2008 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

8-8-2008

Pell v. EI DuPont de Nemours

Precedential or Non-Precedential: Precedential

Docket No. 06-5006

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

 

Nos. 06-5006 and 06-5088

 

MELVYN PELL; ELLEN PELL

 Appellants No. 06-5088

 v.

E. I. DUPONT DE NEMOURS

& COMPANY INCORPORATED,

Individually and in its capacity as Administrator

of the DuPont Pension and Retirement Plan;

THE BOARD OF BENEFITS AND PENSIONS

OF E. I. DUPONT DE NEMOURS,

 Appellants No. 06-5006

 

On Appeal from the United States District Court

for the District of Delaware

(D.C. No. 02-cv-00021)

District Judge: Honorable Kent A. Jordan

 

Argued April 15, 2008
The Honorable Paul R. Michel, Chief Judge of the *

United States Court of Appeals for the Federal Circuit, sitting by

designation.

2

Before: AMBRO, FISHER and MICHEL, Circuit Judges.

*

(Filed: August 8, 2008)

Robert Jacobs (Argued)

Jacobs & Crumplar

2 East 7th Street

P.O. Box 1271

Wilmington, DE 19899

Attorney for Melvyn Pell and Ellen Pell

Donna L. Goodman

E.I. DuPont de Nemours & Company

Legal Department

Suite D-7017A

1007 Market Street

Wilmington, DE 19898
3

Raymond M. Ripple (Argued)

E.I. DuPont de Nemours & Company

Legal Department

Suite D-7012

1007 Market Street

Wilmington, DE 19898

Attorneys for E. I. Dupont de Nemours

& Company Incorporated and the

Board of Benefits and Pensions of

E. I. Dupont de Nemours

 

OPINION OF THE COURT

 

FISHER, Circuit Judge.

Retired employee Melvyn Pell and his wife, Ellen Pell

(collectively, “Pell”) initiated this litigation against E.I. DuPont

de Nemours and Co. and its Board of Benefits and Pensions

(collectively, “DuPont”) under the Employee Retirement Income

Security Act (“ERISA”). Pell claimed that his pension benefit

is lower than DuPont had led him to expect. After a bench trial,

the District Court enjoined DuPont to use a “credited service

date” of August 1, 1972, when calculating Pell’s future benefits,

resulting in a higher monthly pension benefit. The parties cross

appealed.

For the reasons that follow, we will affirm the District

Court’s ruling that Pell is entitled to relief under ERISA. We
4

will reverse the District Court’s ruling that Pell is not entitled to

restitution for his past unduly low pension payments.

Additionally, we will reverse the District Court’s injunction

insofar as it requires DuPont to calculate Pell’s benefit using the

August 1, 1972 service date, because we conclude that DuPont

must use a service date of February 10, 1971.

I. BACKGROUND

On February 10, 1971, Consol, a wholly-owned

subsidiary of Conoco, Inc., hired chemical engineer Melvyn Pell

to work at its facility in Pittsburgh, Pennsylvania. According to

the terms of the Consol Pension Plan, Pell was not eligible to

participate in the Consol Plan until the first day of the month

following his thirtieth birthday. Pell turned thirty in July 1972,

and thus his pension benefit calculation date was August 1,

1972. In 1981, Conoco and Consol merged with DuPont. In

1982, Pell accepted a temporary position with DuPont in

Wilmington, Delaware. Under the temporary assignment, Pell

remained a Consol employee and continued to receive his salary

and benefits from Consol.

In 1983, DuPont, Consol, and Conoco jointly created a

policy covering the transfer of employees between the

companies. The transfer guidelines were not meant for general

distribution,since relatively few employees transferred between

the companies. All three companies followed the guidelines

when effecting permanent employee transfers. The guidelines

explained how pensions would be calculated for transferred

employees:
On November 1, 1975, the Consol pension plan changed 1

so that it no longer had optional contributory features. The

DuPont Board of Directors adopted the 1975 cutoff date for

pension computations in order to prevent inequities that could

have arisen based on whether transferred Consol employees had

participated in the contributory feature.

5

“Continuity of Service

DuPont will recognize a transferred

Conoco/Consol employee’s service to the same

extent Conoco/Consol recognized it at the transfer

date. . . . This service will be used for benefit

eligibility, vesting, and pension computation. . . .

Consol service for DuPont pension calculation

purposes will be recognized only from 11/1/75

forward. (Although all service recognized by 1

Consol will be used to determine pension and

other plan eligibility.)”

The transfer guidelines also contained a provision stating

that when DuPont received a transferred employee,

Conoco/Consol would furnish a letter to the transferred

employee indicating the employee’s years of service, adjusted

service date, beneficiary designations, creditable service, and

eligibility for and participation in benefit plans. A sample of

this letter contained in the guidelines stated that the company

receiving the transferred employee “will recognize [the

employee’s] service to the same extent that [the sending

company] recognized it at the time of transfer. This service will
6

be used for eligibility, vesting and benefit computation in the

[receiving company’s] benefit plans.”

In late 1983, Pell’s DuPont manager asked Pell to

permanently transfer from Consol to DuPont. Pell was

concerned that his salary would decrease upon transferring to

DuPont but believed that DuPont’s more generous pension plan

would offset the lower salary. Pell’s principal concern about his

prospective DuPont pension was whether he would be credited

for his time employed with Consol. Pell’s DuPont manager and

supervisor both assured him that his Consol service time would

be counted under the DuPont pension plan.

While Pell was considering whether to permanently

transfer to DuPont, he received a letter from William Waddell,

the Director of Employee Compensation and Benefits at Consol

(the “Waddell letter”). That letter, dated January 13, 1984,

closely followed the transfer guidelines. It listed Pell’s

“Retirement Plan Credited Service Date” as August 1, 1972,

which was the same date that Consol recognized as the start date

under the Consol Plan. Waddell’s letter further stated:

“Retirement Plan: Your transfer will not be

considered a termination of employment for

retirement purposes. Both creditable service and

earnings used in calculating your benefit under

Consol’s Retirement Plan will be ‘frozen’

effective with your date of transfer to DuPont.

