*This order and judgment is not binding precedent, except under the doctrines of

law of the case, res judicata, and collateral estoppel. This court generally disfavors the

citation of orders and judgments; nevertheless, an order and judgment may be cited under

the terms and conditions of 10th Cir. R. 36.3.

F I L E D

United States Court of Appeals

Tenth Circuit

OCT 14 1999

PATRICK FISHER

Clerk

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

EVAN B. ANDERSON; MERRILY

ANDERSON, husband and wife,

Plaintiffs - Appellants,

v.

INTERMOUNTAIN POWER

SERVICE CORPORATION,

Defendant - Appellee.

No. 98-4175

(D. Ct. No. 96-CV-167-B)

(D. Utah)

ORDER AND JUDGMENT *

Before TACHA , HOLLOWAY , and BALDOCK , Circuit Judges.

Appellants, Evan and Merrily Anderson, filed suit against appellee,

Intermountain Power Service Corporation (IPSC), claiming violations of the

Americans with Disabilities Act, the Utah Antidiscrimination Act, and the

Employee Retirement Income Security Act of 1974 (ERISA). On September 21,

1998, the district court granted appellee’s motion for summary judgment on all

claims and denied appellants’ cross motion for summary judgment. The
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Andersons appeal the district court’s denial of their ERISA claim. We affirm. 

IPSC, a Utah nonprofit corporation, employed Evan Anderson from 1984

until 1989, when Mr. Anderson became totally disabled and left his job. At the

time IPSC hired Mr. Anderson, IPSC provided its employees with a benefits

package that included medical insurance. In its employee handbook, IPSC

reserved the right to amend or terminate its benefit plans at any time. 

Shortly after Mr. Anderson became disabled, he began to receive disability

benefits under IPSC’s Long Term Disability Plan. In February of 1990, IPSC

notified Mr. Anderson that he was required to pay regular premiums if he wanted

to keep his health insurance in effect and that his insurance would be canceled if

payments were not made. Mr. Anderson failed to make timely premium payments

in May, October and November of 1990 and again in February and March of

1991. In May and November of 1990 and March of 1991, IPSC notified Mr.

Anderson by letter that his premiums were delinquent and his health insurance

would be canceled if he failed to make the necessary payments. Moreover, in

June and November of 1990 and in June of 1992, IPSC informed Mr. Anderson

that his premium payments were due by the first of each month.

On March 29, 1991, IPSC learned that Mr. Anderson had accepted a lumpsum disability settlement. Accordingly, in a letter dated April 5, 1991, IPSC

terminated Mr. Anderson’s employment. In the same letter, IPSC noted that Mr.
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Anderson had not made his overdue premium payments and canceled his medical

coverage effective March 1, 1991. Shortly thereafter, IPSC agreed to reinstate

Mr. Anderson’s health insurance and continue his coverage.

In July of 1991, IPSC amended and restated its medical and dental benefits

plan. Under the heading “Collection of Plan Participant Contributions,” the new

plan included the following language: 

The disabled employee shall submit the appropriate monthly

contribution on a monthly basis to the Company. Payments 

shall be made in advance at the beginning of the month for 

which coverage applies; however, there is a thirty (30) day 

grace period. If full payment is not received by the end of 

the grace period, participation in this Plan shall end 

retroactively as of the last day of the month for which the last

payment was timely made.

IPSC Medical and Dental Benefits Plan Wraparound Document § 4.06(b), at 10

(July 1, 1991) (hereinafter “Wraparound Document”). Mr. S. Gale Chapman, the

President and Chief Operations Officer (COO) of IPSC, executed the Wraparound

Document on IPSC’s behalf.

Mr. Anderson failed to make his January 1995 premium payment until

February 8, 1995, several days after the grace period had expired. As a result,

IPSC canceled the Andersons’ health insurance effective January 1, 1995. 

