1997 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-14-1997

DeWitt v. Penn Del Directory

Precedential or Non-Precedential:

Docket 96-7163

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Recommended Citation

"DeWitt v. Penn Del Directory" (1997). 1997 Decisions. Paper 39.

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1

 

 UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 ___________ 

 No. 96-7163 

 ___________ 

 CAROL DEWITT, 

 Appellant

 v. 

PENN-DEL DIRECTORY CORPORATION, a foreign corporation; NATIONAL 

TELEPHONE DIRECTORY CORPORATION PROFIT SHARING PLAN; 

NATIONAL TELEPHONE DIRECTOR CORPORATION PLAN 

ADMINISTRATOR OF PROFIT SHARING PLAN 

 ___________ 

 Appeal from the United States District Court 

 for the District of Delaware 

 (D.C. Civ. No. 93-cv-00581) 

 ___________ 

 

Argued 

 December 12, 1996 

 Before: BECKER, MANSMANN and LEWIS, Circuit Judges. 

 ___________ 

 (Filed February 14, 1997) 

 ___________ 

John M. Stull, Esquire (ARGUED) 

Suite 710 

1220 North Market Street 

P.O. Box 1947 

Wilmington, DE 19899 

 COUNSEL FOR APPELLANT 

Francis M. Milone, Esquire (ARGUED) 

Lynn A. Collins, Esquire 

Morgan, Lewis & Bockius LLP 

2000 One Logan Square 

Philadelphia, PA 19103 

 COUNSEL FOR APPELLEES 

 ___________ 

 OPINION OF THE COURT 

 __________ 
2

MANSMANN, Circuit Judge. 

 Carol Dewitt appeals from the entry of summary judgment 

against her in her action to recover benefits and for unlawful 

termination intended to preclude attainment of her rights under 

her profit sharing plan pursuant to sections 502(a)(1)(B) and 510 

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

§§ 1132(a)(1)(B). Dewitt sought benefits allegedly due her as a 

participant of the National Telephone Directory Profit Sharing 

Plan for the 1990 plan year. 

 We are asked to decide whether the Plan Administrator 

acted arbitrarily and capriciously in denying additional accrued 

benefits to Dewitt's account balance for the 1990 Plan year by 

distributing Dewitt's benefits on an expedited basis, contrary to 

the Plan's provisions. Because we believe that the Plan 

Administrator's interpretation of the Plan and expedited 

distribution of benefits controverts the plain language of the 

Plan, we conclude that the Administrator acted arbitrarily and 

capriciously. Accordingly, we will reverse the district court's 

grant of summary judgment on this claim. 

 Dewitt also alleges that her employer terminated her on 

pretextual grounds with the specific intent to deny her status as 

a Plan participant as of the Valuation Date at the end of 

December 1990. Because we agree with the district court that 

Dewitt has not provided sufficient evidence of specific intent to 

interfere with her benefits, we will affirm the district court's 

grant of summary judgment in favor of her employer on Dewitt's 

section 510 claim. 
3

 

I. 

 During the ten years that Carol Dewitt was an employee 

of Penn-Del Directory Corporation, she was a participant in the 

National Telephone Directory Corporation Profit Sharing Plan, an 

employee pension plan governed by ERISA and administered by the 

National Telephone Directory Corporation, a New Jersey 

corporation and sister corporation to Penn-Del. At the time of 

her termination, Dewitt was 100% vested in her account under the 

Plan. 

