Anthuis v. Colt Industries Operating Corp., s. 85-3259
| Decision Date | 28 April 1986 |
| Docket Number | 85-3260,Nos. 85-3259,s. 85-3259 |
| Citation | 789 F.2d 207 |
| Parties | John W. ANTHUIS, Jr., Appellee, v. COLT INDUSTRIES OPERATING CORPORATION, Administrator of the Colt Industries Operating Corporation Severance Plan and the Colt Industries Operating Corporation Severance Plan, Appellants. Donald Dale GROSCOST, Appellee, v. COLT INDUSTRIES, INC., Colt Industries Operating Corporation Severance Plan and Colt Industries Operating Corporation, as Administrator of the Colt Industries Operating Corporation Severance Plan, Appellants. |
| Court | U.S. Court of Appeals — Third Circuit |
William H. Powderly, III (argued), Brian C. Lucas, Reed, Smith, Shaw and McClay, Pittsburgh, Pa., for appellants.
Gregory K. Douglass (argued), Whitmire, Verlihay & Douglass, Beaver Falls, Pa., for appellee.
Before GARTH and STAPLETON, Circuit Judges, and BISSELL, * District Judge.
In these consolidated cases, Colt Industries, Inc. (Colt), the Colt Industries Operating Corporation Severance Plan (Severance Plan), and Colt Industries Operating Corporation as Administrator of that Plan (Plan Administrator) appeal from a judgment awarding severance benefits and bonuses to two former executives of Colt Industries Operating Corporation (CIOC), John W. Anthuis, Jr. and Donald Dale Groscost, CIOC, formerly Crucible, Inc., is a subsidiary of Colt, and is the sponsor and Administrator of the Severance Plan.
A threshold problem on this appeal is that the proceedings below were confused to the point that we cannot adequately review the judgment. Our difficulty is compounded by the fact that the district court disposed of this case by an order unaccompanied by any explanation of its reasoning. Without reaching any conclusions on the merits of the disputes between the parties, we will therefore remand this action to the district court with instructions to ensure that an appropriate complaint is filed and served against the proper defendants, that these defendants are given an opportunity to respond to the claims against them, that a trial be held if necessary, and that the reasoning underlying any eventual judgment is explained.
The Severance Plan provided "Key Executive Severance Benefits" for certain non-union salaried divisional management employees. 1 This Severance Benefit provided for a maximum severance payment of 4- 1/2 months of the employee's base salary upon termination, on condition that the employee not accept another job upon termination. Sometime after March 10, 1982, the Key Executive Severance Benefit was amended to provide that eligible employees with 25 or more years of service, such as Groscost, would receive an increased maximum benefit of six months' salary instead of 4- 1/2 months' salary.
On March 10, 1982, CIOC announced the impending cessation of its operations at the Midland, Pennsylvania plant where Anthuis and Groscost were employed. At this time, it made available to certain employees, including Anthuis and Groscost, a Continuance Bonus designed to provide an incentive to those employees to remain in the employ of CIOC, both because Colt hoped to sell the plant as a going concern and because in the absence of a sale it would need the services of its essential personnel to assure an orderly winding down. Eligible employees were required to enter into a written Continuance Agreement, pursuant to which they would agree to remain employees for a specified period of time. The Continuance Bonus, provided for by that Agreement, was a lump-sum amount equal to one month's base salary for each month of such extended employment until the date specified in the individual employee's Agreement.
Groscost and Anthuis were both Key Executives who entered into Continuance Agreements. Groscost's Agreement provided, in relevant part, as follows It is agreed that should you [Groscost] voluntarily continue full employment at Crucible Stainless and Alloy Division for the Agreement Period, you shall receive your current compensation and benefits and upon July 30, 1982, should separation be necessary, you shall receive an accrued continuance bonus equal to a month's salary for each month of continued employment up to July 30, 1982 (five (5) months' accrued).
App. 73. Groscost's Agreement, signed on March 17, 1982, provided for a bonus of five months' salary for the period from March 1, 1982 to July 30, 1982. Anthuis entered into a similarly worded Agreement providing for a bonus of 10 months' salary for the period from March 1, 1982 to December 31, 1982. App. 79.