Service with DuPont will be deemed membership

service within the terms of the Consol Plan and

counts only for vesting purposes. Compensation
Although Consol employees did not become eligible to 2

participate in the Consol Plan until after their thirtieth birthdays,

DuPont employees were eligible to participate in the DuPont

plan beginning on their first day of employment. February 10,

1971, was Pell’s first day of employment with Consol.

7

earned during your employment with DuPont will

be used in determining your final average

compensation for benefit purposes under the

DuPont Plan. The Pension you receive will be

calculated under the DuPont Plan based on your

total combined service. This retirement benefit

will be offset by any payment you receive from

the Consol Plan as a result of your accrued benefit

as of the date of transfer.”

After receiving these oral and written assurances about his

pension benefit, Pell accepted the permanent transfer to DuPont

with a retroactive transfer date of January 1, 1984.

In 1991, Pell received a document from DuPont

indicating that his adjusted service date was 1975. Pell was

concerned and contacted Doris Uhde, a pre-retirement counselor

for DuPont, who assured him via email that his adjusted service

date was “2/10/71, not 1975 and DuPont [would] use this date

for [Pell’s] years of service under their formula when calculating

[his] pension.”2

In 1992, Pell requested from DuPont two estimates of his

pension benefits, and each of these estimates listed February 10,
8

1971, as his adjusted service date. In 1998, Pell requested

another pension estimate, and this estimate also stated that his

adjusted service date was February 10, 1971. In 1999, Pell

received a benefit resources statement from DuPont indicating

that he had 28.5 years of service as of August 31, 1999, which

was consistent with an adjusted service date of February 10,

1971. Each estimate contained text at the bottom of the page

indicating that it was an estimate subject to review and

individual adjustments.

In August 2000, Pell inquired what his pension benefits

would be if he retired on December 31, 2000. On December 14,

2000, DuPont informed Pell that it was changing his adjusted

service date to August 1, 1972, thus reducing his recognized

service by 1.475 years. Pell requested a reconsideration of his

adjusted service date, and DuPont’s Benefit Administration

department provided him with a final pension estimate via email

on December 19, 2000.

According to the final estimate, Pell would receive (1) a

pension benefit for his Consol employment that would be

“exactly the same . . . as if Consol had calculated and paid it,”

and (2) a pension benefit for his DuPont employment based on

his service from November 1, 1975 until retirement, partially

offset by the payments under the Consol Plan. The email to Pell

from the Benefit Administration department also noted:

“All of your previous documentation does use

Adjusted Service Date (ASD) equal to 2/10/71.

However, ASD is not a pension date - it is used

for many business specific uses (such as vacation
9

entitlement, service awards, etc.). The ASD is

also used to determine vesting and eligibility

service under the plans, but may need to be

adjusted to reflect pension benefit accrual service,

and in your case it is . . . . [T]he estimate

provided to you about eight years ago . . . . was in

error.”

Upon receiving his final pension estimate, Pell responded that

he “may not be able to retire as scheduled.”

Pell appealed his pension estimate to the DuPont Board

of Benefits and Pensions, which upheld the determination. He

retired on May 31, 2001.

In 2002, Pell filed a complaint against DuPont in the

District Court for the District of Delaware. He requested an

injunction ordering DuPont to pay the higher pension amount.

After a bench trial, the District Court ruled that Pell was entitled

to relief under ERISA based on the theory of equitable estoppel.

The Court further determined that under § 502(a)(3) of ERISA

(codified at 29 U.S.C. § 1132(a)(3)), Pell was not entitled to

restitution for the past pension payments that had been too low.

The Court issued an injunction requiring DuPont to use August

1, 1972 as the service date for calculating Pell’s future pension

benefits. DuPont filed a timely Notice of Appeal and Pell filed

a timely Notice of Cross Appeal.
This issue was not raised in the District Court. 3

However, “[l]ike any jurisdictional requirement, standing cannot

be waived.” Pub. Interest Research Group of N.J., Inc. v.

Magnesium Elektron, Inc., 123 F.3d 111, 117 n.5 (3d Cir. 1997).

“We have plenary review over questions of standing.” Miller v.

Rite Aid Corp., 334 F.3d 335, 340 (3d Cir. 2003).

10

II. DISCUSSION

The District Court had jurisdiction under 28 U.S.C.

§ 1331 and ERISA, 29 U.S.C. § 1001 et seq. We have

jurisdiction under 28 U.S.C. § 1291.

A. Standing3

ERISA provides that “[a] civil action may be brought . . .

by a participant or beneficiary . . . .” 29 U.S.C. § 1132(a)(3). A

“participant” is “any employee or former employee . . . who is

or may become eligible to receive a benefit of any type from an

employee benefit plan.” 29 U.S.C. § 1002(7). DuPont argues

that the actions or omissions forming the basis of Pell’s claim

took place in 1983 and 1984 before he was employed by

DuPont. Because Pell was neither a “participant” in nor a

“beneficiary” of DuPont’s plan at that time, DuPont asserts that

he does not have standing under ERISA’s civil enforcement

provision.

DuPont’s argument does not take into account Pell’s

retroactive DuPont employment date. The Waddell letter, dated

January 13, 1984, misled Pell about the amount of his pension
11

benefits. Pell accepted employment with DuPont after January

13, 1984, with a retroactive effective date of January 1, 1984.

Using Pell’s retroactive employment start date, he received the

Waddell letter during his time as an “employee” of DuPont who

“may become eligible to receive a benefit.” 29 U.SC. § 1002(7).

Therefore, he has standing to sue under ERISA.

In addition, the District Court determined that Pell

“reasonably and detrimentally relied on the informational

statements estimating his pension benefits and showing

February 10, 1971 as his service date.” These estimates

indisputably occurred while Pell was a DuPont employee in

1992, 1998, and 1999. Therefore, the estimates – in addition to

the Waddell letter – confer standing upon Pell.

