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

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_______________

No. 15-2813

_______________

LOU ANN WOERNER, as the beneficiary of Michael J. Woerner,

Appellant

v.

FRAM GROUP OPERATIONS, LLC; THAT CERTAIN 

EMPLOYEE WELFARE BENEFIT PLAN SPONSORED BY FRAM 

OPERATIONS GROUP LLC c/o FRAM OPERATIONS GROUP LLC

________________________________________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civil Action No. 2-12-cv-06648)

District Judge: Stanley R. Chesler

________________________________________

Submitted under Third Circuit LAR 34.1(a)

on June 7, 2016

Before: CHAGARES, KRAUSE, SCIRICA, Circuit Judges

(Opinion Filed: August 19, 2016) 

___________

OPINION

___________

KRAUSE, Circuit Judge

 

 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 

does not constitute binding precedent.

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Lou Ann Woerner appeals a District Court order granting summary judgment in 

favor of FRAM1 on her claim for benefits brought under the civil enforcement provision 

of the Employee Retirement Income Security Act (ERISA). For the reasons set forth 

below, we will vacate and remand.

I.

Mrs. Woerner’s husband, Michael Woerner, was diagnosed with brain cancer 

while working at Honeywell International, Inc. and elected to take disability leave

beginning on June 24, 2011. Shortly thereafter, FRAM acquired Mr. Woerner’s business 

unit from Honeywell, making him an employee of the new company. 

As part of its acquisition, FRAM decided to offer a CIGNA life insurance plan

(hereinafter “FRAM Plan” or “the Plan”) to its new employees, and on October 21, 2011, 

FRAM distributed an email entitled “Message from FRAM Group HR – Benefits Update 

for FRAM Group Employees” informing employees about the FRAM Plan. J.A. 273-74. 

The email announced that “in the coming weeks all new plan options and details will be 

communicated to you.” J.A. 273. “Once you receive and review the benefits details, you 

may elect the plan of your choosing.” J.A. 273. 

 

1 We use FRAM to refer collectively to Defendant-Appellees FRAM Group 

Operations, LLC and That Certain Employee Welfare Benefit Plan Sponsored by FRAM 

Operations Group LLC. 

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3

One week later, on October 28, FRAM sent a follow-up email containing a “brief 

overview” of the Plan.2 J.A. 107. Coverage would be provided at the election of the 

employee, and premiums would be set based on “[the] amount of coverage purchased and 

[the] age [of the employee or spouse].” J.A. 108. The maximum electable coverage

would be equal to the lesser of “5 times [the employee’s] base salary” or $1,500,000. 

J.A. 108. Employees would be permitted to “[p]urchase coverage for [their] spouse[s] in 

$5,000 increments up to a maximum 50% of [their] coverage amount not to exceed 

$250,000” and “for [their] children up to a maximum of $20,000.” J.A. 108. And 

employees would be required to complete a health questionnaire and provide evidence of 

insurability to qualify for coverage in excess of the “[g]uarantee [i]ssue amount” of 

$350,000 for employees and $50,000 for spouses. J.A. 108. This overview did not, 

however, contain the key term at issue here—an active-service condition that prescribed 

that life insurance coverage would not begin until an employee completed one day 

“performing his or her regular occupation for the Employer on a Full-time basis.” J.A.

132.

Mr. Woerner enrolled in the FRAM Plan and selected coverage of $198,000. On 

December 7, 2011, he received a confirmation statement listing Mrs. Woerner as his 

 

2

In addition to the October 28 email, FRAM sent a subsequent email with 

instructions on selecting coverage. That email informed employees that open enrollment 

would run from November 30, 2011 to December 12, 2011, but it contained no additional 

information regarding the terms of the Plan, such as the active-service condition. 

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beneficiary and January 1, 2012 as the effective date of coverage and setting premiums at

$16.91 per pay period.

The following day, Mrs. Woerner emailed Eric Schueneman, FRAM’s Director of 

Compensation, Benefits & HRIS at FRAM, asking for further information about the Plan. 

In her email, she requested “a copy of the 2012 Summary Plan Description” (SPD)3and 

inquired about the “guaranteed coverage” amount. J.A. 122. FRAM never responded to 

these inquiries. 

Mr. Woerner passed away on February 24, 2012. It is undisputed that the 

Woerners did not receive notice of the active-service condition while Mr. Woerner was 

alive, and were not provided an SPD. The record also includes a number of internal 

communications within FRAM and emails and documents exchanged between FRAM 

and CIGNA containing information that was not shared with employees during Mr. 

Woerner’s lifetime. In fact, CIGNA did not deliver a final copy of the SPD to FRAM 

until March 2012, about a month after Mr. Woerner’s death, and the written contract 

between FRAM and CIGNA was not executed until September 2012, another six months 

later. 

