Opinion ID: 78128
Heading Depth: 2
Heading Rank: 1

Heading: The Original Action

Text: Robert Frulla, a retired employee of the original corporation, Transway International Corporation (Transway), received benefits under the Transway International Corporation Group Insurance Plan for Non-Union Employees of Transway and Subsidiaries (Transway Plan). In December of 1985, Transway merged into International Controls Corp. (ICC). Pursuant to the Merger Agreement, ICC undertook to provide the Transway retirees with benefits comparable to, and in no event less than, the benefits provided by the [Transway Plan]. One year later, however, ICC informed the Transway retirees that it intended to provide them with a new plan, effective 1 January 1987, which, among other things, increased the deductible amount on claims for individuals from $50 to $200. The plan also reserved ICC's right to modify or terminate benefits and to amend, modify, or terminate the Plan, including the right to require or increase Employee contributions under the Plan at any time ... without regard to business or financial necessity. In March of 1988, four retired Transway employees who were participants in the original Transway Plan filed a class action lawsuit (the Original Action) against ICC, Transway, and the new International Controls Corp. Group Health Insurance Plan (ICC Plan), challenging the amendment to the ICC Plan. In their complaint, the plaintiffs alleged that the new deductible provision effected an unauthorized diminution of benefits available under the Transway Plan as adopted by ICC and sought to permanently enjoin ICC from enforcing any reduction in benefits that were available under the Transway Plan before 1 January 1987, or from altering, amending, terminating, or in any way modifying the benefits of the Transway Plan. The defendants answered and denied that there was any agreement to immunize plaintiffs or members of the class from periodic modifications of either the Transway or ICC Plans, both of which reserved, in their summary plan descriptions, the right to make such modifications. In October of 1992, the parties to the Original Action entered into a proposed Settlement Agreement and Release (Settlement Agreement), in which ICC agreed to provide to the plaintiffs and other Class members ... the same health insurance benefits ICC is providing members of the Class today under the policy issued by Travelers Insurance Company; these benefits will be provided by ICC for the lives of the Class members. After finding that the Settlement Agreement was fair and reasonable, the district court entered an Agreed Judgment in January of 1993 resolving the litigation. The Agreed Judgment, which incorporated the Settlement Agreement, provides that ... ICC shall provide the members of the Class ... in accordance with the terms of the fully executed Settlement Agreement, the same health insurance benefits ICC is providing members of the Class today under the policy issued by Travelers Insurance Company; these benefits will be provided by ICC for the lives of the Class members. The Agreed Judgment binds the parties to the Original Action and any successors or assigns and contains an integration clause providing that it resolves all issues between the Defendants and the Class relating to the provision of health and life insurance by the Defendants which are raised or could have been raised by the pleadings filed in this lawsuit.