Phillips v. Amoco Oil Co.

Decision Date22 September 1986
Docket NumberNo. 85-7623,85-7623
Citation799 F.2d 1464
Parties, 7 Employee Benefits Ca 2246 Willie D. PHILLIPS, Horace T. Lovell, J.P. Fennell, William H. Jones, Frank Murphree, Billy R. Pinyan, Lewis O. Moore, Mildred Gaynelle McClendon, H. Glenn Gardner, Homer Weaver, Owen J. Sims, Agnes Copeland, James H. Owens, Elah M. Gurley, Larry U. Davis, Walker Shaneyfelt and R.C. Shrader, individually and on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. AMOCO OIL COMPANY, a Corp., Joe D. Bearden, and Northern Propane Gas Company, Defendants-Appellees.
CourtU.S. Court of Appeals — Eleventh Circuit

Yearout, Hardy & Myers, P.C., J. Gusty Yearout, Deborah Braden, Birmingham, Ala., for plaintiffs-appellants.

Stephen E. Brown, Bradley, Arant, Rose & White, Ralph H. Yeilding, William B. Hairston, Jr., Engel, Hairston, Moses & Johanson, Birmingham, Ala., Barnes & Thornburg, Stanley C. Fickle, Charles E. Bruess, Indianapolis, Ind., for defendants-appellees.

Appeal from the United States District Court for the Northern District of Alabama.

Before RONEY, Chief Judge and CLARK, Circuit Judge, and DOYLE *, Senior District Judge.

CLARK, Circuit Judge:

Former employees of Amoco Oil Company's Alabama retail liquid propane gas ("LPG") business appeal from the district court's decision to grant summary judgment in favor of Amoco Oil Company ("Amoco"), Joe D. Bearden and Northern Propane Gas Company ("Norgas") on claims of breach of contract, state common law fraud and Employee Retirement Income Security Act ("ERISA") violations arising in the context of the sale of Amoco's Alabama LPG operations to Norgas. We affirm.

I. FACTS

Appellants (the "employees") were formerly employed by Amoco in its LPG operations in Alabama. All participated in the Employee Retirement Plan of Standard Oil Company and Participating Companies (the "Standard Plan").

In May of 1979, Amoco agreed to sell its LPG operations in the southeastern United States to Norgas. The sales contract was signed on July 31, 1979 and the sale closed on September 4, 1979. Upon selling its Alabama LPG operations, Amoco completely left the retail LPG business in Alabama and therefore had no work in that area for any of the employees.

The sales contract provided that Norgas would offer employment to each regular full-time employee at his or her current salary. It further provided that retirement benefits under Norgas' retirement plan would be based on years of service with Norgas, except that continuous years of service with Amoco would be credited by Norgas for vesting purposes. Thus years of service with Amoco would not be credited for the purpose of calculating benefits or determining eligibility for early retirement. Each of the employees with vested benefits under the Standard Plan, including those who have not yet reached the age of sixty-five, opted to receive and is currently receiving an annuity from the Standard Plan.

A meeting for the Amoco employees was held on August 21, 1979 at Boaz, Alabama to explain the various Norgas benefits that would be available to the employees after the sale (the "Boaz meeting"). At the meeting, the employees were informed of the sale of Amoco's LPG operations to Norgas. They were also told that:

On every other plan we recognize your service with Amoco. For the Retirement Plan, you must treat the day you begin work with Northern Propane Gas Company as your first day of service.

While the parties dispute whether all the employees understood that their years of service would not be credited by Norgas for all purposes, there is no dispute that they were told at the Boaz meeting that Norgas would not credit years of service with Amoco under its retirement plan. There is also no dispute that in August, 1979, the employees were given copies of a Norgas summary plan description stating that the retirement benefits they would receive would depend on service and pay with Norgas. The employees began employment with Norgas on September 4, 1979, the closing date of the sale to Norgas.

On September 4, 1980, the employees filed suit against Amoco, Bearden and Norgas in an Alabama state court. The case was eventually removed to federal district court. After eight amendments, the employees' complaint finally contained state breach of contract claims, state fraud and conspiracy to defraud claims, and various ERISA claims against Amoco and Norgas. 1

Norgas and Amoco filed separate motions for summary judgment. On February 25, 1985, the district court heard oral argument on the motions and, at the close of argument, orally ruled that it was granting Norgas' motion and taking Amoco's motion under advisement. On June 18, 1985, 614 F.Supp. 1094, the district court issued its memorandum opinion granting all motions for summary judgment in favor of Amoco and Norgas.

