AMANDA CROSBY, Administratrix for the Estate of BILLY K. ALLRED, Plaintiff-Appellant, v. ROHM & HAAS COMPANY, Defendant-Appellee.
No. 06-5347
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
March 16, 2007
GILMAN and SUTTON, Circuit Judges; TARNOW, District Judge.
RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206. File Name: 07a0104p.06. Appeal from the United States District Court for the Western District of Kentucky at Louisville. No. 04-00332—John G. Heyburn II, Chief District Judge. Argued: January 31, 2007. Decided and Filed: March 16, 2007.
ARGUED: Stephen C. Emery, STEWART, ROELANDT, STOESS, CRAIGMYLE & EMERY, Crestwood, Kentucky, for Appellant. Raymond A. Kresge, COZEN O‘CONNOR, Philadelphia, Pennsylvania, for Appellee. ON BRIEF: Stephen C. Emery, John Frith Stewart, STEWART, ROELANDT, STOESS, CRAIGMYLE & EMERY, Crestwood, Kentucky, for Appellant. Raymond A. Kresge, COZEN O‘CONNOR, Philadelphia, Pennsylvania, for Appellee.
OPINION
SUTTON, Circuit Judge. Amanda Crosby filed this lawsuit against Rohm and Haas under the Employee Retirement and Income Security Act (ERISA),
On June 12, 2000, Rohm and Haas promoted Billy Allred to be the production manager of its Louisville, Kentucky facility. In his new position, Allred became eligible for Rohm and Haas‘s Health and Welfare Plan for salaried employees, which provided a basic life insurance benefit of $10,000 plus three times the employee‘s annual salary. The plan also gave employees the option of purchasing supplemental life insurance (in 25% increments) up to three times their base salary. Allred purchased supplemental insurance of 175% of his base salary.
In the fall of 2000, Rohm and Haas announced a change to the plan‘s life insurance benefits. It mailed a booklet entitled “Time to Enroll for Your 2001 Benefits” to all salaried employees, which noted that “[t]here are a number of changes to your health care and group insurance benefits for 2001,” JA 99, and explained the material modifications to the plan‘s life insurance coverage. For 2001, the company decreased the basic life insurance benefit to two times an employee‘s salary and increased the maximum supplemental coverage that employees could purchase to six times their salary (in 100% increments). It also eliminated the $10,000 basic life insurance benefit for all active employees. The booklet also noted that employees did not need to enroll in the new plan if they “want[ed] to keep the same supplemental employee life insurance coverage [they] had last year, as long as it was in 100% increments.” JA 109.
Included with the booklet was an enrollment worksheet that listed “information about [an employee] and [his] dependents, the coverage [he would] automatically receive if [he did not] call to enroll, as well as the plans, and their monthly costs, for which [the employee was] eligible in 2001.” JA 97. The booklet advised each employee: “Be sure to check your Enrollment Worksheet to confirm the life insurance you‘ll receive in 2001 if you don‘t call the Benefits Center by December 13 to enroll.” JA 109. It also urged each employee to “review [the worksheet] for accuracy” and to “call the Benefits Center right away and speak to a representative” if “any errors or omissions” were found. JA 100.
The benefits listed in Allred‘s attached worksheet differed from the benefits to which he was entitled under the new plan. As Allred‘s default coverage, for example, it listed the features of his prior coverage—$10,000 plus three times his base salary as his basic coverage and 175% of his base salary as his supplemental coverage—not one benefit of which was accurate under the new plan. Allred‘s total coverage thus was listed as $289,000 and required Allred to contribute $18.54 each month. Because Allred never called to enroll in the new plan, Rohm and Haas confirmed by letter on December 15, 2000, that he would receive the default coverage.
On February 24, 2001, Rohm and Haas confirmed Allred‘s coverage for the period starting March 1 but recalculated his total benefit to be $303,000 (Allred had received a raise in the interim) and his monthly contribution to be $19.44. The company calculated Allred‘s anticipated benefit using the same (mistaken) formula it had used before.
