Opinion ID: 446927
Heading Depth: 1
Heading Rank: 3

Heading: The Full Funding Warranty

Text: 9 The district court's memorandum did not specifically address plaintiffs' contention that the sum transferred by Healthco was $37,104 short of satisfying section X's full funding warranty. Indeed, the court assumed that plaintiffs were satisfied that the $1,132,642 transferred was sufficient to 'fully fund' liabilities. Plaintiffs argue, to the contrary, that defendants breached the full funding warranty and that the court failed to consider the issue. 10 Defendants point out that the full funding claim was raised for the first time when plaintiffs filed an opposition to defendants' motion for summary judgment. In support of their contention that the complaint, which was dated March 11, 1983, failed to raise the full funding issue, defendants point to a June 17, 1983 letter to Healthco, in which Foster demanded payment of $37,104 and indicated a willingness to include the amount in our legal procedures. According to Healthco, plaintiffs' omission in the complaint of a claim for $37,104, coupled with their failure to amend the complaint after the June 17 letter, indicates that the full funding claim was never raised and barred the district court from considering the issue. 11 For their part, plaintiffs emphasize that the complaint alleged that defendants breached section X of the agreement and their fiduciary duties under ERISA by failing to transfer all assets of the Healthco Plan attributable to employees of the Medical Division. Although plaintiffs read more into the words attributable to than the district court did, they argue that the district court's understanding of the phrase proves, a fortiori, that the complaint raised the full funding claim. In this respect, while plaintiffs argued to the district court that the phrase attributable to indicated an entitlement to a pro rata share of the plan's surplus, the court read the phrase more narrowly and found that the only issue raised by the phrase was whether pension liabilities were fully funded. Without abandoning their argument that attributable to has significance over and above the full funding issue, plaintiffs accept the district court's conclusion that, at a minimum, the phrase mandates compliance with the full funding warranty. Thus, in plaintiffs' view, their request that the district court enforce the mandate of attributable to necessarily encompassed a request that the court enforce the full funding warranty. 12 It is true that plaintiffs could have articulated their full funding claim more clearly. Nevertheless, we conclude that the issue is raised implicitly in the complaint and may be gleaned from a reading of its allegations in conjunction with plaintiffs' opposition to defendants' motion for summary judgment. Under modern procedural rules, [a]ll pleadings shall be so construed as to do substantial justice. Fed.R.Civ.P. 8(f). Since pleadings are to be construed liberally, Hildebrand v. Honeywell, Inc., 622 F.2d 179, 181 (5th Cir.1980), precision of pleading no longer can be an absolute determinant of either liability or remedy. DeCosta v. Columbia Broadcasting Sys., 520 F.2d 499, 510 (1st Cir.1975), cert. denied, 423 U.S. 1073, 96 S.Ct. 856, 47 L.Ed.2d 83 (1976). What is more, considering that the claim was explicitly raised in plaintiffs' opposition papers, defendants can scarcely claim surprise or prejudice. See Peter Kiewit Sons' Co. v. Summit Constr. Co., 422 F.2d 242, 271 (8th Cir.1969). Cf. Hanson v. Hoffmann, 628 F.2d 42, 53 n. 11 (D.C.Cir.1980) (so long as defendant is not prejudiced, plaintiff is not bound by legal theory on which he originally relied). 13 Substantively, the record shows a genuine conflict of material fact on the full funding claim and, therefore, summary judgment on the claim was inappropriate. See Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir.1975), cert. denied, 425 U.S. 904, 96 S.Ct. 1495, 47 L.Ed.2d 754 (1976). Accord, e.g., Emery v. Merrimack Valley Wood Prods., Inc., 701 F.2d 985, 990-91 (1st Cir.1983); Maiorana v. MacDonald, 596 F.2d 1072, 1076 (1st Cir.1979). Thus, to this extent, the district court's grant of summary judgment is reversed and the full funding claim is remanded for further proceedings. 14