Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-88-02190/USCOURTS-ca10-88-02190-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

CLAIR B. PRATT, 

Plaintiff-Appellee, 

PIL!O 

Uoited Sr0te1 Cou,r of App,-1s 

Tenth Circuit 

NOV 2 9 1990 

ROBERT L. HOECKER 

Clerk 

vs. 

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No. 88-2190 

PETROLEUM PRODUCTION MANAGEMENT, 

INC. EMPLOYEE SAVINGS PLAN & 

TRUST, et al., 

Defendants-Appellants, 

PETROLEUM PRODUCTION MANAGEMENT, 

INC., Administrator; REUBEN R. 

PAULSEN, Trustee; and FRANKE. 

NOVY, Trustee, 

Defendants. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF KANSAS 

(D.C. No. 87-1311-K) 

Timothy B. Mustaine (James M. Armstrong with him on the brief), 

Foulston, Siefkin, Powers & Eberhardt, Wichita, Kansas, for 

Plaintiff-Appellee. 

Neil S. Sader (Thomas C. Brown with him on the brief), Brown & 

Thiessen·, P. C. , Kansas City, Missouri, for Defendant-Appellant. 

Before BALDOCK, BARRETT and EBEL, Circuit Judges. 

BALDOCK, Circuit Judge. 

Plaintiff-appellee Clair B. Pratt brought this action.against 

his employer's Employee Retirement Income Security Act (ERISA) 

pension plan, the plan's administrator (the corporate employer), 

Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 1 
and the plan's two trustees, alleging that the defendants used an 

improper valuation date when assessing the value of his vested 

interest in the Employer Contribution Account funded by employer 

't. 1 secur1. 1.es. Plaintiff sought judgment on three ERISA claims: 1) 

breach of contract against the plan, 29 u.s.c. § 1132(a)(l)(B), 2) 

breach of fiduciary duty by the three plan fiduciaries (the 

corporate administrator and individual trustees), 29 U.S.C. 

§§ 1109 & 1132(a)(2), and 3) attorney's fees against all 

defendants, 29 u.s.c. § 1132(g)(l), See rec. vol. II, doc. 16 at 

12-14. 

I. 

Plaintiff was terminated from his employment with the 

defendant company on February 28, 1986 due to a reduction in 

force. Under the terms of the plan, when he was terminated he was 

entitled to receive a "distribution of his vested interest in his 

Employer Contribution Account valued as of the Valuation Date next 

preceding the date of his separation from service." Plan§ 7.5, 

rec. vol. II, doc. 16, ex. A. The "Valuation Date" is defined as 

"the date on which the Trust Fund shall be valued and Accounts 

adjusted accordingly, which date shall be the last day of each 

Plan Year with respect to Employer securities and the last day of 

each month with respect to all other securities." Id. § 2.24. In 

1 The Plan consisted of two parts: an Employee Contribution 

Account and an Employer Contribution Account. Plaintiff does not 

dispute the amount he received based upon his vested interest in 

the Employee Contribution Account. 

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turn, the "Plan Year" is defined as "the 12 month period beginning 

on October 1 and ending on September 30 of each year." Id. 

§ 2.18(c). 

Plaintiff separated from his employment on February 28, 1986. 

For the employer securities at issue, the valuation date next 

preceding plaintiff's separation was September 30, 1985, the last 

day of the plan year. On the valuation date of September 30, 

1985, plaintiff's share in employer securities totaled $27,692.32. 

Between the valuation date and plaintiff's separation, however, 

the value of the plan's employer securities declined markedly. 

This resulted in several actions by the defendants. 

First, on April 25, 1986, some eight weeks after plaintiff's 

separation, the plan was amended (retroactive to October 1, 1985) 

to include provisions which redefined the "Valuation Date" to 

"include any date that an Interim Evaluation Accounts is performed 

in accordance with [new] section 6.11." Amended Plan§ 2.24, rec. 

vol. I, doc. 14, ex. 1 (amend. no. 1), infra n.13. New§ 6.11, 

which lacked a counterpart in the original plan, allowed for 

interim valuation when "necessary to account for a material change 

in the fair market value of the Fund." Amended Plan§ 6.11, rec. 

vol. I, doc. 14, ex. 1 (amend. no. 1), infra n.12. Second, 

defendants ordered an interim valuation of the plan assets as of 

January 31, 1986, and determined that plaintiff's share in 

employer securities totaled $7,184.37, not $27,692.32. Defendants 

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now claim Plan§ 11.8, 2 constitutes authority for the revaluation. 

Third, on November 26, 1986, the defendants formally denied the 

plaintiff's request for valuation in accordance with the original 

plan, expressly relying upon amended§ 2.24 and new§ 6.11 and 

claiming that these provisions were "in force for the year 

of . termination." 

The parties filed cross-motions for summary judgment. After 

a hearing, 3 the district court determined that the relevant plan 

provisions in effect at the date of plaintiff's separation were 

unambiguous and clearly resulted in a valuation date of September 

30, 1985. The court rejected defendants' contention that Plan 

§ 11.8 allowed an interim valuation date and adjustment of the 

accounts. Attaching significance to defendants' failure to cite 

§ 11.8 when denying benefits, the court noted that§ 2.24 defining 

"Valuation Date" did not reference§ 11.8 and concluded that the 

more-specific language of§ 7.5 controlled. The court decided 

2 Section 11.8 is part of the Plan's general trust provisions 

and provides: 

Valuation of Trust Fund. The Trustee shall determine 

the book and market values of the Trust Fund annually as 

of close of business on the last day of each Plan Year 

and at such other times as are agreed upon with the 

Company. Such values shall be the book and market 

values of the securities in the Trust Fund, plus cash, 

interest, dividends, and other sums received and accrued 

but not yet invested. The market value of the 

securities in the Trust Fund shall be based upon such 

market quotations and other information as are available 

to the Trustee and as may in the Trustee's discretion be 

appropriate. 