B. Equitable Estoppel under ERISA

The District Court correctly concluded that Pell is entitled

to relief under ERISA based on an equitable estoppel theory.

“On appeal from a judgment entered after a non-jury trial, we

review findings of fact for clear error and conclusions of law de

novo.” Hooven v. Exxon Mobil Corp., 465 F.3d 566, 572 (3d

Cir. 2006) (internal citations omitted).

A beneficiary may “obtain . . . appropriate equitable relief

. . . to redress [ERISA] violations or . . . to enforce any

provisions of [ERISA].” 29 U.S.C. § 1132(a)(3). A beneficiary

can make out a claim for “appropriate equitable relief,” id.,

based on a theory of equitable estoppel. Curcio v. John

Hancock Mut. Life Ins. Co., 33 F.3d 226, 235 (3d Cir. 1994).

“To succeed under this theory of relief, an ERISA plaintiff must
12

establish (1) a material representation, (2) reasonable and

detrimental reliance upon the representation, and

(3) extraordinary circumstances.” Id.

1. Material Misrepresentation

“[A]ny provision of a plan subject to ERISA that

establishes a benefit is a material term of the plan.” Id. at 237.

“[A] misrepresentation is material if there is a substantial

likelihood that it would mislead a reasonable employee in

making an adequately informed decision about if and when to

retire.” Fischer v. Phila. Elec. Co., 994 F.2d 130, 135 (3d Cir.

1993).

The District Court correctly determined that, under our

case law, DuPont’s representations about Pell’s pension benefit

calculation date were material. Pell v. E.I. DuPont de Nemours

& Co., No. 02-00021, 2006 WL 2864604, at *6-7 (D. Del.

2006). When evaluating whether he can afford to retire, a

reasonable employee would consider the amount of his pension,

which in Pell’s case depended on his pension benefit calculation

date.

Previously, we have concluded that representations were

material where they led an employee to wrongly believe that

accidental death and dismemberment insurance was available.

Curcio, 33 F.3d at 236-37. We have also determined that

representations could be material where an employer stated that

no early retirement incentives were on the horizon, when in fact

management was considering such a program. Fischer, 994

F.2d at 134-35. As in Curcio and Fischer, DuPont’s
13

representations to Pell about his pension benefit calculation date

misled Pell as he attempted to make an adequately informed

decision about his benefits.

DuPont argues that its misrepresentations about Pell’s

pension calculations were not material because Pell discovered

the errors before making his final retirement decisions. This

argument is unpersuasive. The test for materiality does not

depend on when an employee discovers the misrepresentations.

The test is whether the information “would mislead a reasonable

employee in making an adequately informed decision” about

retirement. Id. In this case, it is clear that the information –

misreporting about the amount of a pension benefit – would

mislead a reasonable employee. The misleading nature of the

information was demonstrated by the fact that Pell changed his

retirement plans, retiring on May 31, 2001, rather than

December 31, 2000. That Pell discovered the error while he still

had time to alter his plans does not change the fact that

DuPont’s statements were material.

2. Reasonable and Detrimental Reliance

As the phrase “reasonable and detrimental reliance”

implies, in order to prevail, Pell must show (1) reasonableness

and (2) injury. Curcio, 33 F.3d at 237. The District Court

correctly concluded that Pell reasonably and detrimentally relied

on the Waddell letter and the pension estimates he received

throughout the 1990s.
14

a) Reasonable Reliance

We have determined that when an individual acts with

apparent authority to determine an employee’s status in

relationship to a benefit plan, the plan fiduciary can be

responsible for the individual’s material misstatements. Taylor

v. Peoples Natural Gas Co., 49 F.3d 982, 989 (3d Cir. 1995). In

Taylor, a former employee claimed that the Supervisor of

Employee Benefits led him to believe that an early retirement

incentive plan would apply to him retroactively. Id. at 985.

When deciding whether the employee had reasonably relied on

the Supervisor’s statements, we invoked the doctrine of apparent

authority, which “(1) results from a manifestation by a person

that another is his agent and (2) exists only to the extent that it

is reasonable for the third person dealing with the agent to

believe that the agent is authorized.” Id. at 989 (internal

quotation marks and citation omitted).

The Supervisor in Taylor had apparent authority because

(1) he had actual authority to perform ministerial functions such

as advising employees of their rights and preparing reports, and

(2) “the plan participants . . . reasonably believed that [the

Supervisor] specifically had the authority to counsel plan

participants about possible amendments to the plan.” Id.

Therefore, under ERISA, the plan fiduciary was responsible for

the Supervisor’s material misstatements. Id.

DuPont argues that Pell’s reliance on the letter from

William Waddell, Consol’s Director of Employee Compensation

and Benefits, was unreasonable because Waddell “had no

authority to speak for DuPont.” The District Court correctly
15

determined, however, that as in Taylor, Waddell acted with

“apparent authority.” The transfer guidelines were a

manifestation by DuPont that Waddell was its agent. The

guidelines stated that when an employee transferred from

Consol to DuPont, Consol would provide a letter to the

employee and to DuPont describing in detail the employee’s

status with regard to both Consol and DuPont benefit plans.

Waddell, therefore, acted as DuPont’s agent when he wrote the

letter to Pell.

It was reasonable for Pell to believe that Waddell was

authorized to speak on DuPont’s behalf. As the District Court

stated:

“Mr. Pell received the Letter from Mr. Waddell,

the Director of Employee Compensation and

Benefits of his employer Consol, which was

owned and controlled by DuPont . . . . Mr.

Waddell . . . was an appropriate person to

promulgate that information . . . . The Letter

indicated on its face that it had been copied to

DuPont management, including the division head

of Personnel and Employee Relation[s], and Mr.

Herron [a supervisor in the Employee

Compensation Benefits Division] testified that he

believed that he received the Letter in the ordinary

course of his position. It was reasonable for Mr.