In the interim, in April 2012, Mr. Schueneman sent Mrs. Woerner a copy of the 

SPD and indicated that Mr. Woerner did not qualify for coverage because he never 

 

3 An SPD is the primary means of disclosing the terms of an employee benefit 

plan to its participants and beneficiaries. Curtiss-Wright Corp. v. Schoonejongen, 514 

U.S. 73, 83 (1995) (stating that the purpose of an SPD is “to communicate . . . the 

essential information about [a] plan”). The content of SPDs is governed by 29 U.S.C. 

§ 1022 and 29 C.F.R. § 2520.102-3. 

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returned to active service. Several weeks later, CIGNA officially denied Mrs. Woerner’s 

claim for benefits in a letter that stated the following:

Michael Woerner last worked on June 23, 2011 and was not in active 

service on January 1, 2012. The confirmation statement you submitted 

shows the effective date of his election of Voluntary Group Term Life 

Insurance under Policy FLX 964429 as January 1, 2012. Policy FLX 

964429 requires that an employee be actively at work in order for his 

coverage to be effective under the Policy.

Therefore, since you have already received payment for Michael Woerner’s 

Basic Group Term Life Insurance [that he had as an employee of 

Honeywell International] under policy CWL 2000 and his election of 

Voluntary Group Term Life Insurance under Policy FLX 964429 never 

became effective, because he was never actively at work from January 1, 

2012[,] through his death on February 24, 2012, no Group Term Life 

Insurance is payable to you under Policy FLX 964429. 

J.A. 128.

On June 7, 2012, CIGNA sent a subsequent letter to Mrs. Woerner further 

explaining the active-service condition and informing her of her right to appeal the denial 

in writing within 60 days of receiving the denial letter. The letter provided an address 

and indicated that the appeal could include the reason for the appeal, Mr. Woerner’s 

name and social security number, and documentation that Mr. Woerner returned to active 

service on or after January 1, 2012. 

Mrs. Woerner did not submit a written appeal and instead, on October 22, 2012,

filed suit against FRAM in the District of New Jersey raising various claims under

ERISA’s civil enforcement provision, 29 U.S.C. § 1132. She then filed an amended 

complaint raising a single claim for recovery of benefits pursuant to ERISA §

502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). The parties filed cross-motions for summary 

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judgment, which the District Court granted in FRAM’s favor, concluding that the activeservice condition barred Mrs. Woerner from recovering benefits. Woerner v. FRAM Grp. 

Operations, LLC, No. 12-6648 SRC, 2015 WL 3970199 (D.N.J. June 30, 2015). Mrs. 

Woerner filed a timely appeal. 

II.

The District Court had jurisdiction over this matter pursuant to 28 U.S.C. § 1331 

and 29 U.S.C. § 1132(e), and we have jurisdiction pursuant to 28 U.S.C. § 1291. 

We exercise plenary review over the District Court’s grant of summary judgment,

Smathers v. Multi–Tool, Inc./Multi–Plastics, Inc. Emp. Health and Welfare Plan, 298 

F.3d 191, 194 (3d Cir. 2002), which is appropriate only if, viewing the facts in the light 

most favorable to the non-moving party, “there is no genuine dispute as to any material 

fact and the movant is entitled to judgment as a matter of law,” Fed. R. Civ. P. 56(a).

III.

The parties do not dispute that FRAM established an ERISA-governed employee 

welfare benefit plan, or even that the active-service requirement was part of the Plan in its 

final form.

4 Rather, the primary issue raised on appeal is what terms were part of the 

 

4

In proceedings before the District Court, the parties stipulated that an ERISA 

plan, offered by FRAM, existed as of January 1, 2012. The District Court should not 

have accepted this stipulation as true because the existence of a plan is not a purely 

factual question but a mixed question of law and fact. See Montrose Med. Grp. 

Participating Sav. Plan v. Bulgar, 243 F.3d 774, 783 (3d Cir. 2001) (“[T]hough the 

question whether a particular plan is covered by ERISA may not be one of pure law, it is 

also not a ‘purely factual matter’ . . . .”). Parties are free to stipulate to the “‘surrounding 

circumstances’” indicating the existence and terms of an insurance plan, Shaver v. 

Siemens Corp., 670 F.3d 462, 475 (3d Cir. 2012) (quoting Donovan v. Dillingham, 688 

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FRAM Plan at the time of Mr. Woerner’s death. According to the District Court, the 

choice we are presented with is necessarily binary: either the terms disclosed to the 

Woerners prior to Mr. Woerner’s death were sufficient to constitute an ERISA plan, such 

that Mrs. Woerner prevails, or the formal Plan finalized and executed between FRAM 

and CIGNA well after this date precludes Mrs. Woerner from recovering benefits. The 

District Court concluded that because the disclosed terms were insufficient to constitute 

an ERISA plan, the formal FRAM Plan containing the active-service requirement 

necessarily controlled and FRAM was entitled to summary judgment.

