Dytrt v. Mountain State Tel. & Tel. Co.
| Decision Date | 17 December 1990 |
| Docket Number | Nos. 88-15737,89-15201,s. 88-15737 |
| Citation | 921 F.2d 889 |
| Parties | , 13 Employee Benefits Ca 1108 Barbara A. DYTRT, Plaintiff-Appellant, v. The MOUNTAIN STATE TELEPHONE AND TELEGRAPH COMPANY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Curtis L. Kennedy, Denver, Colo., for plaintiff-appellant.
Ruth V. McGregor, Nancy L. Rowen, Fennemore Craig, Phoenix, Ariz., for defendant-appellee.
Appeal from the United States District Court for the District of Arizona.
Before HALL, BRUNETTI and NOONAN, Circuit Judges.
Appellant Barbara Dytrt ("Dytrt") sued her employer, appellee The Mountain States Telephone and Telegraph Company ("Mountain Bell"), alleging federal claims under Secs. 404 and 510 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. Secs. 1104, 1140, and a state law claim for the breach of the express and implied covenant of good faith and fair dealing, pursuant to Mountain Bell's disallowance of Dytrt's attempted withdrawal of her decision to take early retirement. The district court granted summary judgment for Mountain Bell on the ERISA claims, dismissed the state law claim, and awarded Mountain Bell attorney's fees. We reverse the summary judgment on the ERISA claims, affirm the dismissal of the state law claims, vacate the award of attorney's fees, and remand.
The facts of this case are undisputed. Appellant Barbara Dytrt worked for appellee Mountain Bell for thirty-one years in various management positions. In December 1986 she took the position of Facilities-Force Staff Manager in Mountain Bell's Marketing/Products Operator Service segment in Tempe, Arizona. Lois Schmidt, Director of Marketing, told her shortly after she took this position that it would exist only "for a while." Dytrt was unable to get a written or oral guarantee as to the position's longevity. However, District Manager Billie Stephens, her immediate supervisor, did refer to it as "a solid job."
On January 16, 1987 Mountain Bell announced a special retirement plan with incentive benefits for certain management employees, consisting of one year's salary plus supplemental benefits of up to $8,000, in addition to regular pension benefits, with retirement commencing on March 31. The plan, entitled "Enhanced Management Transition Program" ("the Plan" or "EMTP"), qualifies as an employee welfare benefit plan under ERISA, 29 U.S.C. Sec. 1001 et seq., and is subject to those statutory provisions. The Plan is self-maintained and the officers of Mountain Bell are its fiduciaries. The purpose of the Plan was to reduce the number of managers who had five or more years of service as of March 31.
According to the Plan description furnished to the employees, an employee was eligible if he or she (1) was a regular full-time or part-time management employee of Mountain Bell or its subsidiaries on the active payroll as of January 12, with five or more years of employment as of March 31; (2) elected the Plan by submitting a response form on or before February 20 (or by March 31 if the delay was for good cause as determined at the discretion of Mountain Bell), indicating election of the Plan and selecting one of two benefit options; and (3) received the approval of both the segment vice-president and the Vice President-Human Resources, which could be withheld due to the "critical needs of the business."
The Plan description also clearly indicated that once eligibility was determined and granted, the decision to participate could not be revoked, except at the discretion of Mountain Bell for "good cause related to an exceptional hardship." However, a negative response was revocable, because no such determination on eligibility would have occurred. The Plan description instructed employees to refer questions to a list of segment Human Resource managers, and also listed eight "EMTP Contacts" with telephone numbers. Subsequent to this initial Plan description, Mountain Bell circulated various memoranda, articles, and notices regarding the Plan from January 17 through February 20. 1
On February 18 Dytrt submitted her first response form, checking the box indicating "NO, I do not want to be considered for participation eligibility." At that time Dytrt realized that her position could be centralized or eliminated, as Mountain Bell was eliminating and consolidating (regionalizing) management jobs like hers and had learned in January that a major part of her job responsibility could be eliminated. Nevertheless, she decided not to elect the Plan. Also on February 18 Mountain Bell extended the deadline for election of the Plan from February 20 to Monday, March 2. Pursuant to the Plan description, Mountain Bell further permitted responses through March 31, provided an employee could show good cause for the delay in responding. See supra at 891.