3 Only a small portion of the hearing was transcribed and 

placed in the record on appeal by the defendants. 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 4 
that, while various Plan amendments might allow interim valuation, 

such amendments should not be applied retroactively because to do 

so would violate ERISA § 204(g)(l) which provides that "the 

accrued benefit of a participant under a plan may not be decreased 

by an amendment of the plan." 29 u.s.c. § 1054(g)(l). 4 

The district court also decided that the defendant trustees 

had breached their fiduciary duty in applying the plan amendments 

retroactively to the plaintiff and revaluing his interest in the 

employer securities. According to the court, the defendants' 

actions "were arbitrary, capricious or based upon a mistake of 

law." Finally, plaintiff was awarded attorney's fees and costs 

apparently based upon the factors in Gordon v. United States Steel 

Corp., 724 F.2d 106, 109 (10th Cir. 1983). The same day as the 

memorandum and order was entered, the district court entered a 

judgment granting plaintiff's motion for summary judgment and 

awarding "costs and attorney fees as detailed in [the] order." 

II. 

Before addressing the merits of the appeal, we must settle a 

few matters pertaining to our jurisdiction. 5 The notice of the 

4 For "individual account plans," the term "accrued benefit" is 

defined as "the balance in the individual's account." 29 u.s.c. 

§§ 1002(23) & (34). The plan defines the term as follows: 

"'Accrued Benefit' of a Participant on any date means the balance 

in his Accounts under the Plan. . " Plan§ 2.2. 

5 A motions panel of this court determined that we lacked 

jurisdiction over all of the defendants except the plan because it 

was the only party named in the notice of appeal. The motions 

panel also determined that the district court's judgment, though 

(footnote continued to next page) 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 5 
appeal in this case provided: 

Clair B. Pratt, 

Plaintiff, 

vs. 

Petroleum Production Management, 

Inc., Employee Savings Plan and 

Trust, et al., 

Defendants. 

Notice is hereby given that Petroleum Production 

Management, Inc., Employee Savings Plan and Trust et 

al., defendants above named, hereby appeal .... 

(footnote continued from previous page) 

silent on the matter of prejudgment interest, constituted a denial 

of prejudgment interest, and was final for purposes of 28 U.S.C. 

§ 1291. Not before the motions panel was a partial transcript of 

the summary judgment hearing in which the district court announced 

its decision to award prejudgment interest. 

Defendants sought rehearing on various grounds and the 

motions panel granted rehearing and referred the jurisdictional 

issues to the merits panel. We conclude that the original 

disposition of the jurisdictional issues by the motions panel was 

correct, with one minor amendment. On this record, no dispute 

ever existed concerning the plaintiff's right to prejudgment 

interest on the amount awarded. Indeed, the defendants suggest 

that the total amount in controversy in this appeal is the 

difference between the two valuations "plus pre and post judgment 

interest and attorney fees as ordered." Appellants' Brief at 10. 

This is not a case where the court's intentions concerning 

prejudgment interest are unclear, thus taking the issue beyond the 

terms of Fed. R. Civ. P. 60(a), which allows the district court to 

correct clerical mistakes in judgments arising from omission. "It 

is of course possible that the failure to include interest may 

result from a clerical error, and such would be the case where the 

judgment failed to reflect the actual intention of the court." 6A 

J. Moore, J. Lucas & G. Grotheer, Jr., Moore's Federal Practice, 

,r 60.06[4]; see also Hegger v. Green, 91 F.R.D. 595, 597 (S.D.N.Y. 

1981) (district court oversight in failing to direct the award of 

prejudgment interest may be corrected under Rule 60(a)). On 

remand, the district court shall correct its clerical error and 

include prejudgment interest in an amended judgment. Fed. R. Civ. 

P. 60(a). 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 6 
Fed. R. App. P. 3(c) requires that the notice of appeal "shall 

specify the party or parties taking the appeal." In Torres v. 

Oakland Scavenger Co., 487 U.S. 312 (1988), the Supreme Court 

affirmed a Ninth Circuit holding that "'[U]nless a party is named 

in the notice of appeal, the appellate court does not have 

jurisdiction over him.'" Id. at 487 (quoting unreported 

decision). "The failure to name a party in a notice of 

appeal ... constitutes a failure of that party to appeal." Id. 

The Court specifically rejected the argument "that the use of 'et 

al.' in the notice of appeal [is] sufficient to indicate [a 

party's] intention to appeal." Id. at 317. "The specificity 

requirement of Rule 3(c) is met only by some designation that 

gives fair notice of the specific individual or entity seeking to 

appeal." Id. at 318. 

Torres requires "strict compliance" with the naming 

requirement of Rule 3(c) because the filing of a proper notice of 

appeal is mandatory and jurisdictional. Woolsey v. Concorde 

Resources (In Re Woolsey), 855 F.2d 687, 688 (10th Cir. 1988). A 

"harmless error" analysis does not apply given "the nature of a 

jurisdictional requirement: a litigant's failure to clear a 

jurisdictional hurdle can never be 'harmless' or waived by a 

court." Torres, 487 U.S. at 317 n.3. We recently rejected an 

argument similar to the one made by defendants, that because the 

body of the notice of appeal contains the term "defendants," the 

notice should be deemed to include all of the defendants. In 

Laidley v. McClain, 914 F.2d 1386 (10th Cir. 1990), only one of 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 7 
four plaintiffs was named in the notice of appeal and the caption 

also contained the troublesome "et al." designation. Id. at 

1388 n.1. In dismissing the appeals of the three unnamed 

plaintiffs for lack of jurisdiction, we said: 

Although a statement that "plaintiffs hereby appeal," 

when combined with an "et al." designation to some of 

the plaintiffs, could be interpreted to mean that all of 

the plaintiffs intend to appeal, it could also be 

understood as designating less than all of the 

plaintiffs as appellants. Clearly, the specificity 

requirement of Rule 3(c) was intended to eliminate 

ambiguity as to the identity of the appellants. 

(citations omitted). Thus, the failure to specifically 

designate a party somewhere in the notice of appeal is a 

jurisdictional bar to that party's appeal. 

Id. at 1389. We see no reason why the rationale of Laidley should 

not apply to this case which turns on the adequacy of the 

defendants' "et al." designation in the caption of the notice of 

appeal combined with the phrase "defendants above named, hereby 

appeal" contained in the body. Only the plan has appealed; the 

remaining defendants must be dismissed from the appeal for lack of 

jurisdiction. 