Pell to understand that Mr. Waddell was

communicating on behalf of all the subparts of

DuPont’s corporate structure the information that
Specifically, the disclaimers included language such as: 4

“The calculation is a broad estimate . . . . It does not account for

prior plans, prior distributions, or other individual adjustments”;

“This is an ESTIMATE and is not the final calculation of your

pension benefit . . . . The historical data used in this estimate

(pension base earnings, FICA earnings, and adjusted service

date) are subject to review and confirmation at time of formal

application for pension”; “THIS IS AN ESTIMATE. Data used

in this estimate are subject to review and correction in

determining your benefit at retirement.”

16

DuPont intended for him to act upon in deciding

whether to accept a transfer.”

Pell, 2006 WL 2864604 at *9 (internal quotation marks and

citation omitted). In sum, the District Court correctly

concluded, based on the elements of the Taylor apparent

authority test, that Pell reasonably relied on the Waddell letter.

Taylor, 49 F.3d at 989.

The District Court found that it was also reasonable for

Pell to rely on the pension estimates he received during the

1990s. Pell, 2006 WL 2864604 at *9. DuPont asserts that

because each estimate contained a disclaimer clearly labeling the

calculation as an “estimate” that was subject to “review and

correction,” Pell could not have reasonably relied on the 4

estimates. DuPont’s argument fails because it does not take into

account Pell’s 1991 email exchange with Doris Uhde, a DuPont

pre-retirement counselor. In that exchange, Pell inquired what
17

date would be used for his pension calculation, and Uhde

replied:

“Consol pension will be calculated on their

formula and their SS offset. Your adjusted

service date is 2/10/71 not 1975 and Du Pont will

use this date for your years of service under their

formula when calculating your pension. The

‘Pension’ booklet in your green Benefits Binder

explains the Du Pont formulas; however, nothing

written re offsets as each would be different.”

After this exchange, Pell’s subsequent pension estimates (in

1992, 1998, and 1999) listed 1971 as the date from which his

benefit would be calculated.

For the same reasons that it was reasonable for Pell to

rely on the Waddell letter, it was reasonable for him to rely on

Uhde’s apparent authority to act on DuPont’s behalf. By giving

Uhde responsibility for assisting DuPont employees with their

retirement planning, DuPont manifested that she was its agent.

See Taylor, 49 F.3d at 989. It was reasonable for Pell to believe

that Uhde had the authority to determine his adjusted service

date. Id. Moreover, it was reasonable for Pell to believe, going

forward, that his conversation with Uhde had set the record

straight. Having clarified his adjusted service date (or so he

thought), Pell reasonably believed that his employment records

had been corrected and that his pension benefit would be

calculated based on the 1971 date.
18

If we were to accept DuPont’s argument that Pell could

not rely on his pension estimates, employees such as Pell would

be required to continually question their benefits calculations,

even if they agreed with their employers’ estimates. We decline

to formulate such a burdensome rule. In the context of Pell’s

exchange with Uhde and his subsequent pension estimates that

reflected a 1971 adjusted service date, it was reasonable for him

to rely on the estimates, despite their disclaimer language.

b) Detrimental Reliance

In order to show detriment, or injury, a plaintiff must

demonstrate that he relied upon the employer’s representations

in a way that later led to injury. Curcio, 33 F.3d at 237. Pell

detrimentally relied on the Waddell letter when he decided to

transfer permanently from Consol to DuPont. He did not

finalize the transfer until after he had received the letter’s

confirmation of his pension benefit calculation date. Pell was

injured because he accepted a lower salary and he permanently

moved his family to Delaware, despite concerns about the cost

of living and the quality of his children’s schools.

DuPont argues that Pell did not detrimentally rely on the

pension estimates, because he did not take any actions based on

the information they contained. However, our case law

recognizes that refraining from taking action can constitute

detrimental reliance.

In Curcio, we said that the plaintiffs’ detrimental reliance

was “giving up an opportunity to accommodate their insurance

needs through an independent insurance carrier.” 33 F.3d at
It is reasonable to believe that Pell, an engineer with a 5

Ph.D., an MBA, and an employment history with Consol and

DuPont, could have found alternative employment or could have

opened his own consulting business. Cf. Smith v. Hartford Ins.

Group, 6 F.3d 131, 137 (3d Cir. 1993) (rejecting theories of

detrimental reliance because the plaintiffs produced no evidence

that the actions they would have taken were realistically

possible).

19

237. In Smith v. Hartfod Insurance Group, 6 F.3d 131, 137 (3d

Cir. 1993), we concluded that there was detrimental reliance,

even though the reliance could be expressed as a failure to act

(not converting to an individual health care policy that would

have provided adequate coverage) or an action (signing up for

a new group health care plan that provided inadequate

coverage). DuPont’s argument does not convince us to draw a

new distinction between active and inactive detrimental reliance.

Pell relied to his detriment on the pension estimates he

received in the 1990s by refraining from taking certain actions.

Pell testified that if he had known how his pension would be

calculated, he would have explored whether he could return to

Consol, get another job with a better pension, or retire sooner

and start a consulting business. He was injured because he did

not take any of these actions that might have benefitted him.5

Pell has shown that the second element of equitable

estoppel – reasonable and detrimental reliance – is present in

this case. As the District Court concluded, Pell demonstrated

that his reliance on the Waddell letter and the 1990s pension
20

estimates was reasonable and caused him injury. See Curcio, 33

F.3d at 237.

3. Extraordinary Circumstances

The District Court determined that Pell met the third

element of the equitable estoppel theory, concluding that the

circumstances of his case are extraordinary and thus warrant

relief under 29 U.S.C. § 1132. DuPont claims that the District

Court erred, because a finding of extraordinary circumstances

usually results from the employer’s acts of bad faith and not

from mere reporting errors.

In the past, we have determined that extraordinary

circumstances existed in a variety of factual scenarios. Kurz v.

Phila. Elec. Co. (Kurz II), 96 F.3d 1544, 1553 (3d Cir. 1996)

(collecting cases). Extraordinary circumstances can arise where

there are “affirmative acts of fraud,” where there is a “network

of misrepresentations . . . over an extended course of dealing,”

or where particular plaintiffs are especially vulnerable. Id.

