O'Shea Ex Rel. O'Shea v. UPS Retirement Plan, 837 F.3d 67

Background

Brian O’Shea, a long‑time UPS employee, applied for retirement and selected a “Single Life Annuity with 120‑Month Guarantee,” naming his four children as beneficiaries; annuity starting date was set for March 1, 2010.
On HR advice, O’Shea delayed his official retirement to maximize paid leave; he signed the retirement application on his last day of work (Jan. 7, 2010) and later accepted UPS’s Special Restructuring Program (SRP) on Feb. 12, 2010, executing a broad release and receiving $98,800.
O’Shea died Feb. 21, 2010—before his official retirement/annuity starting date. The Plan paid instead a Preretirement Survivor Annuity to a former spouse under a QDRO; the children were denied the 120‑month guaranteed payments.
The Plan’s Section 5.4(d)(iii) provides beneficiary payments if the participant dies after the Annuity Starting Date; Section 5.6 provides a Preretirement Survivor Annuity if a vested participant dies prior to the Annuity Starting Date (to spouse/domestic partner).
The Committee denied the children’s administrative claims; the district court dismissed their equitable claim as released by the SRP and granted judgment for UPS on the benefits claim, prompting this appeal.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether beneficiaries are entitled to 120 guaranteed months when participant dies before annuity start date	O’Sheas: the 120‑month guarantee applies once elected and should pay beneficiaries even if death occurs before annuity start date	UPS: Plan requires participant to survive to Annuity Starting Date; if death occurs earlier, only Preretirement Survivor Annuity (spouse/partner) applies	Court: UPS’s interpretation is reasonable and entitled to deference; beneficiaries not entitled because participant died before Annuity Starting Date
Whether Section 5.6 impermissibly creates an unwritten exclusion	O’Sheas: reading would write an exclusion into the Plan not expressed in text	UPS: Condition (surviving to annuity start) is expressed in Plan language (Section 5.4(d)(iii) and 5.6)	Court: No unlawful exclusion; condition is expressed in Plan and interpretation does not exclude coverage—participant simply failed a precondition
Adequacy of administrator’s notice and reliance on Plan language not cited in initial denial	O’Sheas: committee failed to rely on or cite Section 5.4(d)(iii) in denial, so consideration of it on appeal is improper	UPS: denial letters and application language put claimants on notice of position; strict literal citation unnecessary if notice is adequate	Court: ERISA notice requirement satisfied; claimants had sufficient understanding to permit effective review; consideration of 5.4(d)(iii) proper
Whether equitable claim for misrepresentation survived SRP release	O’Sheas: equitable claim arose only after denial of benefits (post‑release), so release did not bar it and could not have been knowingly waived	UPS: alleged misrepresentations occurred before release; release knowingly and voluntarily surrendered known and unknown claims	Court: equitable claim accrued based on pre‑release misrepresentations; release was knowing and voluntary and barred the claim

Key Cases Cited

Glista v. Unum Life Ins. Co. of Am., 378 F.3d 113 (1st Cir. 2004) (discussing de novo review framework and standards applicable when administrator has discretion)
Niebauer v. Crane & Co., 783 F.3d 914 (1st Cir. 2015) (administrator’s decision must be plausible and supported by substantial evidence under arbitrary‑and‑capricious review)
Stamp v. Metro. Life Ins. Co., 531 F.3d 84 (1st Cir. 2008) (courts need not select the best reading of a plan under deferential review)
Coffin v. Bowater Inc., 501 F.3d 80 (1st Cir. 2007) (upholding administrator interpretation as significantly more persuasive than plaintiff’s)
D & H Therapy Assocs., LLC v. Boston Mut. Life Ins. Co., 640 F.3d 27 (1st Cir. 2011) (reasonableness bounds for administrator interpretations)
Colby v. Union Sec. Ins. Co., 705 F.3d 58 (1st Cir. 2013) (plan administrators may not read exclusions into plans that are not expressed)
Smart v. Gillette Co. Long‑Term Disability Plan, 70 F.3d 173 (1st Cir. 1995) (ERISA permits knowing and voluntary releases of claims)
Morais v. Cent. Beverage Corp. Union Empls.' Supplemental Ret. Plan, 167 F.3d 709 (1st Cir. 1999) (factors for evaluating whether waiver was knowing and voluntary)
CIGNA Corp. v. Amara, 563 U.S. 421 (2011) (role of summary plan descriptions in interpreting plan terms)