 Pursuant to the Plan, "Employer Contributions" and 

"Plan Forfeitures" are credited to the account of Plan 

participants on a date referred to as the Valuation Date, defined 

as the last business day of each December. Plan ¶¶ 5.01, 5.02, 

6.02(c)-(d). The Plan requires, as a condition to receipt of 

these benefits, that the Plan participant be employed as of the 

Valuation Date. Plan ¶¶ 5.01, 5.02. In addition, the Plan 

provides that each participant's account will be credited with 

"Trust Income", i.e., the net increase or decrease in the fair 

market value of trust assets as measured from the last Valuation 

Date. Plan ¶ 6.02(e). Unlike the situation with Employer 

Contributions and Plan Forfeitures, the receipt of Trust Income 

is not conditioned upon the participant's employment on the 

Valuation Date. In order to receive Trust Income, however, a 

Plan participant must have a viable Plan account on the Valuation 

Date. Plan ¶ 6.02(3). 
4

 On December 12, 1990, Dewitt was terminated from her 

position as a sales representative, allegedly for mishandling an 

account. At a meeting to discuss her termination, Penn-Del 

Division Manager Victor Raad reviewed with Dewitt the incident 

that precipitated her termination. Pension benefits were also 

discussed. Although there is some dispute between Dewitt and 

Raad regarding precisely what was said at this meeting on the 

topic of Dewitt's benefits, both parties agree that Raad told 

Dewitt that it takes approximately 30 to 90 days before Dewitt 

would actually receive the distribution of the balance of her 

Plan account. Affidavit of Victor Raad, Exhibit C at ¶9. Dewitt 

asserts that this statement led her to believe that her 

distribution check would not be processed until a date well 

beyond the Valuation Date. Dewitt also maintains that Raad told 

her that her account would include Employer Contributions, Plan 

Forfeitures and Trust Income through the end of the 1990 Plan 

year. To the contrary, in his affidavit, Raad states that no

discussion occurred regarding the nature of the benefits which 

would be included in Dewitt's check. Ex. C at ¶8. 

 On December 14, 1990, Dewitt filled out a request for 

distribution of her account balance. A check was issued two 

weeks later, on December 28, 1990, for Dewitt's total account 

balance in the amount of $75,520.88. Believing this figure to be 

inaccurate because it did not contain any amounts representing 

Employer Contributions, Plan Forfeitures or Trust Income, Dewitt 

contacted Raad to discuss the amount. After her conversation 

with Raad, Dewitt pursued an appeal pursuant to the 
5

administrative process established by the Plan. Following the 

denial of her appeal, Dewitt filed this action. 

 In her complaint, Dewitt asserted claims against her 

former employer (Penn-Del), the Plan (National Telephone 

Directory Corporation Profit Sharing Plan) and the Plan's 

Administrator (National Telephone Directory Corp.) under ERISA 

for recovery of benefits and for unlawful termination intended to 

preclude attainment of her rights under the Plan. In Count I of 

her complaint, Dewitt asserts that she had a right under the Plan 

to receive the 1990 Plan year Employer Contributions, Plan 

Forfeitures, and Trust Income allocable to her account. In this 

Count, Dewitt alleges that defendants violated 29 U.S.C. § 

1132(a)(1)(B), ERISA § 502(a)(1)(B). This section of ERISA 

permits a plan participant or beneficiary to bring a civil action 

"to recover benefits due to him under the terms of the plan." In 

support of her section 502(a)(1)(B) claim, Dewitt asserts that 

the defendants "arbitrarily and capriciously denied additional 

accrued benefits to [her] account balance in the Plan for the 

plan year 1990 by having her benefits paid on an expedited basis 

by the Plan Administrator, contrary to Plan provisions." 

Complaint ¶16, A. 64. Second, she asserts that "her account was 

treated arbitrarily as indicated by the method used in another 

former employee's Plan account payment. . . ." Id. Another 

terminated employee, Stephen Byrne, received Employer 

Contributions, Plan Forfeitures and Trust Income even though he 

was not technically employed at the end of the Plan year. Dewitt 

asserted that Penn-Del terminated Byrne on December 14, 1988, but 
6

that the Plan recorded Byrne's termination date as January 3, 

1989, thereby qualifying Byrne for his share of the previous 

year's Employer Contributions and Plan Forfeitures. Complaint 

¶16; Affidavit of Steven Byrne, A. 7. 

 In Count II of her Complaint, Dewitt asserts that PennDel discharged her to prevent her from qualifying for the 1990 

Employer Contributions, Plan Forfeitures and Trust Income 

allocable to her account. In this Count, she asserts that her 

termination violated 29 U.S.C. § 1140, ERISA § 510, which makes 

it "unlawful to discharge . . . a participant . . . for the 

purpose of interfering with the attainment of any right to which 

such participant may become entitled under the Plan." 

 On December 22, 1994, in ruling on the defendants' 

joint motion to dismiss, the district court dismissed Dewitt's 

section 502(a)(1)(B) claim for Employer Contributions and Plan 

Forfeitures, benefits which formed the bulk of her prayer for 

relief, because the terms of Dewitt's Plan expressly required 

that she be employed on December 31, 1990 in order to be eligible 

to receive those benefits, and she was not.1 Dewitt v. Penn-Del 

Directory Corporation, 872 F. Supp. 126 (D. Del. 1994) (Dewitt 

I). 

 

1. The court also dismissed DeWitt's section 510 claims 

for interference with these same benefits as barred by the 

applicable statute of limitations. 