In this case, the District Court ruled in Pell’s favor

because of DuPont’s “repeated misrepresentations over an

extended course of dealings.” Pell, 2006 WL 2864604 at *10

(citing Kurz II, 96 F.3d at 1553; Smith, 6 F.3d 131). As the

District Court explained:

“[R]epeated misrepresentations over an extended

course of dealings between an employer and an

employee are sufficient to demonstrate the

existence of extraordinary circumstances, when,
21

as here, it is clear that the employee has been

diligent in inquiring into the employer’s

representations, in seeking clarifications about

those representations, and in obtaining

reaffirmations of those representations.”

Pell, 2006 WL 2864604 at *10. We agree with the District

Court that there were extraordinary circumstances.

In the Kurz cases, Kurz and other employees claimed that

their employer had made material misrepresentations about the

terms of an early retirement plan. Kurz v. Phila. Elec. Co. (Kurz

I), 994 F.2d 136, 139 (3d Cir. 1993). The employees had

attended individual retirement interviews in which some of them

asked whether changes to the retirement plan were forthcoming.

Id. The employer’s retirement counselors answered in the

negative, but in fact, management was actively considering an

early retirement incentive plan. Id. at 137-38. The plan was

instituted shortly after the employees retired and did not apply

to them retroactively. Id. at 138. We concluded that despite the

inaccurate information given by the retirement counselors, there

were no extraordinary circumstances. Kurz II, 96 F.3d at 1553-

54. We explained: “There is no conduct suggesting that [the

employer] sought to profit at the expense of its employees, no

showing of repeated misrepresentations over time, [and] no

suggestion that plaintiffs are particularly vulnerable.” Id. at

1553.

DuPont argues that Pell’s case is like Kurz, and “simple

ERISA reporting errors or disclosure violations,” id., do not

constitute extraordinary circumstances. Contrary to DuPont’s
DuPont argues that the special vulnerability of the Smith 6

plaintiff, who had suffered a cerebral hemorrhage and needed

22

argument, Kurz is distinguishable from this case. DuPont did

not commit a simple ERISA reporting error. Instead, it made

affirmative misrepresentations to Pell over an extended period

of time. This case is therefore not like Kurz, where the

misrepresentation to each employee took place in a single

conversation. Id.

Pell’s case, as the District Court concluded, is more like

Smith. 6 F.3d 131. In Smith, the employee’s husband sought

information regarding the employer’s new health insurance plan

and received multiple inaccurate assurances that the coverage

his wife needed would be available. Id. at 134-35. We

concluded that on remand, “a factfinder could find . . . [that

extraordinary] circumstances are established, in light of the

[employer’s] repeated oral and written misrepresentations to [the

husband], his diligence in attempting to obtain accurate answers

regarding his wife’s coverage, as evidenced by his persistent

questioning of [human resources and insurance company]

personnel, and the immense coverage expenses at stake.” Id. at

142.

Like the Smith plaintiffs, Pell was “diligent” and engaged

in “persistent questioning” about the significant benefits at

stake. Relying on Smith, the District Court correctly determined

that DuPont’s repeated affirmative misrepresentations,

combined with Pell’s diligence, demonstrate that there are

extraordinary circumstances.6
skilled inpatient nursing care, was crucial to the finding of

extraordinary circumstances. 6 F.3d at 133. Our subsequent

case law shows that the vulnerability of the plaintiff is just one

factor and is not necessary to demonstrate extraordinary

circumstances. See, e.g., Int’l Union, United Auto., Aerospace

& Agric. Implement Workers of Am. v. Skinner Engine Co., 188

F.3d 130, 152 (3d Cir. 1999).

23

In sum, we agree with the District Court that Pell has

established the elements of an equitable estoppel claim under

ERISA. DuPont made material misrepresentations about the

amount of Pell’s pension benefit, Pell reasonably and

detrimentally relied on those misrepresentations, and DuPont’s

inaccuracies over an extended course of dealing constitute

extraordinary circumstances warranting relief.

C. Remedies

Having determined that Pell is entitled to relief under

ERISA based on an equitable estoppel theory, we turn to the

parties’ disputes over remedies. DuPont argues that the District

Court’s injunction was an impermissible form of relief under

ERISA. In addition, DuPont asserts that the relief Pell was

granted goes beyond the terms of the pension plan and thus

constitutes an impermissible “informal amendment” to the plan.

Pell, for his part, argues that the District Court should

have awarded him restitution for his past unduly low pension

benefit payments. He also claims that the District Court erred
24

when it determined that DuPont should calculate his benefits

based on the 1972 adjusted service date rather than 1971.

Determining what remedies are available under a statute

is a question of statutory interpretation that requires de novo

review. Daniel S. v. Scranton Sch. Dist., 230 F.3d 90, 97 (3d

Cir. 2000). Therefore, we review de novo the District Court’s

grant of an injunction and its denial of restitution for past low

benefit payments. Id. The District Court’s determination that

1972 is the appropriate adjusted service date is a mixed

conclusion of law and fact. See Interfaith Cmty. Org. v.

Honeywell Int’l, Inc., 399 F.3d 248, 269-70 (3d Cir. 2005). We

break down such conclusions into their components and apply

the appropriate standard of review to each component.

Universal Minerals, Inc. v. C. A. Hughes & Co., 669 F.2d 98,

103 (3d Cir. 1981). “We must accept the trial court’s findings

of historical or narrative facts unless they are clearly erroneous,

but we must exercise a plenary review of the trial court’s choice

and interpretation of legal precepts and its application of those

precepts to the historical facts.” Id.

The District Court correctly concluded that an injunction

was an appropriate remedy, but it erred when it refused to award

Pell restitution for his past unduly low pension benefits. In

addition, the Court erred when it determined that 1972, not

1971, was the appropriate adjusted service date.

1. Injunctive Relief Under ERISA

DuPont argues that the injunction requires it to pay Pell

more money than it would have otherwise. DuPont claims that
25

the injunction is therefore a legal rather than an equitable

remedy, and that such relief is not available under ERISA.