Defendants urge us to follow Ford v. Nicks, 866 F.2d 865 (6th 

Cir. 1989), which held that an "et al." designation in the caption 

combined with the phrase "defendants' [sic] appeal" in the body of 

the notice of appeal was sufficient to encompass the unnamed 

defendants. Unfortunately for defendants, the Sixth Circuit 

subsequently and en bane determined that Ford was inconsistent 

with Torres; naming the parties to the appeal is essential. See 

Minority Employees v. Tennessee Dep't of Employment Sec., 901 F.2d 

1327, 1335 (6th Cir.), cert. denied, 111 S. Ct. 210 (1990). In 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 8 
this circuit's most comprehensive analysis of Torres, we relied 

heavily on Minority Employees, indicating our agreement with the 

Sixth Circuit's more recent approach which specifically rejects 

Ford and requires naming. Laidley, 914 F.2d at 1389. We also 

relied upon Rosario-Torres v. Hernandez-Colon, 889 F.2d 314, 317 

(1st Cir. 1990) (en bane) which requires naming the parties to 

meet the specificity requirements of Fed. R. App. 3(c) in accord 

with the Supreme Court's decision in Torres. Laidley, 914 F.2d at 

1389. 

III. 

Defendants also suggest that because the judgment in this 

case is no more specific than the notice of appeal concerning the 

identity of the defendants, .any judgment against the three unnamed 

defendants should not be allowed to stand. According to the 

defendants, 

[s]ince Torres refuses to allow all four of the 

defendants to appeal because the notice of appeal 

designated three of them by the term "et al.," it is 

totally inequitable and nonsensical to allow lower court 

judgment against those same three defendants designated 

by the term "et al." to stand. Elementary logic 

requires judgments to be more specific than notices of 

appeal. 

Rehearing Petition at 11 (filed Aug. 23, 1989). 

The judgment in this case is actually less specific 

concerning the identity of the parties than the notice of appeal 

because the judgment only references the defendants by "The 

Maurice L. Brown Co. et al." The Maurice L. Brown Co. is the 

corporate employer under a previous name. The district court 

previously had entered an order changing all references in the 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 9 
caption of the case to the renamed corporate employer, rec. vol. 

III at 17, however, subsequent court orders incorrectly captioned 

the case using the old corporate name. Specifically, the judgment 

references the district court's memorandum and order granting 

plaintiff summary judgment, which names of all the defendants, but 

retains the old corporate name. 

The clerical errors contained in the judgment do not render 

it invalid. Defendants readily concede that "a change of name on 

the judgment is of no major consequence and can easily be 

accomplished" through Fed. R. Civ. P. 60(a). Apart from that, 

however, the practical question of the enforceability of the 

judgment in its present form is a different matter than the 

jurisdictional question presented by the notice of appeal. Merely 

because the judgment is in need of clerical correction does not 

give us license to disregard it, nor does it excuse defendants' 

noncompliance with the naming requirement of Fed, R. Civ. P. 3(c). 

Building on the mistakes contained in the judgment, 

defendants urge that it is not final and we should remand this 

case for entry of a final judgment from which they would 

undoubtedly file a proper notice of appeal. They suggest that the 

district court's form of judgment is insufficient under Fed. R. 

Civ. P. 58 because it incorporates another document, namely the 

memorandum and order of the district court which contains the 

amounts. The purpose of the separate document requirement of Rule 

58 is to clarify when the time for appeal begins to run. Banker's 

Trust Co. v. Mallis, 435 U.S. 381, 384 (1978) (per curiam). 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 10 
Parties can waive strict compliance with the separate judgment 

rule. Id. at 386-87. And where the parties are not misled into 

believing an order non-final, the lack of technical compliance 

with Rule 58 will not preclude appellate review of that order. 

Laidley, 914 F.2d at 1390. 

Here, all parties proceeded as though the judgment filed June 

30, 1988 was final, notwithstanding that resort to the court's 

memorandum and order was necessary to quantify the judgment. The 

judgment was clearly entered on the docket by the clerk, and the 

docket entry referenced the court's memorandum and order. See 

Fed. R. Civ. P. 79(a); 6A J. Moore, J. Lucas & G. Grotheer, Jr., 

Moore's Federal Practice ,r 58.02 (1990) (distinguishing between 

entry, recordation and filing of judgment). Eight days after 

judgment, defendants moved the court for an additional twenty days 

in which to file a Fed. R. Civ. 59(e) motion to reconsider. The 

district court recognized that it was without jurisdiction to 

extend the ten-day time period contained in Rule 59(e), Brock v. 

Citizens Bank, 841 F.2d 344, 347-48 (10th Cir. 1988), and warned 

the defendants that the time period for taking an appeal had not 

been tolled. Rec. vol. III, doc. 29 at 2. Thereafter,.and within 

the thirty-day time period allowed by Fed. R. App. P. 4(a)(l), the 

defendants filed their notice of appeal. A transcript order form 

was filed and defendants posted a $58,000 supersedeas bond. 

As we have noted, supra n.5, the district court's omission of 

prejudgment interest in its judgment plainly was a clerical error 

which in no way affects the finality of the judgment. Defendants 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 11 
urge that the district court's intent was to award prejudgment 

interest as sought by plaintiff's complaint. We agree. See 

Rehearing Petition at 9; rec. vol. I, doc. 1 at 5 (complaint 

seeking prejudgment interest). Relying upon Garcia v. Burlington 

N. R.R. Co., 818 F.2d 713, 721 (10th Cir. 1987) and Kaszuk v. 

Bakery & Confectionary Union, 791 F.2d 548, 553 (7th Cir. 1986) 

(cited in Garcia), defendants claim that if interest is to be 

awarded, a judgment is not final until such an award is made. 

In Garcia, the district court decided the issue of 

prejudgment interest after entry of judgment and after a notice of 

appeal had been filed. 818 F.2d at 720. The district court sua 

sponte amended plaintiff's judgment to include prejudgment 

interest. Id. We recognized that prejudgment interest was not a 

collateral matter, instead it was part of the primary relief 

sought. Id. at 721. Thus, we held that the district court lost 

jurisdiction to award prejudgment interest, the plaintiff having 

failed to seek reconsideration of the damage award and the 

district court having failed to reserve the issue. Id. at 721-22. 

This case stands in marked contrast to Garcia; here, the district 

court expressly decided the issue of prejudgment interest in 

plaintiff's favor, but inadvertently omitted the amount from the 

judgment. See rec. vol. IV at 4. For the same reason, this case 

is distinguishable from Kaszuk. 