Appellants first argue that IPSC did not follow corporate procedures when

it amended the benefits plan in 1991. Specifically, appellants claim that IPSC’s

Board of Directors never approved the new benefit plan and Mr. Chapman did not
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have the authority to amend the benefits package on his own. Second, appellants

argue that IPSC breached its fiduciary duty to them when it narrowly interpreted

§ 4.06(b) of the Wraparound Document to require premium payment by the first

of each month. In addition, appellants claim that interpretation of the language in

§ 4.06(b) is a question of fact to be determined by a jury. Third, appellants argue

that IPSC breached its fiduciary duty to them because it canceled their insurance

after permitting them to make partial payments as far in advance as they wished. 

Fourth, appellants argue that their breach of IPSC’s benefits plan was not

material. Fifth, appellants argue that IPSC could not cancel their insurance

because it had promised Mr. Anderson that he could never lose his benefits. 

Sixth, appellants argue that IPSC discriminated against them in violation of both

the benefits plan and ERISA. Finally, appellants argue that IPSC waived any

requirement for timely monthly payments.

We review de novo a district court’s grant of summary judgment pursuant

to Fed. R. Civ. P. 56(c). Kaul v. Stephan , 83 F.3d 1208, 1212 (10th Cir. 1996).

Summary judgment is appropriate if the pleadings, 

depositions, answers to interrogatories, and admissions

on file, together with the affidavits, if any, show that 

there is no genuine issue as to any material fact and that

the moving party is entitled to judgment as a matter of

law. When applying this standard, we examine the factual

record and reasonable inferences therefrom in the light 

most favorable to the party opposing summary judgment.

If there is no genuine issue of material fact in dispute,

then we next determine if the substantive law was correctly
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applied by the district court.

Id. (quoting Wolf v. Prudential Ins. Co. , 50 F.3d 793, 796 (10th Cir. 1995)

(further citations omitted)). We find that there are no material facts in dispute

and conclude that the district court correctly applied the substantive law.

I. Did IPSC Properly Amend Its Benefits Plan?

Appellants insist that IPSC violated corporate procedures when Mr.

Chapman amended its benefits plan in 1991 because Mr. Chapman did not have

the authority to amend the plan and IPSC’s Board of Directors never approved the

amendments. To determine whether appellants’ claim is accurate, we must

engage in “a fact-intensive inquiry, under applicable corporate law principles,

into what persons or committees within [IPSC] possessed plan amendment

authority, either by express delegation or impliedly, and whether those persons or

committees actually approved the new plan provision . . . .” Curtiss-Wright Corp.

v. Schoonejongen , 514 U.S. 73, 85 (1995). 

Because IPSC is a nonprofit corporation, Curtiss-Wright directs us to look

to Utah nonprofit corporation law. Utah Code Ann. § 16-6-40 permits a nonprofit

corporation to delegate management of its affairs to its officers and agents

through its articles of incorporation or bylaws. Accordingly, IPSC’s bylaws

authorize IPSC’s officers to “manage the activities of [IPSC] and its employees

within the guidelines provided by the Board [of Directors].” IPSC Bylaws art. II,
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§ 2.1.1 (May 11, 1989). Furthermore, the bylaws state that IPSC’s officers

include “a President and Chief Operations Officer.” Id. art. 5, § 5.1. 

Pursuant to Utah law and through its bylaws, IPSC had authorized Mr.

Chapman, president and COO of IPSC, to manage IPSC’s activities and its

employees. Therefore, we hold that Mr. Chapman possessed the authority under

Utah law to amend IPSC’s medical and dental benefits plan. IPSC properly

amended its benefits plan, and IPSC is entitled to summary judgment on this

issue.

II. Did IPSC Breach Its Fiduciary Duty to the Andersons?

Appellants claim that IPSC breached its fiduciary duty to them because (1)

it interpreted the language in § 4.06(b) of the Wraparound Document to require

premium payments by the first of the month and (2) it canceled their insurance

after accepting partial payments in advance. Specifically, appellants insist that 

§ 4.06(b) merely requires payment by the tenth day of each month and that partial

payment of a premium entitles the payee to a prorated amount of insurance which,

in turn, extends the grace period. 