 The court, however, declined to dismiss DeWitt's claims 

for 1990 Trust Income pursuant to both section 502(a)(1)(B) and 

510 because it concluded that DeWitt's complaint stated those 

claims. See 872 F. Supp. at 136. 

 

 The court also denied a motion for summary judgment 

filed by DeWitt. 
7

 On July 31, 1995, Dewitt moved for summary judgment on 

those claims which survived dismissal in Dewitt I. As a result 

of the district court's holdings in Dewitt I, only Dewitt's 

claims for Trust Income pursuant to ERISA §§ 502(a)(1)(B) and 

510, an amount between $1,400 and $2,200, were deemed viable by 

the court. See 912 F. Supp. at 711. The defendants filed a 

cross-motion for summary judgment asserting that Dewitt was not 

entitled to Trust Income under ERISA § 502(a)(1)(B) because the 

administration of the Plan was not arbitrary and capricious, and 

that Dewitt was not entitled to Trust Income pursuant to ERISA § 

510 because she had not met her burden of proving that Penn-Del 

had specific intent to interfere with her benefits. 

 The district court held a hearing on these motions2 on 

October 22, 1995. By order dated January 17, 1996, the district 

court denied Dewitt's motion for summary judgment for Trust 

Income based both upon the terms of the Plan and upon a breach of 

fiduciary duty theory. Instead, the court granted the 

defendants' motion for summary judgment for Trust Income pursuant 

to ERISA § 502(a)(1)(B), based upon the reasonableness of the 

Plan Administrator's interpretation of the Plan and the district 

court's deferential standard of review of the Plan 

Administrator's actions. The court also granted Penn-Del's 

motion for summary judgment for Trust Income pursuant to section 

 

2. In addition to the cross-motions for summary judgment, 

DeWitt also filed a motion to compel discovery responses from the 

defendants. Defendants moved to strike DeWitt's motion to compel 

discovery responses. The court denied DeWitt's motion to compel 

discovery and instead granted the defendants' motion to strike. 
8

 510 of ERISA, 28 U.S.C. § 1140. The district court found that 

the facts as alleged by Dewitt were not sufficient to provide 

circumstantial evidence of specific intent.3 On January 29, 

1996, Dewitt filed a Motion for Clarification and Reargument of 

 

3. DeWitt also sought summary judgment with respect to her 

request for Employer Contributions and Plan Forfeitures on the 

ground that the defendants breached their fiduciary duty by 

making misleading statements to her. The district court had 

previously found that DeWitt was not entitled to Employer 

Contributions and Plan Forfeitures in DeWitt I, 872 F. Supp. at 

130, based upon the court's findings that the Plan required, as a 

condition to receipt of those benefits, employment as of the 

Valuation Date. The court observed that in attempting to renew 

her request for these benefits, DeWitt had changed her theory of 

relief from the terms of the Plan (which did not provide for 

those benefits), to her current argument that Employer 

Contributions and Plan Forfeitures should be granted to her as 

equitable relief for the Plan administrator's fiduciary breach 

caused by Raad's alleged misrepresentation of her benefits. The 

court concluded that DeWitt had failed to plead a breach of 

fiduciary duty in her complaint and, in any event, had failed to 

allege facts sufficient to establish an actionable claim for 

breach of fiduciary duty and therefore denied DeWitt's motion for 

summary judgment for Employer Contributions and Plan Forfeitures 

on the fiduciary breach theory. 

 As an additional ground for recovery of the previouslydenied Employer Contributions and Plan Forfeitures, DeWitt also 

argued that the Plan was administered in an arbitrary and 

capricious fashion due to the disparity in treatment between her 

and the other employee, Byrne. The court concluded that the 

differential treatment of Byrne and DeWitt did not amount to an 

arbitrary and capricious administration of the Plan because Byrne 

and DeWitt were not similarly situated as presented to the Plan 

Administrator for the purpose of distribution of benefits. See

912 F. Supp. at 722. We will not disturb these rulings on 

appeal. 

 Finally, in her motion DeWitt sought reconsideration of 

the court's ruling that DeWitt's section 510 claims for Employer 

Contributions and Plan Forfeitures were time barred. The 

district court found untimely her request that it reconsider its 

ruling in DeWitt I that DeWitt's claims for Employer 

Contributions and Plan Forfeitures were time-barred because 

DeWitt's motion for reconsideration was not filed within ten days 

of the entry of judgment. 
9

Order. On February 15, 1996, the court denied this motion. This 

appeal followed.4 

 Dewitt raises numerous issues on appeal, many of which 

we find to be without merit.5 Two principal issues remain which 

we address. 

