Leonelli v. Pennwalt Corp.
| Decision Date | 12 October 1989 |
| Docket Number | No. 866,D,866 |
| Citation | 887 F.2d 1195 |
| Parties | , 11 Employee Benefits Ca 1923 Peter D. LEONELLI, Plaintiff-Appellant, v. PENNWALT CORPORATION, Michael Young and T. Caddy, Defendants-Appellees. ocket 88-7997. |
| Court | U.S. Court of Appeals — Second Circuit |
James P. Burns, 3rd, Syracuse, N.Y. (Martha L. Berry, Renee L. James, Hancock & Estabrook, Syracuse, N.Y., of counsel), for plaintiff-appellant.
John D. Allen, Syracuse, N.Y. (John S. Westrick, Bond, Shoeneck & King, Syracuse, N.Y., of counsel), for defendants-appellees.
Before CARDAMONE and PRATT, Circuit Judges, and LASKER, District Judge *.
Appellant is an at will employee who took early retirement and thereby lost certain benefits provided by his employer. Although an employer has an unquestioned right to discharge such an employee, it still must take special pains not to act in such a way as to cause its employee to lose those benefits to which he may otherwise have been entitled. Whether the employer acted in good faith at the time when the employment relationship was ended here presents a question of fact.
On Sunday afternoon, February 3, 1980, a representative of Pennwalt Corporation defendant-appellee, traveled from corporate headquarters in Philadelphia, Pennsylvania to the home of Peter Leonelli, the plaintiff-appellant, in Cortland, New York. The purpose of the visit was to have Leonelli sign forms for his early retirement before he entered the hospital for serious back surgery scheduled for the following Tuesday, February 5. The events leading up to this Sunday signing may be briefly recounted.
Leonelli had been employed since 1958 as a salesman for Pennwalt, or for some 22 years, with territory covering parts of Pennsylvania and New York. Pennwalt, a large diversified company, sells chemicals, equipment and health products world-wide. The division appellant worked for, headed by defendant Terrence Caddy, sold chemicals to farm and agribusiness customers. Appellant's accounts included small individual farmers and large businesses like Hershey Foods and Agway. In 1977, during the course of a sales call, Leonelli fell from a ladder and injured his back. Although he missed several weeks of work in March 1979--due to an unrelated case of gout--appellant's back problems did not interfere with his job performance until early 1980 when the back injury became so severe that it required surgery.
On January 24, 1980 while Leonelli was at home and disabled, he received a telephone call from Caddy who informed him that his employment was being terminated due to poor job performance, and advised him that he could elect to "be fired and lose all your benefits" or "take early retirement and keep all your benefits." After exploring whether there were any other possibilities and being assured by Caddy that there were none, Leonelli asked what Pennwalt wanted him to do. Caddy's response was that he would send up early retirement papers. Leonelli said: "okay, send them up." About a week later--after learning that the original February 16th date for Leonelli's surgery had been moved ahead to February 5th--Caddy called again. He told appellant that he was sending a representative up with the papers and that it was "important that you sign them." Thus, on Sunday afternoon, two days prior to the scheduled surgery, a company representative hurried up to Leonelli's house to obtain his signature on the early retirement papers. As a result of the operation on his spine, Leonelli was permanently and totally disabled, a fact which appellees admit in their answer to plaintiff's complaint.
The following April, appellant's attorney wrote to Pennwalt requesting information regarding the benefits to which Leonelli was entitled. As part of its Pension Plan for retirees, Pennwalt has a disability retirement program, and in addition has a Long Term Disability Plan funded by an insurance policy, and a Salary Continuation Plan that provides up to 26 weeks salary to employees, if sickness or an accident prevents them from working. In response to the request for information, Pennwalt forwarded disability forms. No information was furnished regarding the Salary Continuation Plan. Pennwalt refused to pay Salary Continuation Plan benefits to Leonelli on the ground that entitlement to them ended when he chose early retirement.