We disagree with this analysis for two reasons. First, the District Court applied 

the incorrect standard to determine that the disclosures and representations made to 

employees as of January 1, 2012 could not constitute an ERISA plan. Second, the 

District Court erred in then resorting to a document that, according to the record, was not 

even in FRAM’s possession until well after Mr. Woerner’s death.

As to the first point, the District Court erred in treating the requirements detailed 

in 29 U.S.C. § 1102(b) as the applicable test for determining whether particular terms can 

be said to constitute an ERISA plan. ERISA contains an abundance of regulations 

governing the form and function of employee benefit plans, such as those set forth in 

§ 1102(b). But we have declined to construe an employer’s failure to conform to these

regulations as defeating employee claims as to the existence of a plan and their 

 

F.2d 1367, 1373 (11th Cir. 1982) (en banc)), but they cannot stipulate to the ultimate 

legal conclusion that the plan is governed by ERISA.

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entitlement to benefits. Rather, we have upheld even unwritten plans lacking these 

requirements “in order not to frustrate the legitimate expectation of employees.” See 

Frank v. Colt Indus., Inc., 910 F.2d 90, 97 (3d Cir. 1990).

We have joined other Circuits in adopting the standard developed by the Eleventh 

Circuit in Donovan v. Dillingham, 688 F.2d 1367 (11th Cir. 1982) (en banc), “to 

determine whether informal written or oral communications . . . constitute a plan.”

Shaver v. Siemens Corp., 670 F.3d 462, 475 (3d Cir. 2012); see also Deibler v. United 

Food & Commercial Workers’ Local Union 23, 973 F.2d 206, 209 (3d Cir. 1992). An 

ERISA plan “is established if from the surrounding circumstances a reasonable person 

can ascertain the intended benefits, a class of beneficiaries, the source of financing, and 

procedures for receiving benefits.” Shaver, 670 F.3d at 475 (quoting Donovan, 688 F.2d 

at 1373). In Gruber v. Hubbard Bert Karle Weber, Inc., we agreed with the Ninth Circuit 

that this standard is not stringent and that “[a]n employer . . . can establish an ERISA plan 

rather easily.” 159 F.3d 780, 789 (3d Cir. 1998) (quoting Credit Managers Ass’n of S. 

Cal. v. Kennesaw Life & Accident Ins. Co., 809 F.2d 617, 625 (9th Cir. 1987)); see also 

Winterrowd v. Am. Gen. Annuity Ins. Co., 321 F.3d 933, 939 (9th Cir. 2003) (“Very few 

offers to extend benefits will fail the test laid out in Donovan, which requires neither 

formalities nor elaborate details.”). The Donovan test does not even require that the 

factors be satisfied by way of terms made explicit to employees; a plan exists if, from the 

“surrounding circumstances,” such terms can be inferred. Deibler, 973 F.2d at 210

(quoting Donovan, 688 F.2d at 1373).

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We cannot accept the District Court’s approach to ascertaining the terms of the 

Plan for a second reason. After concluding that the documents disclosed to the Woerners 

before Mr. Woerner’s death were “too unsubstantial to constitute an ERISA plan,” the 

District Court turned to the provisions of the formal plan finalized and executed after Mr. 

Woerner’s death as “the only terms that [it] ha[d] as a basis for a ruling” on the 

applicability of the active-service requirement. Woerner, 2015 WL 3970199, at *8. This 

turn cannot be reconciled with our precedent requiring consideration of “all . . . evidence 

that would indicate the presence or absence of an informal employee benefit plan,” such 

as “internal or distributed documents, oral representations, existence of a fund or account 

to pay benefits, actual payment of benefits, a deliberate failure to correct known 

perceptions of a plan’s existence, the reasonable understanding of employees, and the 

intentions of the putative sponsor.” 5 Henglein v. Informal Plan for Plant Shutdown 

Benefits for Salaried Emps., 974 F.2d 391, 400 (3d Cir. 1992); see also Kenney v. Roland 

 

5 Mrs. Woerner asserts that Henglein offers guidance for ascertaining only the 

existence of an ERISA plan and not its terms. It would make little sense, however, for a 

court to rely on the factors detailed in Henglein to determine whether a plan exists, only 

to then conclude that those factors have no bearing on the plan’s content. That said, we 

recognize that there is some tension in our case law as to the significance of an 

employer’s disclosures for purposes of ascertaining the terms of an ERISA plan. As 

FRAM argues, an employer’s failure to properly disclose to its employees an amendment 

to a formal plan does not itself render the new provisions inoperative and is, indeed, 

“irrelevant in determining [the employees’] entitlement to benefits under the terms of the 

. . . plan.” Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1170 (3d Cir. 1990). But 

where, as here, the inquiry is whether a de facto employee benefit plan exists and what it 

contains, the substance of the communications between the employer and employees and

the reasonable employee understandings that result are evidence from which the terms of 

a plan may be inferred under the Donovan test. See Henglein, 974 F.2d at 399.

