Source: https://law.justia.com/cases/federal/appellate-courts/F2/980/323/335604/
Timestamp: 2019-04-20 00:16:19+00:00

Document:
Bill Waller, Jr., Waller & Waller, Jackson, Miss., for plaintiff-appellant.
William V. Westbrook, III, White & Morse, Gulfport, Miss., for defendant-appellee.
Murphy R. Godwin alleges that Sun Life Assurance Company of Canada ("Sun Life") violated the Employee Retirement Income Security Act of 1974 ("ERISA")1 by (a) failing to provide plan information that Godwin had requested; (b) illegally offsetting his award under the plan with Social Security old age benefits; and (c) erroneously calculating an offset for workers' compensation benefits. The district court granted Sun Life's motion for summary judgment. Godwin appeals, and, finding no error, we affirm.
* Godwin began work for School Pictures, Inc., in 1966. In the mid-1970s, Godwin became a participant in a group long-term disability plan issued to School Pictures by Sun Life. Subsequent to his participation, the plan was amended five times, the last amendment taking effect in December 1983. On December 19, 1984, Godwin sustained an injury in the course of his employment. He continued to work, however, until November 4, 1986, when a second employment-related injury left him disabled. On November 18, 1986, School Pictures terminated Godwin--then sixty-seven years old--for health reasons. After he was terminated, Godwin applied to Sun Life for benefits under the plan.
In July 1989, Godwin brought suit in district court against Sun Life, claiming that Sun Life's actions violated ERISA. The parties filed cross-motions for summary judgment, and the district court granted Sun Life's motion. Godwin appeals.
Godwin contends (a) that he is entitled to statutory penalties under ERISA because Sun Life failed to provide plan information that Godwin requested; (b) that Sun Life's offset of social security old age benefits was illegal because the offset was not set forth in the original policy and Godwin never received notice that the plan was amended to include the offset; and (c) that Sun Life erroneously calculated an offset for workers' compensation benefits.
* Godwin contends that he is entitled to penalties due to Sun Life's failure to supply certain requested information. Godwin alleges that, in July 1985--prior to his application for disability benefits--he requested from Sun Life information relating to the benefit plan and that, over the course of the next four years, Sun Life and School Pictures refused his requests. Godwin argues that Sun Life's failure to provide the information violates ERISA.
Any administrator who ... fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish to a participant or beneficiary (unless such failure or refusal results from matters reasonably beyond the control of the administrator) by mailing the material requested to the last known address of the requesting participant or beneficiary within 30 days after such request may in the court's discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal and the court may in its discretion order such relief as it deems proper.
29 U.S.C. § 1002(16) (A).
Godwin asks us to recognize Sun Life as a de facto administrator and argues that ERISA does not require a claimant to show prejudice in order to be entitled to penalties.6 In support of this argument, Godwin reminds us of our decision in Fisher v. Metropolitan Life Ins. Co., 895 F.2d 1073, 1077 (5th Cir. 1990).
In Fisher, the plaintiff suggested that the plan insurer, Metropolitan, should be regarded as a de facto plan administrator because Metropolitan had been delegated responsibility for evaluating and administering claims. Noting that "Fisher's argument that Metropolitan should be regarded as a de facto administrator has intuitive appeal [,]"7 we nevertheless declined to recognize Metropolitan as the de facto administrator because, in any event, we found no abuse of discretion on the part of the district court in refusing to award the plaintiff penalties under section 1132(c).
As in Fisher, we need not here resolve the question whether Sun Life should be regarded as a de facto administrator, thus entitling Godwin to penalties under 29 U.S.C. § 1132. See Paris v. Profit Sharing Plan For Employees of Howard B. Wolf, Inc., 637 F.2d 357, 362 (5th Cir.), cert. denied, 454 U.S. 836, 102 S. Ct. 140, 70 L. Ed. 2d 117 (1981) ("The decision to grant relief under 29 U.S.C. § 1132(c) is committed to the discretion of the trial judge."). Although section 1132 does not require the claimant to show he was prejudiced to be entitled to penalties,8 we suggested in Paris that prejudice is one factor a district court may consider in exercising its discretion. See Paris, 637 F.2d at 362 ("The plaintiffs have not attempted to demonstrate that they were prejudiced by the alleged failure to respond, and we cannot say the district court abused its discretion."); accord Curry v. Contract Fabricators Inc. Profit Sharing Plan, 891 F.2d 842, 847 (11th Cir. 1990) (citations omitted). The district court's consideration of a lack of prejudice in denying an award of penalties was, therefore, not an abuse of discretion.
Godwin next contends that the 1981 amendment to the Sun Life plan which mandates an offset for "any amount of Old Age Income provided to the employee under the Social Security Act"9 does not apply to him because he had no notice of the amendment when he applied for benefits.
ERISA requires that participants and beneficiaries be furnished with a summary plan description. See 29 U.S.C. § 1022. This summary plan description must contain certain information, including "circumstances which may result in disqualification, ineligibility, or denial or loss of benefits" 29 U.S.C. § 1022(b). Sections 102(a) (1) and 104(b) (1) of ERISA require that a copy of the summary plan description and all modifications and changes be furnished to participants and beneficiaries not later than 210 days after the plan year in which the change is adopted. See 29 U.S.C. §§ 1022(a) (1) and 1024(b) (1), amendment noted in 29 U.S.C.A. § 1024(b) (1) (Supp.1991).