Section 4.06(b) states, “Payments shall be made in advance at the beginning

of the month for which coverage applies; however, there is a thirty day grace

period. If full payment is not received by the end of the grace period,

participation in this Plan shall end . . . .” Using our common sense, we read
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§ 4.06(b) to mean that payments were due on the first day of each month. In

addition, IPSC informed Mr. Anderson on multiple occasions that his premium

payments were due on the first of each month. Therefore, appellants’ strained

interpretation of § 4.06 is without merit. Moreover, § 4.06(b) makes it clear that

premiums must be paid-in-full each month. There is no provision in the plan for

beneficiaries to receive prorated insurance in return for partial payments. Thus,

IPSC is entitled to summary judgment on appellants’ breach of fiduciary duty

claims.

III. Was the Andersons’ Breach of IPSC’s Benefits Plan Material?

Appellants argue that their breach of IPSC’s benefits plan was not material

because they made a partial premium payment before the grace period expired and

their failure to pay the entire premium did not impact the financial well-being of

IPSC. As discussed above, the plan documents do not provide for partial

payments. Therefore, any such payments are irrelevant to the question of whether

the Andersons’ breach was material, and IPSC is entitled to summary judgment on

this issue. 

IV. Did IPSC Promise Mr. Anderson He Could Never Lose His Benefits?

Appellants claim that through oral promises and written documents, IPSC

promised Mr. Anderson he could never lose his benefits. “ERISA requires all

modifications to an employee benefit plan to be written and to conform to the
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formal amendment procedures.” Miller v. Coastal Corp. , 978 F.2d 622, 624 (10th

Cir. 1992) (internal citations omitted). Moreover, an employer’s “promise to

provide vested benefits ‘must be incorporated, in some fashion, into the formal

written ERISA plan.’” Chiles v. Ceridian Corp. , 95 F.3d 1505, 1511 (10th Cir.

1996) (quoting Jensen v SIPCO , 38 F.3d 945, 949 (8th Cir. 1994)). In addition,

an employer’s intent to vest benefits “‘must be stated in clear and express

language.’” Id. at 1513 (quoting Wise v. El Paso Natural Gas Co. , 986 F.2d 929,

937 (5th Cir. 1993)). In the instant case, there are no plan documents which state

in any way that IPSC intended to vest Mr. Anderson’s benefits. Accordingly,

IPSC is entitled to summary judgment on this issue.

V. Did IPSC Discriminate Against the Andersons?

Appellants argue that IPSC discriminated against them under both IPSC’s

benefits plan and ERISA. They claim IPSC consciously and systematically

amended the plan in a concerted effort to strip them of their insurance. However,

“ERISA does not create any substantive entitlement to employer-provided health

benefits . . . . Employers . . . are generally free under ERISA, for any reason at

any time, to adopt, modify, or terminate welfare plans.” Curtiss Wright , 514 U.S.

at 78. Therefore, appellants’ complaint that IPSC “amended its plan to deprive

[them] of health benefits is not . . . cognizable . . . under ERISA,” id. , and IPSC

is entitled to summary judgment on appellants’ discrimination claim
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VI. Did IPSC Waive Its Right to Require Timely Premium Payments? 

Finally, appellants argue that IPSC waived any requirement for timely

premium payments because it accepted partial payments and previously had

accepted late payments. As discussed above, “ERISA requires all modifications

to an employee benefit plan to be written and to conform to the formal

amendment procedures.” Miller , 978 F.2d at 624. In the instant case, the plan

documents provided for monthly premium payments and cancellation of coverage

for failure to pay. There is no evidence which suggests that IPSC ever modified

its benefits plan through formal amendment procedures to provide for partial or

late payments. In addition, as IPSC points out, appellants have failed to establish

the elements of waiver. See K&T, Inc. v. Koroulis , 888 P.2d 623, 628 (Utah

1995). Thus, IPSC is entitled to summary judgment on appellants’ waiver claim.

AFFIRMED .

ENTERED FOR THE COURT,

Deanell Reece Tacha

Circuit Judge