Tolle v. Carroll Touch, Inc.

• Citation: 977 F.2d 1129
• Decision Date: 20 October 1992
• Docket Number: No. 91-2405,91-2405
• Parties: Connie M. TOLLE, Plaintiff-Appellant, v. CARROLL TOUCH, INCORPORATED, a wholly owned subsidiary of AMP Incorporated, formerly known as Carroll Touch Technology Corporation, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 1129

977 F.2d 1129

61 USLW 2262

Connie M. TOLLE, Plaintiff-Appellant, v. CARROLL TOUCH, INCORPORATED, a wholly owned subsidiary of AMP Incorporated, formerly known as Carroll Touch Technology Corporation, Defendant-Appellee.

No. 91-2405.

United States Court of Appeals Seventh Circuit.

Argued Feb. 20, 1992.

Decided Oct. 20, 1992.

Evan A. Strawn, Bloomington, Ill., argued, for plaintiff-appellant.

Ray E. Alexander, Springfield, Ill., Vincent Candiello (argued), Harrisburg, Pa., for defendant-appellee.

Before CUDAHY and COFFEY, Circuit Judges, and WOOD, Jr., Senior Circuit Judge.

HARLINGTON WOOD, Jr., Senior Circuit Judge.

This case raises an interesting and important question of first impression for this court: when does a claim that an employer terminated an employee in order to avoid providing employee benefits accrue under Section 510 of the Employee Retirement Income Security Act ("ERISA")? This case also raises interesting questions regarding ERISA's preemption of state claims.

I.

In November of 1978, Connie M. Tolle went to work for Carroll Touch, Incorporated ("CTI") as one of CTI's first five or so employees. CTI manufactures electrical connection, switching, and programming devices. During her tenure, Tolle provided engineering support services in the form of mechanical drafting, ordering of supplies, and the creation of necessary documentation adjunct to the manufacturing process.

When Tolle began her employment with CTI, its operating facility was located in Champaign, Illinois. However, sometime in 1981 or 1982, Tolle became aware that Art Carroll, CTI's then-President, desired to relocate to Texas. On January 9, 1984, all of CTI's employees were notified of specific measures being undertaken to facilitate the relocation of CTI to Round Rock, Texas.

At the time she was hired by CTI, Tolle advised Carroll that she had heart murmurs but that this condition did not cause her problems. In 1980 Tolle went to see Dr. Suchor for a routine physical examination. Dr. Suchor did a cardiogram and diagnosed stenosis. In February of 1984, Tolle began treatment with Dr. Daniel K. Bloomfield for her heart condition and continued under his care through October 1, 1984. Dr. Bloomfield diagnosed Tolle as suffering from rheumatic mitral stenosis. Dr. Bloomfield described this condition as "a disease which affects the mitral valve ... [which is] the main valve between the left atrium and the left ventricle." According to Dr. Bloomfield, mitral stenosis is a slowly progressive problem which causes a thickening of the mitral valve. Dr. Bloomfield after this first exam concluded that "[t]here clearly was no emergency." Dr. Bloomfield referred Tolle to another doctor for a second opinion. Dr. Van Osdol confirmed that Tolle had mitral stenosis and that surgery would not be necessary for a period of years. Dr. Bloomfield later referred Tolle to a surgeon for yet another opinion. On September 7, 1984, Dr. Alfred Heckman, Jr. performed a cardiac catheterization on Tolle. After performing this catheterization, Dr. Heckman concluded surgery on the mitral valve would not be necessary for four to five years.

According to Tolle's brief on appeal, on September 19, 1984, Nick Tableriou, CTI's Plant Manager, informed Tolle that her employment would be terminated on October 19, 1984. On September 24, 1984, Tableriou sent Tolle a memorandum with regard to this conversation. This memorandum states, "Effective the 19th of October, your services will no longer be required at Carroll Touch in Champaign because of a relocation of the job function and responsibility to Austin, Texas. You will be entitled to insurance coverage effective through November 30, 1984."

