Barnes v. Lacy, 90-7228
| Decision Date | 22 March 1991 |
| Docket Number | No. 90-7228,90-7228 |
| Citation | 927 F.2d 539 |
| Parties | , 13 Employee Benefits Ca 1773 James L. BARNES, Jr., Plaintiff-Appellee, Leonard Grefseng, Roy R. Kimberly, Willie H. Little, Elliott H. Moore, Lillian Northington, Joseph D. Patrick, Lellwyn B. Lacey, Plaintiffs-Appellants, v. A.S. LACY, D.C. Reynolds, Energen Benefits Committee, Energen Corporation, Energen Retirement Income Plan, G.C. Ketcham, G.C. Youngblood, J.A. Martin, R.J. Patzke, W.D. Self, Alabama Gas Corp., Alabama Gas Corporation, Defendants-Appellees, Appellants. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Jay Smith, Cooper, Mitch, Crawford, Kuykendall & Whatley, Jerome A. Cooper, Joe R. Whatley, Jr., Birmingham, Ala., for plaintiffs-appellants.
Bradley, Arant, Rose & White, Maynard, Cooper, Frierson & Gale, P.C., Birmingham, Ala., for defendants-appellees.
Steven Hymowitz, McCalla, Thompson, Pyburn & Ridley, Stefanie Allweiss,
Howard Shapiro, New Orleans, La., for Ala. Gas Corp., Energen Corp, Energen Corp. Retirement Income Plan, Energen Benefits Comm., Self, et al.
Appeal from the United States District Court for the Northern District of Alabama.
Before FAY and JOHNSON, Circuit Judges, and PECK *, Senior Circuit Judge.
Plaintiffs James L. Barnes, Jr., Leonard Grefseng, Lila Faye Huey, Roy R. Kimberly, Willie H. Little, Elliott H. Moore, Lillian Northington, Joseph D. Patrick, and Lellwyn B. Lackey sued defendants A.S. Lacy, D.C. Reynolds, Energen Benefits Committee, Energen Corporation, Energen Retirement Income Plan, G.C. Ketcham, G.C. Youngblood, J.A. Martin, R.J. Patzke, W.D. Self, and Alabama Gas Corporation (hereinafter collectively referred to as "Alagasco"), alleging misrepresentation and violation of ERISA with respect to two early retirement plans that Alagasco had offered its employees. The district court granted judgment in favor of plaintiff Barnes, but held in favor of Alagasco with respect to the remaining eight plaintiffs. Seven of the eight plaintiffs who were defeated at trial appealed, and Alagasco cross-appealed the court's decision in favor of Barnes.
We find no clear error in the district court's factual findings. Accordingly, we AFFIRM the court's order granting judgment in favor of Alagasco with respect to the eight defendants other than Barnes. However, we hold that the court erred in finding Alagasco liable for misrepresentation. The court found Alagasco liable because Barnes misunderstood and detrimentally relied upon Alagasco's representations; yet it found, as a matter of fact, that Alagasco had made only truthful representations, in good faith, to its employees. We find that, based on the court's factual findings, its holding against Alagasco was erroneous as a matter of law. Accordingly, we REVERSE the district court's order granting judgment in favor of Barnes and REMAND with instructions to enter judgment in favor of Alagasco.
In November of 1985, Alagasco announced that it was forming a Voluntary Early Retirement Opportunity plan ("VERO"). The plan was adopted to provide additional incentives for employees, who already were eligible to take early retirement under Alagasco's Retirement Income Plan (the "Energen Plan"), to elect to do so. VERO was available only to those employees who either were already eligible for early retirement or would be by January 1, 1986.
About 80 persons were eligible under VERO. Over 50 percent of those eligible elected to retire on the basis of VERO. Nine of those persons who retired under VERO ultimately sued Alagasco asserting that, although they voluntarily and without coercion had elected to take that early retirement, they had been induced to do so by misleading or ambiguous statements provided to them concerning VERO.
