Ellenburg v. Brockway, Inc.

• Decision Date: 20 June 1985
• Docket Number: 84-5932,Nos. 84-5935,s. 84-5935
• Citation: 763 F.2d 1091
• Parties: Leroy ELLENBURG, Plaintiff-Appellant/Cross-Appellee. v. BROCKWAY, INC. & Spellman Cunningham, Defendants-Appellees/Cross-Appellants. CA.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1091

763 F.2d 1091

Leroy ELLENBURG, Plaintiff-Appellant/Cross-Appellee. v. BROCKWAY, INC. & Spellman Cunningham,

Defendants-Appellees/Cross-Appellants.

CA. Nos. 84-5935, 84-5932.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted April 5, 1985.

Decided June 20, 1985.

Bruce Gelber, Julian B. Fenstein, Los Angeles, Cal., for plaintiff-appellant/cross-appellee.

Loyd P. Derby, Morgan, Lewis & Bockius, Los Angeles, Cal., for defendants-appellees/cross-appellants.

Appeal from the United States District Court for the Central District of California.

Before BROWNING and CHAMBERS, Circuit Judges, and MARQUEZ ¹, District Judge.

MARQUEZ, District Judge:

Leroy Ellenburg, appellant and plaintiff below, brought this action against Brockway, Inc. (Brockway) and Spellman Cunningham (Cunningham), appellees and defendants below, pursuant to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. Sec. 1001, et seq. (1975). Ellenburg sought to recover early retirement benefits under Brockway's pension plan on grounds of breach of fiduciary duty, arbitrary and capricious conduct of fiduciaries, equitable estoppel, and on the state law claim of breach of the implied covenant of good faith and fair dealings toward a long-term employee.

Ellenburg's state law claim was dismissed pursuant to the trial court's Memorandum Decision and Order on Motion for Summary Judgment, ruling that ERISA preempted the state law claim. The remaining claims were tried to the court, and judgment was entered in favor of Brockway and Cunningham.

Ellenburg has appealed the trial court's Memorandum Decision and judgment, and Brockway and Cunningham have appealed the trial court's decision denying them an award of attorneys' fees.

Standard of Review

Eligibility decisions by trustees of an employee benefit plan covered by ERISA will not be overturned unless they are (1) arbitrary and capricious, (2) not supported by substantial evidence, or (3) erroneous on a question of law. Malhiot v. Southern California Retail Clerks Union, 735 F.2d 1133, 1135 (9th Cir.1984); Rehmar v. Smith, 555 F.2d 1362, 1371 (9th Cir.1976).

The district court's factual determinations are reversible by this court only if they are clearly erroneous. United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948); Lojek v. Thomas, 716 F.2d 675, 680 (9th Cir.1983).

FACTS

Ellenburg began working at the Pomona, California plant in 1948 for Continental Can Company (Continental). He continued his employment at that facility after the 1964 acquisition of the plant by Brockway. He worked at that plant continuously until his retirement on June 1, 1980.

Along with the purchase of the Pomona plant, Brockway also assumed pension obligations for Continental employees. To be eligible for early retirement benefits from Brockway, an employee had to (1) have had continuous unbroken service with Brockway from 1964 to the date of retirement, (2) have completed at least ten years of continuous service to both Continental and Brockway, and (3) have attained the age of 55. In order to receive benefits from Continental he had to receive a pension with a qualified pension plan established by Brockway. The portion of benefits Continental would pay an employee was to be "carved out" of the total benefit otherwise payable by Brockway.

Ellenburg submitted "Personal Information Requested" forms, dated June 27, 1979, to Cunningham, Director of Personnel at the Pomona plant, indicating his desire for early retirement and receipt of benefits. On these forms, and later forms filed in connection with his application for early retirement benefits, Ellenburg listed his date of birth as December 26, 1923. Prior to the "Personal Information Requested" forms, all records and documents filed by Ellenburg with Continental and Brockway contained birth dates of December 26, 1926.

Ellenburg's request for early retirement benefits was forwarded to the office of Mr. Richard Lewis, Manager of Employee Benefits. A computer print-out of retirement benefit calculations for Ellenburg, with a birth date of December 26, 1926 was generated and returned to Cunningham with a note indicating Ellenburg was not old enough to retire. When Cunningham informed Ellenburg of the ineligibility, Ellenburg disclosed his recently acquired Delayed Birth Certificate indicating a birth date of December 26, 1923. A copy of the Delayed Birth Certificate was forwarded to Mr. Lewis' office and also to Continental. At this time no Brockway personnel questioned the validity of the Delayed Birth Certificate.