In Kaszuk, the district court entered a Fed. R. Civ. P. 54(b) 

certification on the issue of liability, but failed to resolve one 

of the elements of damages requested, namely prejudgment interest. 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 12 
791 F.2d at 552-53. The Seventh Circuit relied upon Liberty 

Mutual Ins. Co. v. Wetzel, 424 U.S. 737 (1976), for the 

proposition that "(a] decision that fixes liability but not 

damages is not appealable, despite the entry of an order under 

Rule 54(b)." Kaszuk, 791 F.2d at 553. Then the court decided 

that "no material difference" exists "between an order that leaves 

all damages issues open (as in Liberty Mutual) and an order that 

leaves one, important damages issue open (this case). In either 

event, the order is not a final disposition of a claim and does 

not meet the standards of Rule 54(b)." Kaszuk, 791 F.2d at 553. 

Whatever the merits of Kaszuk in the Rule 54(b) context, it 

plainly was not followed in Garcia, which involved an appeal under 

28 U.S.C. § 1291. Garcia, 818 F,2d at 714. The Garcia court 

referred to the district court decision which' awarded damages, and 

did not resolve the prejudgment issue, as a "final order," and 

decided the appeal on the merits. Id. at 721-22. 

Though the judgment in this case referenced another order and 

inadvertently omitted prejudgment interest, it is final. The 

district court and the parties have treated it as such and we have 

jurisdiction to review it. See 6A Moore's Federal Practice, 

,r,r 58.02.1, 60.06(4]; Aviles v. Lutz, 887 F.2d 1046, 1047-48 n.1 

(10th Cir. 1989); Kunkel v. Continental Cas. Co., 866 F.2d 1269, 

1272 n.3 (10th Cir. 1989). Defendants' notice of appeal from that 

judgment plainly was insufficient as to the corporate plan 

administrator and the individual trustees; only the plan has 

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perfected an appeal. 6 Thus, we dismiss the appeals of the 

corporate plan administrator and the two individual trustees 

consider only those issues which affect the plan's liability under 

the judgment. 

IV. 

The plan appeals contending that the plaintiff's vested 

benefit determined as of September 30, 1985 in accordance with the 

valuation procedure as it existed prior to amendment is not an 

accrued benefit. The plan also contends that interim valuation 

was permissible (via§ 11.8) prior to the plan amendment expressly 

providing for such valuation. In the alternative, the plan 

contends that the amendments (amended§ 2.24 and new§ 6.11) 

6 In Brown v. Palmer, 915 F.2d 1435, __ - __ , No. 88-2450, slip 

op. at 6-8 (10th Cir. Oct. 3, 1990), reh'g en bane granted on 

other grounds, (10th Cir. Nov. 6, 1990), a panel of this court 

determined that the following notice was sufficient under Rule 

3(c) to perfect an appeal by the United States: 

JOAN BROWN, et al., 

Plaintiff-appellees, 

v. 

COLONEL JAMES O. PALMER, 

Defendant-appellants. 

The notice of appeal did not list the other defendant as a party 

to the appeal. But because the suit was an official-capacity suit 

against the government, the notice of appeal naming the one 

defendant was sufficient. Id., slip op. at 7. Having determined 

that appellate jurisdiction existed over the appeal of the United 

States, the court did not decide whether the notice of appeal was 

sufficient with respect to the unnamed defendant. Id. at 7 n.3. 

Brown has no application to this case because this suit involves 

private defendants. Moreover, the liability implications in this 

case are not identical for each defendant. 

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adopted subsequent to plaintiff's separation but made retroactive 

provide the authority for interim valuation. Reminding us of the 

fiduciary responsibilities of its administering agents, the plan 

suggests that the interpretation by these agents is not arbitrary 

and capricious and is designed to protect financial integrity of 

participant accounts given the decline in the value of the 

employer securities. Finally, the plan contends that it should 

have been awarded attorney's fees, not the plaintiff, and further 

that an absence of bad faith and benefit to all plan members 

should preclude an award of attorney fees being satisfied from 

plan assets. 

Although only the plan is before us, its interpretation is 

performed in the first instance by its fiduciaries. 7 The 

fiduciaries are required to administer the plan "solely in the 

7 The corporate administrator acting through an administrative 

committee is given the power to: 

(a) construe and interpret the Plan in accordance with 

uniform rules and regulations consistently applied to 

all Participants, 

(b) decide the eligibility of any persons to be covered 

under the Plan in accordance with the Plan, 

(c) determine the right of any person to a benefit, in 

accordance with the Plan, 

In carrying out its duties hereunder, the Committee 

shall have the right to request and rely upon a decision 

of the Board of Directors of the Company in any case 

where the Committee is unable to reach a decision as to 

what course of action to pursue. 

Plan§ 9.2; see also id.§ 9.5 (committee empowered to review and 

decide benefit denials). 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 15 
interest of the participants and beneficiaries." 29 U.S.C. 

§ 1104(a)(l). The fiduciaries are required to interpret "in 

accordance with the documents and instruments governing the plan 

insofar as such documents and instruments are consistent with" 

ERISA. In reviewing fiduciary benefit decisions, we have 

repeatedly held that such decisions are to be upheld unless "'(1) 

arbitrary and capricious, (2) not supported by substantial 

evidence, or (3) erroneous on a question of law.'" Sage v. 

Automation Inc. Pension Plan & Trust, 845 F.2d 885, 895 (10th Cir. 

1988) (quoting Peckham v. Board of Trustees, 653 F.2d 424, 426 

(10th Cir. 1981)); Torix v. Ball Corp., 862 F.2d 1428, 1429 (10th 

Cir. 1988); Carter v. Central States, SE & SW Areas Pension Plan, 

656 F.2d 575, 576 (10th Cir. 1981). 

The Supreme Court has now held that in an ERISA breach of 

contract action, "a denial of benefits ... is to be reviewed 

under a de novo standard unless the benefit plan gives the 

administrator or fiduciary discretionary authority to determine 

eligibility for benefits or to construe the terms of the plan." 

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989) 

(emphasis added). Under a de novo standard, we would ask not 

whether the fiduciaries' interpretation of the contract was 

arbitrary and capricious, but only whether it was correct. More 

deference is paid to the fiduciaries' decision under the arbitrary 

and capricious standard. Here, an administrative committee is 

given power to construe and interpret the plan and that committee 

may seek guidance from others. See supra n.7. Courts have 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 16 
divided concerning whether similar generic language empowers a 

fiduciary with discretion "to construe disputed or doubtful 

terms,"TM Bruch, 489 U.S. at 111, or merely serves to identify a 

particular fiduciary responsible for general plan interpretation. 

