Awbrey v. Pennzoil Co.

• Decision Date: 07 April 1992
• Docket Number: No. 90-2287,90-2287
• Parties: H.W. (Bill) AWBREY, Donal Ray Boyd, Raymond D. Bennett, James R. Smith, and Adan T. Venegas, Plaintiffs-Appellants, v. PENNZOIL COMPANY, a Foreign Corporation, and Duval Corporation, a Foreign Corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 928

961 F.2d 928

H.W. (Bill) AWBREY, Donal Ray Boyd, Raymond D. Bennett, James R. Smith, and Adan T. Venegas, Plaintiffs-Appellants, v. PENNZOIL COMPANY, a Foreign Corporation, and Duval

Corporation, a Foreign Corporation, Defendants-Appellees.

No. 90-2287.

United States Court of Appeals, Tenth Circuit.

April 7, 1992.

Warren F. Reynolds, P.A., Hobbs, N.M., for plaintiffs-appellants.

William C. Slusser, of Baker & Botts, Houston, Tex. (John E. Neslage and Beverly A. Young of Baker & Botts, Houston, Tex., Albert L. Pitts, of Hinkle, Cox, Eaton, Coffield & Hensley, Roswell, N.M., with him on the briefs), for defendants-appellees.

Before HOLLOWAY and McWILLIAMS, Circuit Judges, and CAUTHRON, District Judge. ^*

CAUTHRON, District Judge.

Plaintiffs, all former salaried employees of defendant Duval Corporation, a wholly-owned subsidiary of defendant Pennzoil Corporation, appeal the district court's order granting summary judgment to defendants. Plaintiffs brought this action under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461, alleging they were entitled to certain benefits from defendants under defendants' benefit plans. They sought severance pay and certain retirement-related benefits such as medical and life insurance, social security supplement, and automatic spousal benefit. We affirm the district court's grant of summary judgment to defendants.

I.

The relevant facts are not in dispute. Defendant Pennzoil Corporation, through its subsidiary, Duval Corporation, operated a potash mine in New Mexico at which plaintiffs were employed. Defendants sold the mine as an ongoing concern to Western Ag Mineral Corporation on November 15, 1985. Western Ag continued plaintiffs' employment without interruption. The transfer of ownership took place at midnight, November 14, 1985, so that plaintiffs ended their employment with defendants on November 14, 1985, and became employees of Western Ag at 12:01 a.m. on November 15, 1985. None of the plaintiffs lost any work time.

Pennzoil's corporate policy manual contained a severance pay plan providing in part:

PURPOSE: To state clearly the policy for severance payments when permanent jobs in the Company are eliminated.

POLICY: The Severance Pay Plan will provide one week's pay for each completed year of service under the following conditions:

1. A permanent job has been eliminated.

2. The employee has at least one full year of service or more.

3. The employee has not:

a. Been offered a comparable job.

b. Been terminated for unsatisfactory performance.

c. Been terminated for proven dishonesty or conduct prejudicial to the best interest of the Company.

d. Terminated voluntarily.

e. Been terminated due to the completion of a temporary job assignment.

Plaintiffs' App. at 32.

Plaintiffs argue that because their employment with the defendants was terminated on November 14, 1985, they are entitled to the above-described severance benefit. Defendants argued to the district court that plaintiffs are not entitled to severance pay because (1) no permanent jobs were eliminated, and (2) all employees were offered comparable jobs. ^*

Defendants' benefits plans also included certain retirement and retirement-related benefits, described in part below, to which plaintiffs also claim entitlement:

XVIII. COVERAGE FOR RETIRED EMPLOYEES AND DEPENDENTS

Upon retirement, if you have at least five years of service or are age 65 or older, medical benefits will continue for you and your eligible dependents. A booklet explaining benefits for persons not eligible for Medicare and for those who are eligible for Medicare will be provided to you by your local personnel office.

Plaintiffs' App. at 99; Defendants' App. at 71.

XI. AFTER RETIREMENT

When you retire (early, normal or postponed) with at least five years of service or at age 65 or older, the Company provides $4,000 in life coverage at no cost to you. You have the privilege to convert amounts in excess of $4,000 up to the total amount of insurance you had immediately prior to retirement.

Appellants' App. at 100; Defendants' App. at 91.

XII. LOSS OF ANTICIPATED BENEFITS

Anticipated benefits from the group life insurance plan would not be realized under the following conditions:

1. Your death occurs more than 31 days after you terminate your employment;

2. You transfer to a job classification that does not meet the eligibility requirements;

3. At retirement you have less than 5 years service or have not attained age 65.

Id.