 

II. 

 ERISA was "designed to promote the interests of 

employees and their beneficiaries in employee benefit plans." 

Shaw v. Delta Air Lines, 463 U.S. 85, 90 (1983). As we have 

observed on many occasions, ERISA's concern is with the 

administration of benefit plans and not with the precise design 

of the plans themselves. Indeed, in enacting ERISA, Congress did 

not impose a duty on employers to provide health care or other 

 

4. The district court had jurisdiction pursuant to 28 

U.S.C. § 1331 and 29 U.S.C. § 1132. We have jurisdiction 

pursuant to 28 U.S.C. § 1291. When reviewing grants of summary 

judgment our scope of review is plenary. We apply the same test 

the district court should have applied initially. Goodman v. 

Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. 

denied, 429 U.S. 1038 (1977). The proper interpretation of the 

Plan at issue is a question of law. Ulmer v. Harsco Corp., 884 

F.2d 98, 101-102 (3d Cir. 1989). 

5. On appeal to us DeWitt asserts, inter alia, that she is 

entitled to receive the Employer Contributions and Plan 

Forfeitures applicable to her 1990 account balance as equitable 

restitution based upon the Plan Administrator's fiduciary breach 

and because such benefits were provided to the account of another 

employee, Byrne. She also challenges the district court's 

decision that her section 510 claims for these same benefits were 

time-barred. Lastly, she contends that the district court abused 

its discretion by denying Dewitt's motion to compel discovery 

responses because Dewitt failed to comply with the requirements 

of Rule 7.1.1 of the Local Rules of the United States District 

Court for the District of Delaware. We have reviewed each of 

these allegations and find that they are without merit. 
10

benefits to their employees. In Hlinka v. Bethlehem Steel Corp., 

we observed that "ERISA is not a direction to employers as to 

what benefits to grant their employees. Rather, ERISA is 

concerned with the administration of an established plan and its 

elements." 863 F.2d 279, 286 (3d Cir. 1988). See also Nazay v. 

Miller, 949 F.2d 1323, 1329 (3d Cir. 1991) ("The clear emphasis 

of the statute is to ensure the proper execution of plans once 

established."). 

 Pursuant to ERISA, a plan administrator must act "in 

accordance with the documents and instruments governing the plan 

insofar as such documents and instruments are consistent" with 

ERISA's statutory requirements. 29 U.S.C. § 1104(a)(1)(D), ERISA 

§ 504 (a)(2)(D).6 Accordingly, ERISA plans are required to be in 

writing. 29 U.S.C. § 1102(a)(1). They are to be administered by 

fiduciaries who are obligated to comply with the terms of the 

plan. Nazay, 949 F.2d at 1329. 

 The award of benefits under any ERISA plan is governed 

in the first instance by the language of the plan itself. A plan 

administrator may have discretion when interpreting the terms of 

 

6. This provision provides: 

(1) Subject to sections 1103 (c) and (d), 1342, and 1344 of 

this title, a fiduciary shall discharge his duties with 

respect to a plan solely in the interest of the 

participants and beneficiaries and -- 

* * * 

(D) in accordance with the documents and instruments governing 

the plan insofar as such documents and instruments 

are consistent with the provisions of this 

subchapter and subchapter III of this chapter. 
11

the plan; however, the interpretation may not controvert the 

plain language of the document. Gaines v. Amalgamated Ins. Fund, 

753 F.2d 288, 289 (3d Cir. 1985). We must uphold a plan 

interpretation even if we disagree with it, so long as the 

administrator's interpretation is rationally related to a valid 

plan purpose and is not contrary to the plain language of the 

plan. Id. at 288. Dewitt argues that the Plan Administrator's 

denial of additional benefits controverts the plain language of 

the Plan. 

