Skretvedt v. E.I. Dupont De Nemours

Decision Date16 June 2004
Docket NumberNo. 02-3620, 02-4283.,02-3620, 02-4283.
Citation372 F.3d 193
PartiesOrrin T. SKRETVEDT, Appellant v. E.I. DUPONT DE NEMOURS, a Delaware corporation; Pension and Retirement Plan; Hospital and Medical-Surgical Plan; Dental Assistance Plan; Noncontributory Group Life Insurance Plan; Contributory Group Life Insurance Plan; Total and Permanent Disability Income Plan; Savings Investment Plan; Tax Reform Act Stock Ownership Plan; Short Term Disability Plan.
CourtU.S. Court of Appeals — Third Circuit

John M. Stull, (Argued), Wilmington, DE, for Appellant.

Raymond M. Ripple, (Argued), Donna L. Goodman, E.I. DuPont de Nemours & Company, Legal Department, Wilmington, DE, for Appellee.

Before ALITO, AMBRO and CHERTOFF, Circuit Judges.

AMBRO, Circuit Judge.

Orrin T. Skretvedt seeks, inter alia, interest on the delayed payment of benefits due him under two plans governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). Skretvedt received benefits from one of those plans pursuant to a court judgment, while his employer voluntarily paid him benefits under the other plan after that judgment was entered. The Magistrate Judge denied Skretvedt's request for interest with respect to the delayed payment of benefits under both plans in light of the Supreme Court's decision in Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002).

Based on Anthuis v. Colt Industries Operating Corp., 971 F.2d 999 (3d Cir.1992), we determine that an award of prejudgment interest on a judgment awarding benefits pursuant to ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), follows the Supreme Court's decisions in Board of Commissioners of Jackson County, Kansas v. United States, 308 U.S. 343, 352, 60 S.Ct. 285, 84 L.Ed. 313 (1939), and Rodgers v. United States, 332 U.S. 371, 373, 68 S.Ct. 5, 92 L.Ed. 3 (1947), providing that where "[t]he issue is uncontrolled by any formal expression of the will of Congress," Board of Commissioners, 308 U.S. at 349, 60 S.Ct. 285, "interest is not recovered according to a rigid theory of compensation for money withheld, but is given in response to considerations of fairness. It is denied when its exaction would be inequitable." Id. at 352, 60 S.Ct. 285. Accordingly, we conclude that Great-West, construing the scope of "appropriate equitable relief" available to a litigant under ERISA § 502(a)(3)(B), 29 U.S.C. § 1132(a)(3)(B), does not apply to a request for prejudgment interest on a judgment awarded pursuant to § 502(a)(1)(B).

With respect to Skretvedt's request for interest on the delayed payment of a second type of benefits that his employer voluntarily paid after much delay, the Magistrate Judge acknowledged that our prior holding in Fotta v. Trustees of the United Mine Workers of America, 165 F.3d 209 (3d Cir.1998) ("Fotta I"), would allow a claimant, under some circumstances, to seek interest on the delayed payment of ERISA benefits as "appropriate equitable relief" under § 502(a)(3)(B). However, the Magistrate Judge concluded that such a claim for "interest" would be one seeking "money damages," which Great-West has termed "the classic form of legal relief," Great-West, 534 U.S. at 210, 122 S.Ct. 708 (emphasis in original; internal quotation marks and citations omitted), that is not available as "appropriate equitable relief" under § 502(a)(3)(B).

While we agree that the Supreme Court has bridled the scope of relief available under § 502(a)(3)(B), we are convinced that, looking more specifically at the Court's requirement that the relief requested under § 502(a)(3)(B) have been "typically available in equity," Skretvedt's pursuit of interest on the wrongful or delayed withholding of his benefits is not a request for money damages, but rather a request for restitution that typically would have been available in equity. We conclude that a constructive trust is the appropriate device for such a request, and that Skretvedt may seek interest on the delayed payment of his ERISA benefits in accordance with the principles discussed in Fotta v. Trustees of United Mine Workers of America, 319 F.3d 612, 617-18 (3d Cir.2003) ("Fotta II").

I. Background
A. Facts1

Skretvedt was employed by E.I. DuPont de Nemours and Company2 from June 28, 1974, until February 7, 1995. In early 1994, Skretvedt was working as a Senior Research Environmental Engineer when he began receiving treatments for work-related anxiety from his family physician. Skretvedt took a leave of absence from his job on November 11, 1994, and did not return to work at DuPont thereafter. DuPont began investigating during this period whether Skretvedt would qualify for disability benefits. For reasons that the parties dispute, DuPont terminated Skretvedt on February 7, 1995.

