Vendura, Jr. v. Boxer
845 F.3d 477
| 1st Cir. | 2017Background
- Vendura worked for TRW from 1993, accrued seven years of service, then went on long-term medical leave beginning in 2000 and received SSD/LTD (and alleges workers' compensation).
- Northrop acquired TRW; Vendura stayed as an employee under a 2003 settlement agreement that preserved his status and "all benefits and rights to which he is entitled pursuant to all benefit plans for which he is eligible."
- The NGSMSC Plan (incorporating TRW Plan Section 2.2) defines "Years of Benefit Service," with subsections: (a) service with pay; (b) absence for work-related injury with workers' comp (limits and a proviso tying to LTD eligibility); and (c) absence for disability with LTD entitlement (amended to cap LTD-based service at 60 months for vested participants, 12 months otherwise).
- Vendura sought pension benefits in 2013, claiming 20 years of benefit service (7 active + 13 while on leave), arguing the settlement or subsection (b) entitled him to continue accruing until his LTD eligibility ended in Feb 2013; the Plan administrator credited only 12 years (7 + 5), applying subsection (c)’s 60-month cap.
- Administrative appeal denied; Vendura sued under ERISA § 1132(a)(1)(B) and for breach of the settlement. District Court granted summary judgment for defendants; First Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the settlement agreement itself entitle Vendura to accrue pension service through end of LTD eligibility? | Settlement kept him an "employee" and preserved "all benefits and rights," so he should accrue service through Feb 2013. | The agreement only preserved his status and directs enforcement of whatever the Plan provides; it does not independently create extra pension accrual rights. | Court held settlement does not independently grant additional accrual; it defers to Plan terms. |
| Whether subsection (b)'s trailing language creates an independent, open‑ended right to accrue LTD‑based service (beyond 12 months) that avoids subsection (c)'s 60‑month cap | Vendura: the second half of (b) gives a separate entitlement tied to LTD eligibility (no temporal limit), so he gets full 13 years while eligible. | Administrator: (b)'s trailing proviso is not a standalone entitlement but preserves application of LTD accrual under subsection (c); thus the 60‑month cap applies. | Court: Administrator's interpretation is reasonable; (b)'s trailing language is a proviso, not a separate entitlement, so subsection (c)'s 60‑month cap applies. |
| Was Vendura entitled to elect a lump‑sum in 2013? | He timely requested a lump‑sum in 2013 and contends he was still accruing service. | Lump‑sum election is allowed only if filing occurs while still an employee "accruing Service" in the 3 months before retirement; Administrator says he was not accruing service in 2013 due to the 60‑month cap. | Court affirmed Administrator: Vendura was not accruing service in 2013, so not eligible for lump‑sum. |
Key Cases Cited
- OfficeMax, Inc. v. Levesque, 658 F.3d 94 (1st Cir. 2011) (contract interpretation reviewed de novo)
- Hannington v. Sun Life & Health Ins. Co., 711 F.3d 226 (1st Cir. 2013) (extra‑plan material reviewed de novo)
- Wright v. R.R. Donnelley & Sons Co. Grp. Benefits Plan, 402 F.3d 67 (1st Cir. 2005) (arbitrary and capricious standard for plan administrator reviewed as abuse of discretion)
- Kolling v. Am. Power Conversion Corp., 347 F.3d 11 (1st Cir. 2003) (deference to reasonable plan‑administrator interpretations of ambiguous plan terms)
- Rodriguez‑Abreu v. Chase Manhattan Bank, N.A., 986 F.2d 580 (1st Cir. 1993) (use federal substantive law and contract canons to interpret ERISA plans)
- Bowers Hydraulic Dredging Co. v. United States, 211 U.S. 176 (1908) (interpret contract as a whole; avoid isolating clauses)
- Penncro Assocs., Inc. v. Sprint Spectrum, L.P., 499 F.3d 1151 (10th Cir. 2007) (different language in proximate, similar provisions implies different meanings)
- Taracorp, Inc. v. NL Indus., Inc., 73 F.3d 738 (7th Cir. 1996) (parallel provisions with different wording support different interpretations)
- Diaz v. Seafarers Int'l Union, 13 F.3d 454 (1st Cir. 1994) (later versions of plan documents may illuminate earlier versions)
- Bouchard v. Crystal Coin Shop, Inc., 843 F.2d 10 (1st Cir. 1988) (administrators' interpretations that render plan provisions superfluous can be arbitrary and capricious)