In light of ERISA’s detailed enforcement scheme, courts

are “especially reluctant to . . . [create] remedies not specifically

authorized by its text.” Great-West Life & Annuity Ins. Co. v.

Knudson, 534 U.S. 204, 209 (2002) (internal quotation marks

and citation omitted). ERISA provides for the issuance of

injunctions in order to grant “appropriate equitable relief” to

aggrieved employees such as Pell. Id. (quoting 29 U.S.C.

§ 1132(a)(3)). The Supreme Court has reasoned that

“[e]quitable relief must mean something less than all relief,” and

therefore it has explained that § 1132(a)(3) authorizes only

“those categories of relief that were typically available in

equity.” Id. at 210 (quoting Mertens v. Hewitt Assocs., 508 U.S.

248, 256, 258 n.8 (1993)). Thus, the main question in assessing

injunctions such as the one before us is whether the injunction

constitutes a permissible equitable remedy or an impermissible

legal one. See Eichorn v. AT&T Corp., 484 F.3d 644, 654-55

(3d Cir. 2007).

Great-West could be read as providing facial support for

DuPont’s argument that Pell’s injunction actually constitutes a

legal, rather than an equitable, remedy. But the injunction

effectively creates a constructive trust on particular property in

DuPont’s possession, rather than imposing personal liability on

DuPont. Therefore, as subsequent Supreme Court case law

confirms, the injunction falls within the type of equitable relief

that ERISA authorizes.
26

In Great-West, Mrs. Knudson was rendered quadriplegic

in an auto accident, and her husband’s employer-provided health

plan paid her medical expenses. 534 U.S. at 207. A

reimbursement provision gave the plan the right to recover its

benefit payments from Mrs. Knudson if she recovered them

from a third party. Id. After the Knudsons received a $650,000

settlement from the auto manufacturer, Great-West initiated

legal action under ERISA to enforce the reimbursement

provision. Id. at 207-08. The Supreme Court examined whether

the remedy Great-West sought would have been available from

a court of equity “[i]n the days of the divided bench.” Id. at 212.

The Court noted that equitable restitution was historically

available “where money or property identified as belonging in

good conscience to the plaintiff could clearly be traced to

particular funds or property in the defendant’s possession.” Id.

at 213.

The Court denied relief to Great-West because the

Knudsons’ settlement proceeds were not in their possession, but

had been distributed to attorneys, a Special Needs Trust, and

other parties. Id. at 214. Therefore, “[t]he kind of restitution

[Great-West sought was] . . . not equitable – the imposition of

a constructive trust or equitable lien on particular property – but

legal – the imposition of personal liability for the benefits that

[Great-West] conferred upon [the Knudsons].” Id.

Sereboff v. Mid Atlantic Medical Services, 547 U.S. 356

(2006), followed and amplified upon Great-West. Sereboff’s

basic facts are identical to Great-West. ERISA plan

beneficiaries (the Sereboffs) were injured in an auto accident

and received a settlement from a third party. Id. at 359-60. The
27

health plan (Mid Atlantic) took legal action to claim part of the

settlement proceeds pursuant to a reimbursement provision. Id.

at 360. The facts differed from Great-West in that the parties

entered into a “stipulation . . . under which the Sereboffs agreed

to preserve $74,869.37 of the settlement funds in an investment

account, until the [District] Court rule[d] on the merits of [the]

case and all appeals . . . [were] exhausted.” Id. at 360 (internal

quotation marks and citation omitted). The Supreme Court

decided that the “impediment to characterizing the relief in

[Great-West] as equitable [was] not present.” Id. at 362.

Because the funds in question had been set aside and were

specifically identifiable in the Sereboffs’ investment accounts,

Mid Atlantic could recover through the traditional equitable

remedies of constructive trust or equitable lien. Id. at 362-63.

Sereboff shows that a remedy cannot be classified as legal

merely because it consists of payments. Id. A remedy involving

payments is permissible so long as those payments would have

historically been available in courts of equity. Id. In fact, prior

to Sereboff, we had already determined that ERISA relief may

include payments of money if those payments are properly

characterized as an equitable remedy. Skretvedt v. E.I. DuPont

De Nemours, 372 F.3d 193, 211-12 (3d Cir. 2004). In Skretvedt,

we noted:

“[Some have] perceived in Great-West a per se

pronouncement that where a plaintiff seeks an

award that ultimately involves money . . . , such

an award is a claim for legal relief and is not

available under § [1132](a)(3)(B). . . . Our

reading, however, is that Great-West did not
28

adopt such a rule. Instead, the Supreme Court

indicated that, to determine whether a specific

form of underlying relief requested is available

under § [1132](a)(3)(B), we must consider

whether [the] relief was typically available at law

or in equity and, in the case of restitutionary

relief, whether the relief requested was in fact a

form of equitable restitution.”

Id.

In this case, the relief is an injunction to calculate Pell’s

future pension payments using an earlier adjusted service date.

Injunctions are legal remedies if they “compel the payment of

money past due under a contract, or specific performance of a

past due monetary obligation, [a remedy that] was not typically

available in equity.” Great-West, 534 U.S. at 210-11. The

injunction imposed by the District Court in this case is forwardlooking and entitles Pell to an amount of money that cannot be

calculated with specificity (since it is unknown how long he will

survive and be entitled to benefits). Therefore, the injunction is

an equitable remedy that is permissible under ERISA.

In addition to attacking the form of the remedy that Pell

received, DuPont argues that ERISA provides a cause of action

only to recover the benefits that are due under the terms of an

employee benefit plan. DuPont states that because Pell is

already receiving the pension payment to which he is entitled

under the terms of the plan, he is without relief under ERISA.

Relying on Great-West, 534 U.S. 204, and Sereboff, 547 U.S.