 Although we exercise plenary review over the court's 

grant of summary judgment, our authority to review a plan 

administrator's decision to deny benefits is significantly more 

limited. In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 

110-12 (1989), the Supreme Court held that where an ERISAgoverned benefits plan grants discretionary authority to the plan 

administrator to determine eligibility for benefits under the 

plan, a court reviewing the plan administrator's actions should 

apply the arbitrary and capricious standard of review. Thus, a 

fiduciary's interpretation of a plan will not be disturbed if 

reasonable. Id. at 111; Heasley v. Belden & Blake Corp., 2 F.3d 

1249 (3d Cir. 1993). The Plan in this case contains a clause 

granting discretion to the Plan Administrator, see Plan ¶ 

12.01(d);7 thus only if the Plan Administrator's decision to deny 

 

7. Paragraph 12.01(d) provides: 

(d) Powers of the Committee. The Committee is specifically 

authorized and empowered, but not by way of limitation, 

(1)To construe or interpret the provisions of the Plan whenever 

necessary to carry out its intention and purpose. 
12

Trust Income to Dewitt was arbitrary and capricious can we 

overturn his decision. 

 Under the terms of Dewitt's Plan, entitlement to Trust 

Income is contingent upon the existence of a viable account as of 

the Valuation Date. Plan ¶ 6.02(e). Here, Dewitt did not have 

an account on the Valuation Date because her act of requesting 

distribution of her account balance, and the processing of that 

request on December 28, 1996, had the effect of closing out her 

account. Dewitt contends that under Paragraph 8.01, the Plan 

Administrator was forbidden from paying out the account proceeds 

until January 1, 1991. Paragraph 8.01, entitled "Distribution of 

Benefit," provides for the timing of distribution of account 

proceeds as follows: 

8.01 Distribution of Benefit. Any Benefit of a 

Participant that becomes payable under 

Article 7 shall be paid in the form of a 

single lump-sum cash distribution. 

Distribution shall be made under this section 

8.01 as soon as practicable after the end of 

the calendar month in which termination of 

employment occurs . . . . (Emphasis added.) 

(..continued) 

(2)To engage or employ such accountants, legal counsel, other 

advisors, agents and such clerical, medical and 

other services as may be required by Applicable 

Law or as it may deem advisable to assist in the 

administration of the Plan. 

(3)To establish from time to time rules for the administration of 

the Plan and the transaction of its business. The 

determination of the Committee as to any disputed 

question arising hereunder including, but without 

limitation, questions of construction, 

administration and interpretation shall be final 

and conclusive upon all persons including, but not 

by way of limitation, Employees, Participants and 

Beneficiaries; their heirs, distributees and 

personal representatives; and any other person 

claiming an interest under the Plan. 
13

 The Plan Administrator argues that Paragraph 8.01's 

mandatory language is reasonably construed to be directed at 

protecting the Plan participant from "unreasonable delay" in 

receipt of benefits. He relies on Paragraph 8.03 of the Plan 

which directs the Trustee to make distributions "as soon as is 

reasonably practicable" after receiving notice of the 

distribution from the Plan committee. This provision of the Plan 

provides: 

 8.03 Notice to Trustee.

The Committee shall notify the Trustee whenever any 

Participant or Beneficiary is entitled to 

receive a distribution under the Plan . . . 

upon receipt of such notice from the 

Committee, the Trustee will, as soon as is 

reasonably practicable, distribute such 

amount . . . . (Emphasis added). 

The Plan Administrator argues that it was "reasonably 

practicable" to make a distribution to Dewitt on December 28 and 

that she could not complain because she received her distribution 

earlier than she had expected or hoped. The Plan Administrator 

argues that Dewitt failed to state a claim because she "requested 

and received a distribution of her benefits prior to the last 

business day of December," thereby forfeiting any interest in the 

1990 Trust Income otherwise allocable to her account. 

 The district court agreed with this interpretation that 

Paragraph 8.01 prevented the Plan from taking too long to pay out 

benefits but contained no prohibition on paying early. The court 

held, "It is not unreasonable to interpret Paragraph 8.01 as 

setting the `subsequent month' rule for payment merely as a 
14

mechanism to ensure prompt payment and avoid unreasonable delay 

which may adversely effect the Plan participant." 912 F. Supp. 

at 719. The court found that this interpretation was not 

arbitrary and capricious, but rather, was grounded in the letter 

and spirit of the provision. We disagree. 

 Even under our deferential standard of review, we 

conclude that the Plan Administrator's interpretation of these 

Plan provisions is unreasonable, because it disregards the 

language of the Plan which expressly provides that "Distribution 

shall be made . . . as soon as practicable after the end of the 

calendar month in which termination of employment occurs. . . ." 

 Plan, ¶8.01. A Plan participant reading this provision could 

believe that it clearly prohibited distribution of an account 

prior to the end of the calendar month in which the employee was 

terminated. Dewitt was thus entitled to the Trust Income from 

her account because the Plan Administrator acted in violation of 

this Plan provision which prohibits the Plan Administrator from 

making a final distribution prior to January 1, 1991, the month 

following the calendar month in which Dewitt's termination of 

employment occurred. 