Both Groscost's and Anthuis' employment with CIOC terminated on March 31, 1983. At that time, CIOC required them to choose between receiving the amount due as a Key Executive Severance Benefit and the amount due as a Continuance Bonus. CIOC claimed that these were two alternative options under the Severance Plan. Both Anthuis and Groscost opted for and received the Continuance Bonus, which provided a larger sum than the Key Executive Severance Benefit.
Anthuis and Groscost subsequently initiated contract actions against Colt in Pennsylvania state court claiming that Colt owed each of them their Key Executive Severance Benefit, because the Continuance Bonus was not in substitution of, but was rather in addition to, the Key Executive Severance Benefit. Anthuis further demanded that Colt pay him additional Continuance Bonus monies equal to three months' salary for the three months that he continued to work after December 31, 1982, the date on which his employment was to terminate.
The parties agreed that Anthuis' and Groscost's claims were governed by ERISA, and the cases were therefore removed to federal court. Colt then moved for dismissal of the actions, arguing that it was not a proper party defendant inasmuch as the Severance Plan and the Plan Administrator were the only proper defendants. In the alternative, Colt moved for summary judgment.
Anthuis and Groscost filed cross-motions for summary judgment. In addition, Anthuis and Groscost moved to amend their complaints to delete Colt as a party-defendant and to substitute the Severance Plan and the Plan Administrator as defendants. Groscost also sought to add a claim for additional Continuance Bonus monies, analogous to the claim already filed by Anthuis in his complaint. These additional monies were the bonuses for the two months that Groscost worked between July 30, 1982, the date that his Continuance Agreement expired, and October 1, 1982, the effective date of a subsequent agreement providing for him to remain in CIOC's employ for an indefinite period at his previous salary and benefits level.
On February 28, 1985, the district court permitted Anthuis and Groscost to amend their complaints by deleting Colt as a defendant and substituting instead, as defendants, the Severance Plan and the Plan Administrator. On the same day that it granted Anthuis' and Groscost's motions to amend their complaints, the district court, without opinion, without requiring the filing and serving of amended complaints upon the newly added defendants, and without permitting the new defendants to respond to such amended complaints, granted summary judgment in favor of Anthuis and Groscost. It entered judgment, apparently against the Severance Plan and the Plan Administrator, for the full amounts claimed by Anthuis and Groscost.
As we have earlier recited, the procedural confusion in these proceedings and the lack of an opinion by the district court have contributed to our difficulty in reviewing the judgment of the district court. Accordingly, we list a number of procedural failings that must be remedied and questions that must be answered before we can meaningfully review that judgment.
The complaint in this action was filed against Colt. Colt moved to dismiss the complaint, or in the alternative for summary judgment, on the grounds that Colt was not a proper party to this action, that the Severance Plan and the Plan Administrator were the only proper parties to this action, and that, in any event, Anthuis and Groscost had already received the full amounts owed to them.
The record does not disclose that the district court ever ruled on Colt's motions. It does disclose, however, that Anthuis and Groscost agreed with Colt that the complaints should be amended in accordance with Colt's motion, and that they moved to so amend their complaints. The court, too, obviously thought that the Severance Plan and the Plan Administrator were the proper defendants, because it granted the motions to amend.
However, as we have noted, no amended complaints were ever served upon the new defendants, nor were such complaints ever filed. Indeed, the record does not disclose that any amended complaints were ever prepared. Moreover, Anthuis and Groscost, despite their motions to delete Colt as a defendant, named Colt, and Colt alone, as the party against whom they sought summary judgment. The clerk of the district court added to these difficulties by deleting Colt from the caption in Anthuis, but failing to do the same in Groscost. 2 Finally, the orders granting summary judgment simply refer to "the defendant" (singular), while the captions of those orders name the Plan Administrator and the Severance Plan itself, although the record is silent as to the basis or theory on which the liability of each defendant was predicated.
We are thus confronted with a case in which, acting on a motion against an earlier defendant who ostensibly is no longer in the case, the district court entered summary judgment against two new defendants who were never named in the complaint and who never had an opportunity to respond to the allegations raised in the affidavits of Anthuis and Groscost. 3
In granting summary judgment against the Severance Plan and its Administrator without giving them the opportunity to respond to the claims against them, the district court may have been influenced by the...
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