Opinion ID: 596119
Heading Depth: 1
Heading Rank: 4

Heading: was reversion authorized by the plan documents prior to

Text: 89 THE OCTOBER 25, 1985 AMENDMENT?
90 Murata argues that even if the October 25, 1985 amendment was invalid, the Company is nevertheless entitled to summary judgment because the Plan documents, as they existed prior to that date, permitted reversion to the Company of the excess funds remaining upon termination. We therefore must reach this question. 91 The underlying basis for Murata's argument is that from 1955 until 1985, the Plan documents included a provision allowing for reversion of excess funds to the Company upon termination. That provision, which was contained in section 13.04(D), provided: 92 [T]he net assets after provision is made for administrative expenses and expenses of liquidation, shall be applied to payment of benefits in the following order: 93 .... 94 (6) By distributing to the Company any excess remaining in the Fund due to erroneous actuarial computation as defined in Treasury Regulations. 95 Murata contends that any excess remaining in the fund once all liabilities have been satisfied is an excess due to erroneous actuarial computation and, therefore, may revert to the Company under this provision. 96 Murata acknowledges that this provision allowing reversion to the company of excess funds due to erroneous actuarial computation was excluded from the Plans when they were restated in 1977, but argues that such omission was the result of a scrivener's error rather than intentional exclusion. 15 Murata therefore requests that we treat the erroneous actuarial computation clause as if it were contained in the Plan documents at the time that Murata amended them in 1985, and further urges that the clause allowed for the reversion that subsequently occurred in 1989. The district court apparently disregarded Murata's argument on this issue.
97 We must initially decide whether importing the equitable doctrine of reformation of contract due to a scrivener's error into the ERISA context is consistent with the purposes of ERISA. Under the doctrine of scrivener's error, the mistake of a scrivener in drafting a document may be reformed based upon parol evidence, provided the evidence is clear, precise, convincing and of the most satisfactory character that a mistake has occurred and that the mistake does not reflect the intent of the parties. See In re Estate of Duncan, 426 Pa. 283, 232 A.2d 717, 720 (1967). See also Beck v. Pennsylvania Nat'l Mutual Casualty Ins. Co., 429 F.2d 813, 817 (5th Cir.1970); Easton v. Washington County Ins. Co., 391 Pa. 28, 137 A.2d 332, 337 (1957). 98 As we have previously noted in a different context, one statutory goal of ERISA is to insure that every employee may, on examining the plan documents, determine exactly what his rights and obligations are under the plan. See Frank v. Colt Indus., Inc., 910 F.2d 90, 97 (3d Cir.1990). Allowing the doctrine of scrivener's error to apply in ERISA cases would seem at odds with this statutory purpose. A plan document containing a scrivener's error might mislead an employee into believing he had rights or obligations that he did not, in fact, have. If, on the other hand, the employer were bound by the plan documents, whether or not they contained errors, the employee would know precisely his obligations and rights upon reading the plans. 99 Despite this potential tension with a statutory purpose of ERISA, we believe that the scrivener's error doctrine is appropriate in this particular case. Here, the alleged error relates to what is admittedly a windfall for either Murata or the plaintiffs--an excess remaining in the Plans that neither side could have reasonably expected. The plaintiffs' reasonable reliance on the 1977 Plan documents would probably not have led them to believe that there would be any excess funds remaining upon termination. Nor is it likely that reading the Plan documents would have led participants to believe that if any excess funds remained after termination, that excess would be distributed to them. ERISA's goal of providing clear Plan documents is, therefore, less pertinent in this situation, and we believe that application of the scrivener's error doctrine is appropriate. 100 We also believe that there are genuine issues of material fact with regard to the scrivener's error issue. We note in this regard that Murata presented evidence that the parties intended to include the erroneous actuarial computation provision in the 1977 restatement of the Plan documents. Specifically, Murata submitted the affidavit of a company official, Raymond Bertone, who had been employed by Murata and its predecessors since 1950. Bertone stated that [w]hen the Company adopted the changes in the 1977 and 1978 restatements to the Plans it was attempting only to comply with the language requirements of ERISA.... The Company was not consciously changing its right to the reversion when it adopted the 1977 and 1978 versions of the plan documents....We acknowledge, as the plaintiffs have urged, that this is self-serving testimony that might be determined to lack credibility. Further, the history of collective bargaining negotiations in 1984 may suggest that Murata did not, in fact, believe at that time that it had the right to recoup excess funds remaining in the Plans upon termination. Indeed, the evidence may be insufficient to meet the rigorous test for establishing a scrivener's error, given the clear and convincing standard of proof. See Estate of Duncan, 232 A.2d at 720. Nevertheless, we believe that the Bertone affidavit creates a genuine issue of material fact, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986), and that the district court, if it concludes that the October 25, 1985 amendment was invalid, must resolve this dispute. The court will then have to determine whether the parties intended something other than what was written in the 1977 Plan documents and whether equity requires that the ERISA Plans be reformed consistent with that actual intent. 101
102 If the district court on remand finds that the 1985 amendment was invalid, but that the 1977 Plan documents should be reformed due to a scrivener's error to include the reversion provision of section 13.04(D)(6), the court will then have to construe the meaning of the language erroneous actuarial computation in that provision. Specifically, the court will need to determine whether section 13.04(D)(6) gives the Company a general right of reversion for excess funds remaining in the Plans upon termination. It may be necessary for the district court to receive additional evidence on this point.