In support of its assertion that Sun Life gave proper notice of the amendment, Sun Life presented to the district court the affidavit of its Director of Group Services and Administration--Dale L. Kurtz.11 In his affidavit, Kurtz testified that Sun Life prepared and sent to School Pictures for distribution updated summary plan description booklets following each amendment to the School Pictures plan.12 Godwin, however, maintains that he never received notice of the amendment, and he argues that such personal notice was required under ERISA.
Wherever fault might lie for the alleged nonreceipt by Godwin of notice of the  amendment, the amendment to the employee welfare benefit plan at issue is valid even in the absence of his knowledge of its existence. Henne [ ], 660 F.Supp at 1474-75 (amendment valid though its adoption was never noticed by employer); see also Moore, 856 F.2d at 491-92 (employer could alter benefit plan where summary plan descriptions unambiguously reserved the right to change or discontinue welfare benefit plan). That is because when benefit plans may by their terms be modified at any time and [when] an employer makes no attempt to conceal amendments, an employee cannot seek to avoid application of a valid amendment by claiming he never received notice of its adoption. Henne, 660 F. Supp. at 1475.
Record on Appeal, vol. 2, at 449-50. The district court found, in the alternative, that Godwin was not prejudiced by his lack of knowledge of the amendment. Id.
(5) any indemnity provided for the employee under any Workmen's Compensation law or similar legislation.
Godwin does not dispute Sun Life's authority to offset benefits with workers' compensation payments. But he does challenge Sun Life's calculation of the workers' compensation offset, reasoning that the payment for the worker's compensation settlements occurred after Godwin's benefit period and that his lump sum workers' compensation settlements also included payment for items that had nothing to do with his disability.17 Godwin suggests that the settlement payments should have been prorated over 450 weeks. Sun Life, on the other hand, contends that Godwin's entire settlement award should be applied as an offset.
The validity of workers' compensation offsets is well-established. Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 514-15 & 526, 101 S. Ct. 1895, 1901-02 & 1908, 68 L. Ed. 2d 402 (1981). Our inquiry is limited to the district court's conclusion that Sun Life did not erroneously calculate the amount of the workers' compensation offset. Because this is an action brought under 29 U.S.C. § 1132(a) (1) (B), we review de novo the district court's decision. Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S. Ct. 948, 956, 103 L. Ed. 2d 80 (1989).
The district court, in allowing an offset for the entire amount of the workers' compensation award rather than a prorated amount, noted that the Sun Life plan mandated an offset for "any" workers' compensation award. Record on Appeal, vol. 2, at 453. As noted supra, the precise words of the exclusion clause provide that "any indemnity provided for the employee under any Workmen's Compensation law or similar legislation" may be offset. We find these words to be clear and unambiguous: "any indemnity" means "any indemnity".
Godwin cites two cases as supporting the proposition that only a prorated portion of the workers' compensation should have been offset--Martin v. McCarthy, 520 F. Supp. 783 (D.C.Mass.1981) and Sciarotta v. Bowen, 837 F.2d 135 (3d Cir. 1988). As Sun Life points out, however, Sciarotta addresses an extremely narrow issue--the Social Security Administration's interpretation of the Social Security Act--which is not applicable to ERISA.
Martin likewise is inapplicable to the case sub judice. In Martin, a district court found 1) that the trustees of an ERISA-regulated pension plan properly withheld pension benefits pending the settlement of a workers' compensation claim; and 2) that the trustees of the plan properly refused to pay pension benefits once the workers' compensation claim was settled and the amount of the workers' compensation benefits exceeded the amount of the pension benefits. Martin, 520 F. Supp. at 784-86. Godwin is correct when he states that the district court in Martin prorated the workers' compensation benefits over the concurrent disability period. However, the district court, in doing so, relied upon the express language of the plan in question, which provided that " [a]ny pension benefits payable for any month for which the Pensioner or Participant received worker's compensation benefits shall be offset by the amount of such worker's compensation benefits." Id. at 784 n. *. The language of the Martin plan arguably mandated a monthly offset of the prorated workers' compensation benefit. There is no such language in Godwin's Sun Life plan.
We conclude, therefore, that Sun Life was entitled to reduce Godwin's disability benefits by the entire amount he received due to workers' compensation. See Barklage v. Metropolitan Life Ins. Co., 614 F. Supp. 51, 59 (W.D. Mo. 1985) (receipt of lump sum rather than monthly award of workers' compensation does not bar an offset).
[E]ven if Sun life is a plan fiduciary and had a duty to provide Godwin the information he requested, Godwin has not demonstrated that any prejudice to his right to benefits resulted from a failure by Sun Life to provide the requested information.
In exercising its discretion, therefore, the trial court may undoubtedly consider whether a denial of information prejudiced a plaintiff, but prejudice is not a prerequisite to an award of civil penalties.
Curry, 891 F.2d at 847 (citations omitted) (discussing Paris v. Profit Sharing Plan For Employees of Howard B. Wolf, Inc., 637 F.2d 357 (5th Cir.), cert. denied, 454 U.S. 836, 102 S. Ct. 140, 70 L. Ed. 2d 117 (1981)); see also id. at 848 ("A careful reading of Paris, therefore, suggests that prejudice was merely one factor (although an important one) that the trial court considered in exercising its discretion whether to award a civil penalty under section 1132(c)....").
Employees of School Pictures, Inc. were notified of the terms and conditions of the School Pictures LTD plan by means of summary plan description booklets ("SPD's") which were composed by Sun Life according to instructions received from School Pictures, Inc. regarding desired changes in coverage. The SPD's were printed in Massachusetts and then forwarded to School Pictures' home office in Jackson, Mississippi, for distribution to covered employees. This same procedure was followed on each occasion when the School Pictures LTD plan was amended.

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