Compare de Nobel v. Vitro Corp., 885 F.2d 1180, 1186-87 (4th Cir. 

1989) (language constitutes grant of discretion); Curtis v. Noel, 

877 F.2d 159, 161 (1st Cir. 1989) (same); Guy v. S.E. Iron 

Workers' Welfare Fund, 877 F.2d 37, 39 (11th Cir. 1989) (same); 

Lowry v. Bankers Life & Cas. Retirement Plan, 871 F.2d 522, 524 

(5th Cir.) (same), cert. denied, 110 s. Ct. 152 (1989), with 

Baxter v. Lynn, 886 F.2d 182, 187-88 (8th Cir. 1989) (language 

does not constitute a grant of discretion); Inernational Bhd. v. 

Southern Cal. Edison Co., 880 F.2d 104, 108 (9th Cir. 1989) 

(same);TM also Sisters v. Swedishamerican Group Health Benefit 

Trust, 901 F.2d 1369, 1370 (7th Cir. 1990) (discussing split). We 

are persuaded as a matter of law that the grant in this plan 

carries with it not only the authority, but also the discretion, 

to decide questions of plan interpretation. See Conference of 

Teamsters Retirement Plan, 898 F.2d 424, 427, reh'g en bane 

granted, (4th Cir. Apr. 17, 1990); Moon v. American Home Assur. 

Co., 888 F.2d 86, 8889 (11th Cir. 1989); Lowry, 871 F.2d at 525 

n.5. 

Having determined the proper level of deference to be paid 

the fiduciaries' interpretation of the plan, our review of the 

various legal determinations made by the district court is 

plenary. Its decision whether to award attorney fees is reviewed 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 17 
for an abuse of discretion. 29 u.s.c. § 1132(g); Gordon, 724 F.2d 

at 108 (10th Cir. 1990), see also Anderson v. Emergency Medicine 

Assocs., 860 F.2d 987, 992 {10th Cir. 1988); Sage, 845 F.2d at 

895-96. 

Defendant contends that for plaintiff to prevail, "he must be 

able to prove to the court that his accrued benefit under the plan 

guaranteed him the cash amount reflected on each yearly valuation 

of the plan assets (i.e., a cash sum as opposed to a unit sum)." 

Appellant's Brief at 11. According to the defendant, as of the 

date of termination, the plaintiff did not have an accrued benefit 

based upon the annual valuation of the accounts because such 

valuation was merely an accounting summary. Defendant also 

suggests that the plan before or after amendment provides 

justification for interim valuation. The district court 

determined that the plan was liable on two independent grounds: 

reduction of an accrued benefit under ERISA and breach of 

contract. We agree with the district court. 

Plaintiff sought relief under ERISA § 502(a){l)(B), 8 a 

statutory provision allowing an ERISA "'breach of contract' 

action[]." 29 u.s.c. § 1132(a){l)(B); O'Reilly v. Ceuleers, 912 

8 29 u.s.c. § 1132 provides in pertinent part: 

{a) Persons empowered to bring a civil action. A civil 

action may be brought--

(1) by a participant or beneficiary--

(B) to recover benefits due him under the 

terms of his plan, to enforce his rights under 

the terms of the plan, or to clarify his 

rights to future benefits under the terms of 

the plan; 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 18 
F.2d 1383, 1387 (11th Cir. 1990); see also Straub v. Western Union 

Tel. Co., 851 F.2d 1262, 1264 (10th Cir. 1988) (state-law breach 

of contract claims preempted). This is a defined contribution 

plan, also known as an individual account plan. Such plans have 

two criteria: a separate account for each participant and 

measurement of benefits based solely on the level of funds or 

assets in each participant account. 29 u.s.c. § 1002(34); Concord 

Control, Inc. v. International Union, United States Auto., 

Aerospace & Agric. Implement Workers, 647 F.2d 701, 705 (6th 

Cir.), cert. denied, 454 U.S. 1054 (1981); Pension Benefit Guar. 

Corp. v. Defoe (In re Defoe Ship Bldg. Co.), 639 F.2d 611, 313 

(6th Cir. 1981); Connoly v. Pension Benefit Guar. Corp., 581 F.2d 

729, 733 (9th Cir. 1978), cert. denied, 440 U.S. 935 (1979). An 

."eligible individual account plan" may hold significant amounts of 

employer securities. Fink v. National Sav. & Trust Co., 772 F.2d 

951, 955-56 (D.C. Cir. 1985). A participant's accrued benefit in 

an individual account plan consists of the account balance which 

reflects the monetary value of contributions, income and expenses, 

and gains and losses allocated to the account. 29 u.s.c. 

§ 1002(23) & (34). 

The plan specifically stated that when the plaintiff 

separated he was entitled to receive a "distribution of his vested 

interest in his Employer Contribution Account valued as of the 

Valuation Date next preceding the date of his separation from 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 19 
service." 9 Plan§ 7.5. Section 7.5 plainly sets out that a 

separating employee's vested interest shall be valued "as of the 

Valuation Date next preceding the date of [the participant's] 

separation from service." Id. The "Valuation Date" is defined as 

"the date on which the Trust Fund shall be valued and Accounts 

adjusted accordingly, which date shall be the last day of each 

Plan Year with respect to Employer Securities and the last day of 

the month with respect to all other securities." Id. § 2.24. 

Contrary to defendant's position, the valuation date in these 

circumstances has more significance than merely to tally "the 

plaintiff's number of units" and his proportionate share of the 

plan assets. See Appellant's Brief at 13-15. At the valuation 

date, the accounts, including the Employer Contribution Account 

established for the plaintiff, 10 are "adjusted to reflect the 

9 

10 

Plan§ 7.5 provides: 

Vested Termination of Employment Benefits. An active 

Participant who ceases to be an Employee for any reason 

other than those specified in Sections 7.1 and 7.3 above 

shall be entitled to a distribution of 100 percent of 

his Participant Accounts valued as of the Valuation Date 

next preceding the date of cessation of his status as an 

Employee, increased by any salary conversion 

contributions attributable to him following such 

Valuation Date. The Participant shall be entitled to a 

distribution of his vested interest in his Employer 

Contribution Account, valued as of the Valuation Date 

next preceding the date of his separation from service, 

increased by any Employer contributions attributable to 

him and any adjustment of account pursuant to Section 

6.4 following such Valuation Date. Such distributions 

shall commence in accordance with Section 8.3. 

