Opinion ID: 430565
Heading Depth: 3
Heading Rank: 2

Heading: Extrinsic Evidence Suggests an Ambiguity in the Contract.

Text: 17 A small booklet distributed to all employees described Bunker Hill's retirement benefit plan. This Summary Plan Description stated only one eligibility requirement for receiving insurance: that the applicant be receiving a pension from the Bunker Hill Company. Since the pension is lifelong, employees may have viewed the related insurance also to be a lifelong benefit. Moreover, the summary description assures pensioners that, upon their death, their children and surviving spouse may continue to be covered. Such language suggests that retirement insurance benefits may not have been limited to the duration of the collective bargaining agreement. 18 The district court discounted these statements because a disclaimer printed on the last page of the summary description specifically noted that the booklet was an illustration of benefits--not a contract and instructed employees to see a copy of the contract at the Personnel Office for a full explanation of insurance benefits. The district court found that no reasonable person could infer from plan descriptions limited in this manner that the booklet created contractual rights. 19 Both the summary plan descriptions and the disclaimers are required by the Employee Retirement Income Security Act, 29 U.S.C. Secs. 1001-1461 (1976 & Supp. V 1981) (ERISA). ERISA regulations also mandate that any limitations, reductions, or restrictions of plan benefits shall be described or summarized in a manner not less prominent than the style, captions, printing type, and prominence used to describe or summarize plan benefits. 29 C.F.R. Sec. 2520.102-2(b) (1982). The disclaimer in the Bunker Hill summary plan description, although set off from the main body of text, is printed in substantially smaller type than the remainder of the text. The adequacy of such a disclaimer on a summary plan description is a factual dispute, suggesting that summary judgment was not properly granted in this case. Cf. Corley v. Hecht Co., 530 F.Supp. 1155, 1163-64 (D.D.C.1982) (district court assessing adequacy of summary plan description).
20 Certain statements made by management may have led employees to believe that they had contracted for a lifelong medical insurance plan. One employee has stated under oath that he was told that insurance benefits would continue for the rest of [his] life. The local union president was told that surviving spouses would receive insurance as long as they continued to pay their contributions to the plan. 21 Bunker Hill argues that these statements were never made and, if they were, they do not rise to the level of a material factual dispute. The first part of this argument does not help Bunker Hill's cause. The factual dispute over whether statements were actually made is precisely the sort of issue that is properly resolved by a jury. Thus, this dispute, if material, precludes summary judgment. 22 The second part of this argument, however, is more compelling. While representations to two of the 2400 workers employed by Bunker Hill may not constitute a material issue, when one of those two workers is the local union president, the representations become more troubling. An influential labor figure may bargain on behalf of others, or widely circulate misinformation. Under these circumstances, a more detailed inquiry into the effect of management representations is required. Although this issue may ultimately prove immaterial, the record is not yet sufficiently developed to make this determination. Thus, the district court must examine additional parol evidence to assess the materiality of management representations that insurance benefits were vested.
23 During a four-month strike in 1977, Bunker Hill provided insurance benefits to pensioners. Since labor-management agreements are not in effect during strikes, appellants cite this as evidence that retirement insurance benefits were not governed by the labor-management agreement. 24 The payment of benefits during a strike distinguishes this case from all of the cases relied upon by appellee. See Turner, 604 F.2d at 1222-23; International Union, United Automobile, Aerospace and Agricultural Implement Workers of America v. Roblin Industries, Inc., 561 F.Supp. 288, 290-97 (W.D.Mich.1983); Metal Polishers, Local No. 11 v. Kurz-Kasch, Inc., 538 F.Supp. 368, 369 (S.D.Ohio 1982) (strike immediately precedes plant closing; not mentioned in analysis of whether rights vested); United Rubber, Cork, Linoleum and Plastic Workers of America, AFL-CIO v. Lee National Corporation, 323 F.Supp. 1181, 1184, 1187-88 (S.D.N.Y.1971) (strike; company terminates welfare plan pursuant to its terms; no legal obligation to continue retirement insurance thereafter). 25 Conversely, the only case that analyzes in depth the effect of payment of insurance benefits during a strike concludes that payment suggests that the benefits are vested. United Auto Workers v. Cadillac Malleable Iron Co., --- F.Supp. ----, 3 Empl.Ben.Cas. 1369 (W.D.Mich.1982). The court discounted company testimony that payment was only an accommodation to workers because such testimony was subjective and self-serving. Id. at ----, 3 Empl.Ben.Cas. at 1375. It concluded that the objective manifestation of a party's intent should govern this contractual dispute. Thus when insurance benefits are provided during a strike, those benefits are probably not tied to the term of a labor-management agreement. 26 Although not bound by the precedent of the Cadillac court, we are convinced by its logic. If insurance benefits are provided while no labor-management agreement is in effect, and no other agreement between the employer and employees has been reached, the contract must be deemed ambiguous. Here, we know that benefits were provided during a strike. There is no evidence on the record whether Bunker Hill and its employees had reached an agreement governing the provision of these benefits. It is improper to grant summary judgment before parol evidence on this issue has been heard.