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Parson Contracting Corp., 28 F.3d 1254, 1258 (D.C. Cir. 1994) (describing distribution 

of a plan summary and withholding of employee wages as among the “‘surrounding 

circumstances’ from which a court—like the employees—could reasonably infer that [the 

employer] established or maintained a plan subject to ERISA”) (quoting 29 U.S.C. 

§ 1002(2)(A)). Moreover, the version of the Plan delivered to and executed by FRAM 

after Mr. Woerner’s death cannot provide a basis for ascertaining Mrs. Woerner’s 

benefits simply by virtue of the fact it was eventually finalized, nor does anything in the 

record support rewarding FRAM’s dilatory practices in this manner.6 See Butero v. 

 

6 On this record, we cannot agree with FRAM that Mrs. Woerner failed to exhaust 

her administrative remedies by filing suit in the District of New Jersey instead of 

appealing her denial of benefits to CIGNA. Although “[t]he courts of appeals have 

uniformly required that participants exhaust internal review before bringing a claim for 

judicial review under § 502(a)(1)(B),” Heimeshoff v. Hartford Life & Accident Ins. Co., 

134 S. Ct. 604, 610 (2013), “where a plaintiff reasonably interprets the plan terms not to 

require exhaustion and, as a result, does not exhaust her administrative remedies, the case 

may proceed in federal court,” Kirkendall v. Halliburton, Inc., 707 F.3d 173, 180 (2d Cir. 

2013); accord Watts v. BellSouth Telecomms., Inc., 316 F.3d 1203, 1209 (11th Cir. 

2003). Here, Mrs. Woerner appears to have reasonably believed she was not bound by 

the claims procedure, not only because the procedure was not communicated to her until 

after her husband’s death (when she was sent the SDP in March 2012 and the CIGNA

denial letter in June 2012), but also because, as far as she knew, it was not part of the 

Plan under which she contends she is entitled to benefits. See 29 C.F.R. § 2560.503–1(l) 

(providing that a claimant “shall be deemed to have exhausted the administrative 

remedies available under the plan and shall be entitled to pursue any available remedies 

under section 502(a) . . . [if] the plan has failed to provide a reasonable claims procedure 

that would yield a decision on the merits of the claim” (emphasis added)); see also Zupa 

v. Gen. Elec. Co., No. 3:16-CV-00217 (CSH), 2016 WL 3976544, at *3 (D. Conn. July 

22, 2016) (“Reference to the plan document when assessing a claimant’s exhaustive 

efforts is necessary . . . because ‘exhaustion in the context of ERISA requires only those 

administrative appeals provided for in the relevant plan or policy.’” (quoting Thomas v. 

Verizon, No. 04-5232CV, 2005 WL 3116752, at *1 (2d Cir. Nov. 22, 2005) (in turn 

quoting Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588, 594 (2d Cir. 1993)). 

These are unusual circumstances and we decline to address whether the same result 

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Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1214–15 (11th Cir. 1999) (holding that an 

ERISA plan existed notwithstanding underwriter’s refusal to issue life insurance policy 

months after coverage putatively began, because “whether a plan is ‘established’ is 

determined by the employer’s conduct, not that of any other ERISA entity” and “[the] 

employer represented to employees that life insurance was available, took payroll 

deductions to pay premiums, in fact paid premiums, and obviously intended for life 

insurance to take effect”) (citing, among other cases, Henglein, 974 F.2d 391; Donovan, 

688 F.2d 1367)). 

* * *

For the foregoing reasons, we will vacate the District Court’s grant of summary 

judgment to FRAM and remand for application of the correct standard as to the existence 

and terms of the Plan at the time that Mrs. Woerner’s benefits, if any, vested.

 

would be warranted in other cases, such as where a plan is in effect and merely amended 

as to the claims procedure after a claimant is denied benefits but before she commences 

legal action. Cf. Eastman Kodak Co. v. STWB, Inc., 452 F.3d 215, 223 n.10 (2d Cir. 

2006) (holding that “an ERISA benefits claimant is not required to exhaust a claims 

procedure that was adopted only after a suit to recover benefits has been brought” but 

“express[ing] no view as to whether 29 U.S.C. § 2560.-503-1(l-) applies . . . where an 

ERISA-compliant claims procedure is adopted after benefits are first sought, but prior to 

the filing of suit”).

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