Opinion ID: 217949
Heading Depth: 2
Heading Rank: 1

Heading: Qwest's Reduction of Benefits: Claim 1 of the AC.

Text: Plaintiffs first appeal the district court's dismissal of Claim 1 of the AC. Aplt. Br. 3; 13 Aplt.App. 2794; see Kerber, 544 F.Supp.2d 1187. In relevant part, Claim 1 alleges that Qwest's reduction of life insurance benefits below the Minimum Benefits Provision constituted a breach of fiduciary duty. 1 Aplt.App. 57. At the outset, the parties dispute the characterization of Claim 1. Plaintiffs contend that Claim 1 alleged that the Plan's rules circumscribed the Plan sponsor's general right to reduce retirees' Basic Life Coverage. Aplt. Br. 3. To the contrary, Qwest characterizes Claim 1 as a contractual vesting claim, which requires Plaintiffs to show clear contractual language vesting the life insurance benefits. Aplee. Br. 24-25. Plaintiffs argue that characterization of Claim 1 is important because they do not allege that the Plan created vested rightsindeed, Plaintiffs concede that Qwest could have completely terminated the life insurance benefits. Aplt. Reply Br. 1. Plaintiffs contend that Claim 1 alleges only that the Minimum Benefits Provision served as a limitation on the ROR clause, prohibiting amendment of the life insurance benefits below the amounts provided in Appendix 7. Id. Thus, according to Plaintiffs, they need not prove clear contractual language vesting the benefit. The district court characterized Claim 1 as a contractual bar claim, but analyzed it akin to a contractual vesting claim. See Kerber, 544 F.Supp.2d at 1192. Characterization of Claim 1 is irrelevant for our purposes. The Reservation of Rights Clause unambiguously reserves in Qwest the right to amend the Plan. The Minimum Benefits Provision serves only as a limitation on reductions under the Reduction Formula, not as an overarching limitation on the Plan as a whole. Accordingly, Claim 1 fails under either characterizationthe Plan neither contractually vests the benefits nor proscribes amendments below the amounts provided in the Minimum Benefits Clause. Three rationales support our holding. First, when read as a whole, the Reservation of Rights Clause clearly controls the entire Plan, while the Minimum Benefits Provision serves only as a floor to reductions of the benefit under the Reduction Formula. Second, under the interpretive canon expressio unius est exclusio alterius the expression of one thing excludes all othersQwest's right to amend the Plan is limited only by the Prior Loss Proviso, as the Prior Loss Proviso is the only limitation contained in the Reservation of Rights Clause. Third, our holding is strongly supported, if not compelled, by Chiles, 95 F.3d 1505, a case that dealt with closely analogous language.
We review ERISA plans as a whole; if they are unambiguous, we construe the Plan as a matter of law. Chiles, 95 F.3d at 1511. In order to determine whether a plan is ambiguous, we consider the common and ordinary meaning as a reasonable person in the position of the plan participant . . . would have understood the words to mean. Salisbury v. Hartford Life & Acc. Co., 583 F.3d 1245, 1248 (10th Cir.2009) (internal quotation marks and citation omitted). Viewing the Plan Documents as a whole, it is clear that the Minimum Benefits Provision serves as a limitation only on the Reduction Formula, not on the Plan as a whole. The Minimum Benefits Provision is not a separate clause or section of the Planit is the sentence following the Reduction Formula, deep within subsection 2.6 of Article II of the Plan. See id. at 619, 624. Article II of the Plan is entitled Eligibility and Participation and contains details regarding qualified participants and the benefits for which they are eligible. Id. at 619. Further, the Minimum Benefits Provision references the Reduction Formula, strongly implying that its application is limited to reductions under the Formula. See 3 Aplt.App. at 624 (Notwithstanding the foregoing . . . such Basic Life Coverage amounts shall not be reduced below certain minimum amounts. . . . (emphasis added)). Nothing in the Minimum Benefit Provision so much as suggests that it is intended to serve as an overarching limitation on the Plan as a whole. On the other hand, the Reservation of Rights Clause is contained in Article X of the Plan, entitled Amendment and Termination. Id. at 638. Article X contains only two subsections: the Reservation of Rights Clause at issue here, and an analogous subsection reserving the right to terminate the Plan. Id. The Reservation of Rights Clause does not reference any particular part of the Plan, nor does its language suggest that its applicability is limited to Article X. Id. Thus, the Reservation of Rights Clause is clearly intended to apply to the Plan as a whole. In sum, there is simply no indication that the Minimum Benefits Provision of subsection 2.6(a) somehow serves as an overarching limitation on the entire Plan. It is safe to assume that the drafters of the Plan did not intend to hide elephants in mouseholes. Whitman v. Am. Trucking Ass'ns, 531 U.S. 457, 468, 121 S.Ct. 903, 149 L.Ed.2d 1 (2001). Only by considering the Minimum Benefits Provision apart from its overall context do Plaintiffs arrive at their interpretation. Reading the Plan Documents as a whole confirms the district court's interpretation: the Minimum Benefits Provision serves as a limitation on the Reduction Formula, while the Reservation of Rights Clause governs the entire Plan.