Ellenburg, with the assistance of his sister, obtained the Delayed Birth Certificate from the State of Georgia by having a notary public, who was a friend of the family, certify that she had examined a family bible and a life insurance policy containing the age of Ellenburg. The State of Georgia issued the Delayed Birth Certificate in January 1979, based solely on the certification of the notary public. Ellenburg took disability leave from March 4, 1980 until May 9, 1980. From May 9, 1980 until June 1, 1980, Ellenburg took vacation time. He retired on June 1, 1980.

Due to a rumor among employees that Ellenburg had provided an incorrect birth date in his application for early retirement benefits, Mr. Lewis telephoned the school district and life insurance company whose records supported the Delayed Birth Certificate. He was advised that the school district's records indicated the year of birth as 1927, and not 1923 as claimed on the Delayed Birth Certificate. He was also advised that the records of the life insurance company, the application for the insurance policy, reflected Ellenburg's year of birth to be 1926, and not 1923 as claimed in the Delayed Birth Certificate.

On September 16, 1980, Mr. Lewis wrote Ellenburg informing him that the 1923 year of birth might be incorrect, advising him that payment of benefits was being suspended until the discrepancy in birth dates was resolved, and requesting the following information: (1) a copy of the insurance policy, (2) the name and address of the hospital in which he was born, and (3) a copy of his military discharge papers. Mr. Lewis wrote Ellenburg on October 7, 22, and 31, 1980 again requesting the above information.

Ellenburg claims that the insurance policy, the family bible, and his father, all of which he claimed he relied on in obtaining the Delayed Birth Certificate, have disappeared.

In February 1981, Mr. Lewis received copies of the school records and the application for the insurance policy, both of which supported the birth date of December 26, 1926. Based upon this information In February 1983, Brockway received from the Bureau of Vital Statistics in Putnam County, Georgia, a certified copy of Ellenburg's birth certificate with the year of birth listed as 1926. Ellenburg's name is misspelled on the birth certificate, but his mother and father are correctly identified

Brockway decided to deny early retirement benefits to Ellenburg.

DISCUSSION

Preemption

ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit plans. It sets minimum uniform standards for employee benefit plans and provides for uniform remedies in the enforcement of the plans. See Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 2896, 77 L.Ed.2d 490 (1983); Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 510, 101 S.Ct. 1895, 1899, 68 L.Ed.2d 402 (1981).

ERISA explicitly preempts state laws to the extent that they relate to employee benefits not exempt from federal regulation. 29 U.S.C. Sec. 1144 provides in pertinent part:

(a) Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supersede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of this title.

(c) For purposes of this section: (1) The term "State law" includes all laws, decisions, rules, regulations, or other State action having the effect of law, of any State.

The ERISA preemptive provision is to be broadly construed. Alessi, 451 U.S. at 522-25, 101 S.Ct. at 1905-07. "A law 'relates to' an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan." Shaw, 463 U.S. at 96-97, 103 S.Ct. at 2900. Thus ERISA preempts state laws which either directly or indirectly relate to an employee benefit plan. Dependahl v. Falstaff Brewing Corp., 653 F.2d 1208, 1215 (8th Cir.1981), cert. denied, 454 U.S. 1084, 102 S.Ct. 641, 70 L.Ed.2d 619 (1981).

The Ninth Circuit has held that ERISA preempts common law theories of breach of contract implied in fact, promissory estoppel, estoppel by conduct, fraud and deceit, and breach of contract. Blau v. Del Monte Corp., 748 F.2d 1348, 1356-57 (9th Cir.1984). Those state laws authorizing causes of action for the improper handling of claims under benefit plans have been held to be directly connected with the employee benefit plan and thus preempted by ERISA. Russell v. Massachusetts Mut. Life Ins. Co., 722 F.2d 482, 487-88 (9th Cir.1983).

Ellenburg's state claim for breach of implied covenant of good faith and fair dealing is brought against Brockway and Cunningham in their capacity as employer, rather than fiduciaries, and seemingly concerns the employment relationship, rather than the employee benefit plan. However, this claim originates from the handling and disposition of Ellenburg's claim for early retirement benefits and is therefore directly connected with the employee benefit plan and preempted by ERISA.

Adequacy of Notice

A claim for retirement benefits is filed "when a written or oral communication is made by the claimant ... which is reasonably calculated to bring the claim to the attention of ... any officer of...