Plan§ 2.1 provides: 

"Accounts" means the Participant Accounts and Employer 

Contribution Account established for each Participant 

pursuant to Sections 6.1 and 6.2. 

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( 

effect of income received and accrued, realized and unrealized 

gains and losses, expenses and all other transactions." Id. 

§ 6.4. Should a participant then separate from employment, 

valuation of his vested interest already will have been 

accomplished in large part and distribution may then proceed. Id. 

§ 7.5. 

The plan operated on a fiscal year, October 1 to September 

30. Id.§ 2.18(c). Plaintiff separated from his employment on 

February 28, 1986. The last day of the plan year next preceding 

February 28, 1986 is September 30, 1985. Plaintiff's entitlement 

to benefits valued as of September 30, 1985 ($27.,692.32) based on 

the plan as it existed on February 28, 1986, the date of 

separation, is clear based upon express language. Like the 

district court, we reject the notion that under§ 11.8, supra n.2, 

a general plan provision allowing the plan trustee to determine 

the book and market values of the Trust Fund annually or "at such 

other times as are agreed upon with the Company," takes precedence 

over§ 7.5 which provides a mandatory and specific date for 

valuation when an employee separates. Section 7.5 states: "The 

Participant shall be entitled to a distribution of his vested 

interest in his Employer Contribution Account, valued as of the 

Valuation Date next preceding the date of his separation from 

service, increased by any Employer contributions attributable to 

him and any adjustment_of account pursuant to Section 6.4 

following such Valuation Date." (emphasis added). Thus, a 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 21 
correct interpretation results in valuation date of September 30, 

1985. 

Defendant's contention that§ 11.8 somehow modifies§§ 7.5 

and 2.24 to allow for interim valuation dates is not only 

incorrect, but also unreasonable. First,§ 11.8 allows for 

valuation of the trust fund, 11 not the particular member accounts. 

There is a difference. Compare Plan§ 2.23 (defining "Trust 

Fund") with§ 2.16 (defining "Participant Accounts") & § 2.1 

(defining "Accounts"). When the drafters wanted to refer to both 

the trust fund and the particular member accounts, they did so. 

See Plan§ 2.24. Second, the definition of valuation date 

contained in§ 2.24 nowhere references§ 11.8 or discusses interim 

valuation dates; when§ 2.24 was amended to provide for interim 

valuation it referenced not§ 11.8, but rather a new provision 

(§ 6.11) specifically allowing for interim valuation of accounts. 

Indeed, when the defendants denied plaintiff's claim for benefits, 

they did not reference§ 11.8, but rather relied upon new§ 6.11 

and amended§ 2.24 providing for interim valuations. Third, 

§ 11.8, by its terms, does not provide authority to adjust 

participant accounts, which must occur prior to distribution. See 

New § 6 .11 ~I 3. Finally, § 11. 8 provides for book and market 

values, obviously, book value has little to do with the market 

11 Plan§ 2.23 provides: 

"Trust Fund" means the fund established by the Company 

for the purpose of funding the Plan and into which 

contributions are to be made and from which benefits and 

expenses are to be paid in accordance with the 

provisions of the Plan. 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 22 
value necessary for the payment of benefits. While§ 11.8 may 

provide for valuations needed for plan maintenance, it does not 

override the specific benefit provisions of the plan. See Plan 

§ 7.1, 7.3 & 7.5. 

12 Nor can defendants reasonably rely upon new§ 6.11 and 

amended§ 2.24 13 to accomplish an interim valuation date. These 

12 

13 

New§ 6.11 provides: 

Interim Evauluation of Accounts. Each account of a 

Participant who terminates on a date other than a 

Valuation Date shall be valued currently, using the same 

procedure described in Section 6.3, if such interim 

evaluation, determined in a uniform and 

nondiscriminatory manner, in the opinion of the 

Committee is necessary to account for a material change 

in the fair market value of the Fund. The Committee 

shall determine the fair market value, based on 

information furnished by the Trustee and funding agent, 

as of the end of the calendar month next preceding the 

Participant's date of termination, of the net Fund in 

order to determine the increase or decrease in the fair 

market value of such Fund when compared with the fair 

market value of such Fund as of the next preceding 

Valuation Date. 

In determining the increase or decrease of the fair 

market value of the Fund, all dividends, declared but 

not yet paid, interest and other income received by the 

Trustee and funding agent in the interim between the 

next preceding Valuation Date and the interim evaluation 

date shall be included. 

Once the increase or decrease has been determined, the 

account or accounts of such Participant as of the next 

preceding Valuation Date shall, for purposes of 

distribution only, be adjusted in order to reflect such 

increase or decrease. 

Amended§ 2.24 provides: 

"Valuation Date" means the date on which the Trust Fund 

shall be valued and Accounts adjusted accordingly, which 

date shall be the last day of each Plan Year with 

respect to Employer securities and the last day of each 

(footnote continued to next page) 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 23 
retroactive amendments were made some eight weeks after the 

defendant separated and serve to reduce plaintiff's accrued 

benefit under the plan contrary to ERISA § 204(g)(l). 29 u.s.c. 

§ 1054(g)(l). As a matter of ERISA contract law, these amendments 

cannot operate unilaterally to reduce plaintiff's accrued benefit. 

Plaintiff relies upon Denzer v. Purofied Down Products Corp. 

Profit-Sharing & Retirement Plan, 474 F. Supp. 773 (S.D.N.Y. 

1979), which presents similar facts. The plan provided that after 

ten or more years, a participant would receive one-hundred percent 

of the balance of his account in the event of separation without 

cause. Id. at 774. In January 1978, Purofied terminated the 

plaintiff's sixteen-year employment without cause. Id. at 774-75. 

Purofied refused to distribute the plaintiff's benefits until he 

reached sixty-five, relying upon a plan amendment, adopted six 

months after plaintiff's separation and purportedly retroactive to 

September 1976. Id. at 775. Plaintiff brought an ERISA breach of 

contract action against the employer, the plan and the trustee 

alleging, inter alia, "that the amended Plan cannot be applied 

retroactively to deprive him of a right which vested in him under 

the old Plan, i.e., the right to receive benefits upon termination 

of employment without cause." Id. The district court agreed, 

reasoning that the plan "was an offer of a unilateral contract by 

Purofied to the plaintiff." Id. at 776. Once the plaintiff 

(footnote continued from previous page) 

month with respect to all other securities. Valuation 

Date shall also include any date that an Interim 

Evaluation of Accounts is performed in accordance with 

Section 6.11. 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 24 
performed the conditions of that offer, the pension benefits 

vested and a binding unilateral contract existed which could not 

be modified without the plaintiff's consent. Id. "Thus 

alteration of the plaintiff's vested rights by retroactive 

amendment, without the plaintiff's consent, is ineffective." Id. 