On June 28, 1985, the employees filed a motion to reconsider or vacate the judgment and for recusal of District Judge Seybourn H. Lynne under 28 U.S.C. Sec. 455(a). The employees claimed that an appearance of impropriety arose when the law clerk who had drafted Judge Lynne's memorandum opinion accepted employment with the firm representing Norgas in this litigation prior to drafting the opinion. There is no dispute that the employees' attorneys were informed of the fact that Judge Lynne's sole law clerk had accepted employment with the law firm representing Norgas in January of 1985, seven months before they requested recusal. Judge Lynne denied the recusal motion on the ground it was not timely and that the employees had not been denied due process of law. The employees appeal from the summary judgments in favor of Amoco and Norgas and from the denial of their recusal motion.

II. ISSUES

The employees make the following arguments with respect to their state law claims on appeal: (1) that Amoco breached life-time employment contracts with its employees when it sold its Alabama LPG operations to Norgas; (2) that their claim that Amoco fraudulently assured them of life-time employment with Amoco even while negotiating the sale of the business is not barred by an Alabama statute of limitations; (3) that their claim that Amoco and Norgas fraudulently concealed the effect of the sale on credit for years of service toward retirement benefits is not preempted by ERISA. The employees also argue that Amoco and Norgas bargained away credit for years of service with Amoco when they negotiated the sales contract, thereby violating the following provisions of ERISA: (1) the provision that years of service with predecessor employer be credited by successor employer (29 U.S.C. Sec. 1060(b)(2)); (2) the provision setting forth a fiduciary duty to act solely for the benefit of plan beneficiaries (29 U.S.C. Sec. 1104); (3) the anti-discrimination provision (29 U.S.C. Sec. 1140); (4) the prohibited transactions provision (29 U.S.C. Sec. 1106); (5) the provision governing early retirement benefits (29 U.S.C. Sec. 1056); (6) the criminal fraud provision (29 U.S.C. Sec. 1141); and (7) the disclosure provisions (29 U.S.C. Secs. 1022, 1024). Finally, the employees argue that Judge Lynne abused his discretion in failing to vacate summary judgment in favor of Norgas and to recuse himself in light of the relationship between his law clerk and Norgas' attorneys.

III. ANALYSIS

The district court's opinion in this case is comprehensive, thorough and well reasoned. Phillips v. Amoco Oil Co., 614 F.Supp. 694 (N.D.Ala.1985). Where, as here, a litigant adopts what might be called a "shot gun" approach and invokes every possible cause of action, no matter how tangentially related to the particular context of the case, a few claims are bound to be so obviously inappropriate that little discussion is warranted to dispose of them. The district court's opinion treats even these claims carefully and exhaustively. This court has benefitted from that effort.

Unfortunately, the employees have not narrowed their arguments for appeal as they might have. Rather than pointing out the error in the reasoning that led the district court to reject their positions, they have restated the arguments they made to the district court in the first place. Thus it happens that, with respect to many of the arguments presented on appeal, we have little, if anything, to add by way of explanation of our decision that has not been stated by the district court. For that reason, although we have carefully and independently considered the employee's legal arguments, we will not duplicate the district court's efforts by explaining our decision with the same thoroughness and detail. We write briefly to address various arguments made on appeal and to make clear our understanding of the scope of the district court's reasoning.

A. State Law Claims
1. Breach of Life-Time Employment Contracts

The employees argue that their life-time employment contracts with Amoco were breached when Amoco sold its business to Norgas. However, even where a life-time employment contract is legally enforceable, Alabama law provides that the contract remains in effect only as long as the employer remains in the business for which the employee was hired and needs the particular services the employee was hired to perform. See, e.g., Bates v. Jim Walter Resources, Inc., 418 So.2d 903, 906 (Ala.1982). It is undisputed that Amoco completely abandoned the retail LPG business in Alabama when it sold its operations to Norgas. The employees present no argument on appeal that was not persuasively rejected by the district court. In fact, they conceded at oral argument that they have no breach of contract claim that is not identical, at bottom, to the fraud claim addressed in the next section. The district court correctly granted summary judgment in favor of Amoco on this claim.

2. Fraudulent Misrepresentation With Respect to Continued Employment With Amoco

The employees allege that Amoco continued to represent to them that they would...

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