In March 1982 appellant brought the instant suit against Pennwalt, Caddy, and Michael Young, Pennwalt's Manager of Employee Benefits, in the United States District Court for the Northern District of New York (McCurn, C.J.), alleging that defendants intentionally and negligently failed to inform him of other options that were available when he agreed to early retirement, and that denial of benefits under the Salary Continuation Plan constituted a breach of his employment contract. Defendants moved to dismiss plaintiff's claims relating to the disability retirement Pension Plan benefits and the Long Term Disability Plan benefits on the grounds that both of those plans are governed by ERISA and that plaintiff's purported common law causes of action were therefore preempted. Defendants also moved for summary judgment on the remaining claim asserting that the Salary Continuation Plan was unavailable to former employees. Plaintiff cross-moved for leave to amend his complaint to add ERISA claims. The district court denied plaintiff leave to amend, granted defendant's motion for summary judgment and dismissed plaintiff's complaint. This appeal followed.
We discuss the dismissal of the common law cause of action first. Appellant contends that his complaint and motion papers demonstrate genuine issues of material fact with respect to that action asserting a claim under Pennwalt's Salary Continuation Plan. The Salary Continuation Plan provides that: "If you leave Pennwalt's employ for any reason, your participation in the Salary Continuation Plan ceases on your last day of work." Defendants claim that no breach of contract occurred under the express terms of the plan because when plaintiff chose early retirement he automatically excluded himself from salary continuation benefits. Defendants further argue that since the plan did not restrict Pennwalt's ability to discharge Leonelli, who was an "at will" employee, no misrepresentation on their part occurred. The district court agreed that since Pennwalt could have fired appellant at any time--thereby cutting off his rights to plan benefits--it did not deceive Leonelli when it told him he had only two options: retire or be fired. We disagree.
The quoted language of the plan is, as plaintiff contends, somewhat ambiguous. Although its language clearly prohibits a former employee from applying for salary benefits after his employment ceases, reading the plan so as to allow the company to fire an employee it knows is suffering from illness or injury rather than providing the promised benefits renders the plan's promise illusory. The facts in the record reveal that Caddy was charged with improving the profitability of the division he headed. In his zeal to accomplish that objective, he may have pushed appellant out the door without taking pains to ensure that appellant, as a disabled Pennwalt employee,...
To continue reading
Request your trial
-
Cucchi v. New York City Off-Track Betting Corp., No. 91 Civ. 5624 (KC).
...defendant was an equal opportunity employer is sufficient to limit defendants' right to fire plaintiff at will. 7 Leonelli v. Pennwalt Corp., 887 F.2d 1195 (2d Cir.1989) does not require a different result. Leonelli involved the right of a discharged at-will employee to recover benefits his......
-
Ludwig v. NYNEX Service Co., 90 Civ. 5459 (JMC).
...for benefits in federal court. See Kennedy v. Empire Blue Cross and Blue Shield, 989 F.2d 588, 594 (2d Cir.1993); Leonelli v. Pennwalt Corp., 887 F.2d 1195, 1199 (2d Cir.1989) (noting requirement that ERISA claimants exhaust remedies provided for by their Nevertheless, under the "futility d......
-
Fallick v. Nationwide Mut. Ins. Co.
...Plan, 891 F.2d 842 (11th Cir.1990); Springer v. Wal-Mart Assocs.' Group Health Plan, 908 F.2d 897 (11th Cir.1990); Leonelli v. Pennwalt Corp., 887 F.2d 1195 (2d Cir.1989); Makar v. Health Care Corp. of Mid-Atlantic (Carefirst), 872 F.2d 80 (4th Cir.1989); Drinkwater v. Metropolitan Life Ins......
-
Miller v. Disability Plan
...held liable.” Chapman v. ChoiceCare Long Island Term Disability Plan, 288 F.3d 506, 509-10 (2d Cir.2002) (citing Leonelli v. Pennwalt Corp., 887 F.2d 1195, 1199 (2d Cir.1989); Crocco v. Xerox Corp., 137 F.3d 105, 107 (2d Cir.1998)). Similarly, the United States Court of Appeals for the Elev......
-
How to litigate an Erisa disability claim
...be held liable under section 1132(d)(2), which limits the enforceability of money judgments under ERISA. See Leonelli v. Pennwalt Corp. , 887 F.2d 1195, 1199 (2d Cir. 1989). More recently, however, the Second Circuit expanded that rule to include “a claims administrator that exercises total......