Bittinger v. Tecumseh Products Co., 94-CV-72283-DT.
| Decision Date | 16 July 1998 |
| Docket Number | No. 94-CV-72283-DT.,94-CV-72283-DT. |
| Parties | Charles S. BITTINGER, Individually and as a Representative of those Similarly Situated, a Class, Plaintiff, v. TECUMSEH PRODUCTS COMPANY and Tecumseh Division Group Insurance Plan for Retirees, Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Ann C. Thompson, Kelman, Loria, Detroit, MI, for Charles S. Bittinger, plaintiff.
Diane M. Soubly, Butzel Long, Ann Arbor, MI, Daniel J. Bernard, Robert M. Vercruysse, James E. Roach, Vercruysse, Metz, Bingham Farms, MI, for Tecumseh Products Company, Tecumseh Division Group Insurance Plan for Retirees, defendants.
This matter is currently before the Court on defendants' motion for summary judgment. Plaintiff has filed a five count complaint setting forth the following claims: a breach of labor agreement claim brought under § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185 and a breach of employee welfare plan claim under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et. seq. (Count I); a claim for promissory and/or equitable estoppel (Count II); a claim for breach of fiduciary duty (Count III); a claim for "structural defect" under the LMRA and ERISA (Count IV); and a claim for "misrepresentation and willful concealment" (Count V). This class action suit, initiated by plaintiff Bittinger and former union hourly employees of the Tecumseh Division of defendant Tecumseh Products Company, seeks a declaration that all members of the class are entitled to fully funded lifetime retiree health care and life insurance benefits. On January 30, 1998, defendants filed four motions for summary disposition as to all of the plaintiff's claims.1 The Court entertained oral argument on defendants' motion on June 19, 1998. For the following reasons, the Court grants summary judgment in favor of defendants on all of plaintiff's claims.
Plaintiff and members of his class, retirees of defendant Tecumseh Products Company ("the Company"), seek to establish that health and life insurance benefits conferred upon the retirees pursuant to a collective bargaining agreement ("CBA") were vested, fully funded "lifetime" benefits. The CBAs at issue in this case were entered into by members of the United Products Workers Union ("UPW") and the defendant Tecumseh. The benefits about which plaintiff complains were conferred in a CBA entered into among the parties in 1988 which expired on May 15, 1991. Upon the expiration of the 1988-1991 CBA, a strike ensued. At this juncture, the company issued COBRA notices to all UPW hourly retirees. According to defendant, "the COBRA notices advised retirees that their life insurance and medical coverage had been terminated as of May 16, 1991, and provided an opportunity for the retirees to continue their insurance coverage by paying the full premium." (Df.'s Mot.S.J. at 3).
Following the expiration of the 1991 agreement, in June 1991, the Company entered into a new labor contract under which no provision was made for retiree health or life insurance benefits. The Company then offered the retirees life and health insurance under a new plan the terms of which provided that the Company paid for approximately 75% of the premium. In order to enroll in the new insurance program, the employees were required to sign releases which purported to release any claims against the Company in exchange for acceptance of the terms of the insurance plan. Some, but not all, of the eventual class members executed the releases.
The history of collective bargaining between the UPW and the Company began with the negotiation and ratification of the first CBA agreement on September 1, 1965. The original agreement contained the following provision:
[T]he labor contract contemplates that during the period while the Labor Contract remains in force and effect the Company will establish and maintain an insurance program (herein called the Program), which will provide the Group Life, Extra Accident and Sickness and Accident Insurance Benefits and the Hospital and Medical Expense Benefits described in the booklet hereunto attached as Exhibit A.
Subsequent to the 1965 CBA agreement, the parties negotiated agreements in 1968, 1971, and 1975. The negotiation of each of the foregoing CBAs was memorialized in a "settlement agreement" which set forth the pertinent changes to the CBA agreement, but in other respects retained the unchanged provisions of the original agreement between the parties.