Skretvedt filed a claim with the Equal Employment Opportunity Commission alleging that DuPont violated the Americans with Disabilities Act by discriminating against him because of his anxiety disorder. The EEOC found no violation based upon the information that Skretvedt submitted, and issued a right-to-sue letter. On September 29, 1995, acting on advice of counsel, Skretvedt signed a "Settlement Agreement and Release of All Claims" with DuPont. We previously noted that this agreement "released all of [Skretvedt's] employment-related claims against DuPont except for his application for disability benefits, which DuPont agreed to review in a `neutral' manner." Skretvedt I, 268 F.3d at 171.

Following the settlement agreement, DuPont's three-member Board of Benefits and Pensions ("Benefits Board") reviewed Skretvedt's application for disability benefits, and determined that he was ineligible because, the Board claimed, he had failed to show that he was "permanently incapable of performing the duties of [his] job with the degree of efficiency required by the Company, at the time of [his] termination." Skretvedt I, 268 F.3d at 172. Skretvedt was also advised that, in order to succeed in appealing the Board's determination, he would have to submit "additional objective evidence that will indicate a total impairment of function," such as "MRI, X-ray reports and complete medical evaluations." Id. Skretvedt contended, and DuPont denied, that he and one of his doctors sent three letters to the Board's designated person for appeals, requesting clarification with respect to the types of "objective medical evidence" he would need to perfect his application on appeal in light of the fact that his claimed disability is psychological. After receiving no response, he claims, he submitted a formal appeal to the Board on May 16, 1997. Nonetheless, no further response was received.

B. Procedural Background

Skretvedt filed an eight count complaint in the United States District Court for the District of Delaware on February 4, 1998.

Count I sought benefits from the "Incapability Retirement" pension program ("incapability benefits"), and alleged that DuPont's Benefits Board failed to inform Skretvedt under ERISA § 503, 29 U.S.C. § 1133, of the reasons for denying him benefits.

Count II claimed medical benefits through a DuPont benefits program known as MEDCAP and reimbursement for expenses incurred as a result of MEDCAP benefits not having been provided as of the date of his termination.

Count III asserted a right to dental benefits through a DuPont benefits program known as DAP and reimbursement for expenses incurred as a result of DAP benefits having been denied.

Count IV alleged that Skretvedt was due a $3,000 payment under a DuPont long-term life insurance plan known as the "Noncontributory Plan" as a result of his becoming disabled. Skretvedt also sought declaratory relief that would deem him eligible for participation in DuPont's "Contributory Plan" life insurance program, and sought life insurance benefits under its Noncontributory Plan.

Count V requested benefits from the "Total and Permanent Disability Income Plan" ("T & P benefits").

Count VI alleged that Skretvedt was eligible to participate in a DuPont tax-deferred savings program known as SIP, and sought damages with respect to his contributions in SIP having been paid out prematurely (in light of his having been, he alleged, wrongfully denied the right to participate in the program after his termination).

Count VII claimed that Skretvedt had been wrongfully denied further participation in a DuPont stock ownership plan known as TRASOP, and sought reinstatement of TRASOP benefits and certain damages resulting from the premature termination of his participation in the plan.

Count VIII contended that Skretvedt was improperly denied benefits under DuPont's short term disability ("STD") plan.

Among other things, Skretvedt also sought prejudgment interest, postjudgment interest, and reasonable attorney's fees with respect to each claim.

Skretvedt moved for summary judgment pursuant to Fed.R.Civ.P. 56, arguing, inter alia, that there was no genuine material dispute of fact as to the Benefits Board having acted in an arbitrary and capricious manner, or having abused its discretion, and that he was entitled to the award of benefits he requested.

DuPont also moved for summary judgment, arguing, inter alia, that there was no evidence to support a finding that the Board acted in an arbitrary and capricious manner, thereby entitling them to summary judgment. On September 6, 2000, the Magistrate Judge granted summary judgment in favor of DuPont on all claims, and denied Skretvedt's motion for summary judgment. She concluded, inter alia, that "there is no genuine issue of material fact upon which plaintiff could be successful [in showing that the Board had acted in an arbitrary and capricious manner]" and that "a genuine issue does not exist as to the propriety of the Board's action...." Skretvedt v. E.I. DuPont de Nemours & Co., 119 F.Supp.2d 444, 453-55 (D.Del.2000).

Skretvedt appealed the grant of summary judgment in favor of...

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