Librizzi v. Children's Memorial Medical Center

• Decision Date: 06 March 1998
• Docket Number: No. 97-1934,97-1934
• Citation: 134 F.3d 1302
• Parties: , Pens. Plan Guide (CCH) P 23940M Gilbert J. LIBRIZZI, Plaintiff-Appellant, v. The CHILDREN'S MEMORIAL MEDICAL CENTER, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1302

134 F.3d 1302

40 Fed.R.Serv.3d 210, Pens. Plan Guide (CCH) P 23940M

Gilbert J. LIBRIZZI, Plaintiff-Appellant, v. The CHILDREN'S MEMORIAL MEDICAL CENTER, et al., Defendants-Appellees.

No. 97-1934.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 11, 1997.

Decided Jan. 26, 1998.

Rehearing Denied March 6, 1998.

Mary Cannon Veed (argued), Jessica Tovrov, Peterson & Ross, Chicago, IL, for Plaintiff-Appellant.

Mark A. Casciari (argued), James D. Jorgensen, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, IL, for Defendants-Appellees.

Before POSNER, Chief Judge, and EASTERBROOK and RIPPLE, Circuit Judges.

EASTERBROOK, Circuit Judge.

After Gilbert Librizzi, vice president for facilities design and construction of the Children's Hospital Medical Center in Chicago, suffered a stroke, he elected early retirement at age 59 under his employer's pension benefit plan. Within a year he concluded that this had been a mistake--that he would be better off with disability benefits until 65 and a full pension thereafter. He asked the Medical Center to make this adjustment, but it refused, for elections under the plan are conclusive in light of the relation between age and risk of mortality. For example, the regular retirement benefit is higher (per month) than the early retirement benefit not only because contributions through age 65 produce a higher principal sum that can be annuitized over a shorter period (persons who start receiving benefits at 65 expect to live fewer months than those who start at 59) but also because some employees die before age 65 and therefore do not receive any pension. Allowing an employee to take early retirement and switch to regular retirement if he lives until 65 would wreak havoc with the actuarial assumptions on which pension plans are based. The Medical Center did grant Librizzi's belated request for disability benefits, which he received until he reached 65. Librizzi concedes that he is not entitled to regular retirement benefits under the terms of the pension plan. Nonetheless he filed this suit under ERISA, see 29 U.S.C. § 1132(a)(3), demanding damages equal to the present value of the difference between early retirement benefits and regular retirement benefits for months following his 65th birthday.

His principal contention is that the employer failed to give accurate advice about his eligibility for disability benefits, leading him to make a poor choice among options open at the time. Librizzi contends that in July 1990 he asked Anne Haule, the vice president for human relations, about using disability leave, and that she replied: "I don't think you qualify, but I will check into it and I will get back to you." She never did, Librizzi says. He asked her because at the end of June 1989 he had changed from full-time to part-time duty and wondered whether a part-time employee qualified for disability benefits. It was an odd question for Librizzi to ask, because before switching to part-time employment he learned that he did qualify; in May 1989 Haule sent him a memorandum stating that when working reduced hours he would be eligible for disability coverage "on the same basis as he is now". Librizzi then moved to a 30-hour workweek. He also received a summary plan description that did not say or imply that part-time employees lose disability benefits. But by the time he raised the question with Haule again, both may have forgotten the research and memo of a year earlier--and Librizzi did not reread the documents in his own files. (It was the rediscovery of Haule's memo in October 1991 that led Librizzi to request both immediate disability benefits and a restoration of the full pension at age 65.) Incorrect advice violates the employer's fiduciary duty under § 404(a)(1)(B) of ERISA, 29 U.S.C. § 1104(a)(1)(B), Librizzi submits.

