UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

FRANK STEWART; CHARLES WISEMAN; 

ERVIN D. CHANNELL; LAWRENCE

DOSWELL, all other individuals who

are similarly situated in that they: 1)

at some time were members of the

Industrial Union of Marine and

Shipbuilding Workers of America,

(now incorporated into the

International Association of

Machinists and Aerospace Workers)

Local 33; and, 2) worked for

Bethlehem Steel Corporation at the

Sparrows Point and/or Key

Highway Shipyards; and, 3) are

receiving, have received or are  No. 00-1804 eligible to receive a pension; and,

4) who had their pensions

calculated in such a manner as to

reduce the pension by

inappropriately deducting cost-ofliving allowances from the class

members’ pension-related earnings,

Plaintiffs-Appellants,

v.

PENSION TRUST OF BETHLEHEM STEEL

CORPORATION AND SUBSIDIARY

COMPANIES; BETHLEHEM STEEL

CORPORATION,

Defendants-Appellees. 
Appeal from the United States District Court

for the District of Maryland, at Baltimore.

J. Frederick Motz, Chief District Judge.

(CA-00-418-JFM)

Argued: May 9, 2001

Decided: June 20, 2001

Before WILKINSON, Chief Judge,

NIEMEYER, Circuit Judge, and Arthur L. ALARCON,

Senior Circuit Judge of the United States Court of Appeals

for the Ninth Circuit, sitting by designation.

Affirmed in part, vacated in part, and remanded by unpublished per

curiam opinion. 

COUNSEL

ARGUED: Paul Anthony Weykamp, Baltimore, Maryland, for

Appellants. G. Stewart Webb, Jr., VENABLE, BAETJER & HOWARD, L.L.P., Baltimore, Maryland, for Appellees. ON BRIEF:

Maria E. Rodriguez, VENABLE, BAETJER & HOWARD, L.L.P.,

Baltimore, Maryland; Kathleen M. Mills, Office of the General Counsel, BETHLEHEM STEEL CORPORATION, Bethlehem, Pennsylvania, for Appellees.

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c). 

2 STEWART v. PENSION TRUST OF BETHLEHEM STEEL
OPINION

PER CURIAM: 

Appellants, former employees of the Shipbuilding Division of

Bethlehem Steel Corp. (hereinafter "Bethlehem"), appeal from the

dismissal of their ERISA action pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Appellants contend that the district

court erred in determining that the governing Pension Agreement is

unambiguous and in resolving controverted allegations contained in

their complaint in favor of Appellees. We conclude that the district

court erred by failing to take as true material allegations in Appellants’ complaint, and we vacate the dismissal of Appellants’ cause of

action for breach of contract. We affirm the dismissal of the Appellants’ claim for breach of fiduciary duty. 

I

Appellants are participants in an ERISA plan administered by the

Pension Trust of Bethlehem (hereinafter "the Pension Trust"). Seeking certification as a class, Appellants filed this action contending that

Bethlehem and the Pension Trust improperly reduced Appellants’

pensions by deducting cost-of-living adjustments (hereinafter

"COLAs") from their "earnings" as defined by the Pension Agreement. Appellants alleged causes of action for both breach of fiduciary

duty and breach of contract. 

Appellees moved to dismiss Appellants’ action for failure to state

a claim, pursuant to Rule 12(b)(6). In support of their motion to dismiss, Appellees offered copies of the Pension Agreement, as well as

copies of the collective bargaining agreements (hereinafter "CBAs")

which governed Appellants’ employment. Appellants offered numerous exhibits in opposition to Appellees’ motion to dismiss, including

pay stubs purporting to show that Appellants had not received COLAs

claimed by Appellees. The district court determined that the relevant

terms of the Pension Agreement unambiguously provided that

COLAs would not be included as earnings for purposes of determining Appellants’ pension benefits. The district court concluded that its

interpretation of the Pension Agreement barred Appellants’ claims.

Accordingly, the court dismissed Appellants’ action without reaching

STEWART v. PENSION TRUST OF BETHLEHEM STEEL 3
the question whether Appellants should be certified as a class. Appellants filed a timely notice of appeal. We have jurisdiction pursuant to

28 U.S.C. § 1291. 

II

We determine, as a preliminary matter, that the district court did

not err in considering copies of the Pension Agreement and CBAs

offered by Appellees because Appellants explicitly relied on these

documents in their complaint. New Beckley Mining Corp. v. Int’l

Union, United Mine Workers of Am., 18 F.3d 1161, 1164 (4th Cir.

1994); see also Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir.

1998) ("[A] district court ruling on a motion to dismiss may consider

a document the authenticity of which is not contested, and upon

which the plaintiff’s complaint necessarily relies.") (citing Cortec

Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991));

Weiner v. Klais & Co., Inc., 108 F.3d 86, 89 (6th Cir. 1997) (same

holding in ERISA context). Moreover, because the district court did

not consider any other evidence in ruling on Appellees’ motion to dismiss, it was not required to convert the motion into one for summary

judgment. See Laughlin v. Metro. Washington Airports Auth., 149

F.3d 253, 260-61 (4th Cir. 1998) (stating that the district court is

required to treat a Rule 12(b)(6) motion as one for summary judgment

if it considers matters outside the complaint). 

