2009 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

12-21-2009

Dennis Saddler v. Elliott Company

Precedential or Non-Precedential: Non-Precedential

Docket No. 09-1476

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Recommended Citation

"Dennis Saddler v. Elliott Company" (2009). 2009 Decisions. Paper 63.

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

 

No. 09-1476

 

DENNIS SADDLER, 

 Appellant

v.

ELLIOTT COMPANY

 

On Appeal from the United States District Court

for the Western District of Pennsylvania

(D.C. No. 07-cv-01320)

District Judge: Honorable Joy Flowers Conti

 

Submitted Under Third Circuit LAR 34.1(a)

December 14, 2009

Before: SLOVITER, JORDAN and WEIS, Circuit Judges

(Filed: December 21, 2009 )

 

OPINION

 
The District Court had subject matter jurisdiction pursuant 1

to 28 U.S.C. § 1331. Our jurisdiction to review the District Court’s

final order arises under 28 U.S.C. § 1291. 

2

SLOVITER, Circuit Judge.

Appellant Dennis Saddler (“Saddler”) appeals from the District Court’s order

granting summary judgment for Elliott Company (“Elliott”), his former employer, on his

claim for benefits allegedly due under the Employee Retirement Income Security Act of

1974 (“ERISA”) (as amended), 29 U.S.C. § 1132(a)(1)(B). Saddler asserts that he is

entitled to severance pay pursuant to the Elliott Company Severance Plan (the “Plan”). 

We will affirm.1

I.

As the parties submitted a Joint Statement of Facts for purposes of their crossmotions for summary judgment, the relevant facts are not in dispute. Saddler is a

participant in the Plan which is administered under ERISA. Saddler worked at Elliott as a

project engineer for thirty-two years, the latter part of his tenure in Elliott’s Plant Air

Packaging Group (the “PAP Group”). In early September 2003, Elliott entered into an

Asset Purchase Agreement to sell the assets of the PAP Group to another entity, F.S.

Elliott Company (“F.S. Elliott”). 

Before the sale was complete, Elliott managers held meetings with employees of

the PAP group who would be “transferred” to F.S. Elliott to tell them “that they were not

being laid off.” App. at 45. Saddler was transferred to F.S. Elliott, where he had the
Also, the District Court found Elliott’s interpretation of the 2

phrase “plant closing” to be “inconsistent with [its] conduct under

the Plan,” because Elliott had provided severance pay to the PAP

Group employees who were not transferred from Elliott to F.S.

Elliott. App. at 12. The District Court reasoned that, since there

was no evidence of a decline in business or a technology

improvement when it occurred, Elliott treated the transfer of the

PAP Group as a plant closure. We need not decide that issue

because we find another disposition.

3

same job responsibilities, and worked for the same or better salary, out of the same

building, at the same desk, and with the same telephone number. Five months after the

transfer, Saddler resigned from F.S. Elliott. 

Then, in September 2006, more than two years after he resigned and nearly three

years after the transfer, Saddler sought severance pay from Elliott. Elliott’s written

Severance Pay Policy allows payment at Elliott’s discretion to employees who lose their

job under three circumstances: (1) a decline in business; (2) plant closing; or (3) a

technology improvement. Elliott denied Saddler’s claim for severance pay. Two months

later, Saddler appealed Elliott’s denial of his request for severance pay, arguing that his

job at Elliott “was eliminated due to the plant closure/sale” to F.S. Elliott. App. at 48. 

Elliott denied Saddler’s appeal, finding that Saddler did not lose his job and that the PAP

Group never closed. 

The District Court concluded that Elliott’s interpretation of the phrase “job loss”

under the Plan was not arbitrary and capricious as it applied to Saddler. The District 2

Court so found after taking into consideration Elliott’s inherent financial interest in
4

denying Saddler severance pay. It accordingly granted summary judgment for Elliott and

denied Saddler’s motion for summary judgment. We exercise plenary review over the

District Court’s decision to grant summary judgment. 

II.

As we explained in Doroshow v. Hartford Life and Accident Insurance Company,

574 F.3d 230, 233-34 (3d Cir. 2009), the Supreme Court recently clarified the appropriate

standard trial courts must apply when reviewing denials of benefits under ERISA §

1132(a)(1)(B). See Metro. Life Ins. Co. v. Glenn, 128 S. Ct. 2343 (2008). If the

administrator of a benefits plan has discretion to determine eligibility for benefits, as

Elliott did here, the denial of benefits is to be reviewed under an arbitrary and capricious

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

held that an arbitrary and capricious standard of review in this context is “essentially the

same as the ‘abuse of discretion’ standard.” Abnathya v. Hoffman-La Roche, Inc., 2 F.3d

40, 45 n.4 (3d Cir. 1993) (internal citation omitted). However, reviewing courts must

weigh as a factor the inherent conflict of interest presented when the same party pays

benefits and determines eligibility. See Glenn, 128 S. Ct. at 2350. The District Court

correctly applied these standards when it reviewed Elliott’s denial of Saddler’s claim for

severance pay.

In analyzing the merits of Saddler’s request for severance pay, the District Court

first determined that the term “job loss” is ambiguous under the terms of the Plan because

it could be interpreted reasonably in two ways. Nonetheless, the Court held the Plan did
not compel Elliott to follow the interpretation most favorable to the employee because

such an interpretation would eviscerate the administrator’s discretion, in contravention of

Glenn. Thus, as Glenn mandates, the District Court weighed the conflict of interest as a

factor, and reasoned that Elliott did not abuse its discretion in finding that Saddler

suffered no job loss. We agree. 

Elliott managers told Saddler that he was not being laid off before the transfer

from Elliott to F.S. Elliott. Saddler missed no work after the transfer. On the contrary, he

sat at the same desk with the same job responsibilities, telephone number, same or better

salary, and became unemployed only when he voluntarily resigned from F.S. Elliott. In

light of those stipulated facts, Elliott did not act in an arbitrary or capricious manner in

concluding that Saddler did not suffer a job loss. 

Moreover, the District Court searched the record and found that “there are no facts

of record – other than the potential conflict itself – that any potential conflict of interest

influenced Elliott’s decision . . . .” App. at 14. Such analysis accords with Glenn. See

128 S. Ct. at 2351 (holding that trial courts must give a conflict of interest greater weight

when “circumstances suggest a higher likelihood that it affected the benefits decision. . .

.”).

III.

For the above-stated reasons, we will affirm the District Court’s order granting

Elliott’s motion for summary judgment.

5