The Reservation of Rights Clause contains a single internal limitation, the Prior Loss Proviso, which prohibits retroactive application of amendments that reduce benefits. See 3 Aplt.App. 638. Thus, under the interpretive canon of expressio unius est exclusio alterius which we have previously applied to ERISA plans, see Chiles, 95 F.3d at 1512inclusion of the Prior Loss Proviso as a limitation on the Reservation of Rights Clause compels the conclusion that the Prior Loss Proviso is the only limit on Qwest's rights under the ROR. This confirms our interpretation of the Plan Documents: the Minimum Benefits Provision does not proscribe Qwest's rights to amend the Plan under the Reservation of Rights Clause.
Third and finally, we dealt with a similar reservation of rights clause in Chiles, 95 F.3d at 1508. In that case, the Summary Plan Description (SPD) of a long-term disability plan contained a reservation of rights clause that reserved in the employer the right to amend or terminate the long-term disability benefits, except for those who were totally disabled as of the date of termination. Id. at 1509. We held that the reservation of rights clause was unambiguous and precluded the plaintiffs' claim that their rights to long-term disability benefits had contractually vested. Id. at 1512-14. Although in Chiles the plaintiffs claimed that long-term disability benefits had vested and could not be revoked, whereas in this case Plaintiffs concede that Qwest could have terminated the plan, Aplt. Br. 17, the district court correctly noted that our interpretation of a similar reservation of rights clause in Chiles compels a similar disposition here. See Kerber, 544 F.Supp.2d at 1193-94. Plaintiffs advance several arguments on appeal, none of which we find persuasive. First, Plaintiffs argue that at the time the district court dismissed Claim 1, Qwest had not disclosed Appendix 8 to the Plan. Aplt. Br. 21. According to Plaintiffs, the eventual production of Appendix 8 undercuts the district court's order dismissing Claim 1. Id. However, Appendix 8 is nearly the same as Appendix 7, and in any event Appendix 7 not Appendix 8is referenced by subsection 2.6(a). See 3 Aplt. App. 624. Further, Plaintiffs specifically stipulated that the Plan Documents attached to Qwest's Motion to Dismisswhich did not contain Appendix 8comprised the Plan Documents on which their claims were based. See Kerber, 2008 WL 4630558, at . Finally, Plaintiffs filed a motion for reconsideration and a motion to alter or amend the judgment, but did not raise any arguments relating to Appendix 8. See 13 Aplt.App. 2735. Indeed, in their brief before us, Plaintiffs liken the situation to one where relief would be available from the district court under Rule 60(b). Aplt. Br. 23. But we are not the proper forum for a Rule 60(b) motion. Accordingly, we find no basis for reversal due to the apparent confusion over Appendix 8. See Kerber, 2008 WL 4630558, at -3 (noting that Appendix 8 appeared to be either a mistake or a draft of Appendix 7 never incorporated into the Plan Documents). Second, Plaintiffs argue that the district court erred in determining that the Minimum Benefits Clause was tied to the Reduction Formula because the [minimum benefits set forth in Appendix 7] do not even remotely refer to a formula. Aplt. Br. 5. But that argument is simply not correct. As we have explained, the Minimum Benefits Clause incorporates Appendix 7 as providing the applicable numerical minimum dollar amount, see 3 Aplt.App. 624-25, and the Minimum Benefits Clause specifically references the Reduction Formula, id. (Notwithstanding the foregoing....). Thus, the Minimum Benefits Clause is indeed tied to the Plan's age based reduction formula. Aplt. Br. 15. Finally, Plaintiffs argue that the district court erred by fail[ing] to give specific terms greater weight than general language. Id. at 17. Again, that is simply not the case. Both the Minimum Benefits Clause and the Reservation of Rights Clause speak with roughly equivalent specificity. Compare 3 Aplt.App. 624-25 with 4 Aplt.App. 638. Therefore, we doubt that this principle of contractual interpretation is applicable here. Additionally, Plaintiffs' cited principle of interpretation is helpful only where the specific and general language conflict. See, e.g., Rosillo-Puga v. Holder, 580 F.3d 1147, 1160 (10th Cir. 2009); Shawnee Tribe v. United States, 423 F.3d 1204, 1213 (10th Cir.2005). In this case, the clauses do not conflictthe Minimum Benefits Clause limits reductions under the Reduction Formula, while the Reservation of Rights Clause governs the Plan Documents as a whole. We therefore affirm the district court's dismissal of Claim 1 of the AC.