In Morales v. Plaxall, Inc., 541 F. Supp. 1387 (E.D.N.Y. 

1982), plaintiff was employed from March 1965 until he was 

terminated in July 1977. Id. at 1389. The plan adopted an 

amendment in 1976 which allowed for payment of benefits upon 

termination as opposed to reaching the age of sixty-five. 

Subsequent to the plaintiff's termination, the plan was modified 

to eliminate this early-payment option. Id. at 1389. The 

district court determined that the 1976 amendment was effective 

and, because it contained an expansion of the employee's rights, 

did not need the consent of the employee. Id. at 1391. The 1976 

version of the plan, effective as of the date of the employee's 

termination, controlled and the early-payment option was 

available. Id. 

We agree with the reasoning of Purofied and Plaxall. A 

"pension plan is a unilateral contract which creates a vested 

right in those employees who accept the offer it contains by 

continuing in employment for the requisite number of years." Hurd 

v. Illinois Bell Tel. Co., 234 F.2d 942, 946 (7th Cir.), cert. 

denied, 352 U.S. 918 (1956); accord Hoefel v. Atlas Tack Corp., 

581 F.2d 1, 4-5 (1st Cir. 1978), cert. denied, 440 U.S. 913 

(1979). When plaintiff was terminated, defendant was required to 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 25 
determine benefits in accordance with the plan then in effect. 

See Brug v. Pension Plan, 669 F.2d 570, 575-76 (9th Cir.), cert. 

denied, 459 U.S. 861 (1982); Danti v. Lewis, 312 F.2d 345, 349 

(D.C. Cir. 1962); Plaxall, 541 F. Supp. at 1391; Denzer, 474 F. 

Supp. at 766. Subsequent unilateral adoption of an amendment 

which is then used to defeat or diminish the plaintiff's fully 

vested rights under the governing plan document is not only 

ineffective, but also arbitrary and capricious. See Brug, 669 

F.2d at 574-76; Danti, 312 F.2d at 348-49; Denzer, 474 F. Supp. at 

766. Application of the retroactive amendment in these 

circumstances also is precluded by ERISA § 204(g); only under 

carefully limited circumstances, see 29 u.s.c. § 1082(c)(8), is an 

amendment permitted which would reduce an accrued benefit. See 29 

U.S.C. § 1054(g)(l); Meagher v. IAM Pension Plan, 856 F.2d 1418, 

1420-21 (9th Cir. 1988). 

Of course, the difficulty with the plan in existence at the 

time of plaintiff's termination is that the valuation of the 

plaintiff's interest in employer securities did not reflect the 

current market value because it relied upon market value 

determined in the past. In a declining market, this constitutes a 

burden to the plan, however, in a rising market the plan (not the 

separating employee) would benefit from this feature because the 

employee would receive only historical market value, not the 

higher current market value. We are not free to rewrite the plan 

to reallocate that risk. Moreover, plausible reasons exist for 

the valuation method originally selected; perhaps a stable or 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 26 
rising market was expected or perhaps the expense of obtaining 

more frequent valuations for these employer securities was 

considered too great. 14 

When a plan is silent or ambiguous and the result reached by 

the plan acting through its fiduciaries is not foreclosed by law, 

we will uphold the result. Crouch v. Mo-Kan Iron Workers Welfare 

Fund, 740 F.2d 805, 808 (10th Cir. 1984). But here the plan 

document unambiguously addresses the valuation procedure, hence, 

the plan is contractually bound to honor that procedure as it 

existed when the plaintiff separated. While we are sensitive to 

the obligations of the plan's fiduciaries and the theoretically 

negative effect on other plan members, 15 it would not be proper 

for the court in this instance to modify judicially the terms of 

the plan. 16 That task falls to the plan's administrator and 

14 The employer securities are not publicly traded and no active 

secondary market exists for them. 

15 Defendant explains that had plaintiff been paid based upon 

the valuation date contained in the plan, he would have received a 

windfall of approximately $20,000 based upon his 3% share of 

employer securities. Defendant then suggests that, had those 

holding approximately 20% of the employer securities held by the 

plan demanded like treatment, the plan would fail because the. 

value of the employer securities decreased from $1.1 million on 

September 30, 1985 to $200,000 on January 31, 1986. Appellant's 

Brief at 26. This possible result is pure speculation. The plan 

has been amended to preclude this possibility and no record 

evidence suggests that any member or members holding 20% of the 

employer securities sought like treatment before the plan 

amendment. To be sure, payment of the plaintiff's share according 

to the plan document will represent a charge, either directly or 

indirectly, to member accounts. An even greater charge, however, 

will result when the plan also must pay the plaintiff's pre- and 

post-judgment interest, and attorney's fees (both sides). 

16 Defendant has not argued that the valuation provision of the 

(footnote continued to next page) 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 27 
trustees, and we note that the plan now has been amended to 

provide for interim valuation. 

Two cases relied upon by the defendant consider valuation and 

distribution in a declining market and reach different results 

than we do, but these cases are distinguishable. In Bachelder v. 

Communications Satellite Corp., 837 F.2d 519 (1st Cir. 1988), the 

First Circuit considered the import of a summary plan description 

(SPD) which indicated that, once entitled to benefits, the 

plaintiffs would receive a cash distribution based upon the market 

value of publicly-traded stock held by the plan. Id. at 520. 

