Holloman v. Mail-Well Corp.

Decision Date27 March 2006
Docket NumberNo. 05-10850.,05-10850.
Citation443 F.3d 832
PartiesOtis J. HOLLOMAN, Jonella Holloman, Plaintiffs-Appellants, v. MAIL-WELL CORPORATION, as Successor in Interest to Curtis 1000, Inc., an American Business Products Inc. Company, Defendant-Appellee.
CourtU.S. Court of Appeals — Eleventh Circuit

Christopher Douglas Vaughn, George Melville Johnson & Associates, P.C., Atlanta, GA, for Plaintiffs-Appellants.

William P. Sweeney, James J. Convery, Laner, Muchin, Dombrow, Becker, Levin & Tominberg, Chicago, IL, for Defendant-Appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before DUBINA and MARCUS, Circuit Judges, and GOLDBERG*, Judge.

MARCUS, Circuit Judge:

Appellants Otis J. Holloman and Jonella Holloman appeal from the district court's order of final summary judgment entered in favor of appellee Mail-Well Corp. ("Mail-Well") on their claims brought under the federal Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1101-1114. After thorough review, we conclude that the district court correctly granted final summary judgment on the Hollomans' claims. Moreover, we are unpersuaded by appellants' claim that the district court abused its discretion when it denied their motions to compel discovery. Finally, we lack jurisdiction to consider an appeal by the Hollomans' attorney, Christopher Vaughn, challenging a sanctions order to pay attorneys' fees and accordingly dismiss that issue from the appeal.

I

The essential and undisputed facts in this case are these: Otis Holloman worked for Curtis 1000, Inc., an American Business Products, Inc. ("ABP"), company, from 1948 until he retired in 1991. Holloman joined two retirement plans that ABP offered to certain key executives as a retention incentive. He joined the ABP Supplemental Retirement Income Plan on June 5, 1984, and joined the ABP Deferred Compensation Investment Plan on June 30, 1985.

On both plans, Holloman elected a "Last Survivor Option." Under this option, Holloman would receive lower monthly benefit payments, but those payments, instead of ending at Holloman's death, would continue to his spouse for the rest of her life if she outlived him. Mail-Well claims this survivor benefit only applied to Otis Holloman's wife at the time, who was Katherine Holloman. The Hollomans say that the survivor benefit also applies to Otis Holloman's current wife, Jonella Holloman.

Each plan granted authority to the ABP board to amend the plan terms but restricted that authority by providing that no amendment could reduce the benefits to be paid to a participant. In 1990, ABP amended the plans so that each provided that in the event of a change in control, the plan trustee would have "sole authority to construe and determine the effects of the provisions of the Plan." On July 9, 1990, ABP entered an agreement naming the First National Bank of Atlanta — now Wachovia — as the plan trustee for both plans.

In 1991, Holloman retired and began receiving monthly joint and survivor annuity payments. In November 1994, his wife, Katherine Holloman, died. Otis Holloman then married Jonella Holloman on November 5, 1995. The Hollomans claim that shortly thereafter, at a company Christmas party in December 1995, and again in a later telephone conversation, a Curtis 1000 human resources representative assured the Hollomans that Jonella Holloman would receive the same benefits that Katherine Holloman was to have received.

On July 7, 2000, the defendant, Mail-Well, acquired ABP. In 2001, Mail-Well decided to accelerate payment of benefits under the plans. Mail-Well consulted with its legal counsel, and obtained approval for the acceleration from Wachovia, the plan trustee, and the Mail-Well board of directors. The plans specified "actuarial assumptions" for the payment of benefits, including life expectancy estimates and an assumed 8% discount rate for the payment of benefits, but they did not include specific instructions or actuarial assumptions for making accelerated lump-sum payments. Mail-Well had an outside consulting firm, Mercer Human Resources Consulting, calculate the accelerated payments based on actuarial tables that approximately matched the life expectancy estimates used to calculate benefits.

Otis Holloman received notice of the acceleration on August 29, 2001. Without Holloman's consent, Mail-Well paid him a lump-sum payment of $436,443.00, which came out to $315,421.17 after taxes were withheld. Holloman's payment did not include any amount reflecting survivor benefits to be paid to Jonella Holloman if she survived Otis Holloman.