 Accordingly, we conclude as a matter of law that the 

Plan Administrator's interpretation of the Plan was inconsistent 

with the plain language of the Plan and, therefore, there was no 

reasonable basis for the Plan Administrator's denial of benefits. 

We will reverse the judgment in favor of Penn-Del on Dewitt's 
15

claim for Trust Income and direct that summary judgment be 

entered in favor of Dewitt on this claim.8

III. 

 Section 510 of ERISA, 29 U.S.C. § 1140, provides: 

§ 1140. Interference with protected rights

It shall be unlawful for any person to discharge, fine, 

suspend, expel, discipline, or discriminate 

against a participant or beneficiary for 

exercising any right to which he is entitled 

under the provisions of an employee benefit 

plan. . . for the purpose of interfering with 

the attainment of any right to which such 

participant may become entitled under the 

plan. . . . 

Congress enacted section 510 primarily to prevent "unscrupulous 

employers from discharging or harassing their employees in order 

to keep them from obtaining vested pension benefits." Haberern 

v. Kaupp Vascular Surgeons Ltd., 24 F.3d 1491, 1501 (3d Cir. 

1994) (citations omitted). 

 In Count II of her complaint, Dewitt alleges that 

"[t]he Company and Raad . . . discharged her from her employment 

 

8. In her appeal DeWitt also argued that she was entitled 

under ERISA § 502(a)(1)(B) to the Trust Income for the 1990 Plan 

year based upon the Plan Administrator's fiduciary breach in 

expediting payment in violation of the Plan's terms and an IRS 

Notice Regulation requiring 30 to 90 notice days prior to 

distribution. DeWitt asserts that the Plan Administrator 

committed a fiduciary breach by "rushing payment in order to 

remove [her] account from the books of the plan before the end of 

the year." DeWitt contends she is also entitled to restitution 

as an equitable remedy because of the misleading statement made 

by Raad. Because we conclude that DeWitt is entitled to Trust 

Income under the terms of her Plan, we do not reach the merits of 

her claim that she is entitled to this same Trust Income based on 

the theory of fiduciary breach. See Hein v. Federal Deposit 

Insurance Corp., 88 F.3d 210 (3d Cir. 1996). 
16

on a pretextual basis on December 12, 1990, with specific intent 

to deny her status as a participant in the Plan prior to the end 

of the calendar year and thereby specifically intended to deny 

and interfere with the accrual of additional accrued benefit 

amounts due her account, in violation of ERISA section 510, 29 

U.S.C. § 1140." Complaint ¶24. 

 To establish a prima facie case under section 510 of 

ERISA, Dewitt must demonstrate: 

 1. prohibited employer conduct; 

 2. taken for the purpose of interfering; 

3. with the attainment of any right to which the employee may 

become entitled. 

Gavalik v. Continental Can Co., 812 F.2d 834, 852 (3d Cir.), 

cert. denied, 484 U.S. 979 (1987), 29 U.S.C. § 1140. If Dewitt 

succeeds in establishing each of these elements, a rebuttable 

presumption is created that section 510 has been violated. 

Gavalik, 812 F.2d at 853. 

 Interpreting section 510 of ERISA in Gavalik, we held 

that in order to recover under section 510, a plaintiff need not 

prove that "the sole reason for his [or her] termination was to 

interfere with pension rights." Nonetheless, a plaintiff must 

demonstrate that the defendant had the "specific intent" to 

violate ERISA. 812 F.2d at 851. Proof of incidental loss of 

benefits as a result of a termination will not constitute a 

violation of section 510. Id. (Citing Titsch v. Reliance Group, 

Inc., 548 F. Supp. 983, 985 (S.D.N.Y. 1982), aff'd, 742 F.2d 1441 

(2d Cir. 1983) ("No ERISA cause of action [under § 510] lies 
17

where the loss of . . . benefits [i]s a mere consequence of, but 

not a motivating factor behind, a termination of employment.")). 

