Bricker v. Maytag Co.

• Decision Date: 24 January 1990
• Docket Number: No. 89-241,89-241
• Citation: 450 N.W.2d 839
• Parties: , 11 Employee Benefits Cas. 2677 Francis C. BRICKER, James J. McNeer, Clell F. Morrison, Robert J. Naisbitt, and Ralph E. Wright, Appellees, v. The MAYTAG COMPANY, Appellant.
• Court: Iowa Supreme Court

Page 839

450 N.W.2d 839

58 USLW 2469, 11 Employee Benefits Cas. 2677

Francis C. BRICKER, James J. McNeer, Clell F. Morrison, Robert J. Naisbitt, and Ralph E. Wright, Appellees, v. The MAYTAG COMPANY, Appellant.

No. 89-241.

Supreme Court of Iowa.

Jan. 24, 1990.

Rehearing Denied Feb. 16, 1990.

Ronald L. Sutphin and Steven K. Gaer of Ahlers, Cooney, Dorweiler, Haynie, Smith & Allbee, Des Moines, for appellant.

Charles E. Gribble of Sayre & Gribble, and William A. Wickett of Mark H. Goodrich & Associates, P.C., Des Moines, for appellees.

Considered by HARRIS, P.J., and LARSON, SCHULTZ, LAVORATO, and SNELL, JJ.

HARRIS, Justice.

Plaintiffs are five former long-time employees of defendant Maytag Company who were misled to their considerable disadvantage by a company official regarding their benefits under a company retirement plan. In selecting a remedy with which to seek recovery for their losses they chose to pass their federal statutory rights under the Employees' Retirement Income Securities Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. Rather than seek any recoupment from or rights under the company's retirement plan the employees sued the company itself under a theory of equitable estoppel. The central issue is whether this action is precluded by the preemption provisions of ERISA. The trial court determined there was no preclusion and we agree.

Each of the plaintiffs had more than thirty years of service with Maytag and each was considering retiring under the company's "thirty-and-out" rule when the controversy arose. Prior to June 1, 1986, the plaintiffs were working under a collective bargaining agreement which was to terminate May 31, 1986 (the parties refer to this as the "old contract"). A new bargaining agreement was being negotiated and was ratified on May 31, 1986 (referred to as the "new contract").

Each employee met with Maytag's retirement specialist at least twice before deciding to retire. The specialist had worked for the company for thirty-seven years; for the past twenty-seven years she was Maytag's only retirement specialist. The specialist told the employees they could retire under either the old contract or the new contract (whichever was better) if they did so on May 31, 1986. In reliance on these representations the plaintiffs retired on May 31, 1986. All desired to retire under the new contract because it provided for substantially higher monthly benefits. The following day the retired employees learned the new contract did not go into effect until June 1, 1986, and they were therefore considered retirees under the old contract. If they had opted to retire after one more nonwork day their retirement benefits would have been under the "new contract." This action followed.

I. Plaintiffs originally alleged a separate count for negligence and reckless misrepresentation and demanded a jury. Maytag moved to have the equitable estoppel theory tried in equity but this motion was never ruled upon. Plaintiffs later agreed to a bench trial.

Although Maytag disputes the point it is clear that the trial itself was conducted in the manner of a law action, not an equitable action. This being true our scope of review is on error. Citizens Sav. Bank v. Sac City State Bank, 315 N.W.2d 20, 24 (Iowa 1982) (We consider and review a case on appeal in the manner it was treated at trial.). We do not in any way suggest that on a de novo review our findings of fact would differ from those of the trial court.

II. Equitable estoppel is a doctrine invoked to avoid injustice. Iowa-Illinois Gas & Elec. v. State Commerce Comm'n, 412 N.W.2d 600, 606 (Iowa 1987) (citing Heckler v. Community Health Serv. of Crawford City, Inc., 467 U.S. 51, 59, 104 S.Ct. 2218, 2223, 81 L.Ed.2d 42, 51 (1984)). We have stated that:

[t]he foundations of the doctrine are "public policy, fair dealing, good faith and justice, and its purpose is to forbid one to speak against his own act, representations, or commitments, to the injury of one to whom they were directed, and who reasonably relied thereon."

Johnson v. Johnson, 301 N.W.2d 750, 754 (Iowa 1981) (citations omitted).

The elements of equitable estoppel are:

1. A false representation or concealment of material facts;

2. A lack of knowledge of the true facts on the part of the actor;

3. The intention that it be acted upon; and

4. Reliance thereon by the party to whom made, to his or her prejudice and injury.

Fernandez v. Iowa Dep't of Human Servs., 375 N.W.2d 701, 708 (Iowa 1985). The party asserting estoppel has the burden of establishing each of the elements by clear, satisfactory and convincing proof. Manson State Bank v. Diamond, 227 N.W.2d 195, 201 (Iowa 1975).

The facts we have described were shown by clear and convincing evidence, and satisfied the elements of equitable estoppel.

III. The most troublesome question in the case is Maytag's assertion that plaintiffs' claims are preempted by ERISA. "ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit plans." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 2896, 77 L.Ed.2d 490, 497 (1983). The policy behind the passage of ERISA is intended:

to protect interstate commerce and the interests of participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts.

29 U.S.C. § 1001(b) (1989).

We agree with Maytag that both retirement plans here qualify as "employee benefit plans" or "pension plans" as defined by ERISA. See Alessi v. Raybestos-Manhatten, Inc., 451 U.S. 504, 523, 101 S.Ct. 1895, 1906, 68 L.Ed.2d 402, 416 (1981) (through ERISA congress meant to establish pension plan regulation as exclusively a federal concern).

The preemptive aspects of ERISA (29 U.S.C. § 1144(a)) were described in Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987). Since then courts have struggled with only modest success to draw a line between state actions which directly relate to an ERISA plan (preempted) and those which only indirectly do so (not preempted).

In Davis v. Ottumwa YMCA, 438 N.W.2d 10, 12-13 (Iowa 1989), we acknowledged the sweeping preempting effect that ERISA has...