Opinion ID: 784707
Heading Depth: 2
Heading Rank: 1

Heading: SBC's Interpretation of the SBC Plan

Text: 6 We review a district court's summary judgment de novo. Interstate Cleaning Corp. v. Commercial Underwriters Ins. Co., 325 F.3d 1024, 1027 (8th Cir.2003). We will affirm a district court's grant of summary judgment if the record demonstrates no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Interstate Cleaning, 325 F.3d at 1027. 7 Because it is undisputed [the SBC Plan] gives [SBC] discretionary authority to determine eligibility for benefits or to construe the terms of the plan, we review the denial of benefits for an abuse of discretion, Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), and reverse SBC's decision only if it is arbitrary and capricious, Brumm v. Bert Bell NFL Ret. Plan, 995 F.2d 1433, 1437 (8th Cir.1993). We uphold SBC's interpretation of the SBC Plan if it is reasonable. Id. SBC's interpretation is not unreasonable merely because the reviewing court disagrees with it. Fletcher-Merrit v. NorAm Energy Corp., 250 F.3d 1174, 1180 (8th Cir.2001). 8 This controversy involves SBC's interpretation of paragraph 8.2.1 of the SBC Plan, which states as follows: 9 If the [SBC Plan] provides for the computation of monthly pension benefits in a different manner than that provided under [the PTG Plan], [Hebert's] monthly pension benefit under [the SBC Plan] shall equal the greater of 10 (a) the sum of 11 (1) the monthly pension benefit determined for all service credit included in [Hebert's] Pension Service Credit under [the PTG Plan], in accordance with the provisions of such plan ..., plus 12 (2) the monthly pension benefit determined for all periods of Pension Calculation Service [Hebert] was covered by [the SBC Plan], or 13 (b) the monthly pension benefit determined for all service credit included in [Hebert's] Pension Service Credit under [the PTG Plan] and all Pension Calculation Service during which [Hebert] was covered by [the SBC Plan], in accordance with the provisions of the Plan. 14 (Emphasis added). Both parties agree paragraph 8.2.1(b) provides Hebert with the greatest amount of pension benefits, regardless whether the three MRO years are included in paragraph 8.2.1(b)'s calculation. 15 SBC interpreted paragraph 8.2.1(a) to include Hebert's three MRO years in computing Hebert's benefits. However, SBC interpreted 8.2.1(b) not to include Hebert's three MRO years in computing Hebert's benefits. SBC based its differing interpretations on how the in accordance phrases are used in paragraphs 8.2.1(a)(1) and 8.2.1(b). 16 To determine if SBC's interpretation of paragraph 8.2.1 is reasonable, we consider five factors: (1) whether SBC's interpretation is consistent with the SBC Plan's goals; (2) whether SBC's interpretation renders any of the SBC Plan's language internally inconsistent or meaningless; (3) whether SBC's interpretation conflicts with ERISA's substantive or procedural requirements; (4) whether SBC has consistently interpreted the words at issue; and (5) whether SBC's interpretation is contrary to the SBC Plan's clear language. Finley v. Special Agents Mut. Benefit Ass'n, 957 F.2d 617, 621 (8th Cir. 1992). The above factors need not be examined in any order as each factor presents us with a discrete inquiry. Hutchins v. Champion Int'l Corp., 110 F.3d 1341, 1344 (8th Cir.1997). 17 SBC's interpretation does not render any of the SBC Plan's language internally inconsistent or meaningless and is not contrary to the SBC Plan's clear language. Under paragraph 8.2.1(a)(1), a portion of Hebert's pension benefit and Pension Service Credit are determined in accordance with the provisions of such plan.  The phrase in accordance with the provisions of such plan  refers to the PTG Plan as modified by the MRO Amendment. Under the PTG Plan's MRO Amendment, for the purpose of computing benefits, Hebert's term of employment shall equal [Hebert's] term of employment as of [Hebert's] MRO Effective Date increased by three years. Thus, for computing Hebert's benefit under paragraph 8.2.1(a)(1), Hebert receives the full benefit of the three extra MRO years. 18 Two interpretations arguably exist regarding the calculation of Hebert's PTG Pension Service Credit under paragraph 8.2.1(b), because a comma separates the phrase in accordance with the provisions of the Plan  from the remainder of the sentence. The phrase in accordance with the provisions of the Plan  clearly refers to the SBC Plan. Under one interpretation, the phrase in accordance with the provisions of the Plan  could modify the phrase [Hebert's] Pension Service Credit under the [PTG Plan]. Under this interpretation, SBC looks to the SBC Plan's Pension Service Credit definition to determine whether Hebert's three MRO years are used to calculate her benefits under the SBC Plan, and the Pension Service Credit clearly does not include the three extra MRO years. Under another interpretation, the phrase in accordance with the provisions of the Plan  could modify the term monthly pension benefit. Under this interpretation, the phrase simply specifies the SBC Plan's formula is used to calculate benefits, while Hebert's Pension Service Credit under the PTG Plan would be calculated by referring to the PTG Plan. SBC adopted the first interpretation of paragraph 8.2.1(b). We conclude SBC's interpretation is reasonable and logical. 19 Two other reasons reveal SBC's interpretation is reasonable. First, the SBC Plan's drafters could have included the modifier in accordance with the PTG Plan after the Pension Service Credit in paragraph 8.2.1(b), as the drafters did in paragraph 8.2.1(a)(1). Second, the PTG Plan does not define Pension Service Credit. Without such a definition, it would be difficult to determine Hebert's Pension Service Credit in calculating Hebert's benefits under the SBC Plan. 20 We now turn to SBC's application of the SBC Plan's Pension Service Credit definition to Hebert. Under the SBC Plan, a service credit must be recognized for eligibility, accrual, and vesting to be a Pension Service Credit. SBC asserts the three MRO years do not qualify as a Pension Service Credit because the three MRO years were not recognized, inter alia, for vesting. The MRO Amendment contains no provision stating whether the three MRO years can be used to vest an employee's pension. With the MRO Amendment's silence on the vesting of the three MRO years, we cannot conclude SBC's interpretation rendered terms of the MRO Amendment or the SBC Plan internally inconsistent with or contradictory to the clear language of the MRO Amendment or the SBC Plan. 21 We conclude the remaining Finley factors do not suggest SBC abused its discretion. Aside from conclusory or circular arguments, nothing before us suggests SBC's interpretation is inconsistent with the SBC Plan or its goals. Finally, no contention exists that SBC's interpretation violates ERISA. Paragraph 8.2.1(a) preserves Hebert's benefits under the PTG Plan by giving her the full benefits accorded her under the PTG Plan, including the three MRO years, plus any benefits accrued under the SBC Plan. Paragraph 8.2.1(b) actually provides Hebert greater benefits, because of the larger multiplier used under paragraph 8.2.1(b) of the SBC Plan. 1