 Consequently, to recover under section 510, the 

employee must show that the employer made a conscious decision to 

interfere with the employee's attainment of pension eligibility 

or additional benefits. Gavalik, 812 F.2d at 860. We have 

recognized that in most cases, however, "smoking gun" evidence of 

specific intent to discriminate does not exist. As a result, the 

evidentiary burden in these cases may also be satisfied by the 

introduction of circumstantial evidence. Id. at 851 (citing 

Maxfield v. Sinclair Int'l, 766 F.2d 788, 791 (3d Cir. 1985), 

cert. denied, 474 U.S. 1057 (1986)). Dewitt asserts that she 

has indeed established such a circumstantial case "by combining 

the factors of her termination, expedited distribution as 

compared with the plain terms of the Plan, the comparable 

situation of Steven Byrne, and the misleading statements made by 

Raad." We address each factor alone and in combination. 

 We begin our analysis with Dewitt's proffer of her 

termination on December 12, two weeks prior to the Valuation 

Date.9 In Turner v. Schering-Plough Corp., we observed that 

"where the only evidence that an employer specifically intended 

to violate ERISA is the employee's lost opportunity to accrue 

additional benefits, the employee has not put forth evidence 

sufficient to separate that intent from the myriad of other 

 

9. DeWitt acknowledges that the mere fact that she was 

terminated near the end of the year, standing alone, would be 

insufficient to support a section 510 claim. 
18

possible reasons for which an employer might have discharged 

him." Turner, 901 F.2d 335, 347 (3d Cir. 1990) (quoting Clark v. 

Resistoflex Co., 854 F.2d 762, 771 (5th Cir. 1988)). This kind 

of deprivation occurs every time an ERISA employer discharges an 

employee and is not alone probative of an intent to interfere 

with pension rights. Accordingly, a prima facie case requires 

additional evidence suggesting that pension interference was a 

motivating factor. 

 With respect to the expedited distribution of benefits, 

there is nothing in the record to suggest that the prompt payment 

of Dewitt's benefits by the Plan Administrator was made in order 

to avoid paying her amounts which would be due on December 31, 

1990, and that this was done by the Plan Administrator to achieve 

some benefit for the employer. We observe as we did in Turner, 

supra, that "the record contains no evidence that the savings to 

the employer resulting from [the plaintiff's] termination were of 

sufficient size that they may be realistically viewed as a 

motivating factor." See Turner, 901 F.2d at 347.10 Here, too, 

the savings to Penn-Del and its Plan were not sufficiently 

significant to be a motivating factor. 

 

10. Indeed, the expedited distribution of DeWitt's account 

balance did not result in any additional savings to her employer 

or to the Plan in terms of DeWitt's entitlement to the Employer 

Contributions and Plan Forfeitures allocable to her account. Due 

to the fact that DeWitt was terminated on December 12, 1990, 

under the terms of her Plan, she was no longer eligible to 

receive these benefits in any event. Plan ¶¶5.01, 5.02 and 

6.02(c)-(d). 

 With respect to the Trust Income allocable to her 

account, the distribution of DeWitt's account prior to January 1, 

1991, resulted in a savings of approximately $1,400-$2,200. 
19

 Likewise, we are not persuaded that Raad's alleged 

misrepresentation regarding the timing for distribution of 

benefits gives rise to an inference of specific intent to 

interfere with Dewitt's benefits. Significantly, Raad's alleged 

statements could not have affected Dewitt's receipt of Employer 

Contributions or Plan Forfeitures which, under the terms of the 

Plan, are available only to those employed on the Plan's 

Valuation Date. Plan ¶¶5.01, 5.02. As well, as we pointed out 

above, these statements could not affect Dewitt's entitlement to 

the Trust Income allocable to her account pursuant to Paragraph 

8.01 of her Plan. 

 Lastly, we agree with the district court that the 

manner in which Byrne's benefits were handled by the Plan 

Administrator are not relevant. Even assuming that the Plans for 

Dewitt and Byrne were identical, and the record does not inform 

us one way or the other, Dewitt's employer had elected to make 

Byrne's termination effective on January 3, 1989, but fired 

Dewitt on December 12, 1990. Because Dewitt was an at-will 

employee, her employer could terminate her employment, for any 

reason and on any date the employer chose. Thus, "[e]ach former 

employee's respective position relative to the Valuation Date 

renders the differential treatment of their benefits proper." 

See 912 F. Supp. at 720. 

 Because we agree with the district court that all of 

these facts, taken together, do not constitute sufficient 

evidence of an intent to interfere with benefits, we will affirm 
20

the court's grant of summary judgment in Penn-Del's favor on this 

claim. 

IV. 

