Rodriguez-Abreu v. Chase Manhattan Bank, N.A.

• Citation: 986 F.2d 580
• Decision Date: 11 December 1992
• Docket Number: No. 92-1977,RODRIGUEZ-ABRE,P,92-1977
• Parties: 16 Employee Benefits Cas. 1705 Luis E.laintiff, Appellant, v. The CHASE MANHATTAN BANK, N.A., Defendant, Appellee. . Heard
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 580

986 F.2d 580

16 Employee Benefits Cas. 1705

Luis E. RODRIGUEZ-ABREU, Plaintiff, Appellant, v. The CHASE MANHATTAN BANK, N.A., Defendant, Appellee.

No. 92-1977.

United States Court of Appeals, First Circuit.

Heard Dec. 11, 1992.

Decided Feb. 25, 1993.

Jorge M. Silva-Cuetara, San Juan, PR, for plaintiff, appellant.

Jay A. Garcia-Gregory, with whom Arturo Bauermeister and Fiddler, Gonzalez & Rodriguez, San Juan, PR, were on brief, for defendant, appellee.

Before SELYA, Circuit Judge, BOWNES, Senior Circuit Judge, STAHL, Circuit Judge.

BOWNES, Senior Circuit Judge.

The plaintiff, Luis E. Rodriguez-Abreu ("Rodriguez"), appeals summary judgment granted in favor of the defendant, The Chase Manhattan Bank, N.A. ("Chase"), on cross motions for summary judgment in his suit brought pursuant to the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001 et seq., ("ERISA"). Finding that summary judgment was appropriate, we affirm.

I. BACKGROUND

Rodriguez's claims involve two employee benefit programs offered by Chase: (1) the Long-Term Disability Plan ("LTDP"), and (2) the Voluntary Separation Plan ("VSP"). The LTDP provides a continuing source of income for eligible employees who become Rodriguez was employed by Chase from 1957 until he resigned effective September 21, 1990, as a participant in the VSP. The parties stipulated that Rodriguez was absent from work from March 19 until the effective date of his resignation due to a heart ailment. ¹ While he was absent, Rodriguez was paid first through his accumulated vacation and sick leave and then by Chase through a special paid sick leave. Rodriguez did not apply for or receive LTDP benefits before his resignation from Chase. ²

                disabled and unable to work for a continuous period of six months or longer.   The VSP was a new plan of limited duration introduced by Chase in August of 1990 to reduce its work force.   The VSP offered employees who applied before September 10, 1990, and who were accepted into the program a package of benefits:  severance pay;  up to twelve months of health care costs coverage;  up to twelve months of coverage under the Chase life insurance plan, and group counselling to facilitate transition to another job with a different employer.   The VSP application contained waiver and release provisions
                

Chase introduced the VSP on August 8, and Rodriguez attended the orientation meeting on August 10. At the orientation, Rodriguez inquired as to whether he could participate in both the VSP and LTDP, and the Chase Compensation Manager informed him that the Bank would investigate his question. On August 17, Rodriguez met with Migdalia Lebron, Employee Benefits Officer of Chase, and asked about participation in both the VSP and LTDP. She told him that she would ask the Plan Administrator in New York. Also on August 17, Rodriguez signed the Application and Release for the VSP which provided that it could be withdrawn before September 10. During the week of August 20, Mrs. Lebron informed Rodriguez that he could not participate in both the LTDP and the VSP and that he would have to withdraw his application for the VSP in order to apply for LTDP benefits. Rodriguez did not withdraw his application for the VSP. Rodriguez's application was accepted by Chase on September 13, and his voluntary separation from Chase became effective on September 21, 1990.

On October 17, Rodriguez wrote to the Plan Administrator of the LTDP requesting a review of the decision that he was not entitled to benefits from both programs, review of the amount awarded for severance, and copies of the "Plan Administration" books for the two plans. Chase responded by a letter from Charles A. Smith, Executive Vice President of Chase, dated December 28, that Rodriguez's eligibility for LTDP benefits ended on September 21 with the termination of his employment, that he had given up his rights to LTDP benefits when he chose to participate in the VSP and denied his claim for increased severance benefits. Chase provided summary plan descriptions for the VSP and LTDP and provided a telephone number for further questions. On January 30, 1991, Rodriguez, through a letter from his attorney, requested review of the October determination as a "final administrative appeal," and again requested copies of the "Plan Administration" booklets. Chase affirmed Both Chase and Rodriguez filed motions for summary judgment. The district court granted Chase's motion for summary judgment, and also granted Rodriguez's claim that his severance pay benefits should have been determined based upon his last scheduled salary review, and awarded him the increased amount. On appeal, Rodriguez contends that he was entitled to receive long-term disability benefits which were denied by Chase, and that the district court should have imposed sanctions against Chase for its delay in providing Rodriguez with requested information about Chase's long-term disability plan. Neither party appeals the district court's award to Rodriguez of increased severance benefits.

                denial of Rodriguez's claims on March 12 and sent more copies of the plan summaries for the VSP and LTDP.   Chase sent the "Plan Administration" booklets on May 2, 1991.   In the meantime, Rodriguez had begun the present action against Chase. 3
                

II.

