Marx v. Loral Corp.
| Decision Date | 24 June 1996 |
| Docket Number | Nos. 93-17078,93-17213,s. 93-17078 |
| Citation | 87 F.3d 1049 |
| Parties | , 20 Employee Benefits Cas. 1425, 96 Cal. Daily Op. Serv. 4589, 96 Daily Journal D.A.R. 7411, Pens. Plan Guide P 23921D Sol F. MARX; Harry F. Crooks; and Dallas D. Hann, Plaintiffs-Appellants, v. LORAL CORPORATION, a New York Corporation; Goodyear Tire & Rubber Company, Inc., an Arizona Corporation; Goodyear Aerospace Corporation, an Arizona Corporation, Defendants-Appellees. Sol F. MARX; Harry F. Crooks; and Dallas D. Hann, on behalf of himself and all others similarly situated, Plaintiffs-Appellees, v. LORAL CORPORATION, a New York Corporation; Goodyear Aerospace Corporation, an Arizona Corporation, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Daniel Offidani, Scottsdale, Arizona, for plaintiffs-appellants-cross-appellees.
Stephen Greiner, Willkie, Farr & Gallagher, New York City, for defendants-appellees-cross-appellants Loral Corporation and Goodyear Aerospace Corporation.
James J. Trimble, Fennemore Craig, Phoenix, Arizona, for defendants-appellees Goodyear Tire & Rubber Company.
Appeal from the United States District Court for the District of Arizona, Paul G. Rosenblatt, District Judge, Presiding. D.C. No. CV-91-00475-PGR.
Before BRUNETTI, THOMPSON and HAWKINS, Circuit Judges.
We consider here separate appeals from the district court, one concerning the merits of the litigation and the other an important procedural point concerning the timeliness of instituting an appeal. The merits appeal concerns whether oral and written representations made by the administrator of an employee benefit plan governed by ERISA bind the employer when the representations contradict the unambiguous terms of the plan. The procedural issue concerns the standard for determining "excusable neglect" under Federal Rule of Appellate Procedure 4(a)(5). Particularly, the appeal addresses whether this Circuit's long-established, strict standard for proving "excusable neglect" has been overruled by the Supreme Court's definition of "excusable neglect" in Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd., 507 U.S. 380, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993), and whether, under either standard, excusable neglect was demonstrated in connection with the plaintiffs' failure to timely file notice of their appeal.
The plaintiffs are members of a class comprised of former employees and surviving spouses of former employees of Goodyear Aerospace Corporation ("GAC"). GAC established and maintained an employee benefit plan (the "Plan") under the Employee Retirement Income Security Act of 1974 ("ERISA"). GAC was a wholly-owned subsidiary of Goodyear Tire & Rubber Company ("Goodyear") when the Plan was established, and Goodyear served as the Plan administrator and fiduciary. Goodyear sold GAC to Loral Corporation ("Loral") in March 1987, after which Loral became the Plan administrator and fiduciary.
The Goodyear Plan provided:
[t]he establishment of this Program shall not be deemed to impose upon the Employer any contractual obligation to continue its coverage and the Employer reserves the right in its sole discretion to modify or terminate the Program at any time.
The first page of the summary plan description provided that "[t]he Company reserves the right to modify or terminate these plans within the limits prescribed by law."
Shortly before Goodyear sold GAC to Loral, Goodyear representatives informed the plaintiffs that, if they remained with GAC, their benefits with Loral would be equal to or better than they had been with Goodyear. These representations were made both orally and in writing.
The summary plan description issued by Loral after it purchased GAC stated:
Loral Systems Group hopes to continue these Plans indefinitely, but reserves the right to terminate, suspend, withdraw, amend or modify the Plans at any time. Any change or termination of benefits (a) will be based solely on the decision of Loral Systems Group and (b) may apply to active employees, future retirees and current retirees as either separate groups, or as one group. If this should happen, you will be notified.
Loral later informed the plaintiffs that their benefits would be subject to change unless they chose to retire before January 21, 1989. If they opted to retire, their benefits would be "locked in" as of the date of retirement. These representations were made both orally and in writing. The plaintiffs Despite its representations, Loral amended the plaintiffs' benefits under the Plan in July 1990. Specifically, Loral eliminated reimbursement for basic monthly premiums for supplemental Medicare coverage and increased participant co-pay contributions for prescription drugs. This lawsuit followed.
opted to retire, thereby foregoing further employment, certain accrued benefits, and future increased pension benefits.
