Viad v. Moneygram
1 CA-CV 15-0053
| Ariz. Ct. App. | Nov 1, 2016Background
- Viad spun off MoneyGram in 2004 and executed an Employee Benefits Agreement (EBA) under which MoneyGram agreed to assume payment obligations for certain Viad supplemental pension plans.
- Viad later sued MoneyGram for refusing to pay retirement benefits to several former Viad employees, including former Viad CEO Robert Bohannon and two retirees, Bjornar Hermansen and Alice Smedstead.
- Bohannon had an Amended Employment Agreement with Viad providing retirement benefits calculated at 150% of his annual base salary; he continued working for Viad post‑spin and served on MoneyGram’s board after distribution.
- The superior court granted summary judgment for Viad (except as to Motorcoach retirees), finding MoneyGram obligated under the EBA to pay Bohannon’s and 105 retirees’ benefits; it later clarified Hermansen and Smedstead were included.
- MoneyGram appealed and moved under Rule 60(c) to correct the judgment’s pre‑judgment interest rate; the trial court reduced interest from 10% to 4.25% and Viad cross‑appealed that reduction.
- The Court of Appeals affirmed summary judgment for Viad on the benefit claims (Bohannon, Hermansen, Smedstead) but reversed the amendment lowering pre‑judgment interest, reinstating 10% under A.R.S. § 44‑1201(A).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Viad’s contract claims are preempted by ERISA | Viad: Claims arise under the EBA (contract), not an ERISA plan, so not preempted | MoneyGram: Claims conflict with ERISA objectives and are preempted (conflict preemption) | Not preempted — claims are contractual and do not frustrate ERISA’s goals; complete preemption not implicated |
| Whether EBA requires MoneyGram to pay Bohannon’s post‑distribution accruals and benefit calculated using the amended employment agreement | Viad: Extrinsic evidence and parties’ intent show MoneyGram agreed to pay Bohannon’s full benefits including the 150% formula | MoneyGram: Section 4.01 limits its obligation to credited service through distribution and to salary at retirement, not the 150% formula | Ambiguity resolved via uncontroverted extrinsic evidence for Viad; summary judgment for Viad on Bohannon’s claims |
| Whether Hermansen and Smedstead were properly included in summary judgment/order | Viad: Complaint and discovery put MoneyGram on notice that EBA claims covered over 100 retirees, including them | MoneyGram: Their claims arose later and were not pleaded; court misapplied Rule 15(b) and improperly included them | Inclusion affirmed — pleadings and record gave fair notice; undisputed records show they are covered under EBA |
| Correct pre‑judgment interest rate | Viad: Judgment on liquidated contract claims entitles it to 10% under A.R.S. § 44‑1201(A) | MoneyGram: Judgment interest should be governed by § 44‑1201(B) (lesser of 10% or prime+1 = 4.25%) | Court of Appeals reversed trial court’s reduction and reinstated 10% pre‑judgment interest for liquidated claims under § 44‑1201(A) |
Key Cases Cited
- New York State Conference of Blue Cross & Blue Shield Plans v. Travelers, 514 U.S. 645 (discusses ERISA preemption and statutory objectives)
- Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936 (limits textual application of ERISA’s “relate to” clause)
- Bui v. American Telephone & Telegraph Co. Inc., 310 F.3d 1143 (Ninth Circuit on pragmatic ERISA preemption analysis)
- Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228 (Del. law on contract ambiguity and use of extrinsic evidence)
- Salamone v. Gorman, 106 A.3d 354 (Del. rule endorsing the objective theory of contract interpretation)
- John C. Lincoln Hosp. & Health Corp. v. Maricopa Cty., 208 Ariz. 532 (pre‑judgment interest on liquidated claims)