We shall assume not only that Librizzi received poor advice but also that this is actionable under ERISA, although neither is clear. Varity Corp. v. Howe, 516 U.S. 489, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996), on which Librizzi relies, involved intentional deceit--efforts to swindle employees into surrendering their retirement benefits. Uninformed but well-meaning advice poses a different problem. The employer denies misleading Librizzi at all, and the fact that he had Haule's memorandum containing accurate information makes it questionable to treat inconsistent oral statements (or delay in responding to oral inquiries) as statutory violations. No firm can ensure that all off-the-cuff statements are accurate descriptions of pension and welfare plans; complex plans are hard to explain in a few words, and the risk of error is correspondingly high. That is why ERISA requires accurate written summary plan descriptions (which Librizzi had). Moreover, it is difficult to determine after the fact whether bad advice was given: the participant may misremember or misrepresent what was said, while the employer's agents are likely to forget what they said to a particular participant on a particular occasion. Revealing the truth in writing usually precludes a claim based on a supposed oral error. See, e.g., Central States Pension Fund v. Joe McClelland, Inc., 23 F.3d 1256 (7th Cir.1994) (oral understandings and practices may not be used to vary pension promises); Minasian v. Standard Chartered Bank, PLC, 109 F.3d 1212, 1215 (7th Cir.1997) (an oral statement contradicted by written documents cannot be fraud in contract law); Carr v. CIGNA Securities, Inc., 95 F.3d 544 (7th Cir.1996) (same principle in securities law). Little wonder, then, that Schmidt v. Sheet Metal Workers' Nat. Pension Fund, 128 F.3d 541 (7th Cir.1997), rejects a claim that bad advice delivered verbally violated the plan administrator's fiduciary duty, when written documents provided accurate information. Haule sent Librizzi an accurate memorandum in 1989. The summary plan description told participants how to apply for disability benefits; conversation with a vice president is not an approved method (and Librizzi did not submit a formal application). But it is unnecessary to pursue this subject, for even the assumption that oral misstatements were made, and are actionable, does not help a participant who waits more than three years to file suit.

Haule made her statement in July 1990; Librizzi elected early retirement early in 1991 and started receiving benefits on February 1, 1991; he asked the Medical Center in October 1991 to change his retirement package, so he must have learned by then that Haule's oral response had been incorrect; but he did not file suit until April 1996, about 4 1/2 years later. Here is the governing statute of limitations:

No action may be commenced under this subchapter with respect to a fiduciary's breach of any responsibility, duty, or obligation under this part, or with respect to a violation of this part, after the earlier of--

(1) six years after (A) the date of the last action which constitutes a part of the breach or violation, or (B) in the case of an omission, the latest date on which the fiduciary could have cured the breach or violation, or

(2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation;

except that in the case of fraud or concealment, such action may be commenced not later than six years after the date of discovery of such breach or violation.

29 U.S.C. § 1113. See Rush v. Martin Petersen Co., 83 F.3d 894 (7th Cir.1996); Martin v. Consultants & Administrators, Inc., 966 F.2d 1078 (7th Cir.1992). The district court concluded that Librizzi had "actual knowledge" in October 1991 and dismissed the suit as untimely.

The Medical Center asks us to dismiss the appeal, or at least to hold that Librizzi is confined to the arguments he made to the district court when seeking reconsideration of the order dismissing the suit. The reason: Librizzi's notice of appeal identifies the judgment of January 1997, rather than the order of March 1997 denying reconsideration, as the order under review. But this is entirely proper. Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); Chaka v. Lane, 894 F.2d 923 (7th Cir.1990). It is never necessary--and may be hazardous--to specify in the notice of appeal the date of an order denying a motion under Fed.R.Civ.P. 50 or 59. Identifying the final decision entered under Rule 58 as "the judgment, order, or part thereof appealed from" (Fed. R.App. P. 3(c)) brings up all of the issues in the case. Pointing to either an interlocutory order or a post-judgment decision such as an order denying a motion to alter or amend the judgment is never necessary, unless the appellant wants to confine the appellate issues to those covered in the specific order. An appeal from the Rule 58...