On April 7, 2001, Rohm and Haas sent a letter to Allred confirming his coverage for the period starting May 1. This letter no longer used the old formula for calculating benefits but instead followed the formula described in the booklet: a primary life insurance benefit equal to twice his base salary and a supplemental insurance benefit of 100% of his base salary. Correspondingly, Allred‘s monthly contribution decreased to $11.52. The letter, however, still listed the $10,000 flat coverage as a basic benefit, so Allred‘s anticipated total life insurance coverage was listed as $202,000. A separate letter from Rohm and Haas, dated July 6, 2001, confirmed these calculations.
Allred died on December 11, 2001. Rohm and Haas sent Amanda Crosby, the administratrix of his estate, $192,000 in life insurance proceeds based on Allred‘s coverage as described in the booklet. On August 9, 2002, noting the discrepancy between the amount paid and the amount listed
Crosby filed a claim for additional insurance benefits with the plan administrator, who denied her claim. Crosby then filed a complaint in federal district court seeking to “recover benefits due to [her] under the terms of [the] plan,”
II.
We review the district court‘s grant of summary judgment de novo. EEOC v. Univ. of Detroit, 904 F.2d 331, 334 (6th Cir. 1990). Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmovant, id., “show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law,”
A.
ERISA sets forth a comprehensive national framework by which companies may provide health and welfare plans to their employees. See
An employee benefit plan must “maintain reasonable procedures governing the filing of benefit claims, notification of benefit determinations, and appeal of adverse benefit determinations.”
B.
Crosby insists that she has not received the “benefits due to [her] under the terms of [the] plan,”
As to her first argument, the booklet that Rohm and Haas distributed in the fall of 2000 has all the hallmarks of a legitimate summary of material modifications. See
For many of the same reasons that the booklet was a legitimate summary of material modifications, the enrollment worksheet was not a summary of material modifications or for that matter any other comparable formal plan document—which defeats Crosby‘s second argument. The worksheet, as its name suggests, had none of the features of a plan document. See
A contrary conclusion—permitting personalized estimates to be cognizable vehicles for amending a plan—would create more problems that it would solve. It would discourage plan participants from relying on a uniform, understandable set of documents to determine their rights and obligations under the plan, as they instead would be tempted to focus only on their own personalized estimates. Cf. Flacche, 958 F.2d at 736 (noting that ERISA “creates a strong incentive to write the [summary plan description] carefully, and it gives beneficiaries an understandable document upon which they can rely“). It would lead to a greater number of mistakes in plan amendments as companies could err not just by preparing an incorrect (though readily correctable) single summary of amendments but by miscalculating the serial effects of those amendments for each of their employees. It would lead to great unfairness to participants who receive calculations that mistakenly underestimate their benefits. See Fitch v. Chase Manhattan Bank, 64 F. Supp. 2d 212, 226 (W.D.N.Y. 1999) (“If the mistake had been in the [plan administrator]‘s favor, one cannot seriously imagine that the plaintiffs would have accepted the error as being a term of the plan.“). And in the end it would discourage plan administrators from offering the personalized estimates of benefits in the first place—which would eliminate a useful tool that customarily will effectively communicate changes to employees so long as they heed the warning to compare their estimate to the formal summary plan description to identify any “errors and omissions.” See Sprague, 133 F.3d at 403. Even if, in short, we could do some good for Crosby by accepting her argument, we do not think that it is an argument that would advance “the interests of employees generally.” Id.
Crosby‘s other, related arguments are unconvincing as well. She submits that the booklet does not meet the requirements of a summary plan description under
She also submits that the booklet could not be a valid summary of material modifications because it was not “written in a manner calculated to be understood by the average plan participant.”
She also submits that Allred never received the booklet, making the plan amendment invalid as to him. See
C.