The plaintiffs filed their complaint against Loral, GAC and Goodyear in March 1991, alleging failure to provide benefits in violation of 29 U.S.C. § 1132(a)(1)(B), breach of fiduciary duty in violation of 29 U.S.C. §§ 1109 and 1132(a)(2), promissory estoppel, fraud, and an allegation against Loral of failure to provide Plan information upon request in violation of 29 U.S.C. § 1132(c).
Loral and Goodyear moved to dismiss the complaint. In an order from the bench, the district court dismissed all of the plaintiffs' claims except for the statutory penalty claim for failure to provide plan information. The court reasoned that the plaintiffs' state law contract and fraud claims were preempted by ERISA. It also concluded that the plaintiffs' claim for failure to provide benefits failed to state a claim because the Plan expressly reserved the defendants' right to modify the Plan's terms, and that their claim for breach of fiduciary duty failed to plead the allegations of fraud with the requisite specificity. The court granted the plaintiffs leave to amend their complaint.
The plaintiffs filed their amended complaint in August 1991. This three-count complaint again alleged failure to provide benefits, breach of fiduciary duty, and failure to provide Plan information upon request.
After an unsuccessful attempt to have the failure to provide benefits and breach of fiduciary duty claims once again dismissed for failure to state a claim, the defendants moved for judgment on the pleadings on those two counts. The district court granted the defendants' motion.
Concerning the claim for failure to provide benefits, the court stated that 29 U.S.C. § 1132(a)(1)(B) is the ERISA equivalent of a breach of contract action (citing Miller v. Pension Plan for Employees of Coastal Corp., 780 F.Supp. 768, 770 (D.Kan.1991), aff'd, Miller v. Coastal Corp., 978 F.2d 622 (10th Cir.1992), cert. denied, 507 U.S. 987, 113 S.Ct. 1586, 123 L.Ed.2d 152 (1993)). The Plan, however, expressly allowed the defendants to amend the Plan's provisions, thereby suggesting that no "breach" occurred when defendants decreased the plaintiffs' benefits. Moreover, neither oral nor written representations were sufficient to modify the terms of the Plan. The court noted that, as a result, the plaintiffs relied upon fraud and estoppel theories to support their claim. 1 Neither theory, however, was sufficient to save the plaintiffs' claim. In Olson v. General Dynamics Corp., 960 F.2d 1418 (9th Cir.1991), cert. denied, 504 U.S. 986, 112 S.Ct. 2968, 119 L.Ed.2d 588 (1992), we held that fraud claims are preempted by ERISA's statutory scheme; and under Greany v. Western Farm Bureau Life Ins. Co., 973 F.2d 812, 821-22 (9th Cir.1992), equitable estoppel principles apply under ERISA only when the provisions of the plan are ambiguous, which they were not in this case.
The district court also concluded that judgment on the pleadings was appropriate on the plaintiffs' breach of fiduciary duty claim under 29 U.S.C. § 1109 because relief under that provision "is limited to relief protecting the integrity of the plan as a whole and does not extend to individual plan participants." (Quoting Williams v. Caterpillar, Inc., 944 F.2d 658, 665 (9th Cir.1991)). Because the plaintiffs sought recovery on their own behalf, rather than for the Plan as a whole, defendants were entitled to judgment.
The plaintiffs appealed the district court's ruling on September 24, 1993--31 days after the court entered its judgment. The same day, the plaintiffs, unaware that their notice of appeal was untimely, filed a Motion to Hold Appeal in Abeyance, or in the Alternative, Motion for Extension of Time to Re-file Notice of Appeal. According to the motion, additional time was needed for the plaintiffs' counsel to meet with all the members of the plaintiff class to discuss whether an appeal was appropriate. The motion indicated that the plaintiffs were scheduled to meet on October 18, 1993, and therefore requested that the appeal be held in abeyance until October 30 or that the plaintiffs be allowed to refile their notice of appeal on that date.
Defendants opposed the motion, arguing that the plaintiffs' notice of appeal was untimely under Fed. R.App. P. 4(a)(1), and that any extension of time was therefore inappropriate. In reply, the plaintiffs acknowledged that their notice of appeal was untimely, explaining the late filing as follows:
Unfortunately, when the time within which to file a Notice of Appeal was docketed, it was docketed for the 24th of September for the Judgment filed on the 24th of August, a period of thirty-one days. This error was a result of a failure to realize that August contained thirty-one days. Therefore, the Notice of Appeal ... [was] filed one day late.
Despite the late filing, the district court granted the plaintiffs' motion for extension of time on October 22, 1993, and allowed them "the full...
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