Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-06-01158/USCOURTS-ca8-06-01158-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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1

The Honorable Ronald E. Longstaff, United States District Judge for the

Southern District of Iowa.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 06-1158

___________

LaVerne I. Johnson; Paul Edwards, *

*

Appellants, *

* Appeal from the United States

v. * District Court for the

* Southern District of Iowa.

Lend Lease Real Estate Investment, *

*

Appellee. *

___________

Submitted: September 29, 2006

Filed: October 31, 2006

___________

Before ARNOLD, BYE, and MELLOY, Circuit Judges.

___________

ARNOLD, Circuit Judge.

LaVerne Johnson and Paul Edwards filed suit against their former employer,

Lend Lease Real Estate Investments, Inc., claiming that letters that Lend Lease sent

to them upon termination of their employment constituted free-standing ERISA plans

under the Employee Retirement Income Security Act of 1974 (ERISA), see 29 U.S.C.

§§ 1001-1461, and contesting Lend Lease's decision to terminate the benefits provided

in the letters. Lend Lease moved for summary judgment, which the district court1

granted. Messrs. Johnson and Edwards appealed that order. We affirm.

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I.

Messrs. Johnson and Edwards were employed by Lend Lease until January,

1995, and June, 2002, respectively. Upon termination of their employment, the

plaintiffs both received letters notifying them that Lend Lease would continue their

medical, dental, vision, and life insurance benefits through Lend Lease's ERISA

welfare plans, and indeed Messrs. Johnson and Edwards continued to receive these

benefits post-employment.

In 2004, Lend Lease terminated all operations in the United States and,

concurrently, terminated the plan under which Messrs. Johnson and Edwards were

receiving benefits. The plan specifically allowed Lend Lease to terminate it at any

time under a "reservation of rights" clause contained in the plan documents. Lend

Lease notified Messrs. Johnson and Edwards of this termination and explained the

transition benefits being offered voluntarily by Lend Lease (namely, paying the cost

normally due from employees for their temporary health insurance under the

Consolidated Omnibus Budget Reconciliation Act (COBRA), a $10,000 cash

payment, continued life insurance eligibility, a help line, and access to consultants to

assist participants in obtaining successor coverage). Rather than accepting the

transition benefits, which would have required them to release Lend Lease from "any

and all claims, promises, actions, causes of action and liabilities of any kind or nature

whatsoever" relating to the plan, Messrs. Johnson and Edwards filed the present

action.

The district court granted summary judgment to Lend Lease, holding, inter alia,

that the letters that Messrs. Johnson and Edwards received at the time that they left the

company neither constituted separate and distinct ERISA plans nor indicated an intent

to provide vested, lifetime benefits. We review de novo a district court's grant of

summary judgment, and will affirm the grant only when, viewing the facts in a light

most favorable to the nonmoving party, no genuine issues of material fact remain and

the moving party is entitled to judgment as a matter of law, Fed. R. Civ. P. 56(c).

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Walsh v. United States, 31 F.3d 696, 698 (8th Cir. 1994). The parties here do not

genuinely dispute the material facts.

II.

The only issue before us is whether the letters constitute free-standing ERISA

plans, and if so, whether they indicate that the benefits provided in the letters are to

be provided for life. "A plan is established for ERISA purposes when a reasonable

person can ascertain (1) the intended benefits, (2) the class of beneficiaries,

(3) a source of funding, and (4) the procedures for receiving benefits." Petersen v.

E.F. Johnson Co., 366 F.3d 676, 678 (8th Cir. 2004).

Messrs. Johnson and Edwards argue that the general references to "medical,

dental and life insurance benefits" in the letters sufficiently state the intended benefits

for ERISA purposes. But, as Lend Lease relevantly points out in its brief, the "only

possible way to determine what benefits either of them might receive was by reference

to Lend Lease's existing Plan." Lend Lease also points out additional questions left

unanswered by the letters: "What were the deductibles? What were the co-pays?

What were the annual or lifetime maximums? What services were covered? Were

hospital benefits provided? Private or shared ... hospital rooms? Were prescription

drugs reimbursed? Were outpatient services provided? Did the plan reimburse well

care?"

The letters, moreover, repeatedly refer to "continued" coverage and at one point

describe benefits only as "the same as your current coverage." Both Messrs. Johnson

and Edwards were instructed by the letters to complete and return a "Continuation of

Insurance Upon Retirement Form." We think that the foregoing makes clear that the

only way to determine "the intended benefits" under the letters was by reference to the

underlying Lend Lease ERISA plan, and that the letters thus fail to constitute freestanding ERISA plans. Since the letters do not provide the requisite information

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regarding "intended benefits" to allow them to qualify as free-standing ERISA plans,

we need not address the remaining three requirements outlined in Petersen.

Because the letters are not free-standing ERISA plans, and because, as we have

already noted, Lend Lease's underlying ERISA plan does not provide for lifetime

benefits due to its "reservation of rights" clause, it follows that neither the letters nor

the underlying plan provide lifetime benefits to Messrs. Johnson and Edwards.

Affirmed.

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