Crosby further argues that Rohm and Haas should be estopped from refusing to enforce the terms of Allred‘s enrollment worksheet because, “[h]ad Allred not been mislead, he could have purchased additional insurance[,] . . . a significant ‘missed opportunity.‘” Br. at 30. To bring a cognizable equitable-estoppel claim, Crosby bears the burden of showing that Rohm and Haas made fraudulent representations to Allred, that Allred did “not know the truth behind [Rohm and Haas‘s] representations,” Trs. of the Mich. Laborers’ Health Care Fund v. Gibbons, 209 F.3d 587, 591 (6th Cir. 2000), and that Allred detrimentally and justifiably relied on Rohm and Haas‘s representations, see Armistead v. Vernitron Corp., 944 F.2d 1287, 1298 (6th Cir. 1991). Cf. Sprague, 133 F.3d at 403 (“Altering a welfare plan on the basis of non-plan documents and communications, absent a particularized showing of conduct tantamount to fraud, would undermine ERISA.“) (internal quotation marks omitted).
Crosby cannot satisfy these requirements. She, for one, has not shown that Rohm and Haas‘s inclusion of an incorrect enrollment worksheet “contain[ed] an element of fraud, either intended deception or such gross negligence as to amount to constructive fraud.” Mich. Laborers’ Health Care Fund, 209 F.3d at 591 (internal quotation marks and ellipsis omitted). The accompanying booklet advised Allred to check the worksheet for “errors or omissions” and to “speak with a representative” should he find any. JA 100. Far from trying to deceive Allred, these instructions were designed to prevent Allred and his fellow employees from relying on the worksheet alone. Nor were the errors the least bit difficult to decipher: What the worksheet seemed to provide—basic life insurance of $10,000 plus three times the employee‘s base salary and supplemental insurance of 175% of base salary—the booklet specifically precluded by eliminating the $10,000 benefit, by offering basic insurance of just two times the employee‘s base salary and by permitting supplemental insurance only in 100% increments. The conclusion that Rohm and Haas was not trying to deceive anyone is bolstered by the company‘s repeated attempts to remedy the error through correspondence in February, April and July of 2001. At most, Crosby has shown that the company made an honest mistake, that in other words it was guilty of misfeasance, not the malfeasance that estoppel requires.
Crosby, for another, cannot establish the “reasonable or justifiable reliance” that the claim requires. Sprague, 133 F.3d at 404. A party‘s reliance “can seldom, if ever, be reasonable or justifiable if it is inconsistent with the clear and unambiguous terms of plan documents available to or furnished to the party.” Id. Otherwise, we would be permitting estoppel “to override the clear terms of plan documents” and in the end would be permitting the party to “enforce something other than the plan documents themselves,” which ERISA prohibits. Id. The terms of this plan—the basic life insurance benefit and the supplemental life insurance options—were exceedingly clear, making Allred‘s alleged reliance on contrary informal communications from the company unreasonable as a matter of law.
D.
Crosby, lastly, argues that the district court abused its discretion by refusing to assess monetary penalties against Rohm and Haas for failing to respond more promptly to her request for information. ERISA gives district courts “discretion” to impose up to $110 a day in penalties against “[a]ny administrator . . . who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish to a participant or beneficiary . . .
The key failing in Crosby‘s argument is that the statute expressly gives the district court “discretion” to impose this penalty, and she has not shown how a district court would be compelled to impose the sanction on these facts. In denying Crosby‘s request for a monetary penalty, the district court explained that “Rohm and Haas made a good-faith attempt to comply with [Crosby‘s] request and its failure to comply . . . did not prejudice [Crosby] in any meaningful way.” D. Ct. Op. at 15. Rohm and Haas received Crosby‘s request only belatedly (because the two letters were sent to the administrator, not the company) and responded 51 days later with a detailed letter, the booklet and the relevant portions of the summary plan description then in effect. Although Crosby had requested other documents as well—such as the plan‘s insurance policy—she has not shown why the district court was mistaken in finding that the information sent to her “provided [her] with all of the information she needed to assess a possible claim.” D. Ct. Op. at 14. When Crosby took the further step of requesting the complete summary plan description from the fall of 2000 (a request that Rohm and Haas promptly satisfied), Crosby did not otherwise indicate that Rohm and Haas‘s response was inadequate. Because Rohm and Haas had no reason to doubt the sufficiency of its responses, because the delays resulted at most from good-faith mistakes and because Crosby has not pointed to any way in which she was prejudiced by the delays, we have no basis for saying that the district court abused its discretion in declining to assess this penalty.
III.
For these reasons, we affirm.