Plaintiffs argue that they are entitled to these benefits because they would have reached the age necessary to retire, would have retired, and would have received these benefits if defendants had not terminated their employment. Defendants argue that none of the plaintiffs were eligible for retirement benefits at the time Western Ag bought the potash mine.

In addressing defendants' motion for summary judgment, the district court first determined that it was required to review defendants' decision to deny plaintiffs' claims under a de novo standard of review. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). The court first found that none of the benefit provisions were ambiguous, and therefore extrinsic evidence to determine their meaning was not needed. The court then found that plaintiffs had received offers of comparable jobs from Western Ag and thus were not entitled to severance pay benefits. It also determined that because none of the plaintiffs had retired, and the retirement and retirement-related benefits were conditional upon retirement, plaintiffs were not eligible to receive such benefits. The defendants' motion for summary judgment was granted.

II.

In reviewing a grant of summary judgment on appeal, we apply a de novo standard of review to the district court's conclusions of law. Wheeler v. Hurdman, 825 F.2d 257, 260 (10th Cir.), cert. denied, 484 U.S. 986, 108 S.Ct. 503, 98 L.Ed.2d 501 (1987). When considering summary judgment, both the district court and the appellate court view the facts in a light most favorable to the non-movant, and construe all reasonable inferences against the movant. Wheeler, 825 F.2d at 260; Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir.1991). However, in this case, the facts material to the outcome of the appeal are not in dispute, and therefore we need address only the district court's legal conclusions. Id. Finally, "[w]e are not limited to the grounds upon which the trial court relied but may base summary judgment on any proper grounds found in the record to permit conclusions of law." City of Chanute v. Williams Natural Gas Co., 955 F.2d 641, 647 (10th Cir.1992) (citing United States v. Colorado, 872 F.2d 338, 339 (10th Cir.1989)).

III.

Plaintiffs' first argument is that the district court should have considered extrinsic evidence to determine whether the Western Ag jobs were comparable to the Pennzoil/Duval jobs. They argue that if extrinsic evidence had been considered, a material issue of fact would have arisen regarding whether the jobs are comparable.

The district court found the severance pay plan unambiguously excluded plaintiffs from severance benefits, because plaintiffs were offered comparable jobs. Nothing in the plan restricted a comparable job as being with the same employer. Therefore, if a former employee of defendants is offered a job with a different employer, the job may still be comparable. Plaintiffs' arguments to the contrary are simply without merit.

In New Mexico, as in other jurisdictions, clear and unambiguous contract provisions are conclusive. Rushing v. Lovelace-Bataan Health Program, 93 N.M. 168, 598 P.2d 211 (1979). The usual and customary meaning of contract terms must be given effect. Sun Vineyards, Inc. v. Luna County Wine Dev. Corp., 107 N.M. 524, 760 P.2d 1290 (1988). A court is without authority to alter or amend contract terms and provisions absent an ambiguity in the contract. State ex rel. Robins v. Hodges, 105 N.M. 48, 728 P.2d 458 (1986). When an insurance or other benefit provision falls within the scope of ERISA, it is still subject to these general contract principles. See generally, Senn v. United Dominion Indus., Inc., 951 F.2d 806, 818 (7th Cir.1992) (court would not amend clear and unambiguous contract terms in a case brought under ERISA); Pierce County Hotel Employees & Restaurant Employees Health Trust v. Elks Lodge, 827 F.2d 1324 (9th Cir.1987) (extrinsic evidence inadmissible to interpret unambiguous contract terms); Anderson v. Pittsburgh-Des Moines Corp., 893 F.2d 638, 640 (3d Cir.1990) (clear and unambiguous contract provisions raise no factual issues).

We will not read into the severance pay plan a requirement that, by its clear and unambiguous language, is absent. There is simply no requirement, in the contract or at law, that a comparable job means one with the same employer. See also Holland v. Burlington Indus., Inc., 772 F.2d 1140, 1149 (4th Cir.1985) (jobs with different employers were comparable, where employees had continuous employment in the same positions), aff'd sub nom. Brooks v. Burlington Indus., Inc., 477 U.S. 901, 106 S.Ct. 3267, 91 L.Ed.2d 559 (1986).

The question that remains is whether the Western Ag jobs were comparable to the defendants' jobs. Western Ag retained all of the plaintiffs as employees at the potash mine, at the same positions and salaries. Western Ag's employment benefits differed somewhat, but the differences are minor and do not cause the jobs to be incomparable. The new employer provided such benefits as medical and dental insurance, retirement benefits, long and short term disability coverage, term life insurance, vacation pay, sick leave, and a 401K tax-deferred savings plan. Defendants provided much the same benefits package, with some minor differences.

We agree with the district court's observation that "comparable" does not mean "identical." Some...