Donati v. Ford Motor Co.
821 F.3d 667
| 6th Cir. | 2016Background
- Lydia Donati participated in Ford’s General Retirement Plan and received a monthly payment that combined her own benefits and benefits assigned to her via a QDRO from her ex-husband.
- Ford offered a 2012 cash‑out program; Ford sent Donati a notice stating her lump‑sum would be $230,361.49, and she elected the cash‑out.
- Before payment, Ford discovered a calculation error and told Donati the correct lump sum (excluding the QDRO‑derived payments) was $38,840.34; Donati died shortly thereafter.
- The Plan was amended later to expressly allow cash‑out of QDRO‑derived benefits, but the amendment post‑dated Donati’s death; her rights were governed by the March 2013 Plan terms.
- Donati’s daughter sued on behalf of the estate asserting (1) wrongful denial of benefits under 29 U.S.C. § 1132(a)(1)(B), (2) breach of fiduciary duty under § 1132(a)(3), and (3) equitable estoppel. The district court ruled for the Retirement Committee; the Sixth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plan permitted cash‑out of monthly payments derived from an ex‑spouse under a QDRO | Donati’s ex‑spouse payments were part of her “monthly benefits payable” / “Life Income Benefit,” so Ford promised a $230,361.49 lump sum | Plan language limits Life Income Benefit to benefits from Articles VI and VII payable to the retired member during the member’s lifetime; QDRO benefits arise under Article XII and are not part of that definition | Plan unambiguous: QDRO‑derived payments are not cash‑outtable; summary judgment for Committee affirmed |
| Standard of review for benefits denial | N/A (dispute on coverage, not purely procedural) | If Plan ambiguous, deferential arbitrary‑and‑capricious review applies because Committee has discretion | Court found Plan unambiguous, so no deference inquiry was necessary |
| Whether a § 1132(a)(3) breach‑of‑fiduciary‑duty claim is permissible alongside a § 1132(a)(1)(B) benefits claim | Breach claim alleges misrepresentation/ fiduciary misconduct and was pleaded alternatively | Precedent bars § 1132(a)(3) equitable claim when the plaintiff can obtain the same relief under § 1132(a)(1)(B) | Dismissed breach‑of‑fiduciary claim; plaintiff may pursue § 1132(a)(1)(B) remedy only |
| Whether equitable estoppel can overcome unambiguous Plan terms to require payment of $230,361.49 | Ford’s misstatements induced reliance; extraordinary equities favor estoppel | Estoppel cannot vary unambiguous plan terms; Bloemker exception requires extraordinary circumstances not present here | Estoppel unavailable; summary judgment for Committee affirmed |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (ERISA review standards and administrator discretion)
- Varity Corp. v. Howe, 516 U.S. 489 (ERISA § 1132(a)(3) as safety‑net for misled participants)
- Bloemker v. Laborers’ Local 265 Pension Fund, 605 F.3d 436 (6th Cir.) (narrow estoppel exception where equities are extraordinary)
- Rochow v. Life Ins. Co. of N. Am., 780 F.3d 364 (6th Cir. en banc) (test focuses on adequacy of statutory remedies, not nature of wrongdoing)
- Sprague v. Gen. Motors Corp., 133 F.3d 388 (6th Cir. en banc) (estoppel cannot be used to alter unambiguous plan terms)
- McClain v. Eaton Corp. Disability Plan, 740 F.3d 1059 (6th Cir.) (describing arbitrary‑and‑capricious review as highly deferential)