Whittaker v. Bellsouth Telecommunications Inc., 99-30132

• Citation: 206 F.3d 532
• Decision Date: 23 March 2000
• Docket Number: No. 99-30132,99-30132
• Parties: (5th Cir. 2000) RICHARD L. WHITTAKER, Plaintiff-Appellant v. BELLSOUTH TELECOMMUNICATIONS, INC. CAREER ALTERNATIVE PLAN FOR MANAGEMENT EMPLOYEES, Defendant-Appellee,
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 532

206 F.3d 532 (5th Cir. 2000)

RICHARD L. WHITTAKER, Plaintiff-Appellant v. BELLSOUTH TELECOMMUNICATIONS, INC. CAREER ALTERNATIVE PLAN FOR MANAGEMENT EMPLOYEES, Defendant-Appellee,

No. 99-30132

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

March 23, 2000

Appeal from the United States District Court for the Middle District of Louisiana

Before FARRIS^*, WIENER, and STEWART, Circuit Judges

CARL E. STEWART, Circuit Judge:

This case involves an appeal from the district court's grant of summary judgment. For reasons assigned below, we affirm.

Factual and Procedural Background

Richard Whittaker ("Whittaker") was an employee of a subsidiary of BellSouth Telecommunications, Inc. ("BST") and a member of the BST Career Alternative Plan for management employees ("CAP"). CAP is an employees benefit plan governed under the Employee Retirement Income Security Act of 1974 ("ERISA") that provides a separation benefit for eligible management employees who voluntarily separate employment for the purpose of pursuing education, teaching, or community service opportunities for a period not to exceed three years. In October 1995, Whittaker submitted an application for CAP benefits. Whittaker's CAP application was denied by Stephen Kirkmeier, his department head. Whittaker contends that he was told by Kirkmeier and his district sales manager that his CAP benefits were denied because there was no employee surplus of persons in his job position, and that the denial of his CAP benefits was a "business decision." Whittaker did not receive a written rejection of his benefits claim. In December 1995, Whittaker's attorney sent a letter to BST stating that Whittaker was making a "claim for CAP benefits." The letter also stated that Whittaker believed that he had received an oral denial of his initial benefits claim and that if BST found that Whittaker had already submitted a claim, the letter should be regarded as an appeal. A human resource manager wrote a response to Whittaker's letter on December 14, 1995 which stated that Whittaker's "appeal" was being processed.

In January 1996, Whittaker received another letter from BST which stated that a team of Human Resources Managers and the CAP coordinator "found no evidence to support the claim." Whittaker states that this January review was conducted by the BST CAP Review committee. BST maintains that the January review was only conducted by a CAP coordinator. Prior to Whittaker's December "appeal" for CAP benefits and the January review of his CAP claim, in November 1995 Whittaker's department offered him a Discretionary Termination Allowance Plan ("DTAP"). In February 1996, Whittaker accepted these DTAP benefits and signed a waiver which stated that he would waive, discharge, and release all claims against BST.

In January 1997, Whittaker filed an action in federal district court under 29 U.S.C. § 1132(a)(1)(B) ("§ 1132(a)(1)(B)") challenging BST's denial of CAP benefits. On October 31, 1997 the district court entered an order that stayed the proceedings until Whittaker exhausted his administrative remedies. In January 1999, the district court entered summary judgment for BST finding that the administrator's decision to deny Whittaker CAP benefits was not an abuse of discretion because Whittaker's participation in the BST DTAP barred him from receiving BST CAP benefits. Whittaker now appeals the district court's rulings.

Discussion

We review a district court's grant of summary judgment de novo. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Todd v. AIG Life Ins. Co., 47 F.3d 1448, 1451 (5th Cir.1995). Summary judgment is appropriate if the record discloses "that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In making this determination, we must evaluate the facts in the light most favorable to the non-moving party. Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356; Todd, 47 F.3d at 1451.

Moreover, when we are called to interpret an ERISA-covered policy in cases involving the denial of benefits challenged under § 1132(a)(1)(B), we construe the terms of the plan de novo "unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire &amp Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956, 103 L.Ed.2d 80 (1989); Todd, 47 F.3d at 1451; Harms v. Cavenham Forest Indus., 984 F.2d 686, 688 (5th Cir.1993). In the present case, the BST CAP provisions on plan administration state that the CAP Review committee has "been delegated the sole and complete discretionary authority to resolve benefit claim appeals under BST CAP." Therefore, under the plain language of the plan itself the plan administrator had discretionary authority, and thus the administrator's decision should be reviewed under the abuse of discretion standard.

Application of the abuse of discretion standard may involve a two-step process. Wildbur v. ARCO Chemical Co, 974 F.2d 631, 637 (5th Cir. 1992). First, the court must determine if the plan administrator's interpretation of the plan was legally correct. Id. Second, if the administrator's interpretation of the plan was not legally correct the court should then determine whether the administrator's decision was an abuse of discretion. Id. In determining whether the plan administrator's interpretation of the plan was legally correct a court must consider: 1) whether the administrator gave the plan a uniform construction, 2) whether the interpretation is consistent with a fair reading of the plan, and 3) any unanticipated costs resulting from different interpretations of the plan. Id. at 638.

Our review of...