On May 9, 2003, the Hollomans commenced suit in the Superior Court of Fulton County, Georgia, for breach of contract, alleging specifically that Mail-Well had breached its contractual obligations by accelerating payments without majority approval from the ABP board of directors, discounting payments, and denying benefits to Jonella Holloman. Mail-Well removed the case to the United States District Court for the Northern District of Georgia pursuant to 28 U.S.C. § 1441, contending that the plaintiff's contract claims were preempted by the federal Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1101-1114, whose civil enforcement provisions completely displace analogous state law claims.1 The plaintiffs then moved to remand the cause to state court, but the district court denied that application on November 17, 2003.

Soon thereafter, and with leave of court, the plaintiffs amended their complaint stating claims under ERISA. The amended complaint specifically alleged that Mail-Well's actions amounted to failure to pay benefits (Count I), and interference with benefits (Count II), and that Mail-Well's modification of the benefit plans without a majority vote amounted to a breach of fiduciary duty (Count III). The plaintiffs sought declaratory relief, injunctive relief, compensatory and punitive damages, and attorney's fees and costs.

The plaintiffs and defendant filed cross motions for summary judgment, and on January 24, 2005, the district court granted final summary judgment in favor of the defendants. The Hollomans timely brought this appeal.

II

The Hollomans argue first that the district court erred in granting final summary judgment. They also say that the district court erred in denying their motions to compel discovery.

We review a district court's grant or denial of summary judgment de novo. Bochese v. Town of Ponce Inlet, 405 F.3d 964, 975 (11th Cir.2005). We consider only the evidence that was available to the district court at the time it considered the motion. Welch v. Celotex Corp., 951 F.2d 1235, 1237 n.3 (11th Cir.1992). Summary judgment is appropriate when the evidence, viewed in the light most favorable to the nonmoving party, presents no genuine issue of material fact and compels judgment as a matter of law in favor of the moving party. See Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Bochese, 405 F.3d at 975.

When reviewing a district court's denial of a motion to compel discovery, we apply an abuse of discretion standard. Sanderlin v. Seminole Tribe of Fla., 243 F.3d 1282, 1285 (11th Cir.2001) (citing Burger King Corp. v. Weaver, 169 F.3d 1310, 1320 (11th Cir.1999)). This means that a district court is allowed "a range of choice" in such matters, and we will not second-guess the district court's actions unless they reflect a "clear error of judgment." United States v. Kelly, 888 F.2d 732, 745 (11th Cir.1989).

III

The Hollomans' main argument is that the district court incorrectly granted final summary judgment for the defendants based on its conclusion that the Hollomans had failed to present sufficient evidence to take the case to trial. The plaintiffs offer three reasons: first, that the plans did not allow Mail-Well to distribute Otis Holloman's benefits in a one-time lump-sum payment; second, that the one-time lump-sum payment in essence amounted to a reduction in benefit payments in violation of the express terms of the plans; and, finally, that the lump-sum payment failed to account for the joint and survivor annuity payments Jonella Holloman was to receive if she outlived Otis Holloman.

All of the parties maintain, and we agree, that both of the retirement plans at issue are "top hat" plans for purposes of ERISA. A top hat plan is "a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees," 29 U.S.C. §§ 1051(2), 1081(a)(3), 1101(a)(1). Top hat plans are subject to ERISA, 29 U.S.C. § 1003(a), but notably, they are excluded from many individual ERISA provisions on the basic assumption that high-level employees are in a "strong bargaining position relative to their employers and thus do not require the same substantive protections that are necessary for other employees." Goldstein v. Johnson & Johnson, 251 F.3d 433, 442 (3d Cir.2001); see also 29 U.S.C. § 1051(2) (excluding top hat plans from participation and vesting provisions); id. § 1081(a)(3) (excluding top hat plans from funding provisions); id. § 1101(a)(1) (excluding top hat plans from fiduciary liability provisions).

There is some uncertainty about what standard of review a district court should apply when reviewing decisions made by the administrator of a top hat plan. The district court observed that it was following a Third Circuit case, Goldstein v. Johnson & Johnson, 251 F.3d at 433, and would review the plan administrators' decisions de novo rather than according some deference to the plan administrators. In contrast, the defendants argue that the district court's determination conflicted with an earlier Supreme Court case, Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), and the district court should have applied the more...

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