Tinoco v. Marine Chartering Co., Inc., 01-31004.

Decision Date31 October 2002
Docket NumberNo. 01-31004.,01-31004.
Citation311 F.3d 617
PartiesAllan TINOCO; Valssilios Voulgarakis, Plaintiffs-Appellees, v. MARINE CHARTERING COMPANY, INC., and as successor in interest to Marine Management and Consultant, Ltd., Defendants-Appellants.
CourtU.S. Court of Appeals — Fifth Circuit

Lloyd N. Frischhertz (argued), Frischhertz & Associates, New Orleans, LA, for Plaintiffs-Appellees.

Jack Edward Morris (argued), Metairie, LA, for Defendant-Appellant.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before DeMOSS, STEWART and DENNIS, Circuit Judges.

DeMOSS, Circuit Judge:

Appellant Marine Chartering Company, Inc. (Marine Chartering) appeals from a final judgment and order dismissing without prejudice the action of Appellees, Allan Tinoco (Tinoco) and Vassilios Voulgarakis (Voulgarakis) (referred to collectively as "Appellees"), based on the district court's finding that it lacked subject matter jurisdiction. Marine Chartering also appeals an order from the district court denying its motion for summary judgment and requests attorney's fees and costs. We AFFIRM the district court's final judgment and order dismissing without prejudice the action of Appellees. We do not reach the issues raised by Marine Chartering concerning the district court's denial of Marine Chartering's motion for summary judgment or its request for attorney's fees and costs.

FACTUAL AND PROCEDURAL BACKGROUND

Marine Chartering was in the business of acting as a shipping agent, broker, and consultant. Marine Management and Consulting (Marine Management) was in the business of ship management. When Marine Management's major clients sold their ships, the company was forced to cease operations and it was liquidated and sold to Marine Chartering effective March 31, 1998.

Before March 31, 1998, Marine Management maintained a Profit Sharing Retirement Plan for the benefit of its employees. The company, however, did not offer or provide any other retirement or severance benefits to its employees. Similarly, Marine Chartering had also maintained a Profit Sharing Retirement Plan for the benefit of its employees.

Previously, on January 1, 1989, Marine Chartering established an Early Retiree Health Care Plan (ERHCP) "to provide temporary health-care benefits to Employees who elect Voluntary Early Retirement from the time of such Voluntary Early Retirement until the date the Employee becomes eligible for Social Security Benefits." Marine Chartering's Early Retiree Health Care Plan was wholly unfunded. The ERHCP was payable entirely out of Marine Chartering's general assets. Furthermore, the ERHCP did not require employee contributions, and provided no benefits beyond age 62. In addition, the ERHCP was expressly subject to amendment, suspension, or termination at any time pursuant to the following provisions contained in the "Summary Plan Description":

Section 12. Amendment, Suspension or Termination of the Plan:

The Board of Directors may amend, suspend or terminate the Plan at any time, in whole or in part. The Board of Directors specifically reserves the right to terminate benefit payments at any time, even if such benefits are in pay status.

The "Summary Plan Description" also provided: "The Personnel Committee shall have sole discretion in determining whether an Employee is eligible to participate in the Plan." "Personnel Committee" is defined by the ERHCP as "the named fiduciary with the discretionary authority to and the responsibility for: (i) construction of the terms of the Plan, and (ii) determination of eligibility for benefits."

At all pertinent times, Appellee Tinoco was Marine Management's Accountant, Treasurer, and Shareholder. Appellee Voulgarakis was Marine Management's Technical Marine Engineer, Vice President, Director and Shareholder. On March 18, 1998, both Appellees attended Marine Management's annual meeting of the Shareholders in New Orleans. At that meeting, Marine Management announced that it would cease operations and be liquidated and sold to Marine Chartering, and that some of its employees would be terminated. Marine Management also announced that Marine Chartering's ERHCP would be adopted and that those employees who had worked for Marine Management for 15 years and who had attained the age of 55 would qualify for the plan. In addition, the company announced that the funds in the Marine Management Profit Sharing Retirement Plan would be rolled over into the Marine Chartering Profit Sharing Retirement Plan.