On October 1, 1984, Tolle made her first oral request for a medical leave of absence from CTI due to her heart disease. On October 10, 1984, Tolle submitted a "Claim for Loss of Time Benefits Form" to Judy Day, CTI's personnel manager. Day informed Tolle that this form needed to be submitted to Dr. Bloomfield, and, if Dr. Bloomfield certified her as "disabled," CTI would put her on "medical leave." Day then enlisted Jeryl Ploeger of Ploeger & Associates, Inc. to process Tolle's claim. Apparently, Ploeger sent the "Claim for Loss of Time Benefits Form" to Dr. Bloomfield for completion on October 11, 1984. Dr. Bloomfield completed part of the form but left blank the portion regarding Tolle's disability. Apparently Ploeger called Dr. Bloomfield regarding his failure to fill out the information regarding Tolle's disability, and Dr. Bloomfield told Ploeger that he did not consider Tolle disabled. As such, on November 8, 1984, Ploeger wrote Tolle stating that her disability claim could not be processed because Dr. Bloomfield did not consider her disabled. Dr. Bloomfield's failure to certify Tolle as disabled not only meant that she could not receive benefits as a result of the disability, but it also meant that CTI terminated her on October 19, 1984, rather than placing her on medical leave. Tolle did not contact Dr. Bloomfield to see why he did not classify her as disabled, nor did she talk to anyone at CTI before January of 1988 with regard to her request for disability benefits.

On September 29, 1989, Tolle filed a complaint against CTI. On October 31, 1989, Tolle filed an amended complaint. On April 5, 1991, about one month after the discovery cut-off date, CTI filed a motion for summary judgment. In reviewing this motion for summary judgment the district court focused on the following allegations contained in Tolle's complaint: (1) CTI's employment termination of Tolle on October 19, 1984, interfered with and deprived her of certain employee benefits in violation of Section 510 of ERISA, 29 U.S.C. § 1140; (2) CTI breached the employment agreement existing between it and Tolle as reflected in the employee welfare benefit plans by terminating her employment without regard to or in compliance with such plans; and (3) CTI breached an implied covenant of good faith and fair dealing by terminating her employment "to avoid the payment to her of benefits to which she was or would become entitled to receive" under the benefit plan. And, on May 20, 1991, the district court granted this motion on the basis that ERISA preempted her state claims and the statute of limitations barred Tolle's claim under Section 510 of ERISA, 29 U.S.C. § 1140. Tolle appeals this dismissal. We affirm the district court's dismissal of Tolle's state claims and her ERISA Section 510 claim. However, as we explain, Tolle's complaint not only raises a claim under Section 510 of ERISA, but the complaint also raises claims under Sections 502(a)(1)(B) and 503 of ERISA, 29 U.S.C. §§ 1132(a)(1)(B), 1133. We remand for further proceedings with regard to these remaining ERISA claims.

II.

A. Nature of Tolle's ERISA Claims

Because this appeal comes to us on grant of a motion for summary judgment, we proceed de novo. Schroeder v. Copley Newspaper, 879 F.2d 266, 268 (7th Cir.1989). We will look to the language of a few relevant ERISA provisions before proceeding with a discussion of the nature of Tolle's claims for relief.

Section 502(a)(1)(B) of ERISA provides:

(a) Persons empowered to bring a civil action

A civil action may be brought--

(1) by a participant or beneficiary ...

(B) 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).

When someone raises a Section 502(a)(1)(B) claim, he or she is essentially asserting his or her contractual rights under an employee benefit plan. Jenkins v. Local 705 Int'l Brotherhood of Teamsters Pension Plan, 713 F.2d 247, 252-53 (7th Cir.1983). And, the wrong that the person alleges in bringing such an action is that despite the fact that he or she has satisfied the conditions necessary for benefits under the plan, the defendant has failed to abide by the terms of the plan. Not surprisingly, this court has concluded that Section 502(a)(1)(B) claims are creatures of contract law. Id.

The relevant portions of Section 510 provide:

It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan, this subchapter, section 1201 of this title, or the Welfare and Pension Plans Disclosure Act ..., or for the purpose of interfering with the attainment of any right to which such a participant may become entitled under the plan, this subchapter, or the Welfare and Pension Plans Disclosure Act.... The provisions of section 1132 of this title shall be applicable in the enforcement of this section.

29 U.S.C. § 1140 (emphasis added).

A Section 510 claim is made enforceable through Section 502(a)(3) and (e) of ERISA, 29 U.S.C. § 502(a)(3), (e). ¹ Section

510, unlike Section 502(a)(1)(B), is not concerned with whether a defendant complied with the contractual terms of an employee benefit plan. Rather, the emphasis of a Section 510 action is to prevent persons and entities from taking actions which might cut off or interfere with a participant's ability to collect present or future benefits or which punish a participant for exercising his or her rights under an employee benefit plan. See, e.g., 29 U.S.C. § 1140; Felton v. Unisource Corp., 940 F.2d 503, 512 (9th Cir.1991). The difference between enforcing the terms of a plan and assuring that parties do not somehow impinge on current or future rights under employee benefit plans may seem subtle at first glance, but upon a close examination it becomes clear that the distinction is great. In order to enforce the terms of a plan under Section 502, the participant must first qualify for the benefits provided in that plan. See 29 U.S.C. § 1132. Rather than concerning itself with these qualifications, one of the...