356, DuPont claims that an employee such as Pell cannot
29

receive relief beyond that specified by the plan terms. DuPont

argues that the District Court’s injunction renders DuPont’s

erroneous representations to Pell an impermissible “informal

amendment” to the plan. Confer v. Custom Eng’g Co., 952 F.2d

41, 43 (3d Cir. 1991).

We have previously considered and rejected this

argument. See In re Unisys Corp. Retiree Med. Benefit ERISA

Litig., 57 F.3d 1255, 1264-65 (3d Cir.1995). Although Unisys

dealt with a breach of fiduciary duty claim, our rationale for

providing relief beyond a plan’s terms encompassed equitable

estoppel as well:

“Imposing upon an employer a fiduciary duty in

this case does not threaten or contradict our

well-established policy disfavoring informal plan

amendments . . . . [O]ur equitable theories of

relief under ERISA (breach of fiduciary duty and

estoppel) are not to be construed as conflicting

with our precedent precluding oral or informal

amendments to ERISA benefit plans.

The retirees here do not argue that Unisys’

misrepresentations modified their retiree medical

benefit plans. Rather, for purposes of their breach

of fiduciary [duty] claim, they assume the plans

did not contractually vest benefits, and claim

instead that the company breached its fiduciary

duty by leading employees to believe that the

plans did. This claim is distinct from a claim for

benefits under the terms of the plan because it
Subsequent to Great-West Life & Annuity Ins. Co. v. 7

Knudson, 534 U.S. 204, 210 (2002), we have confirmed the

30

requires different proof . . . than would be

required for a contract claim that the plans had

been modified.

In recognizing the retirees’ breach of

fiduciary [duty] claim here, we do not intend to

create a precedent for any beneficiary to make

claims beyond those provided in a plan.”

Id. (internal quotation marks and citations omitted).

As in Unisys, the District Court in this case “assumed” or

acknowledged that the plan terms did not entitle Pell to the

higher pension amount. Pell, 2006 WL 2864604 at *14. The

Court explained: “As [Pell has] met the elements of [his]

equitable estoppel claim, it is appropriate to estop DuPont from

asserting its right to rely on the terms of the DuPont Plan as a

basis for asserting that . . . Pell’s adjusted service date is

November 1, 1975.” Id. Thus, the District Court’s injunction

neither rewrote nor informally amended the plan. The

injunction left the plan intact while acknowledging that equity

requires DuPont to pay Pell a higher pension amount.

Our case law clearly establishes the right of a plaintiff

such as Pell to receive relief beyond the benefits specified in the

plan, and the District Court injunction did not rewrite or

informally amend the plan. DuPont’s argument fails.7
viability of the equitable estoppel theory to obtain relief for

misrepresentations about the availability of benefits. See

Hooven v. Exxon Mobil Corp., 465 F.3d 566, 578 (3d Cir.

2006). Eichorn v. AT&T Corp., 484 F.3d 644 (3d Cir. 2007), is

not to the contrary. In that case, AT&T sold a subsidiary, with

the result that the subsidiary’s employees were no longer AT&T

employees. Id. at 646-47. These employees later alleged that

they were wrongfully prevented from returning to AT&T and

regaining their entitlement to AT&T pension benefits because

of a “no-hire” agreement. Id. at 647. The employees sought to

be awarded the benefits they would have received had they

remained AT&T employees. Id. We concluded that because the

plaintiffs were not seeking to enforce the terms of the plan,

relief was not available under 29 U.S.C. § 1132(a)(1)(B). Id. at

651-53. Unlike Pell, the Eichorn plaintiffs’ requested relief was

based on a hypothetical situation (the possibility that but for the

no-hire agreement, they could have returned to AT&T) and was

a claim for benefits that they had not earned. Id. Here, Pell was

a DuPont employee and had earned pension benefits. The logic

of Eichorn does not affect our conclusion that in this case the

relief Pell requests is available under ERISA.

31

2. Restitution for Past Low Pension Benefit Payments

Having determined that it was permissible for the District

Court to order DuPont to pay a higher pension benefit going

forward, we must examine whether the Court correctly declined

to order DuPont to pay restitution for the unduly low payments

Pell had already received. Because the pension funds are held

in trust by DuPont and thus are specifically identifiable property,
32

the District Court erred when it determined that restitution was

not available.

“[A] plaintiff [may] seek restitution in equity, ordinarily

in the form of a constructive trust or an equitable lien, where

money or property identified as belonging in good conscience to

the plaintiff [can] clearly be traced to particular funds or

property in the defendant’s possession.” Great-West, 534 U.S.

at 213. The difference between the pension payments Pell

actually received and the payments he should have received

belongs, “in good conscience,” to him. Therefore, Pell can

receive restitutionary payments for the difference if the funds

can “clearly be traced to particular funds” in DuPont’s

possession. Id.

ERISA says: “Except as provided . . . , all assets of an

employee benefit plan shall be held in trust by one or more

trustees.” 29 U.S.C. § 1103(a). Therefore, ERISA plan funds

are, as a matter of law, “held in trust” and are not available to

the employer for general use. Our case law, both before and

after Great-West, treats employee benefit plan funds as trust

funds. We have noted that ERISA “requir[es] the application of

traditional trust law in the administration of the statute.” Coar

v. Kazimir, 990 F.2d 1413, 1422 (3d Cir. 1993) (citing Firestone

Tire & Rubber Co. v. Bruch, 489 U.S. 101, 110 (1989)).

We applied trust law principles in Skretvedt, a case where

a DuPont employee had previously litigated, and won, the right

to disability benefits. 372 F.3d at 198. Skretvedt moved for an

award of interest on the wrongfully withheld benefits. Id. at

199. We concluded that Skretvedt could be entitled to interest
Although Pell requested an award of interest on the 8

amount of pension benefits wrongfully withheld, he did not

mention this request until he filed his reply brief. The argument

is thus waived. Skretvedt v. E.I. DuPont de Nemours, 372 F.3d

193, 202-03 (3d Cir. 2004) (“[A]n issue is waived unless a party

raises it in its opening brief, and for those purposes a passing

reference to an issue will not suffice to bring that issue before

this court.”). We do not cite Skretvedt here for the proposition

that an ERISA litigant can receive interest (although he may),

but rather for the proposition that “restitution by way of a

constructive trust” is an appropriate and available remedy. Id.

at 214.