Also on March 18, 1998, both Appellees attended a meeting of the Board of Directors. There, Tinoco learned that he would become a temporary employee of Marine Chartering until June 30, 1998, or until completion of accounting work arising out of Marine Management's liquidation, at which time his employment would be terminated. Voulgarakis learned he too would become a temporary employee of Marine Chartering until April 30, 1998, at which time his employment would be terminated. The Appellees also learned that Marine Chartering was giving them "special consideration by making the Early Retiree Health Care Plan available to them as a severance benefit upon their anticipated retirement or termination." Tinoco's temporary employment was terminated by Marine Chartering on or about December 31, 1998. Voulgarakis was terminated by Marine Chartering on or about April 30, 1998. However, Marine Chartering retained Voulgarakis as a consultant until July 1998.

On January 27, 2000, Marine Chartering's Board of Directors adopted the following resolution: "RESOLVED, That the Early Retiree Health Care Plan adopted effective January 1, 1989 is hereby withdrawn, canceled and discontinued as of February 1, 2000." Both Appellees were notified by letter that their benefits under the ERHCP had been terminated.

Appellees retained attorney Lloyd N. Frischertz (Frischertz), who sent a letter to Marine Chartering dated February 18, 2000, claiming that Appellees were entitled to continue receiving benefits under the ERHCP even though the Board of Directors had terminated the plan. Marine Chartering responded to Frischertz's letter denying the Appellees' claims in a letter dated March 10, 2000, stating:

In both cases, they were given special consideration by [Marine Chartering] to enjoy the benefits of this plan, even though, technically, they were not eligible. This was done in deference to the fact that they would likely have to be released and it was the Company's desire to provide them with as soft a cushion for landing as possible, for as long as possible. This was accomplished through January 31, 2000 when the [Marine Chartering] Board of Directors finally had to enact its right to terminate the benefit, not only for these two employees to whom this special consideration was given, but to all others who were or would be eligible.

As a result of Marine Chartering's response letter, Appellees filed their Complaint herein alleging in part that "the early retirement benefits were in a pay-status, that the benefits had accrued and [Appellees] had become vested and, as such, under ERISA, Marine Chartering legally could not terminate said benefits." In addition, Appellees claimed "monthly early retirement benefits ... together with prejudgment interest and reasonable attorney's fees." On or about September 26, 2000, Marine Chartering filed an Answer to Appellees' Complaint denying the allegations and praying for judgment denying the relief demanded in the Complaint and requested that reasonable attorney's fees and costs be awarded to Marine Chartering.

On February 26, 2001, Marine Chartering filed a Motion for Summary Judgment on the grounds that the benefits offered to and accepted by Appellees were a non-vested and terminable severance pay arrangement and, therefore, an employee welfare benefit plan within the meaning of ERISA. The district court, however, questioned whether the benefits received by Appellees were actually subject to ERISA, or whether they instead should be viewed simply as two isolated agreements to pay Appellees a fixed amount until their 62nd birthdays. The district court was concerned that in the latter event, it would lack subject matter jurisdiction over the case. As a result, the district court denied Marine Chartering's motion for summary judgment "as premature, without prejudice to be re-urged at a later date if appropriate," and ordered the parties to brief the issue of whether federal subject matter jurisdiction was present in the case.

After reviewing the briefing on the issue, the district court entered a Minute Entry finding that: "To the extent that the continuing nature of the payments in this case might make the issue before it a close call, the Court observes that the litigants, who appear to consent to federal jurisdiction, have simply failed to conclusively establish it." The district court concluded that "it appears the payments to [Appellees] were not made pursuant to an ERISA-governed plan." Therefore, the district court entered Judgment on August 2, 2001, dismissing the Appellees' suit without prejudice. The district court noted in a footnote that it was not ruling on any state law claims such as breach of contract that Appellees may have.

Marine Chartering now appeals the district court's judgment, contending that the district court erred in denying its motion for summary judgment, and that this Court should reverse that ruling and render judgment granting Marine Chartering's motion. Marine Chartering also requests this Court to award it reasonable attorney's fees and costs, an issue which Marine Chartering contends should be remanded to the district court for determination of the amounts to be recovered.

DISCUSSION

This Court's review of subject matter jurisdiction is plenary. Ceres Gulf v. Cooper, 957 F.2d 1199, 1204 (5th Cir.1992). When a district court dismisses an action for lack of subject matter jurisdiction based on the "undisputed...

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