Wilcott v. Matlack, Inc., s. 94-1296

• Decision Date: 30 August 1995
• Docket Number: 94-1583,Nos. 94-1296,s. 94-1296
• Citation: 64 F.3d 1458
• Parties: 11 IER Cases 311 Willis H. WILCOTT, Plaintiff-Appellee and Cross-Appellant v. MATLACK, INC., doing business as Matlack Systems, Inc., a Pennsylvania corporation; Matlack Systems, Inc. Employee Benefits Trust; John Erwin, Defendants-Appellants and Cross-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1458

64 F.3d 1458

11 IER Cases 311

Willis H. WILCOTT, Plaintiff-Appellee and Cross-Appellant v. MATLACK, INC., doing business as Matlack Systems, Inc., a

Pennsylvania corporation; Matlack Systems, Inc.

Employee Benefits Trust; John Erwin,

Defendants-Appellants and

Cross-Appellees.

Nos. 94-1296, 94-1583.

United States Court of Appeals, Tenth Circuit.

Aug. 30, 1995.

Gregg C. McReynolds, P.C., Englewood, CO, for defendants-appellants and cross-appellees.

Nathan Davidovich and Steven W. Moore of Nathan Davidovich & Associates, Denver, CO, for plaintiff-appellee and cross-appellant.

Before TACHA, LOGAN, and BRISCOE, Circuit Judges.

LOGAN, Circuit Judge.

These appeals arise from an action plaintiff Willis H. Wilcott initially filed in state court seeking redress for the denial of employee disability benefits, wrongful discharge, and associated contract and tort claims. After the case was removed to federal court, the district court dismissed all state claims as preempted by the Employee Retirement Income Security Act (ERISA), which "supersede[s] any and all State laws insofar as they may now or hereafter relate to any employee benefit plan," 29 U.S.C. Sec. 1144(a). Three federal claims were then tried to the court: (1) denial of short and long-term disability benefits due under defendants' ERISA plan, see 29 U.S.C. Sec. 1132(a)(1)(B); (2) interference with ERISA rights (i.e., termination of employment in an attempt to avoid paying benefits), see 29 U.S.C. Sec. 1140; and (3) failure to provide requested information about the ERISA plan, see 29 U.S.C. Sec. 1132(c). The court entered judgment for plaintiff on the first claim and for defendants on the others. On appeal, defendants challenge the award of long-term disability benefits (appeal No. 94-1296), ¹ and plaintiff objects to the decision not to impose a penalty under Sec. 1132(c) and the dismissal of his state law claims (cross-appeal No. 94-1583). ²

I

Most of the pertinent facts are undisputed. In January 1990, plaintiff's treating physician recommended that he take time off from work in an attempt to alleviate debilitating chest pains. Upon being advised of the situation, defendant Erwin (who was defendant Matlack, Inc.'s Western Regional Vice President) told plaintiff he could take a short-term disability leave of six months at half salary or several weeks at full pay. (Plaintiff alleges Erwin also assured him at this time that he would have his job for as long as he wished.) Plaintiff agreed to the shorter leave, wound up some pending matters, and went on disability commencing January 27, 1990. Five days later, plaintiff was notified that he had been terminated as a part of a general reduction in force.

Thereafter, plaintiff attempted to secure long-term disability benefits under defendants' ERISA plan, but his requests and inquiries elicited no response. He tried a position with another employer in April 1990, but this effort ended with his hospitalization a month later. After one more unsuccessful attempt at employment, plaintiff applied for and was awarded social security disability benefits retroactive to May 1990. He did not, however, ever receive long-term disability benefits from defendants.

Defendants assert that plaintiff did not satisfy the criteria for total disability benefits under the ERISA plan, i.e., that he did not "require[ ] regular medical supervision" and was not "in a continuous state of [vocational] incapacity" for the requisite time period, see App., Pl. ex. 1 (Employee Benefits Plan) at 29. Defendants also contend that plaintiff's post-termination employment undercuts any evidence that might otherwise indicate the requisite disability.

