaintiff’s remaining arguments and conclude that they are

without merit. We therefore AFFIRM the judgment of the district court.

                                 FOR THE COURT:
                                 CATHERINE O’HAGAN WOLFE, Clerk of Court




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