Negotiations with respect to the CBA were undertaken in 1978, 1981, 1984, and 1988. Beginning with the 1978 settlement agreement, the parties assented to the inclusion of the following clause: "All other provisions of the current Insurance Benefit Plan will remain unchanged and will be continued during the term of the new Agreement." (Df.'s Mot.S.J.Ex. 6 at 2). This language was retained in the 1981 settlement agreement with an added specification that stated, "All other provisions of the Retiree's [sic] insurance program remain unchanged during the term of the new Contract." (Df.'s Mot.S.J.Ex. 7 at 3).
In 1984, the Company and the UPW engaged in mid-contract concessionary bargaining, the result of which eliminated future retiree health and insurance coverage for those employees hired after May 15, 1984. The 1984 settlement agreement, in which substantial changes2 were made to retiree benefits, added the following language: "All other provisions of the Retiree Life, Health, Medical and Surgical benefits remain unchanged during the term of the Contract." (Df.'s Mot.S.J.Ex. 8 at 5). In 1988, the settlement agreement contained the following language:
The Company will continue during the term of the new Contract the Group, Life, Health, Medical and Surgical benefits in the same amount and under the same amount and under the same provisions currently in effect and under the same terms and conditions outlined in the 1984 Settlement Agreement for employees, retirees, and eligible dependents. These benefits will continue unchanged during the term of the new Contract.
In addition to the CBA and settlement agreements entered into by the parties, the Company also distributed summary plan documents which pertained to the furnishing of retiree insurance benefits and summarized the contents of those benefits for the participants. Sometime in 1972, the Company issued a booklet entitled "Group Insurance Plan for the Retired Hourly Employees of Tecumseh Products Division" which contained the following caveat: "It is hoped that this plan will be continued indefinitely, but, as is customary in Group Insurance Plans, the right of change or discontinuance at any time must be reserved." (Df.'s Mot. S.J.Ex. 19). The company issued another booklet on March 1, 1975 for retired hourly employees which contained the aforementioned language.3 In 1988, the summary plan document was entitled "Benefit Handbook for Retirees of Tecumseh Products Division" and contained the following clause:
These benefits are negotiated under the basic labor agreement. The benefits, terms and conditions of the Plan are, therefore, subject to change through the collective bargaining process, wherein the Company reserves the right to amend, modify or discontinue any or all of the benefits described in this booklet at any time.
(Df.'s Mot.S.J.Ex. 23). At the conclusion of the 1988 summary plan description a section appears entitled "ERISA Rights" and contains the following limitation:
It is the intention of the Company to continue the plans for active and retired employees indefinitely, although the Company reserves the right to modify or discontinue the Plan described herein at any time without the consent of or without giving notice to participants.
The final document pertinent to the present inquiry was issued by the company in 1988 and is entitled "Group Health Care Plan for United Products Workers Hourly Retirees,"4 and provided the following limitation:
1.2 Term of Plan. The Plan shall be coextensive with the collective bargaining agreement entered into between the UPW and the Division, which is effective as of May 15, 1988 and covers a three (3) year period ending May 15, 1991 (the "Labor Agreement"), unless the plan is earlier terminated as described in Articles V and VIII below.
(Df.'s Mot.S.J.Ex. 23 at 50). Article VIII of the group health care plan states:
8.1 Amendments. The Plan Sponsor reserves the absolute right, through the collective bargaining process, to amend, modify, or discontinue any or all of the benefits described in the Contract or the Plan, and any amendment shall be effective in the manner and at the time therein set forth. Notwithstanding the provisions of the Section 8.1, the Contract may be amended only in accordance with the provisions of such Contract. Additionally, no employee of the Division or the Company is authorized to modify or vary from the actual written provisions of the Contract or the Plan. Accordingly, any advice received by a Participant is subject to verification, and, if necessary, correction.
The CBA covering the period from 1988 to 1991 expired on May 15, 1991 and a strike ensued.
Rule 56(c) of the Federal Rules of Civil Procedure mandates the entry of summary judgment when "the pleadings, depositions, answer to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." There is no "genuine issue of material fact for trial unless, by viewing the evidence in favor of the nonmoving party, a reasonable jury could return a verdict for that party." Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Boddy v. Dean, 821 F.2d 346, 349 (...
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