Plaintiffs received a lesser amount because, when the stock was 

sold several weeks later, the price per share had declined. The 

Bachelder court made the legal determination that the SPD was 

ambiguous and the language and structure of the plan precluded an 

immediate cash distribution. Id. at 522. In an alternative 

holding, the court announced that the plaintiffs failed to show 

reliance or prejudice flowing from the SPD, a secondary plan 

document. Id. at 521-22. In the absence of a specific provision 

governing "the date upon which shares of stock are to be converted 

into cash," id. at 520, the court looked to the plan's "apparent 

purposes, its structure and its history." Id. at 522. The court 

determined that specific shares of stock had to be sold to avoid 

(footnote continued from previous page) 

plan should not be enforced because it will cause the plan to fail 

of its essential purpose. See 29 u.s.c. §§ l00l(b) (ERISA policy 

to protect "interests of participants in employee benefit plans 

and their beneficiaries") & 1104(1)(D) (fiduciary must discharge 

his duties in accordance with plan documents insofar as those 

documents are consistent with ERISA). 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 28 
the "risk of disbursing funds from shares allotted to other 

participants" which could expose the "fiduciaries to allegations 

of breach of fiduciary duties." Id. No dispute existed 

concerning the reasonableness of the six-to-eight week delay to 

accomplish the administrative task of apportioning the shares and 

selling them. Id. at 521 n.4. 

In this case, we do not have a plaintiff relying upon a 

secondary plan document, a descriptive brochure. Rather, 

plaintiff merely is insisting that the terms of the original plan 

document be enforced. We will not require detrimental reliance 

before enforcing actual, express contractual provisions that admit 

only of a single interpretation. Here, unlike Bachelder, the plan 

is not silent concerning a valuation date; we are without license 

to alter an express, unambiguous provision, even though that 

provision results in one participant receiving an amount greater 

than the appraised value of the employer securities immediately 

prior to separation. 

Defendant also relies upon Cator v. Herrgot & Wilson, Inc., 

609 F. Supp. 12 (N.D. Cal. 1984), which involved enactment of a 

\ 

plan amendment providing for interim valuations. The district 

court noted the salutary purpose of a provision allowing for 

interim valuation: "to provide ... the 'necessary flexibility' 

to minimize the detrimental impact of fluctuating market 

conditions on the Plan's assets." Id. at 14. Recognizing the 

duty of plan fiduciaries to participants and beneficiaries, the 

district court determined that the interim valuation amendment, 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 29 
enacted one month prior to the plaintiff's retirement, was not 

arbitrary and capricious. 

Cater did not include one of the operative facts in this 

case: application of a retroactive amendment to defeat or 

diminish an eligible member's vested benefits. Thus, Cater is 

distinguishable. The Cater district court recognized that the 

plan amendment "took effect before Cator retired and, therefore, 

was not applied retroactively to divest him of eligibility for 

benefits." Id. at 16. It distinguished Brug v. Pension Plan, 669 

F.2d 570, a Ninth Circuit case following the accepted rule that 

application of retroactive amendment may not work to defeat or 

diminish vested benefits as of the date of eligibility. Cater, 

609 F. Supp. at 16. 

Defendant's last two arguments on this point may be handled 

with dispatch. Defendant argues that because the Internal Revenue 

Service (IRS) determined that the plan amendments did not 

disqualify the plan from favorable tax treatment, this means that 

the plan amendments could not have decreased the plaintiff's 

accrued benefit. See I.R.C. § 411(d)(6). Nothing in this record, 

however, indicates that the IRS considered the specific facts and 

issues that we decide today. Given that fact, defendant's 

reliance upon the IRS decision concerning the amendments is 

misplaced. See Sage, 845 F.2d at 894 n.4 (rejecting argument that 

IRS decision, which contained no discussion of the issue before 

the court, constrains a district court decision). Likewise, 

defendant refers us to Treas. Reg.§ 1.411(d)-4(A-l)(d)(8) (1988) 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 30 
which indicates that "valuation dates for account balances" are 

not "protected benefits" under I.R.C. § 41l(d)(6). Section 

411(d)(6) generally provides that a plan will not qualify for 

favorable tax treatment if an accrued benefit is eliminated or 

reduced. For those plan members not yet separated, we agree that 

plan valuation dates may be changed by amendment because they are 

not protected benefits. However, the regulation does not address 

the problem in this case: retroactive amendment of plan valuation 

dates which causes an impermissible reduction in an extant benefit 

amount upon separation. Accordingly, the applicability of the 

regulation to the specific facts of this case is doubtful. 

v. 

The district court awarded attorney's fees as against all 

defendants. See 29 u.s.c. § 1132(g)(l). Previously the district 

court had determined that the plan ~dministrator and trustees had 

breached their fiduciary duty by attempting to apply a retroactive 

amendment (which would reduce an accrued benefit) to the plaintiff 

and by repeatedly insisting that plaintiff sign a release from 

liability contrary to ERISA § 410. See 29 u.s.c. § lllO(a). 17 

Defendant concedes that had the plaintiff signed the release, it 

17 29 u.s.c. § lllO(a) provides: 

(a) Except as provided in sections 1105(b)(l) and 

1105(d) of this title, any provision in any agreement or 

instrument which purports to relieve a fiduciary from 

responsibility or liability for any responsibility, 

obligation or duty under this part shall be void as 

against public policy. 

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Appellate Case: 88-2190 Document: 01019956474 Date Filed: 11/29/1990 Page: 31 
would have been void. Appellant's Brief at 38-39. Our review of 

the record in this case convinces us that the district court did 

not abuse its discretion in deciding to award attorney's fees. 

However, we must reverse the attorney's fee award (only as 

against the plan) and remand for further findings because the 

district court did not explain, nor is it apparent from the 

record, why it chose to award attorney's fees as against the plan, 

as well as against the other defendants personally. The award of 

attorney's fees as against the fiduciaries is not at issue in this 

appeal given our holding on the jurisdictional issue. In Eaves v. 

Penn, 587 F.2d 453, 464-65 (10th Cir. 1978), we faced a similar 

situation and determined that a remand was appropriate when we 

could not determine from the record the extent to which the 

district court had considered the following factors in deciding 

whether attorney's fees should be absorbed by the plan or the 

breaching fiduciaries: 

(1) the degree of the offending parties' culpability or 

bad faith; (2) the degree of the ability of the 

offending parties to satisfy an award of attorney fees; 

(3) whether or not an award of attorneys fees against 

the offending parties would deter other persons acting 

under similar circumstances; (4) the amount of benefit 

conferred on members of the pension plan as a whole; and 

(5) the relative merits of the parties position. 

Id. at 465. The district court should consider these factors 

vis-a-vis the plan's liability for an award of attorney's fees. 

On remand, the district court should also correct the clerical 

errors in the judgment consistent with this opinion. 

DISMISSED IN PART, AFFIRMED IN PART, REVERSED IN PART and 

REMANDED. 

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