We review de novo a district court’s decision to grant a motion to

dismiss. Flood v. New Hanover County, 125 F.3d 249, 251 (4th Cir.

1997). We must accept all the properly pled allegations of the complaint as true and construe all facts in the light most favorable to the

plaintiff. Id. "We may affirm the district court’s dismissal only if it

appears beyond doubt that the Plaintiffs can prove no set of facts in

support of their claim that would entitle them to relief." Id.

Appellants first cause of action alleged that Appellees breached

their fiduciary duty under ERISA. The district court found that Appellants had failed to state a cause of action for breach of fiduciary duty

because they did not allege "that they have given the Union an opportunity to act on their behalf and that the Union has breached its duty

to represent them." The court further noted that Appellants had

waived their breach of fiduciary duty claim because they had "provi4 STEWART v. PENSION TRUST OF BETHLEHEM STEEL
sionally agree[d] to proceed only on the breach of contract claim

against both defendants." Appellants have not challenged these findings on appeal. Thus, we must affirm the district court’s dismissal of

Appellants’ breach of fiduciary duty cause of action. See, e.g.,

Canady v. Crestar Mortgage Corp., 109 F.3d 969, 973-74 (4th Cir.

1997) (stating that issues not briefed on appeal are waived). 

In their second cause of action, Appellants alleged that Appellees

breached the Pension Agreement by "improperly and routinely reduc-

[ing] class members’ pensions by (1) deducting ‘phantom cost-ofliving adjustments’ . . . [i.e., never earned cost-of-living adjustments]

. . . and by (2) deducting COLAs which were rolled into the base rate

of pay in subsequent contracts." (second parenthetical and emphasis

in original). The district court determined that the "Pension Agreement provides that an employee’s pension is calculated on the basis

of his average monthly earnings during the best 60 of 120 months

immediately preceding his retirement." The district court further concluded that the Pension Agreement specifically defines "earnings" to

mean "the participant’s earnings (including the amount resulting from

a cost-of-living adjustment provision only to the extent of the cost-ofliving adjustment which was included in the base hourly rates effective August 1, 1975)." (quoting Pension Agreement ¶ 1(j)). The court

held that any COLAs earned after August 1, 1975 were therefore not

"earnings" for purposes of the Pension Agreement, even if such

COLAs were "‘rolled into’ the base rate of pay and appeared as [base

pay] on employee’s pay stubs." 

Appellants contend that COLAs which were "rolled in" to their

base pay are "earnings" for purposes of the Pension Agreement

because the terms of subsequent CBAs either supplemented or superceded the terms of the Pension Agreement. "In interpreting ERISA

plans, we turn to principles of the federal common law of contracts."

Denzler v. Questech, Inc., 80 F.3d 97, 101 (4th Cir. 1996). 

Our review of the Pension Agreement reveals that the disputed

terms are unambiguous, and thus we need not refer to the CBAs in

order to resolve Appellants’ claim. See id. at 103 (concluding that

because plan documents were unambiguous, court was not required

to consider extrinsic evidence or principles of estoppel). Moreover,

because Appellants do not allege that the CBAs were formally

STEWART v. PENSION TRUST OF BETHLEHEM STEEL 5
adopted in conformance with the amendment procedures of the Pension Agreement, they cannot maintain that the CBAs supercede the

terms of that agreement. See Healthsouth Rehab. Hosp. v. Nat’l Red

Cross, 101 F.3d 1005, 1009 (4th Cir. 1996) (stating that "any modification to a plan must be implemented in conformity with the formal

amendment procedures [of the plan] and must be in writing.") (quoting Coleman v. Nationwide Life Ins. Co., 969 F.2d 54, 58 (4th Cir.

1992)). The district court did not err in determining that the plain

terms of the Pension Agreement do not permit COLAs earned after

August 1, 1975 to be treated as "earnings," even if those COLAs were

later rolled into Appellants’ base rate of pay. 

Appellants alleged in their complaint that Appellees breached the

Pension Agreement by "rolling in" COLAS that Appellants never

received. Appellees asserted in their motion to dismiss that Appellants

were paid COLAs, that these COLAs were later "rolled in" to their

base pay, and that the "rolled in" COLAs were properly excluded

under the Pension Agreement. This dispute regarding whether the

allegedly "rolled in" COLAs were actually received must be resolved

in favor of Appellants for purposes of a motion to dismiss pursuant

to Rule 12(b)(6). Flood, 125 F.3d at 251. Taking Appellants’ factual

allegations as true, they have stated a cause of action for breach of the

Pension Agreement under 29 U.S.C. § 1132(a)(1). Accordingly, we

vacate the district court’s dismissal of this action and remand for further proceedings concerning Appellants’ breach of contract claim

based on the deduction of COLAs that the Appellants allege they

never received. We affirm the dismissal of Appellants’ cause of

action for breach of fiduciary duty.

AFFIRMED IN PART, VACATED IN PART,

AND REMANDED

6 STEWART v. PENSION TRUST OF BETHLEHEM STEEL