Miller v. Pension Plan for Emp. of Coastal Corp.
| Decision Date | 31 December 1991 |
| Docket Number | No. 89-1431.,89-1431. |
| Citation | 780 F. Supp. 768 |
| Parties | Fred T. MILLER, Plaintiff, v. PENSION PLAN FOR EMPLOYEES OF the COASTAL CORPORATION; the Coastal Corporation, A Delaware Corporation, Defendants. |
| Court | U.S. District Court — District of Kansas |
Robert W. Kaplan, Kaplan & McMillan, Wichita, Kan., for plaintiff.
Charles P. Efflandt, Foulston & Siefkin, Wichita, Kan., for defendants.
The case comes before the court on the defendants' motion for summary judgment. Plaintiff brings this action under the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. § 1132(a)(1)(B), to recover certain pension plan benefits under the Pension Plan for Employees of the Coastal Corporation. Plaintiff's theory of recovery is based not on the terms of the written pension plan but on certain oral and written representations made to him. The court denies the plaintiff's request for oral argument as the court is able to comprehend the parties' respective positions on the central issues from their briefs.
A motion for summary judgment gives the judge an initial opportunity to assess the need for a trial. Without weighing the evidence or determining credibility, the court grants summary judgment when no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). Essentially, the inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-52, 106 S.Ct. at 2512. More than a "disfavored procedural shortcut," summary judgment is an important procedure Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986).
On pages three through twelve of the pretrial order, the parties have stipulated to most of the facts pertinent to this motion. In the interest of brevity, the court will adopt those stipulations and set out herein a factual summary of them.
Plaintiff Fred T. Miller was employed at the Derby Refinery from December 4, 1950, through January 1, 1989. Over his years of employment, plaintiff participated in several different pension plans. Plaintiff was hired by Derby Oil Company as an hourly employee and participated in a pension benefit plan funded through Minnesota Mutual Life Insurance.
Colorado Interstate Gas Company purchased Derby Oil Company on October 1, 1955. Around the same time, plaintiff requested and obtained his accrued benefits from Minnesota Mutual. Plaintiff's claim in this case does not include any of these benefits accrued up to 1955 and distributed to him.
As of October 1, 1955, plaintiff was an hourly employee participating in and accruing benefits from Colorado Oil & Gas Retirement Plan. This continued until the plan was restated and named "CIC Industries, Inc. Retirement Plan," in August of 1968. Plaintiff accrued benefits under the renamed plan through December 31, 1968.
CIC Industries, Inc., which then owned Derby Refinery, amended and restated, effective January 1, 1969, this plan establishing a separate plan for hourly employees within the collective bargaining unit and giving it the name of "Derby Refining Company Pension Plan." Plaintiff participated in this hourly union plan through April 15, 1974.
Defendant Coastal Corporation acquired the Derby Refinery in 1973. In July of that year, Coastal Corporation merged the non-union CIC pension plan into its predecessor to the Pension Plan for Employees of the Coastal Corporation. There was no merger of the Derby Refining Company Pension Plan in which the plaintiff was a participant.
In April of 1974, plaintiff was promoted from his union hourly position to the non-union salaried position of Assistant Operating Superintendent at Derby Refinery. With this promotion, plaintiff stopped participating in the Derby Refining Company Pension Plan and began participating in the predecessor to the Pension Plan for Employees of the Coastal Corporation. Plaintiff accrued benefits under this latter plan until his retirement effective January 1, 1989.
The Pension Plan for Employees of the Coastal Corporation specifies a benefit formula for the calculation of a participant's retirement benefits. A factor in this formula is the participant's years of "credited service." This factor was defined in the plan to include in some instances those years of service with the company prior to its acquisition by Coastal Corporation. Immediately prior to Coastal Corporation's acquisition of CIC Industries, Inc., plaintiff was not a participant in a qualified pension plan of CIC Industries, Inc.
Plaintiff filed a formal claim for benefits under the plan on December 7, 1988. Administration of the Coastal Corporation Plan is delegated to the Administrative Committee. The Committee decided that plaintiff's "credited service" included only those years, April of 1974 to his retirement, that he was a salaried employee with Coastal Corporation at the Derby Refinery. Consequently, plaintiff's benefits for the years running from October of 1955 through April of 1974 were calculated at the lower amounts found in the Derby Refining Company Pension Plan rather than the higher amounts provided in the Coastal Corporation Plan.
The plaintiff received annual benefit statements concerning his benefits under the Coastal Corporation Plan. Attached to one or more of these benefit statements was the following:
The information shown in this statement is based on personal information in effect at the time the report was prepared and on various assumptions as to future events. While great care has been taken in developing this information it may, in some cases, be subject to inaccuracies in the accumulation of data or in calculations. In the event of a discrepancy between the information contained in this statement and the plan document, the latter will govern.
Plaintiff seeks to recover those pension benefits that he would have recovered had all of his years of employment at Derby Refining Company, beginning in October of 1955, been treated as credited service under the Coastal Corporation Plan. He alleges that upon his promotion in April of 1974 he was told his prior service would be computed as if he had been salaried employee throughout his employment at Derby Refining Company. From 1975 through 1984, with the exception of 1983, plaintiff received annual benefit statements from the Coastal Corporation Plan which showed benefits being computed consistent with the prior oral representation. On these allegations, plaintiff bases three legal theories for recovery. The oral representation and benefit statements created a contractual obligation on Coastal Corporation to pay those pension benefits, and this duty was breached with the denial of plaintiff's claim. Because of these representations, Coastal Corporation is equitably estopped from denying these benefits and the plaintiff detrimentally relied upon them.
Defendants advance three issues in support of their motion for summary judgment. Whether defendants are liable under ERISA for the pension benefits claimed on the basis of certain alleged oral and non-plan written representations made to plaintiff? Whether recovery of these benefits is available under some theory of federal common law? Finally, whether Coastal Corporation is a proper party in this action to recover pension plan benefits under ERISA, 29 U.S.C. § 1132? The court will combine its discussion of the first two issues.
A person may bring an action under ERISA "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). This provision basically recognizes an ERISA "breach of contract" action. Pratt v. Petroleum Prod. Mngmt. Employee Sav. Plan, 920 F.2d 651, 658 (10th Cir.1990). "Every employee benefit plan shall be established and maintained pursuant to a written instrument." 29 U.S.C. § 1102(a)(1). Plaintiff's claim is based not on any written term of the Coastal Corporation Plan but on oral representations and non-plan written benefit statements. Consequently, the defendants are correct in their argument that the success of plaintiff's ERISA claim turns first upon whether the written plan may be modified by oral or non-plan written representations.
In Straub v. Western Union Telegraph Co., 851 F.2d 1262, 1265 (10th Cir.1988), the Tenth Circuit held "that no liability exists under ERISA for purported oral modifications of the terms of an employee benefit plan." In support of its holding, the Tenth Circuit cited the Eleventh Circuit decision of Nachwalter v. Christie, 805 F.2d 956, 959-61 (11th Cir.1986), and quoted the following: "`This requirement that ERISA plans be `maintained' in writing precludes oral modifications of the Plans; the common law doctrine of estoppel cannot be used to alter this result.'" 851 F.2d at 1265.
ERISA preempts all state commonlaw claims relating to employee benefit plans. 29 U.S.C. § 1144(a). Federal courts are vested with the power, however, to develop a body of federal common law addressing the rights and obligations under ERISA plans. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 110, 109 S.Ct. 948, 953-54, 103 L.Ed.2d 80 (1989). The Tenth Circuit in Straub rejected an attempt to use federal common law to modify orally the written terms of the plan and adopted the following rationale from Nachwalter:
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