Opinion ID: 172426
Heading Depth: 1
Heading Rank: 13

Heading: District Court's Rejection of Plaintiffs' Extra-Plan Evidence

Text: Plaintiffs next contend that the district court, in addressing Counts One, Two and Three of the second amended complaint, erred in concluding that a welfare benefit can vest for purposes of ERISA only based upon clear and express language in the relevant Plan documents, and in turn rejecting the extra-Plan evidence presented by plaintiffs in order to establish that the Plan sponsors intended for the Pensioner Death Benefit to vest. More specifically, plaintiffs complain that the district court gave no weight to [their] evidence showing former Plan sponsor U S WEST's conduct and treatment of the [Pensioner Death Benefit] reflecting an intent to vest the [Pensioner Death Benefit]. Id. at 42. [T]he most significant evidence in this regard, plaintiffs assert, is that former Plan sponsor U S WEST made the [Pensioner Death Benefit] an[] integral part of the early retirement singe [sic] sum payment. Id. In other words, plaintiffs argue, [t]he formula U S WEST chose for calculating the total amount of the single sum payment proves U S WEST considered the [Pensioner Death Benefit] to be vested and an essential element of the normal retirement benefit. Id. In determining whether a welfare benefit offered under an ERISA-governed plan has vested, [t]he question of what `other evidence' is admissible turns on the relative ambiguity of the plan provision being construed.... Halbach v. Great-West Life & Annuity Ins. Co., 561 F.3d 872, 877 (8th Cir.2009). If neither the specific provision at issue, nor the plan as a whole, resolve the vesting issue, then it is proper for a reviewing court to consider extrinsic evidence to assist it in resolving the issue. Id. at 878. In this case, plaintiffs have failed to identify any ambiguities in the Plan with regard to the purported vesting of the Pensioner Death Benefit or its DLS Equivalent component. Further, in our view, the Plan clearly indicated that the Pensioner Death Benefit as a whole, including the DLS Equivalent, was not considered to be an accrued benefit under the Plan. As for the formula selected by U.S. West in the Plan for calculating the DLS Equivalent, plaintiffs have failed to explain precisely how that demonstrated U.S. West's intent for the DLS Equivalent to vest. Thus, we conclude the district court properly refused to consider the extrinsic evidence offered by plaintiffs regarding U.S. West's purported intent. Plaintiffs also mention, in passing, a July 1989 version SPD given to ... Kerber and Phelps upon retirement that, according to plaintiffs, contained a ROR [reservation of rights clause] but [wa]s limited to the right to terminate the pension plan and sa[id] nothing about any right to cut-back benefits after retirement. Aplt. Br. at 44. Although plaintiffs do not flesh out their argument any further, they appear to be implying that the language in this SPD somehow conflicted with the Plan. See Chiles, 95 F.3d at 1518 (Because the SPD is such an important vehicle in ERISA's attempt to fairly regulate employment benefits, courts have held that the terms of the master plan cannot control an SPD's provision that is ambiguous or in conflict with the master plan document.). The obvious problem with plaintiffs' argument in this regard, however, is that Amendment 2003-5 did not cut-back benefits after retirement, but instead limited the Pensioner Death Benefit to employees retiring on or before a certain date. Thus, as the district court correctly noted, Amendment 2003-5 had no impact on plaintiffs Kerber and Phelps. Moreover, as the district court noted in its order granting summary judgment, that very same SPD contained language stating that it was an overview of the plan, and that [d]etailed provisions of the Plan [we]re contained in the official Plan text, which govern[ed] in all cases. App. at 1213. Thus, as the district court correctly concluded, there was no conflict between the SPD and the Plan. Lastly, plaintiffs mention, again in passing, the priority given to payment of [Pensioner Death Benefits] by the Plan's rules applicable upon termination of the Plan. Aplt. Br. at 47. Plaintiffs argue that these rules, by specifying that [Pensioner Death Benefit] payments are to receive priority over payment of certain deferred vested pensions, is strong evidence of intent to vest the [Pensioner Death Benefit]. Id. at 48. As noted by the district court, however, these provisions regarding prioritization of benefits upon termination of the Plan did not result in the vesting of any rights, including the Pensioner Death Benefit, nor do they otherwise create an ambiguity in the Plan where none otherwise existed.