On Friday, February 27 Dytrt was told that her position would be eliminated due to regionalization and that she could either (1) move to Salt Lake City, Utah and take a comparable position; (2) elect retirement under the Plan; or (3) attempt to find employment within the Phoenix area. She was reluctant to take the Utah job, as she took care of her elderly mother in Tempe. However, by her own admission she did not consider her options or call her mother over the weekend. On Monday, March 2 Dytrt submitted her second response form, checking the box indicating "YES, I want to be considered for the option indicated below" and marking option 1. The form specifically provided in block capitals the following legend:
I UNDERSTAND THAT MY DECISION WHICH IS INDICATED BELOW IS IRREVOCABLE BY ME.
I ALSO UNDERSTAND THAT IF I INDICATE "YES", THIS DOES NOT GUARANTEE THAT I WILL BE ELIGIBLE FOR THE PROGRAM. THIS FINAL DECISION REMAINS AT THE DISCRETION OF THE COMPANY.
Notwithstanding this legend, she testified that it was her belief that under the circumstances, she could change her decision.
That evening she spoke with her mother, who indicated a willingness to go to Salt Lake. Dytrt then decided she would take the Salt Lake City job and relocate. On Tuesday, March 3 she told Stephens and Schmidt of her change of mind. Both made appeals on her behalf, with Stephens writing a March 3 memorandum to Schmidt and Schmidt writing a March 6 memorandum to R.C. Hawk, Vice President-Marketing, F.L. Cook, Vice President-Human Resources, and A.G. Ames, Executive Vice President and Chief Operating Officer. Both memoranda personally requested that Dytrt be allowed to rescind her positive response, concluding that "Barbara can make a real positive contribution to the company." Dytrt also wrote a letter on March 10 attempting to revoke her acceptance. Mountain Bell maintained that her acceptance was irrevocable and notified her that her retirement was effective as of April 20. Dytrt began receiving monthly pension benefits of approximately $1,300 and received a severance benefit in the amount of her previous annual salary pursuant to option 1, distributed over a two-year period.
On May 13 her attorney submitted a revocation request on her behalf to Edward Kerber, the Plan Administrator. On May 20 Kerber notified her attorney that his request would be treated as an appeal and would be referred to the Plan Review Committee, consisting of Mountain Bell officers and directors. On July 17 the Committee denied her request for reinstatement, finding that Dytrt had not shown "good cause related to an exceptional hardship" to justify the cancellation of her March 2 acceptance.
Dytrt filed suit on September 28, 1987 alleging that Mountain Bell (1) breached its fiduciary duty under Sec. 404 of ERISA; (2) interfered with protected rights under Sec. 510 of ERISA; and (3) breached the express and implied covenant of good faith and fair dealing under state law. On cross-motions for summary judgment, the district court granted Mountain Bell summary judgment on the ERISA claims and dismissed the state law claim as preempted by ERISA. The court subsequently awarded ten percent of the attorney's fees requested by Mountain Bell.
Dytrt appeals (1) the summary judgment for Mountain Bell on the ERISA claims; (2) the dismissal of the state law claim; and (3) the award of attorney's fees. Mountain Bell seeks attorney's fees on the appeal.
This circuit reviews a district court's grant of summary judgment de novo, Kruso v. International Telephone & Telegraph Corp., 872 F.2d 1416, 1421 (9th Cir.1989), cert. denied, --- U.S. ----, 110 S.Ct. 3217, 110 L.Ed.2d 664 (1990), viewing the evidence in the light most favorable to the party against whom summary judgment was granted to determine whether there are any genuine issues of material fact and whether the district court properly applied the relevant substantive law. Tzung v. State Farm Fire and Casualty Co., 873 F.2d 1338, 1339-40 (9th Cir.1989).
Dytrt first contends that her March 2 acceptance was invalid because her March 3 attempted revocation occurred prior to her eligibility determination and was thus a valid revocation. Mountain Bell maintains that the March 2 acceptance was valid, because Mountain Bell had determined Dytrt eligible prior to her March 3 attempted revocation. 2
Under the Plan an employee was eligible if the employee (1) held a management position for five years; (2) submitted a positive response form; and (3) was approved by the segment vice president and Vice President-Human Resources. The first two requirements are not disputed. 3 Although Dytrt claims that she was not approved by the two vice presidents between her acceptance and attempted revocation, the record shows that all managers in her division were pre-approved.
At the outset of the Plan, Dytrt's segment vice-president, Robert Hawk, Vice President-Marketing, determined that all employees within the Marketing Segment...
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