 For the foregoing reasons we will reverse the district 

court's entry of summary judgment against DeWitt on the claim for 

Trust Income pursuant to section 502(a)(1)(B) of ERISA. We will 

affirm the judgment of the district court on DeWitt's section 510 

claim and in all other respects. 

CAROL DEWITT, APPELLANT V. PENN-DEL DIRECTORY CORPORATION, A 

FOREIGN CORPORATION; NATIONAL TELEPHONE DIRECTORY CORPORATION 

PROFIT SHARING PLAN; NATIONAL TELEPHONE DIRECTOR CORPORATION PLAN 

ADMINISTRATOR OF PROFIT SHARING PLAN, NO. 96-7163 

BECKER, CIRCUIT JUDGE, CONCURRING IN PART, DISSENTING IN PART: 

 Although I join in parts I and III of the majority's 

opinion, I cannot agree with the conclusion that the majority 

reaches in part II as to the proper interpretation of the ERISA 

plan at issue. Unlike the majority, I do not believe that the 

plan administrator acted arbitrarily or capriciously in 

interpreting the plan to allow the distribution of benefits in 

the same month in which the termination of employment occurs. 

I. 

 The relevant provisions of the ERISA plan at issue are 

Paragraphs 8.01 and 8.03, both of which are excerpted in the 

majority opinion. The plain language of the two paragraphs does 
21

not, as the majority contends, lead ineluctably to a single 

interpretation. Rather, when read together, the two paragraphs 

are ambiguous. On the one hand, Paragraph 8.01 requires that 

distribution of benefits be made "as soon as practicable after 

the end of the calendar month in which . . . termination of 

employment occurs . . . ." On the other hand, Paragraph 8.03 

requires that, when he is notified that a beneficiary is due 

benefits, the Trustee of the plan will distribute the benefits 

"as soon as is reasonably practicable." Paragraph 8.03 goes no 

further in describing when the distribution is to be made. 

 Therefore, assuming that a beneficiary is entitled to a 

distribution, there is the possibility of conflicting demands on 

the Trustee. If, as was the case here, it was reasonably 

practicable for the Trustee to distribute the benefits before the 

end of the calendar month in which the termination occurred, is 

the Trustee to wait for the month to end, as Paragraph 8.01 

suggests, or, is the Trustee to distribute the benefits when they 

are ready, as Paragraph 8.03 suggests? 

 In my view, given the ambiguity inherent in Paragraphs 

8.01 and 8.03, the plan administrator did not act arbitrarily or 

capriciously in interpreting the plan to mean that distribution 

of benefits would occur in this case as soon as reasonably 

practicable. Certainly, the language itself allows for this as 

one possible reading of the plan. This is especially so because 

it is sound policy and makes good sense to encourage plan 

administrators to distribute benefits due beneficiaries sooner 

rather than later. More often than not, beneficiaries need their 
22

benefits immediately; delaying distribution might be highly 

detrimental.11 Requiring the plan administrator to wait to 

distribute the benefits until the end of the calendar month in 

which the termination of employment occurs would inject 

unnecessary delay into a process that should function 

expeditiously. 

 In sum, I cannot fault the plan administrator for 

expediting the distribution of DeWitt's benefits in this case.12

 I would therefore affirm the judgment of the district court in 

all respects. 

 

 

11Although she did not communicate her need to her employer, 

DeWitt's own situation provides an example. DeWitt stated in her 

deposition that she needed her distribution almost immediately. 

She did not know how long she would be out of a job, and she 

wanted to help her son, who had just entered college, with his 

tuition. 

 

12I am troubled by Raad's failure to inform DeWitt that if 

she were to wait until after the Valuation Date to fill out a 

request for a distribution of her benefits she would be ensured 

of receiving a greater distribution. However, as the majority 

notes supra in footnotes 3 and 5, DeWitt failed to allege facts 

sufficient to show that Raad stood in a fiduciary relationship to 

her. Moreover, even assuming such a fiduciary relationship, Raad 

did not have a duty to inform DeWitt that waiting to request a 

distribution might be beneficial; DeWitt did not allege that she 

made known to Raad any facts that would create such a duty. See

In re Unisys Corp. Retiree Medical Benefit "ERISA" Litig., 57 

F.3d 1255, 1261-67 (3d Cir. 1995) (describing the scope of the 

affirmative fiduciary duty to provide ERISA beneficiaries with 

information about the ERISA plan); Bixler v. Central Pa. 

Teamsters Health & Welfare Fund, 12 F.3d 1292, 1301-03 (3d Cir. 

1993) (same).