STANDARD OF REVIEW

We follow the familiar standard when reviewing summary judgment in ERISA actions. Allen v. Adage, Inc., 967 F.2d 695, 699 (1st Cir.1992); Manchester Knitted Fashions v. Amalgamated, 967 F.2d 688, 693 (1st Cir.1992). Summary judgment is appropriate if the factual materials submitted to the court establish that there is no genuine dispute as to material facts, and if the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Burnham v. Guardian Life Ins. Co. of Am., 873 F.2d 486, 488 (1st Cir.1989). Our review of the district court's grant of summary judgment is both de novo and plenary: we review afresh the entire record in the light most favorable to Rodriguez, resolving all inferences in his favor. August v. Offices Unlimited, Inc., 981 F.2d 576, 579 (1st Cir.1992); Allen, 967 F.2d at 699; Williams v. Caterpillar, Inc., 944 F.2d 658, 661 (9th Cir.1991).

A district court reviews ERISA claims arising under 29 U.S.C. § 1132(a)(1)(B) ⁴ de novo unless the benefits plan in question confers upon the administrator "discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956, 103 L.Ed.2d 80 (1989). Interpretation of terms of a plan and determination of the validity of claims are not, in themselves, discretionary functions. Id. at 112, 115, 109 S.Ct. at 955, 956. The Firestone rule has been interpreted to mean that a benefits plan must clearly grant discretionary authority to the administrator before decisions will be accorded the deferential, arbitrary and capricious, standard of review. Brown v. Ampco-Pittsburgh Corp., 876 F.2d 546, 550 (6th Cir.1989).

In this case, the district court employed the de novo standard based upon its findings that Rodriguez's claim was denied by the Plan Administrator ⁵, and neither the

                LTDP nor the Plan Administration Booklet granted discretionary authority to the Plan Administrator necessary to invoke the arbitrary and capricious standard.   The Plan Administration Booklet contains the only direct statements of authority for determining benefits under Chase's benefit plans
                

Named Fiduciaries

The Named Fiduciaries have general authority over the administration and operation of the Plans.

. . . . .

Plan Administrator

The Plan Administrator is primarily responsible for the publication of information to Plan participants and the filing of reports regarding the Plans.

. . . . .

In making a final decision, the Named Fiduciaries or their delegates have discretion in interpreting the meaning of Plan provisions and in determining questions of fact.

Rodriguez did not make a written request of the Named Fiduciaries as provided in the Plan Administration Booklet, but sent his letter of October 17, requesting a review of the denial of his LTDP benefits, to the Corporate Human Resources Executive of Chase. His letter was answered by Charles A. Smith, Executive Vice President of Chase, and further communication concerning Rodriguez's claims for LTDP benefits and additional severance pay was with Mr. Smith.

Chase contends that the district court should have used the deferential, arbitrary and capricious, standard because the Plan Administrator (Smith) was acting as the delegate of the Named Fiduciaries who are granted discretionary authority. Chase points to the fact that Smith used "we" instead of "I" in his response to Rodriguez's final request which Chase suggests means that Smith was acting on behalf of the Fiduciaries. Chase also argues that because Smith was answering Rodriguez's final request for review, his response was the final determination of Rodriguez's claim on behalf of the Fiduciaries.

As the district court found, neither the LTDP, the VSP, nor the Plan Administration booklet granted the Plan Administrator discretionary authority to review claims. The Plan Administration booklet granted the Plan Fiduciaries, or their delegates, discretionary authority. ERISA allows named fiduciaries to delegate responsibilities (other than trustee responsibilities) through express procedures provided in the plan. 29 U.S.C. § 1105(c)(1). ⁶ To be an effective delegation of discretionary authority so that the deferential standard of review will apply, therefore, the fiduciary must properly designate a delegate for the fiduciary's discretionary authority. Madden v. ITT Long Term Disability Plan, 914 F.2d 1279, 1283-84 (9th Cir.1990).

Chase's claim that Smith was acting as the delegate of the Fiduciaries fails for lack of evidence. First, Chase fails to point to any plan provisions which provide express procedures...