Defendants characterize these contentions as involving the construction of the ERISA plan and, accordingly, insist on de novo review of the district court's interpretation. We disagree. The dispositive issue is "not really the interpretation of the [ERISA plan], but rather a question of fact: whether [plaintiff] was totally and permanently disabled from any kind of work." Delaney v. Union Carbide Corp., 749 F.2d 17, 19 (8th Cir.1984); see Kirwan v. Marriott Corp., 10 F.3d 784, 790 (11th Cir.1994) (reversing summary judgment against ERISA plaintiff because of dispute over factual question of total disability). Thus, we will not disturb the district court's determination absent clear error. See, e.g., Hopkins v. Seagate, 30 F.3d 104, 106 (10th Cir.1994) (applying clear error standard to factual findings dispositive of ERISA claim). ³

The district court rejected defendants' position on long-term disability for several reasons. First, the prerequisites for such disability were established by plaintiff's treating physician, who testified that he had provided regular medical supervision to plaintiff and that plaintiff was totally and continuously disabled from and after January 1990. Supp.App. 47-50. Moreover, echoing the physician's own views, see id. at 49, the district court deemed plaintiff's subsequent aborted attempts at employment to be consistent with this disability, rather than, as defendants contend, evidence of an unused capacity for work. Cf. Washington v. Shalala, 37 F.3d 1437, 1442-43 (10th Cir.1994) (recognizing same point in social security context). Finally, the court noted that under the ERISA plan, plaintiff's social security award, retroactive to May 1990, constitutes conclusive proof of his total disability thereafter. App., Pl. ex. 1 (Employee Benefits Plan) at 32 ("Notwithstanding the above [provisions regarding substantiation of total disability], the awarding of a primary Social Security Disability Benefit will be accepted by the Trust as proof of total disability and the continuation of such Social Security Disability Benefit will be accepted as proof of a continuing total disability.").

The record fully supports the district court's finding of a continuing total disability compensable under the ERISA plan. Accordingly, we affirm its award of long-term disability benefits pursuant to Sec. 1132(a)(1)(B).

II

On cross-appeal, plaintiff asserts the district court should have imposed a penalty under 29 U.S.C. Sec. 1132(c), which grants the district court discretion to impose a penalty on any ERISA plan administrator "who fails or refuses to comply with a request for any information which such administrator is required ... to furnish to a participant or beneficiary (unless such failure or refusal results from matters reasonably beyond the control of the administrator) by mailing the material requested ... within 30 days after such request." 29 U.S.C. Sec. 1132(c)(1)(B). Plaintiff invoked this statutory remedy in conjunction with his allegations of repeated, unanswered requests regarding disability application procedures. The district court deemed the penalty unwarranted under the circumstances, particularly in light of plaintiff's failure to address his communications directly to the plan administrator. We must accept that determination absent an abuse of discretion. Boone v. Leavenworth Anesthesia, Inc., 20 F.3d 1108, 1111 (10th Cir.1994).

Plaintiff requested information and forms relating to long-term disability benefits under the ERISA plan by (1) a letter, concededly misaddressed, to the plan administrator, (2) a copy of that letter sent to the particular office where plaintiff had worked, and (3) personal communications with his sales manager, the regional vice president, and the head of human resources. Under appropriate circumstances, a Sec. 1132(c) penalty may be based on information requests such as plaintiff's that were not directed to the plan administrator. See Boone, 20 F.3d at 1109 n. 2 (letter addressed to company's counsel who "handled the business of the plan"); McKinsey v. Sentry Ins., 986 F.2d 401, 404-05 (10th Cir.1993) (if other personnel routinely answer requests from participants, their actions may be imputed to plan administrator). However, such circumstances have not been demonstrated here. Moreover, the district court did not deny relief on the legal ground that plaintiff had not made an enforceable request, but because in its judgment a penalty was not warranted. The record does not show that judgment to be an abuse of discretion.

III

Finally, plaintiff asserts the district court erred in determining that his state law claims were preempted by ERISA. This court recently summarized the general principles governing ERISA preemption:

Before preemption will be found, three requirements must be met. There must be a state law, an employee benefit plan, and the state law must relate to the employee benefit plan....

A law relates to an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan. Thus, even if a state law is not specifically directed toward the regulation of an ERISA plan or affects such a plan only indirectly, it can still be found to relate to a plan.

There is no simple test for determining when a law relates to a plan. This circuit has recognized four categories of laws which have been held preempted because they relate to ERISA plans.... First, laws that regulate the type of benefits or terms of ERISA plans. Second, laws that create reporting, disclosure, funding, or vesting requirements for ERISA plans. Third, laws that provide rules for the calculation of the amount of benefits to be paid under ERISA plans. Fourth, laws and common-law rules that provide remedies for misconduct growing out of the administration of the ERISA plan.

Airparts Co. v. Custom Benefit Servs. of Austin, Inc., 28 F.3d 1062, 1064-65 (10th Cir.1994) (citations and quotations omitted). Application of these principles to particular state law claims is a legal matter that we review de novo. Id. at 1064.

The question here is whether the state contract and tort claims asserted by plaintiff seek to redress actions somehow associated with defendants' ERISA plan and, thus, fall into the fourth...