33

under a restitutionary theory and remanded for further

proceedings. Id. at 215. We determined that such an award 8

would not make DuPont “‘personally liable’ for ‘interest’ . . . in

violation of Great-West [, because] . . . . Skretvedt’s cause of

action under § [1132](a)(3)(B) is against the relevant ERISA

plans whereby he seeks restitution by way of a constructive trust

over the actual funds wrongfully earned by those plans.” Id. at

214.

We also determined that the funds in question could be

“clearly traced”:

“[T]o find the funds Skretvedt alleges belong to

him . . . , we need look no further than the ERISA

plans that withheld Skretvedt’s benefits for

several years and profited with respect to the

withholding of those benefits. . . . Skretvedt has
In some cases, Great-West will foreclose the plaintiff’s 9

remedies because the plan funds will not be clearly traceable.

534 U.S. at 213. This is because ERISA provides exceptions to

the requirement that plan funds be held in trust. 29 U.S.C.

§ 1103(b).

34

sufficiently identified specific funds traceable to

the defendant ERISA plans that belong in good

conscience to him.”

Id. We added in a footnote: “[A]s several circuit courts have

noted, the Senate Finance Committee, in its report on ERISA,

specifically contemplated that ‘appropriate equitable relief’

under § [1132](a)(3)(B) would include, ‘[f]or example, . . . a

constructive trust [to] be imposed on the plan assets . . . .’” Id.

at 214 n.28 (citations omitted).

The ruling in Skretvedt did not violate Great-West, nor

would a ruling that Pell is entitled to restitution for his unduly

low prior pension payments. During Pell’s employment, 9

DuPont made contributions to its pension fund to cover the

aggregate future pensions of its current employees. The

amounts of these contributions were calculated through a

formula that specifically took Pell into account. Therefore, the

restitution Pell seeks for his unduly low past pension payments

is clearly traceable to the plan trust funds in DuPont’s

possession.

The District Court made an error of law when it assumed

that it could not order DuPont to pay Pell for the difference
Again, we note that this case is distinguishable from 10

Eichorn. The Eichorn plaintiffs sought to be awarded the

benefits they would have received had they remained AT&T

employees. 484 F.3d at 648. The relief they requested was in

the nature of “back pay” and was legal rather than equitable, so

it was unavailable under ERISA. Id. at 656. Pell’s requested

relief is not “back pay,” but consists of the benefits that DuPont

told him he had earned.

35

between the benefit amounts he received and the amounts he

should have received. Under Skretvedt, it is appropriate to 10

impose a constructive trust on the DuPont plan funds to obtain

restitution for the portions of the past pension payments that

were wrongfully withheld from Pell. 372 F.3d at 214.

3. Adjusted Service Date

The District Court enjoined DuPont to calculate Pell’s

pension benefits using the date of August 1, 1972. There are

two potential dates that could be used: Pell’s first day of

employment at Consol (February 10, 1971) or the date on which

he became eligible to participate in Consol’s pension plan

(August 1, 1972). Pell argues that the District Court erred when

it determined that the correct date is August 1, 1972. We agree.

The 1991 email from DuPont pre-retirement counselor Doris

Uhde, combined with the pension benefit estimates Pell received

during the 1990s, constitute a material misrepresentation about

Pell’s adjusted service date.
36

The District Court chose August 1, 1972 on the basis of

the Waddell Letter. Directly below the salutation “Dear Mr.

Pell,” the letter provided the following information:

“RE: SALARY BENEFIT PLANS

Social Security Number: [omitted]

Date of Birth: 07-11-42

Employment Date: 02-10-71

Retirement Plan

 Credited Service Date: 08-01-72”

In the second paragraph, under the heading “Retirement Plan,”

the letter stated: “The Pension you receive will be calculated

under the DuPont Plan based on your total combined service.

This retirement benefit will be offset by any payment you

receive from the Consol Plan as a result of your accrued benefit

as of the date of transfer.”

The District Court concluded that Pell should have

known that the correct date was his eligibility date for

participation in the Consol plan, and not his initial Consol

employment date. Pell, 2006 WL 2864604 at *14 n.13. This

conclusion does not take into account DuPont’s

misrepresentations over an “extended course of dealing.” Kurz

II, 96 F.3d at 1553.

Neither the Waddell letter nor the emails from DuPont’s

benefits administrators explained unambiguously how Pell’s

pension would be calculated. But DuPont communicated

repeatedly to Pell, in the Uhde email and the 1990s pension
37

estimates, that his adjusted service date was February 10, 1971.

In the analysis above, we explained that Pell has made out a

claim for equitable estoppel because the Uhde email and the

subsequent pension estimates were material misrepresentations,

Pell reasonably and detrimentally relied on the

misrepresentations, and there were extraordinary circumstances.

For these same reasons, DuPont is liable to Pell for benefit

payments that reflect a pension calculation date of February 10,

1971.

III. CONCLUSION

Pell has standing to sue under ERISA, and the District

Court correctly determined that he made out a claim for relief

based on the theory of equitable estoppel. The Court properly

enjoined DuPont to pay Pell an increased pension benefit going

forward. However, the Court made an error of law when it

determined that Pell could not receive equitable restitution for

the amount of his past pension payments that was wrongfully

withheld. In addition, the Court erred when it determined that

DuPont should use an adjusted service date of 1972. Because

of DuPont’s repeated misrepresentations to Pell over an

extended course of dealing, it should use his first day of Consol

employment (February 10, 1971) as his adjusted service date.

We will affirm the District Court’s rulings that Pell is

entitled to relief and that DuPont must pay him a higher pension

benefit going forward. We will reverse the District Court’s

ruling that restitution for past low payments is unavailable, as

well as its ruling that DuPont must use an adjusted service date
38

of August 1, 1972. We will remand for the entry of an order

consistent with this opinion.