This claim of misrepresentation essentially arose out of Alagasco's announcement in November of 1987, two years after VERO, of a new opportunity for early retirement. This second program, Voluntary Retirement Incentive Program ("VRIP"), provided various benefits that were greater than those which the plaintiffs had obtained under VERO. Plaintiffs asserted that the company misadvised them concerning the original plan by announcing at that time that it was a "one-time offer." They claimed that they understood Alagasco's comment to mean that they would not have any later opportunity for enhanced early retirement beyond that provided under the plan itself. Alagasco asserted that its use of the words "one-time offer" was proper and not misleading, and that it related essentially to the window of time from November 15, 1985 through December 6, 1985, in which eligible employees could elect to take advantage of VERO.
In its findings of fact, the trial court determined that plaintiffs had failed to show that Alagasco either contemplated or intended to offer a voluntary retirement incentive plan subsequent to VERO. Clear evidence offered at trial established that in late 1985, when Alagasco had decided to make VERO available, Alagasco did not anticipate that it would make any further or later offers of early retirement, that it believed that it would be unable to make any such offers on a cost-neutral basis, and that no such offers were, indeed, anticipated. Accordingly, the court found that Alagasco never intended to mislead plaintiffs. Quite to the contrary, the court held that Alagasco intended "to provide accurate and full information that the employees would need in order to make their own individual decisions."
Additionally, the court did not specifically point to any violation of ERISA on the part of Alagasco. Instead, it applied trust principles of fiduciary responsibility to Alagasco with respect to its explanation of the VERO offer. Alagasco does not contest whether it should have been held to the standard of a fiduciary under ERISA with respect to the employees under the VERO plan. Alagasco merely claims that, based upon the information available to it at the time in question, it made no material misrepresentation, either by false statement or omission, regarding the prospect of a subsequent early retirement incentive plan. Thus, even if it should be held to some standard of fiduciary responsibility, Alagasco maintains that it did not violate its fiduciary duty to its employees.
The court held that Alagasco did mislead eight of the nine plaintiffs by failing to disclose that the company reserved the right to consider making benefits available in the future--whether higher, lower, or the same--at any time it wished to do so. The court then weighed the testimony of the remaining eight defendants with respect to whether they in fact relied upon the "misleading" offer to elect VERO. The court found that, in fact, only plaintiff Barnes would not have accepted VERO if the "correct" information had been given. Accordingly, the court granted judgment in favor of Barnes, and in favor of Alagasco as to the eight other plaintiffs.
Federal Rule of Civil Procedure 52(a) provides that a district court's findings of fact in actions tried without a jury may not be reversed unless clearly erroneous. Fed.R.Civ.P. 52(a); United States v. Fidelity Capital Corp., 920 F.2d 827, 836 (11th Cir.1991). The rule also provides that "due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses." Fed.R.Civ.P. 52(a). If the court's findings are " 'plausible in light of the record viewed in its entirety,' the court of appeals must accept them even if it is 'convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently.' " Fidelity Capital Corp., 920 F.2d at 836 n. 36 (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 574, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985)); see also Worsham v. United States, 828 F.2d 1525, 1526-27 (11th Cir.1987). The district court in this case made various findings of fact, most of which the parties do not dispute. The seven plaintiffs other than Barnes who have appealed essentially dispute only one area of the court's findings. They assert that the court clearly erred in finding that eight of the nine plaintiffs would have elected VERO even if Alagasco had disclosed such information to them.
In light of the record before us, the district court's explanation of its holding, 1 and the limited scope of our review, we cannot say that the court was clearly erroneous in judging the credibility of each of the witnesses. The district court acknowledged the speculative nature of testimony on this issue. Further, the court conceded that, in making a factual determination, it had to draw fine lines of distinction in crediting testimony. Although we recognize, as did the district court, that it did indeed cut a fine line in weighing the plaintiffs' testimony, such a distinction does not, alone, constitute clear error. We therefore AFFIRM the district court's grant of judgment in favor of Alagasco with respect to plaintiffs Grefseng, Kimberly, Little, Moore, Northington, Patrick, and Lackey.
In contrast to the standard of review of findings of fact, our review of the district court's application of the law to its findings of fact is de novo. Fidelity Capital Corp., 920 F.2d at 836 (). The district court made several factual findings regarding Alagasco's conduct. Alagasco had told its employees the truth about VERO. Alagasco had no intent to mislead employees regarding whether any future offers would be made following the VERO offer. The evidence clearly established that, at the time Alagasco made VERO available to its employees, "it did not contemplate making...
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