Schaffart v. Oneok, Inc.
686 F.3d 461
| 8th Cir. | 2012Background
- Schaffart and Peters entered into long‑term performance share and restricted stock agreements with ONEOK requiring a three‑year performance period for full shares, with pro rata payments if certain terminations occurred.
- After termination, ONEOK denied pro rata payments and appellees sued for breach of contract; case tried to district court with an advisory jury; verdicts favored appellees and district court entered judgments awarding pro rata damages but denied attorney fees.
- The plans (LTIP and ECP) were not ERISA plans, they were unfunded and maintained to provide deferred compensation, with ERISA not applying.
- Roth, as Senior VP and fiduciary to the Benefit Plan Committee, denied pro rata payments based on his interpretation of retirement and his view of an involuntary termination, though retirement was not defined in the plans.
- ONEOK closed its Omaha office; appellees were asked to relocate to Tulsa, but Schaffart could not move and Peters began commuting unsuccessfully, leading to their separations in late 2006 and 2007.
- ECC has authority to administer the plans; Roth acted as fiduciary to the BPC, but the ECC did not expressly authorize Roth to deny claims, raising questions about delegation and authority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Roth have actual or apparent authority to deny pro rata claims? | Schaffart and Peters contend Roth lacked authority to decide; ECC, not Roth, should have decided. | ONEOK argues Roth had actual or implied authority as BPC fiduciary due to plan structure and corporate reliance on him. | Roth did not have authority; ECC did not delegate decision‑making to Roth, so de novo review applies. |
| Whether retirement is properly defined and applied to appellees under the plans? | Retirement should be construed to allow pro rata payments for permanent withdrawal from work, even if under age 50. | ONEOK’s interpretation limited by its own separate retirement plan; appellees knew or should have known the interpretation only after signing. | Retirement is interpreted against ONEOK; appellees retired under the agreements when they ceased active work, despite not meeting the age threshold. |
| Whether the district court properly granted judgment as a matter of law or should have remanded to ECC for decision? | ONEOK failed to follow contract procedures; ECC should determine entitlement with deferential review if proper. | If ECC delegated, deferential review would apply; otherwise de novo review. | The court conducted de novo review; ONEOK did not comply with the decision‑making procedures, so de novo review was appropriate. |
| Whether the district court erred in excluding evidence and in treating the advisory jury verdict as controlling? | Evidence from divorce proceedings could be probative; advisory jury verdict should guide the determination of benefits. | Exclusion was permissible; the advisory verdict cannot control a non‑jury factual issue in this contract action. | Exclusion of divorce evidence and trial of the case to an advisory jury were permissible; the advisory verdict was not binding. |
| Whether appellees are entitled to attorney fees under the Nebraska Wage Payment and Collection Act (NWPCA)? | Pro rata payments are wages under NWPCA; appellees should recover attorney fees. | NWPCA wages exclude severance; pro rata payments are not wages and thus fees are not warranted. | Attorney fees are owed under NWPCA; district court erred in denying fees and remand to determine amount. |
Key Cases Cited
- Gray v. City of Valley Park, Mo., 567 F.3d 976 (8th Cir. 2009) (factors for judicial estoppel applied in determining inconsistent positions)
- Johnson v. Johnson, 307 N.W.2d 783 (Neb. 1981) (divorce asset interests require present property interest, not mere expectancy)
- Mauldin v. WorldCom, Inc., 263 F.3d 1205 (10th Cir. 2001) (de novo review when plan administrator lacks proper delegation)
- Noonan v. Staples, Inc., 556 F.3d 20 (1st Cir. 2009) (predicting law on deference and plan interpretations beyond Delaware contexts)
- Schwartz v. Century Circuit, Inc., 163 A.2d 793 (Del. Ch. 1960) (board’s final decision on benefits not to be second‑guessed absent fraud or bad faith)